Alberta budget news

[crazy_eoj]

Originally Posted by Makarov

To add to this, relying on this article from the Fraser Institute (shiver), it looks like labour costs account for one half of all spending by the Ontario government (and it seems reasonable to assume that the proportion is similar in Alberta.) Therefore, in order to have the same fiscal capacity to deliver services as Ontario, without relying on non-renewable resource revenues, Alberta would need to have per capita non-resource revenue of approximately $7,300. That is a $1,000 (or 14%) shortfall.

Of course, Makarov totally ignores some very important figures.

Namely, that public sector salaries have grown 119% in only ten years. How is it that they have outpaced private sector salary growth so much (40% more)? Why is it that only in Alberta has public sector salaries increased so much in such a short period? Why has the number of public employees ballooned in the same period (almost double the amount of growth as the private sector)... with higher wages why do we need even more employees?

Why has the % of our labor expenses per total expenditures gone from 25% to over 45% in only ten years?

Something doesn't add up. And it ain't a lack of revenues!

[crazy_eoj]

Originally Posted by GP_Matt

According to Stats Can http://www.statcan.gc.ca/tables-tabl...abr69g-eng.htm
The average hourly wage in Alberta is $27.55 and in Ontario it is $24.35. This is a 13% difference.
According to your numbers Ontario budget is $9382 per person and Alberta is $10683 per person. This is also a 13% difference. As labor costs only account for half of the difference, is it safe to say that the other $650 per person or $2.5 billion is a spending problem?

Plus we already know that the public sector wage gap is approximately 20%. So removing the overpayment Alberta makes to public sector employees the average wage in Ontario and Alberta is likely much smaller than 13%.

[Slava]

Originally Posted by crazy_eoj

Of course, Makarov totally ignores some very important figures.

Namely, that public sector salaries have grown 119% in only ten years. How is it that they have outpaced private sector salary growth so much (40% more)? Why is it that only in Alberta has public sector salaries increased so much in such a short period? Why has the number of public employees ballooned in the same period (almost double the amount of growth as the private sector)... with higher wages why do we need even more employees?

Why has the % of our labor expenses per total expenditures gone from 25% to over 45% in only ten years?

Something doesn't add up. And it ain't a lack of revenues!

Just out of curiousity, (and no, I'm not wading into the battling statistics about the PST values), why aren't you working for the public sector then? The way you phrase it, it just sounds so glorious there. You get enormous wage increases and you can barely have to do any work....sounds too good to be true!

[crazy_eoj]

Originally Posted by Slava

Just out of curiousity, (and no, I'm not wading into the battling statistics about the PST values), why aren't you working for the public sector then? The way you phrase it, it just sounds so glorious there. You get enormous wage increases and you can barely have to do any work....sounds too good to be true!

My chosen profession isn't employed within the public sector, and yes, I do believe it is too good to be true/sustainable.

But when you have politicians buying off powerful public sector unions in order to maintain power, and enormous revenues enabling reckless spending, it's not surprising to see the kind of wage growth we have.

[bizaro86]

The Tory government says it’s keeping a firm hold on provincial debt but could borrow up to $40 billion under its new self-imposed limits.

http://www.calgaryherald.com/news/To...#ixzz2NQurcqVz

We're replacing the no debt law with the "$10,000 of debt for every man woman and child in Alberta" law

[Makarov]

Originally Posted by crazy_eoj

You've yet again brought nothing to the table to back up your assertions. Not that I'm surprised really.

LOL.

Originally Posted by crazy_eoj

Wondering how you got a per capita non-renewable resource revenue number from income that excluded non-renewable resource revenues? Do you have any idea what you are even talking about anymore?

Oh please. That is your criticism. Sorry, I mislabeled the final numbers as "non-renewable resource revenue" when what I meant, really, was revenue excluding non-renewable resource revenues (or "non-non-renewable resource revenue). I sincerely and profoundly apologize. My point, however, remains.

