[Flash Walken]

How Alberta blew it

Alberta and Norway obviously have very different ideological bents, and 40 years ago you could have a spirited argument on which worldview would come out on top. But such esoteric speculation is no longer necessary given the hard facts in full view on their respective balance sheets.

The laissez-faire approach to resource management in Alberta has been a fiscal disaster compared to what might have been. In 2012, the province collected a mere $4.04 in royalties per barrel of oil equivalent. That same year, the Norwegian taxpayer raked in $46.29 on their petroleum production -- more than 10 times as much. How did they achieve such vastly better results? By embracing a profitable public involvement and oversight in their resource economy that would be abhorrent to the Fraser Institute worldview that has taken root in Alberta.

While it is true that Norway's Brent crude is worth much more than the low-grade bitumen currently wrung out of the oilsands, Alberta has also produced enormous amounts of conventional crude since oil was discovered in the Turner Valley southwest of Calgary 100 years ago.

Ignoring the oilsands altogether, Alberta has produced 18 per cent more conventional crude and natural gas than has Norway, and the province didn't have to venture hundreds of kilometres into the North Sea to get it.

Admitting the problem

For now the latest Alberta bender is over, and it's time to take stock of certain destructive lifestyle choices. The budgetary cupboards are bare, yet Canada's allegedly "richest" province has an unfunded municipal infrastructure deficit of up to $24 billion. A badly needed new cancer treatment facility has just been delayed past 2020. The long-overdue plan to build or modernize over 230 schools by 2018 is threatened by an $11-billion "fiscal hole" in provincial finances.

According to the Alberta Urban Municipalities Association, "Alberta continues to have the lowest overall tax system in Canada, with the lowest fuel taxes, no sales tax, no health premiums, no capital or payroll taxes, and low personal and corporate income taxes. Albertans and Alberta businesses would pay at least $10.6 billion more in taxes each year if Alberta had the tax system of any other province."

While provincial finances are grim and real estate values are about to fall off a cliff, the real deficit is not economic but intellectual. Some observers have made the case that the free-market mindset that got us in this mess is actually a long-term project of powerful outside forces eager to acquire Canada's treasure trove of resources at rock bottom prices.

If so, this audacious endgame has been a stunning success. The anti-tax sentiment has intruded so far into the collective psyche of Alberta voters that they almost have Stockholm Syndrome, punishing any politician that threatens to raise resource rents. The last Alberta election almost saw a Fraser Institute alumna become premier. If there is an upside to the most recent downturn in Alberta, it is bringing into crystal clear focus the abject fiscal failure of decades of "free market" resource policies promoted by well-funded think tanks.

http://thetyee.ca/Opinion/2015/01/19...ta-Oil-Bender/