Alberta budget news

[GP_Matt]

Originally Posted by Makarov

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

The PC government is arguing this. They have come out many times and said the the reason for the deficit is the price differential.

Originally Posted by Makarov

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?

The reason people don't like talking about both at once is because they are afraid that if the province thinks tax hikes are politically feasible they will go that route and ignore cuts.
Another problem I have with tax hikes like the HST is that I really think the future of this province should be towards tax reform and shifting income taxes to consumption taxes. If a consumption tax is brought in without the corresponding income tax cut that goal is dead.

As for the WRP response, I am no longer on the board of directors with the WRP so I can not speak to why they are doing anything.

[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".

Incidentally, according to the Ontario budget link I provided earlier, I see debt financing as 8.4% of Ontario's expenses. Subtracting that, I get a total of $115.8 billion dollars in spending, divided by 13.5 million residents, for $8,578 per capita spending.

Alberta spent $10,816 per capita, or 21% more. According to Statistics Canada, Alberta's average weekly wage was 17.9% higher than Ontario's in March of 2012 (link).

Presuming that wages are 50% of the cost of delivering public services in Alberta, we would expect Alberta to spend about $9,350 per capita. Obviously, that is still significantly less than the $10,816 that Alberta did spend (or at least budget). If Alberta were able to reduce its spending to that $9,350 number, it would save roughly $5.5 billion (so pretty close to your number).

According to the Government of Alberta, it relied on resource revenue of $11.2 billion and had a deficit of about $900 million (although the angry people at CTF argued that the real deficit was $6 billion). In my view, that means that Alberta needs to somehow close a gap of at least $12 billion if it wants to not be reliant on resource revenue. Saving $5.5 billion by reducing spending to something comparable to Ontario only gets us halfway there.

[crazy_eoj]

Originally Posted by Makarov

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

You're the one making the many assertions. You'd think you would have something to back it up easily accessible.

I would suggest you either prove your assertions or change your arguments. I see you've moved towards the latter in this thread. Probably shouldn't be surprised.

[Makarov]

Originally Posted by crazy_eoj

You're the one making the many assertions. You'd think you would have something to back it up easily accessible.

I would suggest you either prove your assertions or change your arguments. I see you've moved towards the latter in this thread. Probably shouldn't be surprised.

Um, how has my argument changed?

[crazy_eoj]

Originally Posted by Makarov

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.

Totally wrong. Alberta relies on resource revenue to fund spending that people don't really want.

Alberta should reduce spending to the point where people are comfortable with taxation (likely the status quo) and save resource revenues for future generations.

As such, the last 12 years or so of PC party rule has been the most disastrous of all, by wasting resource revenues almost entirely upon public sector salaries.

Just like the last time this happened, there will have to be a period of drastic spending cuts to bring Government expenditures in line with reality. Klein was the first, Smith will be the second.

[Makarov]

Originally Posted by crazy_eoj

Totally wrong. Alberta relies on resource revenue to fund spending that people don't really want.

Evidence that Albertans want drastically (i.e., the 30% slashing that would be required) less spending on public services?

Originally Posted by crazy_eoj

Alberta should reduce spending to the point where people are comfortable with taxation (likely the status quo) and save resource revenues for future generations.

Yeah, well, I think its safe to presume that no one especially likes more taxes, but again, you haven't provided any evidence that Albertans would rather slash government spending by 30% rather than some balanced approach that includes both raising revenue and reducing spending. If Albertans did support such a thing, that would make them complete outliers from other Canadians. Without seeing some evidence, I have great difficulty believing that. In any event, the WRP posting misleading statistics doesn't really assist us in answering this question and having this discussion in a meaningful way.

[crazy_eoj]

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 that's really the kicker isn't it.

Public sector workers are dominated by three main fields: education, health care, and public administration. While some of these fields may have some competition between the private sector, the majority (ie: nurses, doctors, teachers, professors) of it does not compete with the private sector at all, but with other provincial governments.

In those fields where there are similar qualifications, such as the AHS superboard, we seem to find a real lack of motivated and efficient employees. Could it be these jobs, the highest paying of all, become places to reward party patronage or insiders instead of the best candidates for the job?

