Alberta PC's way out front

[Cowboy89]

Originally Posted by Slava

Well eventually we all end up taxed higher, really. One the US starts relying on their supply of gas and our oil is not as necessary (or a number of other reasons), taxes will either go up or services will go down.

I've re-read your third sentence and I just can't understand it. Either its above me or there are words missing? I don't know.

I sometimes miss words while typing !

[Slava]

Originally Posted by Cowboy89

I sometimes miss words while typing !

It wasn't meant to be a shot. I do that all the time and I do it when I write as well. I guess your mind just gets ahead of where you are.

[Cowboy89]

Originally Posted by Slava

It wasn't meant to be a shot. I do that all the time and I do it when I write as well. I guess your mind just gets ahead of where you are.

I did not take it as a shot. I read it again and did not like how it came out and understood the confusion.

EDIT: As an added point to our discussion about spending and taxes, I find the decision to spend more is much easier for a government to make than it is to restrain or cut spending. As a voter who is mindful of that fact I find it less dangerous to vote for a party that doesn't want to spend more.

[Slava]

Originally Posted by Cowboy89

I did not take it as a shot. I read it again and did not like how it came out and understood the confusion.

EDIT: As an added point to our discussion about spending and taxes, I find the decision to spend more is much easier for a government to make than it is to restrain or cut spending. As a voter who is mindful of that fact I find it less dangerous to vote for a party that doesn't want to spend more.

Oh, I have reservations about giving any government more money. I know that at some point there would be a desire for them to spend, without question. I actually think we can afford to spend, and in some areas we need to spend. For example, you wouldn't get a huge amount of argument from either side of the political spectrum if you pointed to infrastructure as an area of need. Even within the education system the infrastructure deficit is huge; schools need repairs and upgrades let alone many that need to be built.

My issue is how we fund these things though. We have an enormous amount of money from a one-time resource. We have this money for a somewhat limited time, although no one is sure for how long. The prudent thing is not to use this boon to keep taxes low for this generation and potentially no others. Clearly the prudent and responsible thing to do is pay an incrementally higher tax rate today and wind up with something to show for all of this resource wealth.

[killer_carlson]

Originally Posted by llama64

Wanna back that up? I've seen nothing from either the PC's or the Wild Rose about moving Alberta into the 21th Century.

What I want to see is a solid plan to diversify Alberta's economy into something more secure then hoping people wanna buy our oil sands or natural gas. We're a first world province operating off a third world economy - that has to change.

I will even vote for a crazy religious demagogue if they have a solid plan to enhance Alberta's economy over the next 20-50 years.

Seriously? You can't find a party that has a plan for Alberta's future?

If the debate over whether to export raw bitumen to capitalize on markets in Asia and the US to the tune of hundreds of billions of dollars
(PCs)
vs

Process more bitumen and upgrade it here to create more jobs
(everyone else)

does not convince you that these parties are thinking generations ahead, then I'm not sure anything will.

THen toss on the other election issues which will include:

Investing in education infrastructure (or not)
Investing in more power lines and electricity generation (or not)

each of which is clearly thinking decades ahead....

THen we'll move to the talk about decreasing the tax base; or
Fixing health care into a longer term more sustainable model

I don't know what issues you are looking at? All of the major issues this election which the parties have platforms for are long term issues with long term solutions.

you either are hoping the election issues will be about spaceships or you have no idea what you are talking about.

[Cowboy89]

Originally Posted by Slava

Clearly the prudent and responsible thing to do is pay an incrementally higher tax rate today and wind up with something to show for all of this resource wealth.

Brutally agree. However can the government pull this off while resisting the urge to needlessly spend both the additional taxes and the resource wealth? If the money's going to be squandered anyway at least with less taxes I can choose to be responsible myself and save/invest the difference between low and high tax options.

Of course as a former Liberal supporter and an experienced Financial Advisor you probably couldn't resist posting a response to this along the lines of Scott Reid's 'beer and popcorn rant' about the thought of Albertans prudently managing their own money. And you would be correct, but I believe I would also be correct in presuming the government can't do it properly either.

