Official (Alberta) Oil Discussion Thread

[Johnny199r]

Originally Posted by Slava

Let's not pretend this is political though. The Alberta budget from so-called fiscal conservatives is up in smoke as well. They based theirs on $58 oil and growth for the next few years. That looks extremely unlikely at this point and were less than a month in.

The Alberta gov't could not have predicted coronavirus, but the $58 dollar estimate was always very optimistic.

[Regorium]

Originally Posted by CaptainCrunch

Yup drive more people into bankruptcy and out of the middle class to lower class while continuing to spend a deficit on the operating budget. Brilliant. Your plan would reduce individual spending making things even worse economically and probably increase operating and spending budget deficits.


Yup increase taxes on individuals, increase taxes on everyone and what profit. And You have to be careful on this whole thought that infrastructure stimulus is going to do anything, as its becoming impossible to build anything in the current regulatory environment and nobody is going to invest in it under your plan.

The only way to get off of an O&G rollercoaster is to have a stable source of revenue so that governments don't panic one way or the other (going nuts on public sector, or going nuts with cuts). The PST/HST is the best way to do that.

On a good O&G year, I would say we could do what Alaska does and hand out dividends to Alberta citizens, but then on a bad year like this, the PST keeps our government stable.

Noone is going bankrupt over a 5% PST - it's the reality for literally every other province in Canada.

[Flash Walken]

It's almost like all of the 'no tax' goofs have no idea how the rest of the first world operates or functions.

Like the people living 4 hours away in Cranbrook are living in an economic wasteland.

It's almost like they aren't worth listening to about anything at all?

[Roughneck]

Even Texas has a sales tax.

[burn_this_city]

Originally Posted by Flash Walken

It's almost like all of the 'no tax' goofs have no idea how the rest of the first world operates or functions.

Like the people living 4 hours away in Cranbrook are living in an economic wasteland.

It's almost like they aren't worth listening to about anything at all?

I think most people would be fine with a sales tax, it's only the UCP who seems to think it's sacreligious. Last I heard the majority of voters were accepting of some kind of sales tax to balance the books.

PCs missed a golden opportunity to throw 2% on when Harper lowered the GST.

[Bunk]

Originally Posted by Johnny199r

The Alberta gov't could not have predicted coronavirus, but the $58 dollar estimate was always very optimistic.

Oil and gas royalties should be purely above and beyond “normal revenue” to operate services in the province. Budget balance when low, windfall when high to be saved and one time spent on capital.

[Flash Walken]

Originally Posted by Regorium

Noone is going bankrupt over a 5% PST - it's the reality for literally every other province in Canada.

you're telling me the rest of canada isn't bankrupt by the side of the road stitching together bits of flannel flung amongst the ditches and trees?

that this panic and outrage about a consumption tax isn't based in any kind of reason at all?

that it's closer to a temper tantrum than it is a discussion on sound economic policy?

[Flash Walken]

Originally Posted by burn_this_city

I think most people would be fine with a sales tax, it's only the UCP who seems to think it's sacreligious. Last I heard the majority of voters were accepting of some kind of sales tax to balance the books.

PCs missed a golden opportunity to throw 2% on when Harper lowered the GST.

Well, it's not just the UCP, it's also a couple of reactionaries in this thread that have posted in the last page.

[Handsome B. Wonderful]

Originally Posted by Regorium

Noone is going bankrupt over a 5% PST - it's the reality for literally every other province in Canada.

And look how financially successful and indepedent they all are.

[burn_this_city]

You can argue the merits of a sales tax all you want and most people would agree. I don't however think it's smart policy when your biggest sector just took a historic kick in the junk. We are still the least indebted provinces in the country, wait for some level of recovery before we start adding costs on the soon to be unemployed.

[Bunk]

Originally Posted by burn_this_city

You can argue the merits of a sales tax all you want and most people would agree. I don't however think it's smart policy when your biggest sector just took a historic kick in the junk. We are still the least indebted provinces in the country, wait for some level of recovery before we start adding costs on the soon to be unemployed.

Ok, start small. Say 3%, ramping up to 6 or 7 over a few years.

[burn_this_city]

Originally Posted by Bunk

Ok, start small. Say 3%, ramping up to 6 or 7 over a few years.

Who gives a crap about the deficit right now, in all honesty what impact will it have on anyone over the short and medium term? 30 year bonds are at historic lows. I think it's admirable to preach fiscal responsibility, but if this price drop lasts more than a few months people will be stunned by the meltdown coming.

[accord1999]

Originally Posted by Roughneck

Even Texas has a sales tax.

But Texas doesn't have an state level income tax and their per capita spending by the State Government is far below Canadian provinces. And Texas has a positive balance of payment from the Federal Government, it actually gets more money than it pays out.


https://rockinst.org/issue-areas/fis...yments-portal/

[Yoho]

Oil a blood bath in overseas trading down 30% to $30/barrel.

https://amp.cnn.com/cnn/2020/03/08/i...bia/index.html

[burn_this_city]

Based on Friday's differential, WCS will open around $18 tomorrow. It won't narrow to less than $10 based on transportation costs, so best case scenario is $20 WCS.

[accord1999]

Originally Posted by Canadianman

Amazing that every other province can handle their higher tax levels without unprecedented economic collapse.

How much of that is cushioned by redistribution policies by the Federal Government?

[Roughneck]

Originally Posted by accord1999

But Texas doesn't have an state level income tax and their per capita spending by the State Government is far below Canadian provinces.

Pass off major portions of healthcare and highway spending to the feds, pass on more university funding to residents, give cities expanded taxing powers to pay for services and we too could significantly drop our provincial per capita spending.

[Bunk]

Originally Posted by burn_this_city

Who gives a crap about the deficit right now, in all honesty what impact will it have on anyone over the short and medium term? 30 year bonds are at historic lows. I think it's admirable to preach fiscal responsibility, but if this price drop lasts more than a few months people will be stunned by the meltdown coming.

OK, so what would you do? Just status quo? Ride it out?

[Robo]

Well what ever we do I'm glad we didn't just elect a gov't who had no other plan beside oil and gas could you imagine how screwed we would be right now if we did

[burn_this_city]

Originally Posted by Bunk

OK, so what would you do? Just status quo? Ride it out?

Primum non nocere. Do nothing at first and ride it out, bolstering government revenue is probably the last thing I would consider. Notley didn't add a sales tax because it was not the right time in the midst of a huge recession.

Consider borrowing with sub 1% bond rates and start tackling the orphan wells. At least you could keep some jobs going and probably clean it up for as cheap as ever will be possible.

Public sector unions should probably give up dreaming about any increases at least in 2020/21.

Implement a sales tax when oil goes above $55 for a sustained period, >6 months, but something small that ramps up to 8% including GST.