Official (Alberta) Oil Discussion Thread

[Bend it like Bourgeois]

Originally Posted by Red

He specifically refers to business so maybe it's correct, but otherwise the general contribution of Alberta is trumped by Ontario and is smaller than Quebec. Slightly ahead of the "socialist" BC...

Or is this just hogwash?

http://thoughtundermined.com/2012/07...s-by-province/

Doesn't that article say near enough the same thing?

In 2009 - the only year they looked at - the net was 16B more out of AB than came back in.

This table clearly shows that, in 2009 at least, Alberta was the only province in which the revenues collected by the federal government were greater than its expenditures

[Red]

Originally Posted by accord1999

Even for that though, the last table shows that whatever contribution Ontario makes to the Federal government, it gets it all back (and a bit more) in Federal spending and transfers within Ontario. On the other hand, for every $1 in Federal revenue collected from Albertans, the Feds essentially only spend 52c of it in Alberta.

I saw that, but with the way equalization payments work it may not be the robbery we like to say it is.

[Red]

Originally Posted by accord1999

Even for that though, the last table shows that whatever contribution Ontario makes to the Federal government, it gets it all back (and a bit more) in Federal spending and transfers within Ontario. On the other hand, for every $1 in Federal revenue collected from Albertans, the Feds essentially only spend 52c of it in Alberta.

Imagine if Alberta was a separate country where Albertans pay the exact same taxes. Even accounting for the extra expenses of running federal responsibilities, the Alberta government would have many billions more to spend. Meanwhile, the rest of Canada would have 16-17% less revenue to spend but where costs have only gone down ~10%. And this is in 2009, Alberta's economy is 40% larger now and grown more than 2.5x as fast the rest of Canada.

2009 was the first year Ontario got $$$. Not sure how many times alberta was on the receiving end, if ever. But clearly we are not the only ones getting "robbed".

[accord1999]

Originally Posted by Red

2009 was the first year Ontario got $$$. Not sure how many times alberta was on the receiving end, if ever. But clearly we are not the only ones getting "robbed".

I don't think Alberta is getting robbed, it's the nature of Alberta being much richer than the rest of Canada. But on the other hand, I think the article is more of quantification of just how important Alberta is to Canada and a reply to all those talking about how poorly managed Alberta is and how Alberta should have a sovereign wealth fund like Norway.

[Red]

Originally Posted by accord1999

I don't think Alberta is getting robbed, it's the nature of Alberta being much richer than the rest of Canada. But on the other hand, I think the article is more of quantification of just how important Alberta is to Canada and a reply to all those talking about how poorly managed Alberta is and how Alberta should have a sovereign wealth fund like Norway.

Richer or not, we pay the same federal tax rates as the rest of the country. The equalization fund is basically general revenue so really we all pay the same percentage in to it. We are (were) prosperous though, agreed.

I feel like the article is misleading. But oh well...

[Frequitude]

Originally Posted by Red

He specifically refers to business so maybe it's correct, but otherwise the general contribution of Alberta is trumped by Ontario and is smaller than Quebec. Slightly ahead of the "socialist" BC...

Or is this just hogwash?

http://thoughtundermined.com/2012/07...s-by-province/

Cool article. Thanks. Always good to get some data about equalization.

I think the difference here is that in the article I posted he's talking about net transfers, not absolute transfers. ("Between 2000 and 2014, on a net basis, Alberta’s individual and corporate taxpayers shipped an estimated $200 billion-plus to the federal government. That’s what left the province, less what the feds reinvested here.")

So the first table in your article which caught your eye doesn't apply. That's gross money received from each province and doesn't consider transfers back. As accord1999 has pointed out, the second table in your article would be more in line with the point the first article was trying to make...that Alberta has far and away the largest net outflow.

[Tinordi]

The persistence of the myths surrounding equalization continues unabated in Alberta.

The moral indignation coupled with ignorance coupled with persecution complex is a mix to behold.

[Slava]

Originally Posted by Tinordi

The persistence of the myths surrounding equalization continues unabated in Alberta.

The moral indignation coupled with ignorance coupled with persecution complex is a mix to behold.

I don't think its moral indignation though. I think its a scenario where people are actually hurting and in trouble here, and then see newspaper headlines about a probable Bombardier bailout and the like. I also think that most Albertans are fine with equalisation in general; we're not opposed to helping fellow Canadians at all, but if we aren't going to get help from the federal government in times like these then what has to happen for us to be on the receiving end or at least break-even?

I wouldn't call that moral indignation. It seems like a pretty reasonable thought at this point?

[Red]

Originally Posted by Slava

I don't think its moral indignation though. I think its a scenario where people are actually hurting and in trouble here, and then see newspaper headlines about a probable Bombardier bailout and the like. I also think that most Albertans are fine with equalisation in general; we're not opposed to helping fellow Canadians at all, but if we aren't going to get help from the federal government in times like these then what has to happen for us to be on the receiving end or at least break-even?

I wouldn't call that moral indignation. It seems like a pretty reasonable thought at this point?

Pretty much what you said. Hardly any complaints during good times. But now it's louder than ever.

Of course the money we send isn't supplementing anyone's income, so not sure what help the unemployed here expect exactly.

Infrastructure could create jobs, but the feds are already looking at that.

[corporatejay]

Well Tinordi, if you can give me some benefits of confederation from an Alberta perspective I'm all ears.

Right now it's a lot of taking and not much giving.

[Kavvy]

Well I think a great do of AB's do whine about transfer payments during good times as well, but it is usually because of some new eastern media article which labels our oil dirty or anti-pipeline provinces protesting us, which then I would say justifies said whining.

