Alberta budget news

[Senator Clay Davis]

Originally Posted by Rerun

Over the length of a std 20 year mortgage a house will definitely increase in value.... actually its mostly the land that increases in value but thats beside the point.

Sure in the short term, a house may decrease in value.... but in the long term... yes it will unless there are extraordinary circumstances.

Again, talking in definites is wrong. Sorry, not true. You wanna use "more than likely", go ahead. But you're acting like you know for sure that every property purchased is guaranteed to increase in value. Wouldn't everyone play the real estate market and make tens of millions if you were guaranteed every property you buy would increase?

[Tinordi]

The bigger issue is that the oil and gas royalty game is not going to be around forever. Conventional gas reserves will be completely depleted by 2045 in Alberta. What will albertans have to show for those royalties? Nothing.

look at what a mature and honest jurisdiction does with its fossil fuel revenues in Norway. It actually saves them for an endowment that will help fund education, health, and the like for future generations when that resource is gone. Albertans, they get lower taxes, so they can consume crap now, immediately, and completely foregoing the livelihood of the future. Couple that with the fact that fossil fuel development will have huge net costs in the form of GHG emissions, then there's no way that there's a moral argument to be made for the way Albertans are handling this source of revenue.

Rant over.

[Handsome B. Wonderful]

Originally Posted by Mean Mr. Mustard

rather than waiting for however long it takes for the price of natural gas to rebound (and that is the main issue here)

That is not the main issue here.

[Plett25]

Originally Posted by CaptainCrunch

How about damn the PC's for creating a budget based of fairy tale numbers that they pulled out of their a$$es to make themselves more sellable.

How come Saskatchewan who had access to the same type of budgets actually managed to create a reality based budget and generate a surplus?

If SK has a surplus, it is because they have higher tax revenues, because SK spends more per capita than AB does



It is almost like falling revenues created a deficit...

[NuclearPizzaMan]

Originally Posted by Tinordi

The bigger issue is that the oil and gas royalty game is not going to be around forever. Conventional gas reserves will be completely depleted by 2045 in Alberta. What will albertans have to show for those royalties? Nothing.

look at what a mature and honest jurisdiction does with its fossil fuel revenues in Norway. It actually saves them for an endowment that will help fund education, health, and the like for future generations when that resource is gone. Albertans, they get lower taxes, so they can consume crap now, immediately, and completely foregoing the livelihood of the future. Couple that with the fact that fossil fuel development will have huge net costs in the form of GHG emissions, then there's no way that there's a moral argument to be made for the way Albertans are handling this source of revenue.

Rant over.

Yeah, but if we just use all the gas money to buy houses and keep our taxes low, and the values of our homes increase forever, we won't even need an economy!

Originally Posted by fotze

Just checked the income tax rates of a $100k income. I thought Alberta would be the lowest. Ontario and BC are way lower which surprised me. I know there is the sales tax too.

Newfoundland and Labrador $ 11,194.98
Prince Edward Island $ 13,565.54
Nova Scotia $ 13,941.28
New Brunswick $ 11,025.16
Quebec $ 19,188.00
Ontario $ 7,991.52
Manitoba $ 13,680.00
Saskatchewan $ 12,158.70
Alberta $ 10,000.00
British Columbia $ 7,718.70

Alberta has a regressive flat tax and no pst, so it is no wonder that the first 100k is taxed more heavily here.

[chemgear]

Originally Posted by Rerun

Except a mortgage on a house is money owed on an asset that will increase in value over time.

Originally Posted by fotze

Its really hard to just cut spending. Especially when health is 44% of the budget.

Probably only to get worse as time goes on and the boomers get older in the next little while.

[NuclearPizzaMan]

Originally Posted by chemgear

Probably only to get worse as time goes on and the boomers get older in the next little while.

Especially since they want to eat food that tastes good and bathe more than once a week! I imagine a large chunk of right-wing low tax no debt boomers are going to be changing their tune when they retire, because then everyone will owe them.

[Rerun]

Originally Posted by Tinordi

Laugh. Pretty much solidifies my feeling that you barely grasp the concepts that you rail on about.

