Alberta Politics Thread

[CaptainCrunch]

Originally Posted by Tinordi

That's not particularly true. The reason those public servants make more was because they worked in a hot labour market. You simply can't separate the market for teachers with the market for oil and gas workers. They compete against each other for talent. This is a basic tenet of economics that is wholly lost in these reaches.

Now sure, we can ask to roll back wages. But as you know they're sticky and there will be a hell of a fight to do so. Is that where you want to spend your political capital? Maybe. But just saying that's how it ought to be is fairly disjointed from the reality of how it would happen.

The only gig left is sales taxes and other revenue increases.

That would be awesome, lets totally do that in a province that already has reached a height in terms of personal and corporate bankruptsy, and is rapidly approaching 10% unemployment.

[Tinordi]

Please, demonstrate to me where there are billions of dollars of inefficiencies in the system. Don't wave your hands at it. Tell me where you cut 6 to 10 billion. Be specific.

[Robbob]

Originally Posted by Tinordi

Please, demonstrate to me where there are billions of dollars of inefficiencies in the system. Don't wave your hands at it. Tell me where you cut 6 to 10 billion. Be specific.

If they spent the same amount of time reviewing where there could be efficiency gains in the healthcare system as they did the royalty review I am sure they could have found some. It isn't difficult to look at the other areas around the country to see what could be brought in to help. You don't need to reinvent the wheel as a workable model is out there.

[CaptainCrunch]

You're telling me that when the government is spending about $4 billion dollars on governmental supplies for their departments that there's not efficiencies that can be found there?

Or 5 billion in supplies for AHS that there's not places to cut there.

or in the 3 billion in post secondary salaries where you have a lot of people on the sunshine list that can be reduced.

or there aren't efficiencies that can be found in the 7 billion in AHS salaries that doesn't include physician pay.

What about looking at the 5 billion in post secondary school operations?

or how is the money in the 2+ billion in the AHS budget for adminstration?

We spend 11 billion in a nebulous budget line called other ministries and legislative assembly. You're saying there's not at least a 10% haircut there?

where are the privatization areas that can be exploited to be actual private sector opportunities. do we need the government to do highway maintenance, how about parks maintenance? How about janitorial services and building maintenance?

[CliffFletcher]

Originally Posted by jammies

That's the beauty of it, no matter which of the three big parties you voted for, you'd be hearing about buyer's remorse if your guys had won. I don't disagree that the NDP has done a terrible job, but I do disagree that any realistic alternative would have been much better. I hope that next election, the almost inevitable voter anger channels itself more productively, but I know that it's more likely we end up with different circus starring different clowns.

Energy royalty revenues, and the sense of blithe entitlement they inspired in Alberta voters, poisoned the political culture of this province. Alberta voters have lost any sense of correlation between the taxes they pay and the services they receive. Just as workers in the energy industry took 100K salaries, 6K bonuses, rising stock options, and iron-clad job security for granted, as voters we took rock-bottom taxes and the highest-per-capita spending for granted. As workers in the private sector, we got a rude awakening to the new reality. As voters, we're still living in a fantasy world.

Originally Posted by Tinordi

That's not particularly true. The reason those public servants make more was because they worked in a hot labour market. You simply can't separate the market for teachers with the market for oil and gas workers. They compete against each other for talent. This is a basic tenet of economics that is wholly lost in these reaches.

Some fields do and some don't. Was Alberta facing a teacher shortage in 2006? People who major in Sociology and English Literature can't easily transfer those credentials to the private sector.

Originally Posted by Tinordi

Please, demonstrate to me where there are billions of dollars of inefficiencies in the system. Don't wave your hands at it. Tell me where you cut 6 to 10 billion. Be specific.

Looking for inefficiencies is the clarion call of the perpetually deluded. People who don't want to recognise any correlation between the taxes they pay and the services they receive. There were serious inefficiencies in every oil company in this province. But when the sh*t hit the fan, companies had to cut a lot more than the coffee budget and a few marketing flacks. A balanced provincial budget, in this energy climate, will involve substantial cuts to public services that will be felt by everyone, along with substantial increases to taxes that will be felt by everyone. The fantasy fiscal model of the energy boom is over.

