Quote:
Originally Posted by bizaro86
One year we build a billion dollar hospital in Calgary, then twin an expensive highway in the North, then next year it'll be LRT expansions, then ring road funding, then a new hospital in Ft Mac, then...
The province's capital budget is different than one families, because they have more than one major need. There will be a continuous stream of required major projects. If we borrow to pay for this years hospital, then next year we have to pay interest on the debt plus pay for next year's highway 63 twinning.
Of course, we could borrow to pay for that, but then the next year when we need LRT expansions we'll be trying to pay for the interest on two tranches of debt, plus an LRT expansion. Of course, we COULD just borrow for that also.
Once you start, it's very difficult to stop the cycle, which is why debt payoff has happened very rarely in other jurisdictions.
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So what is the option that you propose - not put any money into capital projects because there is a fear about going into debt? Decrease wages amongst the public sector, ignoring the high cost of living in Alberta which is secondary to the oil boom? Take money out of the Heritage savings fund?
All of the projects you listed are required projects, hospitals, roads and public transit... people complain about wait times but don't want to fund a hospital, say seniors should be bathed more often but want to cut staffing/wages, promote the oilsands and don't want to build the road, better public transit... with a low pricetag of course.
In my opinion going into debt while the interest rates are low makes the most sense, that in combination with increasing tax rates and introducing a PST/HST system. Alberta was able to pay off the debt because of resources money which we have been living off of for the past 15 years enjoying a low tax rate.