Alberta Budget

[Azure]

Laying money away has always been a good idea to me because it can be spent in a time of recession where costs are cheaper and the province needs to kick in the ass to help get the economy going.

Of course, you always spend money, but I hope we get back to the point where we're laying away a couple billion every year. When we cycle back into a recession pump that money into the economy.

[Shazam]

Originally Posted by Cowboy89

If there was a nice linear continuum of more money spent = More and better services that are valued by the population then this post would be a nice criticism of Albertans who are annoyed with increasing spending but also want good services.

Bottom line is the province is already spending on an unreasonable scale without seeing a resultant benefit of greater services or quality of services compared to other provinces. A 5.6% increase in spending on top of that in a year when inflation has been the lowest in quite some time is unacceptable. I don't think it would be unreasonable to suggest that in the long run the government should be able to provide the same level of service for less money than today (inflation/population adjusted of course).

How do we even know that other provinces are better run?

Let's say that Alberta's government is 20% worse at doing stuff in general than the best province. So we'll knock 20% off costs due to "efficiencies". This is truly a best case scenario.

We have no sales tax. We dropped the health care premium. We lowered royalty rates. We have one of the lowest personal income tax rates. Dividend tax rates are incredibly low as well.

Something has to give.

[clintb]

We still have the lowest income taxes in the country

[Shazam]

Originally Posted by clintb

We still have the lowest income taxes in the country

No, this hasn't been true for a while now.

[Azure]

Lowered royalty rates? What am I missing?

I thought the Stelmach government increased the royalty rates?

[Shazam]

Originally Posted by Azure

Lowered royalty rates? What am I missing?

I thought the Stelmach government increased the royalty rates?

Er, where you've been?

[Cowboy89]

Originally Posted by Shazam

How do we even know that other provinces are better run?

Let's say that Alberta's government is 20% worse at doing stuff in general than the best province. So we'll knock 20% off costs due to "efficiencies". This is truly a best case scenario.

We have no sales tax. We dropped the health care premium. We lowered royalty rates. We have one of the lowest personal income tax rates. Dividend tax rates are incredibly low as well.

Something has to give.

20% and even at much less rates of efficiency that contribute to cost reductions due to inefficiencies makes up for the deficit and then some, all the while allowing us to keep enjoying lower levels of taxation that foster growth in business. Bottom line, even now we have higher revenues per capita than any other province. This is not a revenue problem, its a spending problem!

[Cowboy89]

Originally Posted by Shazam

Er, where you've been?

How are royalty rates lower now than they were when Stelmach took over as leader of the PC party?

[Flames0910]

They keep saying education hasn't been cut. But no new money has been given to post-secondary institutions to fight rising costs. Thanks for nothing Ed.

[Shazam]

Originally Posted by Cowboy89

20% and even at much less rates of efficiency that contribute to cost reductions due to inefficiencies makes up for the deficit and then some, all the while allowing us to keep enjoying lower levels of taxation that foster growth in business. Bottom line, even now we have higher revenues per capita than any other province. This is not a revenue problem, its a spending problem!

Using Klein era spending as a benchmark is very deceptive.

Not all taxation is bad. Bringing back the health care premium would've brought back almost $2 billion in revenue. Ah well.

[Shazam]

Originally Posted by Cowboy89

How are royalty rates lower now than they were when Stelmach took over as leader of the PC party?

They were raised, and then lowered. Look, do a Google search.

Regardless, what's your take on LNG prices anyhow?

[Cowboy89]

Originally Posted by Shazam

They were raised, and then lowered. Look, do a Google search.

You answered a trick question.

To be very high level, in certain wells in some economic and volumetric production cases, current royalty rates are even lower than old Klein era royalty rates. In many other cases they are currently higher. Broadly speaking when all hydrocarbon production in the province of Alberta is taken into consideration the government take percentage is higher in today's economic reality (Even after the temporary incentives on specific types of production).

[Cowboy89]

Originally Posted by Shazam

Using Klein era spending as a benchmark is very deceptive.

Not all taxation is bad. Bringing back the health care premium would've brought back almost $2 billion in revenue. Ah well.

I'm not using Klein level anything. We have higher revenues per capita than any other province. If we got our money's worth with our high spending then why must revenues be increased through higher taxation?

[Shazam]

Originally Posted by Cowboy89

You answered a trick question.

To be very high level, in certain wells in some economic and volumetric production cases, current royalty rates are even lower than old Klein era royalty rates. In many other cases they are currently higher. Broadly speaking when all hydrocarbon production in the province of Alberta is taken into consideration the government take percentage is higher in today's economic reality (Even after the temporary incentives on specific types of production).

Yeah, I knew it was a trick question. But why do you feel you need to ask such a question? I thought budgeting was a straightforward process. At least, that's the impression I get from some of you.

[Shazam]

Originally Posted by Cowboy89

I'm not using Klein level anything. We have higher revenues per capita than any other province. If we got our money's worth with our high spending then why must revenues be increased through higher taxation?

Like I said, something gotta give.

[Cowboy89]

Originally Posted by Shazam

They were raised, and then lowered. Look, do a Google search.

Regardless, what's your take on LNG prices anyhow?

Looking promising in the near term with Europe and Asia importing much of the volume of LNG due to cold weather. Demand is even picking up nicely in the US.

[Slava]

Originally Posted by Azure

And you sound like someone who loves to look at the US and scream bloody murder everytime someone mentions private health care because THEIR system is so screwed up.

I probably am influenced by the US examples of private health and private insurers (hard not to be!). But to be fair I've also worked in and around the insurance industry since my graduation from university over a decade ago, so I'm basing my comment on that experience as well.

Maybe everyone else thinks differently, but the last thing I want to deal with is paying for medical care when I need it and then hoping that the insurer is going to cover me when its all said and done.

I'm not sure what you're implying by your last capitalized word either, but I do think that the US system is screwed up. Its a complete disaster and a travesty that the phrase "an illness away from bankruptcy" even exists in a developed nation.

[Slava]

Originally Posted by Cowboy89

Looking promising in the near term with Europe and Asia importing much of the volume of LNG due to cold weather. Demand is even picking up nicely in the US.

How long can that last though? With all of the shale gas now it makes me wonder how stable the prices are for the next few years?

[Cowboy89]

Originally Posted by Slava

How long can that last though? With all of the shale gas now it makes me wonder how stable the prices are for the next few years?

Well LNG is really a different beast than local North American gas business. Essentially the beauty of LNG is that due to their portability they get to arb price differentials between different terminals in different continents, which can be a big advantage. If you're a student of real options, this is a perfect example.

As for North America I believe that something has to increase substantially on the demand side in order to keep a longer term price level of $6-7/mcf or higher. If I were a gas producer I would thank my lucky stars for the cold winters the past two years. The only thing on the horizon that might be a game changer is GHG legislation changes. Many gas bulls believe that it will come from destruction of coal demand in such a scenario.

[Fire]

Originally Posted by Reaper

You sound like someone who can afford to pay for your own healthcare.

Just a normal middle class person. The poor will still get their healthcare but they will have to wait longer than a person willing to pay for the privilege of quick healthcare. I have no problem with that. We are going down the road of bankruptcy trying to keep up with the ever increasing costs of healthcare. People in this country are afraid to be responsible for themselves. They need the government to hold their hands.