Alberta Politics Thread v2

[Fuzz]

Originally Posted by transplant99

From the very first line..



In the paper he suggests lowering income tax while implemeting a sales tax instead...thats what tax reform means in this case. Both or niether.

Im fine with PST only IF all other taxes are lowered accordingly.

In the broad sense it doesnt matter a whole lot where the revenue comes from, just that they have what they need already. Governments of every stripe are loathe to give back tax money they already collect, and that is standard across the board. So unless they lower some income tax rates and some other "hidden" taxes, i say no way should they increase/add taxes even more than they have,

Implement a PST tied to a gradual decrease in income tax, BUT it doesn't kick in for 3 or 5 years. This would provide the extra funds needed now, and a timeline for when those extra dollars will disappear.

[Ozy_Flame]

Originally Posted by transplant99

In the broad sense it doesnt matter a whole lot where the revenue comes from, just that they have what they need already. Governments of every stripe are loathe to give back tax money they already collect, and that is standard across the board. So unless they lower some income tax rates and some other "hidden" taxes, i say no way should they increase/add taxes even more than they have,

I am not sure I came to this conclusion reading Tombe's paper, nor did Tombe. He directly says tax reform, in his conclusion, is to also add a sales tax to help fill revenue gaps. So yes, a new tax should be considered.

Not sure what other implication there is from him?

[Makarov]

Originally Posted by transplant99

From the very first line..



In the paper he suggests lowering income tax while implemeting a sales tax instead...thats what tax reform means in this case. Both or niether.

Im fine with PST only IF all other taxes are lowered accordingly.

In the broad sense it doesnt matter a whole lot where the revenue comes from, just that they have what they need already. Governments of every stripe are loathe to give back tax money they already collect, and that is standard across the board. So unless they lower some income tax rates and some other "hidden" taxes, i say no way should they increase/add taxes even more than they have,

You are either (1) reading what you want to read; or (2) purposely misrepresenting the conclusions in that article. For example:

Importantly, without new revenues, even the significant spending restraint implied here is
insufficient to stabilize net debt to GDP by 2040. The conclusion here is simple: substantial
spending restraint alone is insufficient to close Alberta’s fiscal gap. Entertaining new revenue
sources or using carbon tax revenue to address long-run debt sustainability are an important part of
the policy mix we should consider.

And from the conclusion:

Reasonable people can disagree on the preferred route forward. Some prefer smaller government,
lower revenue and lower spending. Others prefer larger government, higher taxes and higher
spending on public services. But regardless of one’s personal preferences in this regard,
appreciating the scale of the fiscal challenges we face is necessary.

A balanced
approach of increased revenues and reduced spending growth is perhaps the best route forward,
rather than relying solely on raising taxes or restraining spending. I present such a path in the
“restrained spending and modest new revenue” scenario explored in Section 4. Albertans should
soberly consider broader tax reform that includes saving more of the province’s resource revenues
and introducing a provincial sales tax to make up the difference (and more). We should also
consider using carbon tax revenues to shrink the deficit. On the spending side, Albertans and their
government should also consider, just as soberly, opportunities to decrease spending where benefits
may not be worth the costs or improving the efficiency with which public services are delivered.
In particular, we should explore innovations in health-care delivery, perhaps including private
provision or competitive procurement within the public system.

[transplant99]

Originally Posted by Fuzz

Implement a PST tied to a gradual decrease in income tax, BUT it doesn't kick in for 3 or 5 years. This would provide the extra funds needed now, and a timeline for when those extra dollars will disappear.

Not a chance there is a government you could legitimately trust to incorporate this.

Cut spending now to revenue levels being received, and only then implement a PST at the same time you reduce taxes elsewhere to keep it neutral.

Again we have seen over and over how much all gov'ts at all levels love to keep all the money they can....and then add to it through various means.

Austerity HAS to be part of this thing, or we will simply slide further and further into the black hole that is swallowing the province now.

IMO only of course.

[CaptainCrunch]

I would want to honestly see an all encompassing strategy in terms of spending and the benefits of PST before just adding a PST from both parties in the next election.


A we're going to guy spending without a plan isn't of interest to me as a platform.


At the same time a we need to add a PST to cover the shortfall will get a snort from me as well.

[killer_carlson]

I agree we need to get our fiscal books in order, however I also want to point out that the demand on our social system resources is greater in an economic downturn. Those services are needed.

The balance will be difficult to achieve. We desperately need that oil revenue back in the province.

[Locke]

Originally Posted by killer_carlson

I agree we need to get our fiscal books in order, however I also want to point out that the demand on our social system resources is greater in an economic downturn. Those services are needed.