[Rerun]

Originally Posted by Rerun

Over the length of a std 20 year mortgage a house will definitely increase in value.... actually its mostly the land that increases in value but thats beside the point.

Sure in the short term, a house may decrease in value.... but in the long term... yes it will unless there are extraordinary circumstances.

Originally Posted by Senator Clay Davis

Again, talking in definites is wrong. Sorry, not true. You wanna use "more than likely", go ahead. But you're acting like you know for sure that every property purchased is guaranteed to increase in value. Wouldn't everyone play the real estate market and make tens of millions if you were guaranteed every property you buy would increase?

Ok.... to make you happy, I will edit my original statement to include "in the majority of cases over the long term (20 years or more)".

[Slava]

I've tried to avoid these threads, but that graph is scary. You buy a house in 1988 at the peak, pay 11% interest on your mortgage (which was below prime at that time) and after 20 years and roughly double your money for a compound return of about 3.52% per year. Where do I sign up?

[mariners_fever]

Originally Posted by Tinordi

The bigger issue is that the oil and gas royalty game is not going to be around forever. Conventional gas reserves will be completely depleted by 2045 in Alberta. What will albertans have to show for those royalties? Nothing.

look at what a mature and honest jurisdiction does with its fossil fuel revenues in Norway. It actually saves them for an endowment that will help fund education, health, and the like for future generations when that resource is gone. Albertans, they get lower taxes, so they can consume crap now, immediately, and completely foregoing the livelihood of the future. Couple that with the fact that fossil fuel development will have huge net costs in the form of GHG emissions, then there's no way that there's a moral argument to be made for the way Albertans are handling this source of revenue.

Rant over.

You're right, let's look at what Norway has done vis-a-vis Alberta. They started their equivalent of a Heritage Fund at the same time as we did. They have almost enough to run their government and provide services on the returns that chunk of money brings in, conversely our fund is depleted.

If I'm not mistaken, the Wildrose ran on doing the exact same thing, but I doubt you'd ever vote for them.

Defending going into debt does nothing to reaching the goal you've outlined above, but in previous posts you don't seem to think going into debt is a big deal.

Also, I'm not sure where your numbers are from. I go back and forth to the Oil Sands on business once or twice a week. I attended a CAPP presentation last week that indicated we could mine in the oil sands at our current pace for 250-300 more years.

[GP_Matt]

Originally Posted by Tinordi

Conventional gas reserves will be completely depleted by 2045 in Alberta.

Do you have a source for this? If nothing else, there is no possible way you could make that claim with any certainty. gas reserves will never run out, merely our desire/ability to extract them will run out. And there is no way that that can be predicted.

As for Norway, that is a country not a province so they have more control. They also have one of the highest costs of living and tax rates in the developed world.

I am not against a tax hike if it is needed, but what happens when we implement a HST and resource prices rebound. Do we cut taxes or raise spending to match the revenue leaving us screwed the next time prices drop.

[Senator Clay Davis]

Originally Posted by mariners_fever

You're right, let's look at what Norway has done vis-a-vis Alberta. They started their equivalent of a Heritage Fund at the same time as we did. They have almost enough to run their government and provide services on the returns that chunk of money brings in, conversely our fund is depleted.

If I'm not mistaken, the Wildrose ran on doing the exact same thing, but I doubt you'd ever vote for them.

Defending going into debt does nothing to reaching the goal you've outlined above, but in previous posts you don't seem to think going into debt is a big deal.

Also, I'm not sure where your numbers are from. I go back and forth to the Oil Sands on business once or twice a week. I attended a CAPP presentation last week that indicated we could mine in the oil sands at our current pace for 250-300 more years.

Must have missed that one. I remember them saying any surpluses would be given back in the form of rebate cheques and most of us here finding that to be a total waste, and most of us suggesting that money be put to better use by investing in the Heritage Fund...