Originally Posted by crazy_eoj

Still waiting for a comparison of revenue from sales taxes per capita across provinces. Until then, the only one having a problem with "intellectual honesty" is you.

Why? Do you honestly think that there will be a meaningful difference from the Ontario numbers? Why?

[Makarov]

Originally Posted by crazy_eoj

Of course, Makarov totally ignores some very important figures.

Namely, that public sector salaries have grown 119% in only ten years. How is it that they have outpaced private sector salary growth so much (40% more)? Why is it that only in Alberta has public sector salaries increased so much in such a short period? Why has the number of public employees ballooned in the same period (almost double the amount of growth as the private sector)... with higher wages why do we need even more employees?

Why has the % of our labor expenses per total expenditures gone from 25% to over 45% in only ten years?

Something doesn't add up. And it ain't a lack of revenues!

I don't know where any of these numbers are coming from. Source?

And, yes, I believe that what primarily does not add up is revenues (unless of course Albertans are happy to use resource revenues to artificially keep their taxes low. If so, carry on I suppose.

[Makarov]

Originally Posted by Maccalus

Makarov, One thing your spending numbers also don't take into account is that the other provinces spend much higher percentages of the budget straight onto debt interest than alberta does. Ontario, for example, 9.5% of their budget on debt interest (as per the link you provided in their 2012-2013 plan). This is money that is still being spent, but none of it going to any sort of program or infrastructure. This makes the efficiency of our programs shine is a worse light than many other provinces.

Yes, I considered that but was too lazy to go back and edit my post. Its a fair point however. Again, I am not against reasonable spending cuts. However, those spending cuts will clearly not solve Alberta's fiscal problems.

[GP_Matt]

Originally Posted by Makarov

Yes, I considered that but was too lazy to go back and edit my post. Its a fair point however. Again, I am not against reasonable spending cuts. However, those spending cuts will clearly not solve Alberta's fiscal problems.

If you remove the 9.5 percent of the Ontario budget that goes to debt servicing you now have that Alberta is spending 24% more than Ontario per person with salaries that are 13% higher.
24 percent more less half of the labor costs works out to 17.5 percent more than Ontario. Multiplying that by Alberta's budget numbers shows a surprising 6.7 billion dollars. That means that we are spend 6.5 billion more than Ontario after the higher salaries are accounted for. As it happens, that number is pretty well the amount of money that the government plans to borrow next year to make up for our "revenue shortfall".

[Azure]

Originally Posted by Slava

Just out of curiousity, (and no, I'm not wading into the battling statistics about the PST values), why aren't you working for the public sector then? The way you phrase it, it just sounds so glorious there. You get enormous wage increases and you can barely have to do any work....sounds too good to be true!

Just working for the public sector(housing) is a brain drain. Can't imagine how it would be actually working WITH them.

[Slava]

Originally Posted by Azure

Just working for the public sector(housing) is a brain drain. Can't imagine how it would be actually working WITH them.

Ya, I'm not working in that capacity at all. I'm just saying that the case for government employment that he's making is sounding so good! I mean think about it; the pension plan, working conditions and above all else the wages are so incredible that the private sector can't keep pace. You just have so many benefits here (according to these accounts, anyway) that why would anyone want to work anywhere else? Surely their altruism and dedication elsewhere would crumble in the face of these amazing benefits?

[Azure]

Originally Posted by Slava

Ya, I'm not working in that capacity at all. I'm just saying that the case for government employment that he's making is sounding so good! I mean think about it; the pension plan, working conditions and above all else the wages are so incredible that the private sector can't keep pace. You just have so many benefits here (according to these accounts, anyway) that why would anyone want to work anywhere else? Surely their altruism and dedication elsewhere would crumble in the face of these amazing benefits?

Well I'm not sure how every different part of the public sector is like, but I could never imagine myself working on the public side of the industry I'm in for the simple fact that there is absolutely no push for efficiency and improvement.