[GP_Matt]

Originally Posted by Slava

Perfect, so if we're using that as a model it must also be fine for governments to borrow money?

I feel that while debt is a great tool for a young family it makes less sense for an older mature family. For most people the idea is to take out a mortgage when you are first starting out, maybe expand the mortgage as you move into a bigger house and then slowly pay it off. Once you are established I don't think it makes as much sense to be taking on debt as an ongoing budgeting tool.

Taking something like schools, Alberta is growing so new schools are needed but it seems like they should be able to build a steady supply of new schools with cash flow. Assuming you borrow money to build each school and make payments over 25 years it will work great for the first few years, but as you get closer to year 25 you are paying the full cost every year in payments alone and are stuck in a cycle. (And yes, I know that is a bit of an over simplification)

[Fire]

Originally Posted by c.t.ner

So reduce one tax for essentially what will work out to be a higher tax (especially health care). Seams like a brilliant idea.

The one thing I've learned from living in the US for the past 2.5 years, is that in the long run individual user fees tend to work out far worse in the long run than having a small group tax.

User fees are not taxes. You use a service you pay for it (at least a portion of it). Pretty straightforward. Better than paying a sales tax and the money going into general revenues where the government can waste on any stupid thing.

[Slava]

Originally Posted by GP_Matt

I feel that while debt is a great tool for a young family it makes less sense for an older mature family. For most people the idea is to take out a mortgage when you are first starting out, maybe expand the mortgage as you move into a bigger house and then slowly pay it off. Once you are established I don't think it makes as much sense to be taking on debt as an ongoing budgeting tool.

Taking something like schools, Alberta is growing so new schools are needed but it seems like they should be able to build a steady supply of new schools with cash flow. Assuming you borrow money to build each school and make payments over 25 years it will work great for the first few years, but as you get closer to year 25 you are paying the full cost every year in payments alone and are stuck in a cycle. (And yes, I know that is a bit of an over simplification)

I think that the campaign against debt in general is more ideology than logic. Take the new south hospital here in Calgary. It will likely be used for what, 50 years? (Assuming they don't blow it up first!). Why pay cash when you could finance that over that time? Its just not sensible at all.

Of course if you're borrowing money to keep the lights on thats a different story. No party is in favour of that kind of debt though.

[GP_Matt]

That is true for some of the bigger one time expenses, but how many hospitals do they build/overhaul over that 50 year period? There are probably 100 in the province. The South Calgary Hospital was more expensive than most of the regional ones, but our new GP hospital is budgeted at $500 million. Maybe they set aside $500 million a year for new construction and plan accordingly.

[SebC]

Originally Posted by killer_carlson

If the debate over whether to export raw bitumen to capitalize on markets in Asia and the US to the tune of hundreds of billions of dollars
(PCs)
vs

Process more bitumen and upgrade it here to create more jobs
(everyone else)

If that's the case, (and I'm not saying it is) then we should all vote PC! We have a bigger competitive advantage in extraction than in processing, and that makes an optimum capital allocation one that generally favour extraction.

I also want to point out that it's simply not possible for Alberta to deliver services as cost-effectively as, say, other provinces. Things cost more, construction costs more, labour costs more here.

[killer_carlson]

Originally Posted by SebC

If that's the case, (and I'm not saying it is) then we should all vote PC! We have a bigger competitive advantage in extraction than in processing, and that makes an optimum capital allocation one that generally favour extraction.

I also want to point out that it's simply not possible for Alberta to deliver services as cost-effectively as, say, other provinces. Things cost more, construction costs more, labour costs more here.

Let's have the debate about it.

[SebC]

Originally Posted by killer_carlson

Let's have the debate about it.

About what? Economy composition or cost of services?

Either way it seem like they're both pretty clear cut.

Interfering with the market to boost processing in AB is no different than any other market interference in that deadweight losses are pretty much inevitable... and that's before you get into the issues with NAFTA and all the other free trade agreements Canada is working on.

As for cost of services there are a variety of indexes you could use to determine that cost of living is higher here than elsewhere, but it's pretty well known.

[killer_carlson]

Point is, the outcome will shape our economy for years to come. The critique from another postervwas that no party was thinking long term.