Alberta Politics Thread

[CaptainCrunch]

Anyone look at the couple on the right and think, holy crap thats little bill and his wife from boogie nights.

NSFW!

[PsYcNeT]

Originally Posted by GGG

For those who don't like this budget what is your proposal for the next four years. What are your 40 - 60 billion in cost reductions? How much debt would you run.

So far the solutions proposed are:

"Cutbacks in healthcare, without impacting service levels somehow...something something bloated system!"

"Cutbacks in education, without impacting service levels somehow...something something bloated system!"

"Cutbacks in government, without impacting service levels somehow...something something bloated system!"

Details forthcoming I suppose.

[CliffFletcher]

Originally Posted by GGG

What we really need is to exclude all Royalty revenue from the budget and tax and spend based on an assumption of zero royalty and build a sovereign wealth fund or at least say any royalties earned over $60 oil cant be counted on.

That's what we should do. But that would require Alberta voters to act like adults, and recognize we can't get all our wants on the cheap, and we may have to both A) pay taxes comparable to what the rest of Canada and the developed world pay, and B) cut back on public spending. But the left will never agree to cutting public service jobs or salaries, and the right will never agree to have a tax regime that is only tied for the lowest in Canada, and not the lowest by far.

[Slava]

Originally Posted by PsYcNeT

So far the solutions proposed are:

"Cutbacks in healthcare, without impacting service levels somehow...something something bloated system!"

"Cutbacks in education, without impacting service levels somehow...something something bloated system!"

"Cutbacks in government, without impacting service levels somehow...something something bloated system!"

Details forthcoming I suppose.

That's why I think that there is a mid-point in here though. I'm no naive enough to suggest that we should run a balanced budget at this point because desperate times call for desperate measures. But at the same time it's foolish to suggest that we can't find anywhere to cut to bring the operational budget to balance.

This isn't all or nothing. Wage freezes, reductions in some less than prioritized departments and other cost saving measures should be investigated. If that means that some unions are going to be upset, you spend some of the earned political capital and give it a shot.

[corporatejay]

I'm less concerned about the next four years and the debt increases as I am about how we pay it back.

Running deficits and incurring debt is not the worst thing in the world, but when the answer is "how are you going to pay this back" and they have no answer, that's concerning.


Buying a car on credit is not a terrible idea if you know you're getting paid at the end of the month and you NEED a vehicle. But if you buy a car and someone asks how you plan on paying for it at the end and you have no idea, that's a bit concerning.

[shermanator]

Originally Posted by CliffFletcher

That's what we should do. But that would require Alberta voters to act like adults, and recognize we can't get all our wants on the cheap, and we may have to both A) pay taxes comparable to what the rest of Canada and the developed world pay, and B) cut back on public spending. But the left will never agree to cutting public service jobs or salaries, and the right will never agree to have a tax regime that is only tied for the lowest in Canada, and not the lowest by far.

I agree with this. There has to be some compromise on both sides. We need BOTH spending cuts and an increased tax base that is not dependent on a volatile revenue source. Unfortunately I don't see either happening.

[Wiggum_PI]

Originally Posted by PsYcNeT

So far the solutions proposed are:

"Cutbacks in healthcare, without impacting service levels somehow...something something bloated system!"

"Cutbacks in education, without impacting service levels somehow...something something bloated system!"

"Cutbacks in government, without impacting service levels somehow...something something bloated system!"

Details forthcoming I suppose.

The public sector compensation is estimated to be $25 billion for 2016/17 which is 49% of the total government expenses of $51 billion. There may not be $10 billion dollars of worth of savings there, but with a few small cuts they could probably find at least 1 or 2 billion in savings.

The government could postpone/defer large capital projects that aren't critical to build right away.

[redforever]

Originally Posted by Reaper

The Heritage Fund is gone. Last year's budget took care of that.

I think the sustainability fund is gone, not the Heritage fund.

[OMG!WTF!]

Originally Posted by PsYcNeT

So far the solutions proposed are:

"Cutbacks in healthcare, without impacting service levels somehow...something something bloated system!"

"Cutbacks in education, without impacting service levels somehow...something something bloated system!"

"Cutbacks in government, without impacting service levels somehow...something something bloated system!"

Details forthcoming I suppose.

If we spent per capita what BC spends we'd save 12 billion. Obviously it's not an apples to apples comparison. But we're not exactly competing with a vibrant private sector for employees any more either.

[Fuzz]

Originally Posted by Wiggum_PI

The public sector compensation is estimated to be $25 billion for 2016/17 which is 49% of the total government expenses of $51 billion. There may not be $10 billion dollars of worth of savings there, but with a few small cuts they could probably find at least 1 or 2 billion in savings.

The government could postpone/defer large capital projects that aren't critical to build right away.

That's the thing, though. We've been doing that for years. And now interest rates are rock bottom, and capital projects would help with employment and the economy. So now is actually the time to be doing them. You wither borrow money against the future, or you defer these things further, and borrow against future infrastructure failures, that cost more in the long run.

[GGG]

I think 2 year union contracts with no increases would be reasonable. Let's compare that to 2% per year saves us .5 billion per year compounded so 2.5 billion at the end of the term. And then let's call waste another billion so 3
Billion at the end of term

So we've frozen salaries for 2 years and eliminated waste and saved 5.5 billion. Though that billion in waste we cut a year did cause 10000 (100k per person) more people to be unemployed and we probably spent 250-500 million in severance to do it plus 100 million in tax losses so take a billion of the savings number.

So I think there is 4.5 billion total in the next 3 years of low hanging fruit.