[GP_Matt]

Originally Posted by Slava

Ya, I'm not working in that capacity at all. I'm just saying that the case for government employment that he's making is sounding so good! I mean think about it; the pension plan, working conditions and above all else the wages are so incredible that the private sector can't keep pace. You just have so many benefits here (according to these accounts, anyway) that why would anyone want to work anywhere else? Surely their altruism and dedication elsewhere would crumble in the face of these amazing benefits?

Do you have any idea what the job availability is for government positions?
I have no idea, but it is possible that every governement job opening is greatly over subscribed and only the best are hired.
I do have a friend who wanted government work but gave up because all they could offer her was an internship position that kept renewing every year with no hope of ever turning that into a full time position.

[Makarov]

Originally Posted by GP_Matt

If you remove the 9.5 percent of the Ontario budget that goes to debt servicing you now have that Alberta is spending 24% more than Ontario per person with salaries that are 13% higher.
24 percent more less half of the labor costs works out to 17.5 percent more than Ontario. Multiplying that by Alberta's budget numbers shows a surprising 6.7 billion dollars. That means that we are spend 6.5 billion more than Ontario after the higher salaries are accounted for. As it happens, that number is pretty well the amount of money that the government plans to borrow next year to make up for our "revenue shortfall".

Yes, but that is still relying massively on resource revenue that should, in my opinion, be going into the Heritage Fund (or be used for some extraordinary long term strategic infrastructure investments.)

[Azure]

Originally Posted by Makarov

Yes, but that is still relying massively on resource revenue that should, in my opinion, be going into the Heritage Fund (or be used for some extraordinary long term strategic infrastructure investments.)

And that has what to do with the fact that Alberta spends more than other provinces?

[GP_Matt]

Originally Posted by Makarov

Yes, but that is still relying massively on resource revenue that should, in my opinion, be going into the Heritage Fund (or be used for some extraordinary long term strategic infrastructure investments.)

They are saying that we have a revenue problem because resource revenue is down this year. I am saying that the first 6.5 billion is a spending problem. If they could save the spending then we would be able to put away billions in resource revenue every time there is a year where the revenues aren't terrible.

We can argue about how much should be saved, but it is hard to do when so much is being spent.

[Makarov]

Originally Posted by Azure

And that has what to do with the fact that Alberta spends more than other provinces?

Nothing. But it has a lot to do with the fact that Alberta relies on resource revenue to replace revenue that it should be collecting from other sources (i.e., taxation), which is what I have been arguing this entire time.

[Makarov]

Originally Posted by GP_Matt

They are saying that we have a revenue problem because resource revenue is down this year.

Sorry, I'm confused. Who is arguing this? As I understand it, the WRP is arguing that Alberta has no revenue problem whatsoever.

Originally Posted by GP_Matt

I am saying that the first 6.5 billion is a spending problem. If they could save the spending then we would be able to put away billions in resource revenue every time there is a year where the revenues aren't terrible.

We can argue about how much should be saved, but it is hard to do when so much is being spent.

Why? I don't understand why excess spending must be addressed automatically prior to insufficient revenues? Why can't both be addressed? A balanced approach would make it much easier and much faster (especially because it takes years for collective bargaining agreements to expire and be renegotiated) to reach a rational fiscal balance.

In any event, clearly we can have a reasonable and serious discussion about whether revenues should be increased or expenses somehow reduced. My entire point throughout this discussion has been: why isn't the WRP engaging in that discussion? Why did they instead cherry pick meaningless income tax statistics and then conclude that Alberta has no revenue problem?

[Makarov]

Originally Posted by Azure

Well I'm not sure how every different part of the public sector is like, but I could never imagine myself working on the public side of the industry I'm in for the simple fact that there is absolutely no push for efficiency and improvement.

How do you know this?

[GP_Matt]

The problem is that the Alberta government has saved resource revenues several times, but as soon as things look rough (fiscally or politically) they spend the money.
I don't want them raising taxes so that they can have enough money to stay in power.

If I believed that they would save the resource revenue for when we are no longer getting money from oil and gas then I would be in favour of that plan and could live with the increased taxes.