Jim Prentice, the man called upon to patch up the listing provincial Progressive Conservative ship in Alberta, deliver critical oil export pipelines and make “big government” respectable again, looked like a masterful choice when he replaced Alison Redford as premier last fall.

Coping with Alberta’s dizzying reversal of fortune since then has been a different story. Prentice, a former senior federal minister, may be adept at moving pieces around the chessboard when things are calm. But he hasn’t been at his best as oil prices plummeted, already weak natural gas prices slumped and the energy sector cancelled capital programs and began dumping staff en masse. Prentice responded with symbolic steps and trial balloons. Trimming MLAs’ and cabinet ministers’ salaries saved a few million dollars on an annual budget nearing $50 billion.

Although some news media described this strategy as “slashing,” that description is disconnected from reality. The slashing is taking place in the private sector, in which the energy sector’s 2015 capital spending has been cut by $23 billion – nearly 35%. Dave Yager, veteran oilfield services management consultant and the opposition Wildrose Party’s vice president of fundraising, estimates 100,000 energy-sector workers have lost their jobs. Companies are cutting pay by 10%-20%, from the CEO to the receptionist. Sounds brutal. Yet, doing so is effective for what Yager terms a “rebalancing of expectations.”

Alberta’s public sector, meanwhile, continues to spend $1,200 more per capita than any other province. Over the PCs’ 44 years in power, that party has stuffed the public sector with senior appointees, cronies and grazers who, along with their entourages and offices, cost far more than those token MLA salaries. Alberta’s public sector needs to be similarly retooled.

Prentice? He continues to use the budgetary tricks of his predecessor. By separating capital from operating spending, Prentice can borrow billions while claiming a budgetary surplus. This fiscal year, the province is borrowing $7 billion, its debt will increase to $12 billion and the “sustainability fund” (where surplus revenue was placed during good times) has plunged to $6 billion from $17 billion. Yet, Prentice recently claimed Alberta ran a $450-million surplus in the third quarter.

That’s misleading. “Under international financial reporting standards, if you spend capital on something that generates no revenue and/or can’t be liquidated, that has to be expensed,” points out Yager. “Government ‘capital investment’ is, in fact, spending. Jim Prentice had promised to go back to cash accounting, but I guess he was just kidding.”

Prentice did announce that next year’s spending will drop by 5.1%. A solid start, perhaps; but trimming $2.5 billion isn’t enough with a $7-billion revenue shortfall that could be seriously understated. Yet another government disconnect from reality.

More of Koch’s columns can be read at www.drjandmrk.com.

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