[Wormius]

Originally Posted by CaptainCrunch

That would be awesome, lets totally do that in a province that already has reached a height in terms of personal and corporate bankruptsy, and is rapidly approaching 10% unemployment.

There is nothing wrong with it, and no other provinces are particularly hurting because of their provincial sales taxes. The lack of one here is really contributing nothing and is neither attracting or repelling anyone. Has anyone, in the history of forever, stated they came or stayed in Alberta specifically because of the lack of PST? The dent it makes on an individual is minor. There is nothing wrong with implementing it.

[CaptainCrunch]

We already have a consumer tax coming in, which is the carbon tax.

it doesn't much matter, with declining corporate tax rates, and rising unemployment, where people are just going to stop spending money anyways if you throw on a general sales tax.

[Zarley]

You'd have to be delusional to think that Alberta isn't home to the most bloated, wasteful, and inefficient provincial government in Canada. Statistics do not lie.

Originally Posted by Tinordi

That's not particularly true. The reason those public servants make more was because they worked in a hot labour market. You simply can't separate the market for teachers with the market for oil and gas workers. They compete against each other for talent. This is a basic tenet of economics that is wholly lost in these reaches.

Please tell me how teaching is transferable to the oil and gas sector? You may have a point with respect to finance and engineering government positions but there is absolutely zero rationale for the obscene salaries that teachers and healthcare workers are receiving in this province. This an intellectually lazy rationalization of a dire problem in Alberta.

Right now in Canada we have a massive oversupply of teachers - suggesting the labour market for education is out of balance. There is no reason to be paying above market wages to these professionals.

[belsarius]

Originally Posted by CaptainCrunch

Borrowing money to run operations is not even close to an economic stimulation or creation of jobs. Its pissing money away that could be used to stimulate the economy or create jobs, or stabilize business.

Alberta spends 40% on health care out of its budget, yet has some of the worst wait times and delivery of services in the country, iirc from last years evaluation. So we're basically right now pissing money down a well in health care, and I don't blame doctors or nurses for this. But the whole thing is one bloat.

We are literally paying our utility bills on an over drawn credit card (borrowing to pay operations), we have a massive sunshine list, we have more public sector workers then we know what to do with.

And its nice that they are consumers, but that's a pretty small reason to keep something that's unaffordable.

First off, Thanks for the well thought response. Too many times I get canned answers can called down.

It is not ideal, but we lost 10B in revenue from natural resources, so yes we need to finance some operating expenses or risk ripping the whole system down. This is exactly what the NDP campaigned on, no austerity cutting. Cutting 10B is not easy but it's not like the NDP are not working on it. Amalgamation of agencies, targeting the highest paid members on the sunshine list and trying to streamline ministries.

There is still work to do, but unilaterally cutting half of the public service isn't the best way to keep government working. AHS needs some kind of efficiency experts get in there to trim it down.. it was built one building at a time and there is no synergy so yes I agree there are cuts there to be done but it's not something that can be accomplished overnight.

Originally Posted by CaptainCrunch

A lot of this is yet to be seen, but there was just a report of small business bankruptsy's being up massively, and a lot of companies are coming out and saying that the main cause of these corporate deaths are a combination of minimum wage hikes (especially in hospitality) property taxes and corporate taxes, all as one solid punch. so its yet to be seen that minimum wage is negligible until we get a breakdown of the unemployment rolls, and corporate tax rate increases absolutely have an effect on the economy. And then when you combine those three with the over the horizon sucker punch that is the carbon tax coming. you'll see what you think is a ripple effect becoming a tsunami.

Studies have shown many times that there is no direct correlation between economic growth and corporate tax rates. This is simply a "common sense" idea that the right generates to protect corporations but the math has shown time and again to be false. Regonomics is wrong.

Also studies have shown that minimum wage hikes also have negligible effects, there will be some business loss but that is offset but gains in the remaining businesses as the increased income is spent. Minimum wage people are the most likely to spend in the local economy and promote growth, in the end it really is a net 0 item when looking at employment.

Property tax hikes I will defer as a detriment as they are an expense and I have no idea how much they have gone up for the average business so yes they can definitely be hurting growth.

