"How on earth did we get here?" Mr. Prentice asks. "There are many factors but if there is one underlying reason, I would say that for too many years, our budgeting has been speculative. And I use the term speculative - because in essence, we have built our budgets around energy revenues and oil prices."
For evidence that government restraint works, the Fraser Institute points to Texas, a similarly large oil and gas jurisdiction that has smoothed the impact of oil downturns by doing a better job of managing spending.
In A Tale of Two Energy Booms, author Mark Milke argues Alberta acted imprudently with its oil windfall by cranking up government spending, while Texas kept it in check. Both jurisdictions are highly dependent on oil and gas revenue - it accounts for 26.8% of GDP in Alberta, and 11% of GDP in Texas.
They also experienced similar GDP growth in the 2001-to-2013 period - 3.2% on average in Alberta, and 3.1% in Texas; and had similar population growth - Alberta added more than one million people, a 33.4% increase; Texas added 5.5 million people, a 26.3% increase.
But Alberta's per-capita government spending rose by 69.5%, compared to 59.5% in Texas over the same period, while public sector employment growth soared by 2.8% a year in Alberta, compared to 1.1% in Texas.