Alberta budget news

[crazy_eoj]

Originally Posted by Slava

Oh right. I actually forgot about why I had thought that this document was so amusing. There were so many reasons, but most of all it was the figures they were using for things that were so far off the mark. The $2B carbon capture being one of them. By my calculations I figured that they were hiding huge cuts or at least not being truthful with how things were going to be balanced.

But, I'l play along. To make that work, what are they projecting the price of oil/gas? I don't know the answer to this, but in their "budget" (its not a budget, but I'll use their terminology here), would they also be underwater at this point due to declining oil prices and reduced revenue?

Also, just to ask a stupid question. Why is the "only" fiscally conservative route to cut spending? I happen to think that there is another way here. We have an enormous resource here and a generation or two down the line the only thing we'll have to show our children's children is that we paid lower taxes than everybody else. That is a complete disgrace. Not that we built the best education system we could because of this wealth. Not that we have the most advanced and efficient healthcare system. We don't have amazing infrastructure and public services for all of us hard-working Albertans. WE just have lower taxes. In short, the parties running around promoting themselves as "fiscal conservatives" (which is everybody, but you know which two I'm specifically talking about here) aren't conserving a bloody thing!

If we had a PST, or even increased our taxes and STILL had the lowest taxes in the nation we would have no issue with the budget. If we moved to a budget that wasn't solely reliant on a limited resource with a volatile royalty return we could have the lowest taxes in the country and fund all of our needs. We could conserve the funds (see what I did there?) that we get from our energy supply and maybe one day have something to show for it. Look, I'm as proud as the next guy to be able to tell my grandkids or great grandkids about how awesome it was to be part of the generation that exploited our resource wealth and paid a mere ten percent flat-tax. Its wicked. I'm sure that they'll have no trouble seeing how wise that was for us to do either. Maybe, just maybe there is another way though?

/rant

We also have the highest spending in all of Canada to be proud of. So we can hand our children crippling debt, having spent all our resource revenues and more, but without ensuring we saw any benefit from the outrageous decades of spending.

If spending more money was the solution to our problems, we would have solved everything a long time ago. Our new and higher taxes will likely be just to cover off debt payments... and what exactly did we get for those billion upon billions we spent?

[Rathji]

Originally Posted by Knalus

It's not a one to one comparison, and to pretend it is is disingenuous.

Of course not, but pretending that it is totally irrelevant is also equally disingenuous.

[Senator Clay Davis]

Originally Posted by crazy_eoj

What facts would you like checked, Mr. Wizard?

Originally Posted by crazy_eoj

I would suggest you read the Wildrose budget submission. And you can see the spending problems clearly defined since Lougheed/Getty in detail here:
http://www.taxpayer.com/sites/default/files/downloadable/Roadmap%20to%20a%20Balanced%20Budget.pdf
Specifically: Ralph Klein was elected on the promise to tame the deficit and eliminate Alberta‟s debt, not by increasing taxes, but rather by making spending cuts. And cut he did. In fact, between 1993 and 1997 the Klein government cut 21.6 per cent in program spending. It‟s often suggested that Klein, “cut to the bone,” or implemented “slash and burn” policies. Rhetoric aside, where did Alberta stand in 1997 in comparison to other provinces?
At the depth of the spending cuts in 1996-97, Alberta was still, per capita, the sixth highest spending province in the nation at $4,568.

Big time thanks here. Cause the report says what I said. Deferring the cost to the future = deficit.

Following the deferral of maintenance on infrastructure during the 1990s as well as the
emergency deferral of $735 million in infrastructure projects in 2001, the Alberta
government has been attempting to catch-up. This catch-up has led to a considerable
increase in infrastructure spending in the past five years.

Also, all the numbers in there are total spending, nothing specific to infrastructure. Also, the Canadian Taxpayers Federation? Why not just use the Fraser Institute? Biased source is biased. They are as pro-WR as it gets (except for maybe Fraser)

Originally Posted by Knalus

So, in your mind, a town of a population of 300,000, and growing at 20%, spending $100 million a year, and a city of a population of 3,000,000, growing at 5%, spending $100 million a year, would you say the town is underspending? Because you are comparing the growth rates to the city? Cause that's what you are trying to say here about Alberta and Quebec.

Well just using the figure of $100 million makes it hard to determine. You need two years to compare to see the increase. If for instance $100 million for the town of 300,000 was previously $95 million before the 20% growth, it would be in a deficit (only a 5% increase in spending versus 20% growth). Conversely, if the town of 3,000,000 does the same ($95m to $100m), it is actually overspending (5.25% increase in spending versus growth of 5%). In this case the actually dollar figures are irrelevant, rather it is the % that is the key figure. Of course Calgary is always going to spend more on infrastructure than say Canmore. But Calgary could be in an infrastructure deficit and Canmore may not be.

