Quote:
Originally Posted by Hanni
This my understanding of the current situation as well. The Operating Budget is in surplus but they are borrowing for capital projects. The justification I've heard is that the borrowing for capital projects does not count towards the deficit as you gain an actual asset (a road, school, hospital etc.).
I think it's completely wrong and doesn't make a whole lot of real world sense. I understand that a road or a building is a physical asset but in no way does it have any real world value. The province isn't going to sell a school or a hospital during its useful life so the value just isn't there. When you look at the life of the infrastructure you don't end up with a paid off asset, you end up with something that is then going to cost you to replace. I even thought I heard Horner make an off the cuff remark a couple of weeks ago about they could sell the Anthony Henday in Edmonton tomorrow if they really wanted to.
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Ya and that's all I was saying. I'm not defending it, just saying that this is probably why we can borrow more and still have a balanced budget.