[crazy_eoj]

Originally Posted by Makarov

Evidence that Albertans want drastically (i.e., the 30% slashing that would be required) less spending on public services?



Yeah, well, I think its safe to presume that no one especially likes more taxes, but again, you haven't provided any evidence that Albertans would rather slash government spending by 30% rather than some balanced approach that includes both raising revenue and reducing spending. If Albertans did support such a thing, that would make them complete outliers from other Canadians. Without seeing some evidence, I have great difficulty believing that. In any event, the WRP posting misleading statistics doesn't really assist us in answering this question and having this discussion in a meaningful way.

Evidence would be the history of the province. Perhaps you might want to look up the fiscal policies of Ralph Klein and the overwhelming majority governments that he ran?

And I would suggest that you provide some evidence to assist you in claiming the WRP posted misleading statistics?

[Makarov]

Originally Posted by crazy_eoj

Evidence would be the history of the province. Perhaps you might want to look up the fiscal policies of Ralph Klein and the overwhelming majority governments that he ran?

Call me crazy, but wouldn't that provincial election that was held 11 months ago be a better indicator of the current will of the province than provincial elections that were held over 11 years ago?

Originally Posted by crazy_eoj

And I would suggest that you provide some evidence to assist you in claiming the WRP posted misleading statistics?

I feel like you're just trolling me now. Let me state my argument as simply as I possibly can: revenue from income tax is only one type of provincial revenue. Therefore, relying on higher than average revenue from income tax to conclude that Alberta does not need to evaluate its revenue or raise more revenue is utterly fallacious. Is that difficult to understand? Do you take issue with this?

[GP_Matt]

Originally Posted by Makarov

Incidentally, according to the Ontario budget link I provided earlier, I see debt financing as 8.4% of Ontario's expenses. Subtracting that, I get a total of $115.8 billion dollars in spending, divided by 13.5 million residents, for $8,578 per capita spending.

Alberta spent $10,816 per capita, or 21% more. According to Statistics Canada, Alberta's average weekly wage was 17.9% higher than Ontario's in March of 2012 (link).

Presuming that wages are 50% of the cost of delivering public services in Alberta, we would expect Alberta to spend about $9,350 per capita. Obviously, that is still significantly less than the $10,816 that Alberta did spend (or at least budget). If Alberta were able to reduce its spending to that $9,350 number, it would save roughly $5.5 billion (so pretty close to your number).

According to the Government of Alberta, it relied on resource revenue of $11.2 billion and had a deficit of about $900 million (although the angry people at CTF argued that the real deficit was $6 billion). In my view, that means that Alberta needs to somehow close a gap of at least $12 billion if it wants to not be reliant on resource revenue. Saving $5.5 billion by reducing spending to something comparable to Ontario only gets us halfway there.

I am glad that we agree on the numbers. They will always be a bit different depending on what point in time and such but tend to agree for the most part.

Assuming the cuts are made to bring us in line with Canadian averages there is definitely room for a discussion as to how much money Alberta should put away. In the above scenario though we are saving $6 billion in a bad year, more in better years and less in other years. I think it would be hard for any politician to sell the province on a tax increase to help increase the savings rate, but I would definitely listen to them if they had a solid plan to both save/spend the money and to prevent it from being used as a piggy bank for election promises.

[Senator Clay Davis]

Originally Posted by Makarov

Call me crazy, but wouldn't that provincial election that was held 11 months ago be a better indicator of the current will of the province than provincial elections that were held over 11 years ago?

Come on, you know the answer is going to be "The PCs and their dirty tricks and fear mongering" is why they won. I'm surprised you continue to engage with crazy_eoj, he's proven time and again he is a strict, hardline Wildrose supporter. You will not change his mind on anything.

[RubberDuck]

Originally Posted by Senator Clay Davis

Come on, you know the answer is going to be "The PCs and their dirty tricks and fear mongering" is why they won. I'm surprised you continue to engage with crazy_eoj, he's proven time and again he is a strict, hardline Wildrose supporter. You will not change his mind on anything.