[Resolute 14]

Originally Posted by CliffFletcher

That's what we should do. But that would require Alberta voters to act like adults, and recognize we can't get all our wants on the cheap, and we may have to both A) pay taxes comparable to what the rest of Canada and the developed world pay, and B) cut back on public spending. But the left will never agree to cutting public service jobs or salaries, and the right will never agree to have a tax regime that is only tied for the lowest in Canada, and not the lowest by far.

Serious question, actually: What other jurisdictions "act like adults" and remove all of their resource-based income from their budgetary processes like this?

[PsYcNeT]

Originally Posted by Resolute 14

Serious question, actually: What other jurisdictions "act like adults" and remove all of their resource-based income from their budgetary processes like this?

Norway I guess.

[GGG]

Originally Posted by Resolute 14

Serious question, actually: What other jurisdictions "act like adults" and remove all of their resource-based income from their budgetary processes like this?

Alaska
Norway
Saudi Arabia
Most of OPEC -- although recently as their extraction costs went up and there security costs went up haven't been.
Alberta under Peter Lougheed from 1972 to 1987.
They each do it to varying degrees.

Essentially any jurisdiction that builds a sovereign wealth fund.

[Azure]

Considering how low interest rates are right now, borrowing money isn't a terrible idea.

Alberta has the potential to erase debt very fast if the oil price goes up again. Most other provinces/countries don't have that.

[CliffFletcher]

Originally Posted by Fuzz

That's the thing, though. We've been doing that for years. And now interest rates are rock bottom, and capital projects would help with employment and the economy. So now is actually the time to be doing them. You wither borrow money against the future, or you defer these things further, and borrow against future infrastructure failures, that cost more in the long run.

Agreed. Capital spending serves a purpose of building needed infrastructure while it's cheap, and keeping people in a hard-hit sector (engineering and construction) employed. And it's not a long-term annual commitment.

Originally Posted by Resolute 14

Serious question, actually: What other jurisdictions "act like adults" and remove all of their resource-based income from their budgetary processes like this?

Originally Posted by GGG

Alaska
Norway
Saudi Arabia
Most of OPEC -- although recently as their extraction costs went up and there security costs went up haven't been.
Alberta under Peter Lougheed from 1972 to 1987.
They each do it to varying degrees.

Essentially any jurisdiction that builds a sovereign wealth fund.

Not to mention all the places in the world that don't have resource royalty bonanzas, and fund government strictly through taxes and fees. Time to wean this province off the royalties teat.

[Fuzz]

Crazy idea... remove all royalties from the budget, increase taxes to compensate. Then rebate royalties to Albertan's every year. On good years, when the industry is doing well, everyone in the province benefits. In bad years, they don't.

[Locke]

We just have to face the facts that nothing can be done, there are no alternatives, the Government has to spend as much as they want on whatever they want and all we can do is fork over whatever we have.

Raising taxes, implementing new taxes and rampant unchecked Government spending is the only answer.

By the way, heres the guy thats really in charge:

Spoiler!

[Cappy]

Originally Posted by GGG

How much debt did we accumulate under Redford / Stelmech? (I include her spending the contingency funds as accumulating debt). The PC's needed to be removed from power. The stupidity of the Alberta population is at fault for blindly electing the same government for 50 years. Change was required. Is the NDP doing the best job? No. would the WR have done better? maybe although the deficit would likely be 9 billion instead of 10.

What we really need is to exclude all Royalty revenue from the budget and tax and spend based on an assumption of zero royalty and build a sovereign wealth fund or at least say any royalties earned over $60 oil cant be counted on. The corporate, carbon and income tax increases that were done under the NDP are necessary to accomplish this task.

Hopefully after this rout people will understand that reliance on oil revenue to subsidize operating budgets is a bad idea. Artificially low taxes based on energy extraction leads to this problem. That is the issue that needs to be solved.

For those who don't like this budget what is your proposal for the next four years. What are your 40 - 60 billion in cost reductions? How much debt would you run.

I would take issue with the way this Gov't has gone about increasing revenue. Carbon tax, whatever they are inevitable.

Corporate taxes are the most inefficient form of taxation and when trying to diversify the economy, probably not the best solution with lower rates in BC and Sask. Income taxes are more efficient than Corp. taxes but not by much. Sales taxes are one of the most efficient tax forms out there and Alberta should be utilizing them - it's really a shame that people cannot look past some misconceived notion that PST = failure.

Also, if you think this Province needs to curb its reliance on royalties, then you need to "look in the mirror" as well and determine how we can cut 40-60 billion. We are basically running on limited royalties as we speak and its clear that we have a spending problem in this Province (as is clear in almost every province and Fed) and things NEED to be cut.

[Cappy]

Originally Posted by corporatejay

I'm less concerned about the next four years and the debt increases as I am about how we pay it back.

Running deficits and incurring debt is not the worst thing in the world, but when the answer is "how are you going to pay this back" and they have no answer, that's concerning.


Buying a car on credit is not a terrible idea if you know you're getting paid at the end of the month and you NEED a vehicle. But if you buy a car and someone asks how you plan on paying for it at the end and you have no idea, that's a bit concerning.

This will always be my issue with running big deficits. There really is never a solution to paying it back.

Look at the Feds under Chretien/Martin. They made big cutbacks to Fed spending (many would argue that those cutbacks increased the burden on Provinces) and during the high times of wealth creation, ran 10 billion surpluses. Then the people bought the idea that the Gov't was taking too much and sought tax breaks. Next thing we know, the economy falters and 40 billion deficits are the norm once again.

Happened in AB. Happened in USA.