Originally Posted by CaptainCrunch

Its literally almost too late now that barn door has been left open. The combination of previous government incompetence, combined with the low oil prices, combined with the stupidity of this government has probably killed this province as a investment opportunity for a long time. Because of that you almost have to now go with the realization that like corporations the government and this province can no longer afford the governmental structure that's in place now.

Beyond the whole boga boga line of oh no they're going to cut teaches and doctors and nurse. There's a lot of fat and excess that can be cut before we get to that point.

Absolutely fat to be trimmed.. sometimes when I hear my friends talk about their jobs it reminds me of Office Space with how many supervisors they have. The problem is there isn't 10B in cuts that can be made, the danger of the boom/bust is government can't afford to act like a corporation and make massive cuts without hurting the general public, but in the boom times they have to pay in order to attract qualified people.

If you look at the budget the biggest change from year to year is a modest increase in operating <5% but a much bigger increase in capital grants and capital investment which is what is really bringing the debt financing up.

I'm not arguing there are cuts to be made, I think we should be seeing a reduction in operating costs, but there is no way to take 10B in cuts with dramatically negatively affecting the GDP. So we either take on some debt to keep services working and investing in the province or we make apocolypic cuts and risk increasing the recession.

[Regorium]

Originally Posted by belsarius

Studies have shown many times that there is no direct correlation between economic growth and corporate tax rates. This is simply a "common sense" idea that the right generates to protect corporations but the math has shown time and again to be false. Regonomics is wrong

Sorry I'm going to have to call you out on this one as it's a personal pet peeve of mine.

https://www.oecd.org/mena/competitiveness/41997578.pdf

A second option is to reform corporate taxes, as they influence productivity in several ways. Evidence in this study suggests that lowering statutory corporate tax rates can lead to particularly large productivity gains in firms that are dynamic and profitable, i.e. those that can make the largest contribution to GDP growth

Raising corporate taxes harms the economy. It is a populist philosophy that the corporations are somehow evil and aren't paying their fair share. Raising the corporate tax rate was probably the worst thing that Notley did (much worse than minimum wage and carbon tax and the royalty review).

[Regorium]

I hate the term "squandered oil wealth" or "relied on oil revenues."

Do you know what the best way to get ourselves weaned off of oil revenues? Adding a 10% PST tomorrow.

We used oil revenues to pay for services, our canada-low taxes, our public service and returned some to the general public. How do we pay for that without any oil revenues? Additional taxation. The other option is to cut services.

We can use all of our oil royalties for the heritage fund and save for a rainy day as people are suggesting, but we need to replace 8.3 billion dollars in the budget. There are not 8.3 billion dollars worth of inefficiency in our government. I'll even be conservative and say that even if we find 2 billion in inefficiencies, we need to make up the other 6.3 billion with either cuts or taxation.

We have never squandered our oil revenues. It was deliberate spending and choices that provided Albertans with the highest level of services, and the highest level of take-home income in Canada for the last several decades. Look in the mirror, that's where the problem lies.

[belsarius]

Originally Posted by Regorium

Sorry I'm going to have to call you out on this one as it's a personal pet peeve of mine.

https://www.oecd.org/mena/competitiveness/41997578.pdf



Raising corporate taxes harms the economy. It is a populist philosophy that the corporations are somehow evil and aren't paying their fair share. Raising the corporate tax rate was probably the worst thing that Notley did (much worse than minimum wage and carbon tax and the royalty review).

That's a good read, it makes some really valid points, but it does use a lot of "shoulds" and "coulds" which is a big problem I have with anecdotal evidence.

Check out this paper which examines the relation of corporate tax rates on real GDP in the US from 1947 to 2010 and concludes that there is no statistical relation between the two.

http://www.epi.org/publication/ib364...onomic-growth/
"Further analysis, however, finds no evidence that either the statutory top corporate tax rate or the effective marginal tax rate on capital income is correlated with real GDP growth."

[Addick]

Originally Posted by CaptainCrunch

do we need the government to do highway maintenance, how about parks maintenance? How about janitorial services and building maintenance?

Isn't highway maintenance already contracted out?

[calculoso]

Originally Posted by Wormius

There is nothing wrong with it, and no other provinces are particularly hurting because of their provincial sales taxes. The lack of one here is really contributing nothing and is neither attracting or repelling anyone. Has anyone, in the history of forever, stated they came or stayed in Alberta specifically because of the lack of PST? The dent it makes on an individual is minor. There is nothing wrong with implementing it.