[Knalus]

Originally Posted by Senator Clay Davis

Well just using the figure of $100 million makes it hard to determine. You need two years to compare to see the increase. If for instance $100 million for the town of 300,000 was previously $95 million before the 20% growth, it would be in a deficit (only a 5% increase in spending versus 20% growth). Conversely, if the town of 3,000,000 does the same ($95m to $100m), it is actually overspending (5.25% increase in spending versus growth of 5%). In this case the actually dollar figures are irrelevant, rather it is the % that is the key figure. Of course Calgary is always going to spend more on infrastructure than say Canmore. But Calgary could be in an infrastructure deficit and Canmore may not be.

Or they could both be over spending, but the smaller town is spending a disgusting amount. I've lived in other jurisdictions. Alberta way overspends, and has much nicer things than other places.

But what you are saying, is that if it ever drops, then it's less than needed. You sound like a locked out hockey player, that wants a cap that can only increase, but never decrease. In fact, there is a lot of things you have said in this thread that sounds like the same kind of logic they use.

[MoneyGuy]

Governments, households, most tend to send to and sometimes beyond their capacity. So, this is not much different than the rising debt levels in Canada where so many of us can't seem to control our spending. I've long supported this Tory government and the finance minister is a friend, but I'm starting to look more seriously at options. Unfortunately, I don't see any good ones. I'm very worried about this government's inability to balance a budget when revenues are exceptional, knowing that that will not always be so. Klein had many critics but I think we need a Klein-esque premier. I have little belief that Redford can be that.

[shermanator]

In my opinion the only way to raise revenue in a fair manner is to implement HST. Do I want to be taxed more? Not particularly, but it's apparent that our revenue streams are far too volatile to balance the budget, so let's suck it up and get on with it. If revenues go up again, toss it back in the Sustainability Fund and let it grow.

If "The Alberta Advantage" means having crappy infrastructure then it's not much of an advantage IMO

[Azure]

Once you travel to Manitoba you quickly realize Alberta infrastructure is far from crappy.

[Slava]

Originally Posted by Azure

Once you travel to Manitoba you quickly realize Alberta infrastructure is far from crappy.

I know what you're saying here, but it sure doesn't feel that way. I look at a project like the Glenmore/Deerfoot interchange and can't believe it isn't getting done. That's just one glaring example of many around a province. We don't have enough schools, medical facilities (not talking about the "system" here, but the actual facilities), seniors care homes, etc.

We have some fairly obvious needs that aside from money, I think any party could agree should be addressed. Are we in a better spot than other places? Of course, but that's not the test.

[Knalus]

Originally Posted by Slava

I know what you're saying here, but it sure doesn't feel that way. I look at a project like the Glenmore/Deerfoot interchange and can't believe it isn't getting done. That's just one glaring example of many around a province. We don't have enough schools, medical facilities (not talking about the "system" here, but the actual facilities), seniors care homes, etc.

We have some fairly obvious needs that aside from money, I think any party could agree should be addressed. Are we in a better spot than other places? Of course, but that's not the test.

Your idea of enough is the real problem, though. Some people think they don't have a big enough house, when they do. Others think they don't get paid enough for what they do, when they actually get paid more than they should. Like most hockey players. You think that the province is in a need situation, when really its in a want situation. That is not reason enough to go into debt or raise taxes.

[Slava]

Originally Posted by Knalus

Your idea of enough is the real problem, though. Some people think they don't have a big enough house, when they do. Others think they don't get paid enough for what they do, when they actually get paid more than they should. Like most hockey players. You think that the province is in a need situation, when really its in a want situation. That is not reason enough to go into debt or raise taxes.

Really? Thinking that a major road like Deerfoot Trail ought to flow adequately or having enough care facilities for our seniors in a demonstrably aging population is a want? Just because money has been allocated to other projects areas doesn't mean that these are wants as opposed to needs.

I would also suggest that a review of the schools (again, the infrastructure pieces themselves) would show an enormous mounting problem. Many of these schools are decades old and need a lot of work. I guess if you look back and say "students used to have a one room school house" then sure, that's a want. I guess I just have a higher standard though.

[Azure]

There are lots of highway projects that you could keep expanding and improving even if you already spent trillions on infrastructure. My point is that Alberta has done a great job spending money on infrastructure. That much is evident when you visit a craphole like Manitoba, where the governement seemingly has no idea what the hell they're doing.

Sure there are projects that need to be improved on, but you can't just keep spending with a $5 billion dollar deficit year after year. I know it is hard to cut back spending once you spend that much, but it can't go on forever.

Either that or you grow revenues. Taxes.

[Flash Walken]

Originally Posted by Knalus

Your idea of enough is the real problem, though. Some people think they don't have a big enough house, when they do. Others think they don't get paid enough for what they do, when they actually get paid more than they should. Like most hockey players. You think that the province is in a need situation, when really its in a want situation. That is not reason enough to go into debt or raise taxes.

Do you get paid too much and live in a house that's too big?

[Tinordi]

Originally Posted by MelBridgeman

Huh?

http://www.finance.alberta.ca/business/ahstf/faqs.html

Of the $155 billion Alberta has made from fossil fuel royalties, it had saved $19 billion. So huh right back at you.