Pot?

[Senator Clay Davis]

Originally Posted by RubberDuck

Pot?

Yes, please!

[Makarov]

Originally Posted by Senator Clay Davis

Yes, please!

You drug-addled liberal.

[crazy_eoj]

Originally Posted by Makarov

Call me crazy, but wouldn't that provincial election that was held 11 months ago be a better indicator of the current will of the province than provincial elections that were held over 11 years ago?

You're comparing apples to oranges. Unfortunately, last election Albertans were given the choice of maintaining out of control spending while also maintaining low taxes. A very unfortunate and fiscally irresponsible decision by the modern PC party, but that's the reality.

Once the savings that Klein's legacy have left us runs dry (Ie: now) we return to the same spot we were before he took the leadership. A province with far too much spending and no way to finance it with savings.

The choice will become, one again; Increase taxes and maintain spending (current liberal and NDP party position vs NDP position of 1992), Continue spending and maintain low taxes through debt financing (Current PC position), or cut spending and maintain taxes (current Wildrose position and Liberal/PC position of 1992).

Judging by the most recent polls, Albertans are once again supporting the party who wants to cut spending. Of course, proof will be in the next election but we definitely know what happened last time.

I feel like you're just trolling me now. Let me state my argument as simply as I possibly can: revenue from income tax is only one type of provincial revenue. Therefore, relying on higher than average revenue from income tax to conclude that Alberta does not need to evaluate its revenue or raise more revenue is utterly fallacious. Is that difficult to understand? Do you take issue with this?

Please prove your point. Either you can't or you're just lazy. Your assertion was (it keeps changing...) that the exceptionally high revenues from Alberta's income and corporate taxes can not compare to the amount of revenue raised by the the other provinces sales taxes. Please show us all exactly how much this is with facts instead of your opinion.

[Jacks]

Originally Posted by crazy_eoj

You're comparing apples to oranges. Unfortunately, last election Albertans were given the choice of maintaining out of control spending while also maintaining low taxes. A very unfortunate and fiscally irresponsible decision by the modern PC party, but that's the reality.

Actually they were told they would get balanced budgets, nobody voted for huge deficits and tens of billions of dollars in new debt.

[Makarov]

Originally Posted by crazy_eoj

.



Please prove your point. Either you can't or you're just lazy. Your assertion was (it keeps changing...) that the exceptionally high revenues from Alberta's income and corporate taxes can not compare to the amount of revenue raised by the the other provinces sales taxes. Please show us all exactly how much this is with facts instead of your opinion.

No, I haven't ever argued that. I have consistently argued that corporate and income taxes are only one source of provincial revenues in Canada and that, for example, provinces with sales taxes derive a significant portion of their total revenue from their sales taxes. Other provinces also have higher fuel taxes, etc. Therefore, I argued, it was very misleading of the WRP to conclude that Alberta did not have a revenue problem based solely on higher than average per capita income/corporate tax revenues. I suspected, and indeed, after further research it turned out to be true, that Alberta actually relies on non-renewable resource revenues to hide the fact that its per capita revenue from other non-resource sources like taxation is actually lower than other provinces like Ontario. This is clearly supported by the provincial budget numbrrs that I have provided. You, on the other hand, have provided nothing.

[Slava]

Originally Posted by Jacks

Actually they were told they would get balanced budgets, nobody voted for huge deficits and tens of billions of dollars in new debt.

Oh now you're just being ridiculous - the NDP even won seats, let alone got people to vote for them!

[Jacks]

Originally Posted by Slava

Oh now you're just being ridiculous - the NDP even won seats, let alone got people to vote for them!

Sorry I stand corrected, 9.8% may have voted for debt and deficit. Did the NDP promise that? didn't read their platform.

[Slava]

Originally Posted by Jacks

Sorry I stand corrected, 9.8% may have voted for debt and deficit. Did the NDP promise that? didn't read their platform.

Well I'm sure that their platform showed a balanced budget if you took out a calculator, but really...we all know that it would result in debt. I think if you took all of the bolded beginning of the paragraph letters and unscrambled them it spells out 'bankruptcy'.