Anecdotal, sure, but I know many people from BC and Saskatchewan that shop in Alberta due to no PST.

But.. let's just make everything more expensive so that the cost of living increases even that much more.

[WCan_Kid]

Originally Posted by Wormius

There is nothing wrong with it, and no other provinces are particularly hurting because of their provincial sales taxes. The lack of one here is really contributing nothing and is neither attracting or repelling anyone. Has anyone, in the history of forever, stated they came or stayed in Alberta specifically because of the lack of PST? The dent it makes on an individual is minor. There is nothing wrong with implementing it.

I have no idea how much difference it would make as a whole, but the number of green plates flowing into Med Hat or blue plates into Lethbridge/Calgary/Okotoks on weekends indicates that a bunch of money is being spent here because there's no PST. Still likely a good way to go, but the lack of a sales tax does have some benefit to Alberta.

[belsarius]

Originally Posted by CaptainCrunch

where are the privatization areas that can be exploited to be actual private sector opportunities. do we need the government to do highway maintenance, how about parks maintenance? How about janitorial services and building maintenance?

That all depends on who can do it better for the right cost. The government still has to pay for these services so it is either to a private company or to it's own branches.

Chances are privatization will do some of these jobs better and cheaper, but the risk is having the costs get bloated as these companies need to maintain a profit; and it also risks the corner cutting to reduce costs which may end up making it worth less than the cost of doing it in house.

The registries are so much better once they became privatized but electricity was a total mess from the beginning. Looking at privatizing all of these things should be on the table, but each one needs a proper, full business plan to actually show we are better off than just running it ourselves.

[Zarley]

Originally Posted by belsarius

That's a good read, it makes some really valid points, but it does use a lot of "shoulds" and "coulds" which is a big problem I have with anecdotal evidence.

Check out this paper which examines the relation of corporate tax rates on real GDP in the US from 1947 to 2010 and concludes that there is no statistical relation between the two.

http://www.epi.org/publication/ib364...onomic-growth/
"Further analysis, however, finds no evidence that either the statutory top corporate tax rate or the effective marginal tax rate on capital income is correlated with real GDP growth."

Obviously GDP is impacted by a wide variety of factors beyond the corporate tax rate, so it's not surprising that there is no statistical relationship. The relationship between corporate income tax rates and investment is undeniable, however. Raising the corporate tax rate by 20% is the single most idiotic policy implemented by this government.

[belsarius]

Originally Posted by Zarley

Obviously GDP is impacted by a wide variety of factors beyond the corporate tax rate, so it's not surprising that there is no statistical relationship. The relationship between corporate income tax rates and investment is undeniable, however. Raising the corporate tax rate by 20% is the single most idiotic policy implemented by this government.

It also is a major reason they formed the government. The unwillingness of Prentice to increase corporate tax created a lot of animosity against the PCs.

[Zarley]

Originally Posted by belsarius

It also is a major reason they formed the government. The unwillingness of Prentice to increase corporate tax created a lot of animosity against the PCs.

They formed the government because a sizable minority of (ill-informed) Albertans voted for a charismatic party leader without consulting the NDP platform before the election. I doubt more than 50% of NDP voters even knew what the party had planned with respect to corporate tax rates at the time of the election.

It really highlights a shortcoming of our education system. The fact that so many people are woefully uneducated with respect to finance and macroeconomics is a very concerning problem.

[gasman]

Originally Posted by Wormius

There is nothing wrong with it, and no other provinces are particularly hurting because of their provincial sales taxes. The lack of one here is really contributing nothing and is neither attracting or repelling anyone. Has anyone, in the history of forever, stated they came or stayed in Alberta specifically because of the lack of PST? The dent it makes on an individual is minor. There is nothing wrong with implementing it.

This is also anecdotal, but my parents specifically chose alberta to retire in vs. manitoba because of the lower taxes.

on their annual spending the break on PST alone is almost $5k per year and then another 3k per year in less income tax.

So by living in alberta they get an additional $8k/year to spend then they would living in an area with higher sales and income tax. $8k, that would ultimately end up back in the economy.