[Rerun]

Originally Posted by Tinordi

The bigger issue is that the oil and gas royalty game is not going to be around forever. Conventional gas reserves will be completely depleted by 2045 in Alberta. What will albertans have to show for those royalties? Nothing.

look at what a mature and honest jurisdiction does with its fossil fuel revenues in Norway. It actually saves them for an endowment that will help fund education, health, and the like for future generations when that resource is gone. Albertans, they get lower taxes, so they can consume crap now, immediately, and completely foregoing the livelihood of the future. Couple that with the fact that fossil fuel development will have huge net costs in the form of GHG emissions, then there's no way that there's a moral argument to be made for the way Albertans are handling this source of revenue.

Rant over.

Aren't you forgetting something?

Alberta ranks third, after Saudi Arabia and Venezuela, in terms of proven global crude oil reserves.

In 2010, Alberta’s total proven oil reserves were 170.8 billion barrels, or about 12% of total global oil reserves (1,469.6 billion barrels).

Almost all of Alberta’s proven oil reserves are found in Alberta's oil sands. Of Alberta's total oil reserves 169.3 billion barrels, or about 99% come from the oil sands; and the remaining 1.5 billion barrels come from conventional crude oil.

Just goes to show that the great Tinordi doesn't know everything about everything.... or just that he likes to cherry pick his facts.

[Tinordi]

Important distinction, conventional gas reserves. There in an inexorable decline. Sure, tight gas, coalbed methane, all of that will be available, or will it with depressed NG prices?

[Tinordi]

Originally Posted by Rerun

Aren't you forgetting something?

Alberta ranks third, after Saudi Arabia and Venezuela, in terms of proven global crude oil reserves.

In 2010, Alberta’s total proven oil reserves were 170.8 billion barrels, or about 12% of total global oil reserves (1,469.6 billion barrels).

Almost all of Alberta’s proven oil reserves are found in Alberta's oil sands. Of Alberta's total oil reserves 169.3 billion barrels, or about 99% come from the oil sands; and the remaining 1.5 billion barrels come from conventional crude oil.

Just goes to show that the great Tinordi doesn't know everything about everything.... or just that he likes to cherry pick his facts.

Respectfully, your 'point' means jack squat. By your logic, Canada has the third biggest forest reserves on the planet therefore if we invested in forestry all of our economic problems would be over. Uhm, false, the size of the reserve doesn't really matter, the greater market context that that reserve exists in is what matters.

Oil sands are basically marginal. New reserves are being out competed by tight oil in Dakota right now for god's sake. Connoco, one of the largest leaseholders for undeveloped oil sands can't unload those leases fast enough. The days of billions over billions of annual investment to the sector are over. Now what you're seeing is small plays for guaranteed costs of production, oil sands investment now resembles buying a bond more than anything else.

Alberta's sitting on an ocean of oil (more like a giant scummy pond) there's no denying. Whether that reserve will be anything more than a sandbox or billions of barrels of oil is a huge gamble. One that I would not be frittering away with the current provincial fiscal policy.

[Rerun]

Originally Posted by Slava

I've tried to avoid these threads, but that graph is scary. You buy a house in 1988 at the peak, pay 11% interest on your mortgage (which was below prime at that time) and after 20 years and roughly double your money for a compound return of about 3.52% per year. Where do I sign up?

Are you not forgetting about the leveraging aspect?
Say in 1988 your house cost $150,000 but in fact you only put 10% ($15,000) of your own money towards the house. In 2008 you sold the house for $325,000.

[Tinordi]

If I'm not mistaken, the Wildrose ran on doing the exact same thing, but I doubt you'd ever vote for them.

Uhm, reality? Hello?

Wild Rose was proposing to do something even frickin worse. It was going to just transfer back any surplus as a cash payment to citizens. A stupider policy to handle oil and gas revenues you could not fathom.

[Slava]

Originally Posted by Rerun

Are you not forgetting about the leveraging aspect?
Say in 1988 your house cost $150,000 but in fact you only put 10% ($15,000) of your own money towards the house. In 2008 you sold the house for $325,000.

Well surely you're counting the 20 years of mortgage payments though?

[Tinordi]

Originally Posted by Slava

I've tried to avoid these threads, but that graph is scary. You buy a house in 1988 at the peak, pay 11% interest on your mortgage (which was below prime at that time) and after 20 years and roughly double your money for a compound return of about 3.52% per year. Where do I sign up?

Haven't you heard, housing prices never go down?