What was your point in posting that? To demonstrate how ineffective and reckless this low tax policy has been? If so then I agree. If it was to somehow argue with me then you need your head checked.

[Jets4Life]

Originally Posted by Azure

There are lots of highway projects that you could keep expanding and improving even if you already spent trillions on infrastructure. My point is that Alberta has done a great job spending money on infrastructure. That much is evident when you visit a craphole like Manitoba, where the governement seemingly has no idea what the hell they're doing.

I can personally attest to this. Just google "Bipole III" if you don't believe me....

[Azure]

How are income tax rates in Alberta compared to other provinces? I know from living there people were crazy when you said to them that a fluctuating royalty income is not the best bet going forward, and they would be better off at paying more in taxes to get MORE services.

The royalty money should only be used for special projects and in emergency situations when tax revenues fall.

Of course, try convincing that to Albertans. They, like so many others want lots of good services, but they don't want to pay for it.

Still think that Alberta has it so much better than other provinces. Always room for improvement, but be thankful for what you have.

[MoneyGuy]

Alberta has a 10-per-cent flat tax rate. The other provinces have progressive rates and most provinces have higher rates but there are some income levels where residents in other provinces pay less.

[Julio]

Here is where you can compare income tax rates from different provinces http://www.taxtips.ca/taxrates/taxco...arison2012.htm

BC has a lower take on the first 75K, Ontario is on the first 79K.

[GP_Matt]

Originally Posted by Tinordi

Of the $155 billion Alberta has made from fossil fuel royalties, it had saved $19 billion. So huh right back at you.

What was your point in posting that? To demonstrate how ineffective and reckless this low tax policy has been? If so then I agree. If it was to somehow argue with me then you need your head checked.

I don't disagree with you in principle. Where we differ is that I think that a higher tax rate would have resulted in the same low savings that we have now and the same budget deficit that we are now facing.
Governments seem to spend up to their budget so we would probably see more infrastructure and legacy projects and more government employees as they would have had a hard time with the hiring freeze if there was more money in the bank.

[Tinordi]

Cross post but germane to this thread:

The story is similar when looking at discretionary programmes—if there is a pure "entitlement society", it is small and poorly funded.

There is a reason politicians often do not specify which spending cuts they're talking about in budget negotiations: the popular ones (see cuts to foreign aid) don't add up. And, in general, Americans do like the programmes that primarily drive the country's fiscal imbalances—notably Social Security (20% of the budget) and Medicare (21%, taken with Medicaid and CHIP). Most of us do or will (hopefully) benefit from those programmes. That leaves us with the uncomfortable reality that we, not the jobless moochers, are the problem.

Greg Mankiw, an economist and former advisor to Mitt Romney, made clear the challenge facing America in a column two weeks ago: "Ultimately, unless we scale back entitlement programs far more than anyone in Washington is now seriously considering, we will have no choice but to increase taxes on a vast majority of Americans." My colleague notes that Jonathan Chait is confident that Americans will choose tax hikes over cuts to their own entitlements. But is that really the calculation most Americans are making? Most are still in denial over their role in America's fiscal drama. And as long as they are able to find convenient scapegoats for the country's fiscal challenges they will oppose the infliction of pain on themselves. Someone needs to tell these people, it's not them, it's you.

http://www.economist.com/blogs/democ...snotthemitsyou

[Jacks]

My how her wording has changed in less than a year.
http://fullcomment.nationalpost.com/...s-and-red-ink/

Speaking to reporters in Edmonton on Wednesday, Alberta Premier Alison Redford said that her “preference is clear”: She does not “want to see new taxes.” “I have made a commitment, and I’m sticking to my commitment,” she said. “Tax revenue will not change in this budget.”
Yet Ms. Redford also noted that “the sudden drop in oil revenue has meant we need to put all options on the table.” As to whether one of those options could mean higher taxes, she added: “Surprisingly, I have heard … there are Albertans saying there are all options on the table.”
There are indeed Albertans advocating, or at least musing about, a tax increase. One of them happens to be Ms. Redford’s Finance Minister, Doug Horner; another is Lee Richardson, her principal secretary.
Ms. Redford appears to be floating what is known as a “trial balloon” — raising an idea without making any firm commitments, in order to gauge the public’s reaction.
The last time I remember an Alberta politician doing this was when former premier Ralph Klein mused about eliminating the province’s income tax altogether. How times have changed.
When Mr. Klein departed the political scene in 2005, he left the province with a balanced budget and no debt. If his successors simply had increased spending in a fashion consistent with the rate of inflation, the province wouldn’t be facing today’s deficits and a dwindling rainy-day fund.
Instead, the provincial government increased spending by 59% between 2005 and 2012. Next year’s losses could be as high as $6-billion, and we won’t see another balanced budget until at least 2016-17, despite the Progressive Conservatives’ election promise of bringing finances in line by 2014-15.