[Kavvy]

nm

[CampbellsTransgressions]

It really doesn't help when the opposition fools like Codere are telling an insidious lie that Quebec doesn't receive enough economic benefit, or that they think it matters whether Quebec receives any benefit, or that Alberta isn't sharing in the risk of the projects.

All three arguments are entirely untrue.

Though maybe we're right for having a sense of moral indignation when our cheeky friends out east can simultaneously blame the price of oil for the federal government's deficit while doing absolutely everything in their power to delay the growth of the Canadian oil sector. Or maybe we're right for having a sense of moral indignation when we can look at all of the environmentally treacherous and ethically appalling mining companies operating out of Quebec and Ontario that the easterners apparently have zero issue with, yet see that they hypocritically have a problem with ethical oil extraction. Or how about their insistence on conducting business with Saudi Arabia, both in selling arms and in buying oil?

[burn_this_city]

The whole discussion of equalization revolves around the misplaced idea that Alberta squandered a potentially Norway sized wealth fund. I see this bandied about by people in the rest of Canada, while they blindly ignore the massive wealth transfer out of Alberta through Federal taxation.

Also the mechanisms for equalization payments are flawed when its based on an aggregate trailing three years vs. a more timely formula revision based on the current economic conditions. Alberta during the worst economic conditions in 30 years will still send approximately $8B more to the Federal government this year than we receive back in services.

[red sky]

Maybe if we weren't sending over billions of dollars to the east we could have used that to reinvest and diversify Alberta's economy?

[ranchlandsselling]

I remember seeing a presentation by Todd Hirsch of ATB. He talked about the reciprocal side of transfer payments that a lot of Albertan's forget or never think of. There were no real numbers or statistical analysis to support/refute what would be fair or not. But he did explain that over the past few decades Alberta has benefited from Net inter provincial migration. These migrating individuals and families all were educated elsewhere at the cost of tax payers and governments at which point they came to Alberta as a highly educated young workforce. Once here they have primarily been a net benefit to the Alberta economy yet were "developed" elsewhere at a cost to another province/government.

Was interesting.

[VladtheImpaler]

Originally Posted by ranchlandsselling

I remember seeing a presentation by Todd Hirsch of ATB. He talked about the reciprocal side of transfer payments that a lot of Albertan's forget or never think of. There were no real numbers or statistical analysis to support/refute what would be fair or not. But he did explain that over the past few decades Alberta has benefited from Net inter provincial migration. These migrating individuals and families all were educated elsewhere at the cost of tax payers and governments at which point they came to Alberta as a highly educated young workforce. Once here they have primarily been a net benefit to the Alberta economy yet were "developed" elsewhere at a cost to another province/government.

Was interesting.

So what? If Alberta was a separate country we would still receive this benefit (just like we benefit from having doctors and engineers educated in Iran and Nigeria) without the cost. It's a false "benefit" of federation. Those people would still come here for economic reasons.
Separatism is the answer my friends. The sooner we wake up to that the better.

[CliffFletcher]

Originally Posted by burn_this_city

Alberta during the worst economic conditions in 30 years will still send approximately $8B more to the Federal government this year than we receive back in services.

I think it's important to note that it isn't Alberta sending money to the federal government, but Albertans. And not all Albertans, but those with high incomes. Just as all Canadians with high incomes contribute more to the federal coffers than average Canadians do. It's really just a matter of progressive income taxes hitting Albertans, in aggregate, more than other the taxpayers of other provinces.

Still, it is frustrating when other Canadians don't want to recognize how much Albertans contribute to the general welfare (just as most don't want to recognize how much high-earning Canadians contribute to the general welfare).

Originally Posted by ranchlandsselling

I remember seeing a presentation by Todd Hirsch of ATB. He talked about the reciprocal side of transfer payments that a lot of Albertan's forget or never think of. There were no real numbers or statistical analysis to support/refute what would be fair or not. But he did explain that over the past few decades Alberta has benefited from Net inter provincial migration. These migrating individuals and families all were educated elsewhere at the cost of tax payers and governments at which point they came to Alberta as a highly educated young workforce. Once here they have primarily been a net benefit to the Alberta economy yet were "developed" elsewhere at a cost to another province/government.

Was interesting.

If we asked New Brunswickers if they'd rather keep the top-up in federal funding, or have all those educated workers and young families back, we might be surprised by the answer.

In a way, transfer payments are successful, young Canadians sending money back home to their older and less successful family and friends. And we see a similar transfer here in Alberta, where young and high-earning urban Albertans subsidize the aging, rural parts of the province. Oddly, you never hear conservative politicians in this province squawking about that transfer of wealth.

[Tinordi]

How important is equity in service provision among provinces to Alberta? What does equity in fiscal capacity of the provinces contribute to stable social, business and political environments which translates to greater wealth? What value is there in providing population floors among provinces to Alberta?

Critically, how did equalization maintain Alberta's population and service delivery when it was a have-not agricultural province and did that gestate investment in the province when oil was discovered?

Again, it's a complex question and not one easily answered through gritted teeth and the sense of victimhood of having to pay for those undeserving others.

[OMG!WTF!]

Originally Posted by ranchlandsselling

These migrating individuals and families all were educated elsewhere at the cost of tax payers and governments at which point they came to Alberta as a highly educated young workforce. Once here they have primarily been a net benefit to the Alberta economy yet were "developed" elsewhere at a cost to another province/government.

Honest question, is high school now "highly educated"? Or do provinces subsidize university tuition a lot? I know federal money covers a great deal of tuition, but I don't know how much the provinces, especially the have not provinces spend in comparison. I assume Alberta has paid for a lot of that education.

Oil took a dive today after the Saudi OPEC minister spoke. Interesting comments on how they are not trying to protect their market share but rather just trying to keep customers happy. However they are going to meet in March to talk about possibly thinking about lowering production.