The balance will be difficult to achieve. We desperately need that oil revenue back in the province.

Tell that to all the idiots fighting it tooth and nail.

The fact of the matter is that Oil Resource Revenue is good for Canada as a whole, some are just either too stupid or too easily duped like a bunch of country Rubes to realize and understand it.

[you&me]

Originally Posted by Locke

Tell that to all the idiots fighting it tooth and nail.

The fact of the matter is that Oil Resource Revenue is good for Canada as a whole, some are just either too stupid or too easily duped like a bunch of country Rubes to realize and understand it.

I see what you did there.

[PepsiFree]

Originally Posted by transplant99

Tombe concludes that the province doesn't need any more revenue...they need to stop/change spending.

If we are to believe this, as many do, then giving the incoming government even more money to spend seems like a very poor idea...no?

Fascinating, as has been pointed out, Tombe does not conclude this at all, and I’m not sure how you missed it or why you glossed over it.

The solution is both stopping/changing spending AND increasing revenue, through a PST, in part.

Implementing a PST and lowering taxes elsewhere to offset the PST entirely has no net benefit. It does nothing to increase revenue, so it effectively ignores Tombe’s conclusion.

Part of Albertans AS A WHOLE having to face the facts is just that: you need to accept that changes must be made, and no Albertan is going to be happy with them in the short term, but it’s what’s going to get us back to where we want to be. Thinking that if we just cut services your taxes don’t have to go up is a nice dream, as is thinking if taxes just go up we can keep all our services, but Albertans need to face some hard truths, not spend time dreaming.

[Weitz]

Its cute you guys think if we raise taxes any amount of government spending will be curtailed. Regardless of who is in power.

You could raise taxes 10% across the board, without curtailing spending first, and I bet in 5 years we are still hearing the: Not enough revenue! Taxes too low! Our programs need more money!

[Thunderball]

There is a distinction between raising revenue and raising taxes... blindly raising tax rates doesn't mean more revenue if the income isn't there.

This is why on a municipal level, the business tax hike is likely not going to bring in the money they hope relative to what a property tax hike would.

Raising revenues might actually happen by lowering taxes strategically (ie: corporate, not personal) if you get a smaller share of a bigger pot. This requires careful analysis and a willingness to do something that may not have the best optics politically (ie: raise personal tax and lower corporate tax).

Cutting costs are a lot more straightforward and are far more necessary. I also agree that I wouldn't trust any government (especially the NDP) to control spending if they have access to more cash without consequence. An increase in tax should be politically dangerous without matching (deep) cuts.

[Makarov]

Originally Posted by Weitz

Its cute you guys think if we raise taxes any amount of government spending will be curtailed. Regardless of who is in power.

You could raise taxes 10% across the board, without curtailing spending first, and I bet in 5 years we are still hearing the: Not enough revenue! Taxes too low! Our programs need more money!

Increased taxes combined with spending cuts is the hallmark of most modern austerity programs. See Greece, France, and the UK for examples. So it is hardly the unicorn which you make it out to be.

[PepsiFree]

Originally Posted by Weitz

Its cute you guys think if we raise taxes any amount of government spending will be curtailed. Regardless of who is in power.

You could raise taxes 10% across the board, without curtailing spending first, and I bet in 5 years we are still hearing the: Not enough revenue! Taxes too low! Our programs need more money!

Literally nobody is saying that, and I’m guessing nobody is even thinking it either.

[Makarov]

Originally Posted by Thunderball

There is a distinction between raising revenue and raising taxes... blindly raising tax rates doesn't mean more revenue if the income isn't there.

Agree.

Originally Posted by Thunderball

Raising revenues might actually happen by lowering taxes strategically (ie: corporate, not personal) if you get a smaller share of a bigger pot. This requires careful analysis and a willingness to do something that may not have the best optics politically (ie: raise personal tax and lower corporate tax).

Agree.

Originally Posted by Thunderball

Cutting costs are a lot more straightforward and are far more necessary.

Totally disagree. There is nothing straightforward about cutting costs. It is just as complex as attempting to increase revenues. In many cases, attempts to cut costs may actually (and inadvertently) increase costs. For example, slashing mental health services may actually increase costs for in the criminal justice system, other health services, or social assistance programs.

Also, just stating that "cutting costs is far more necessary" does not make it so. I would have to see some actual evidence/hear a compelling argument before I simply accept that (ideological) statement as gospel.

[GordonBlue]

Captain Crunch posted this in the Canadian Politics thread.

https://calgaryherald.com/news/polit...a-little-early

The Liberals are managing down Alberta's industry by imposing new regulations, killing pipeline options, withdrawing tax incentives, and passing energy-hostile bills

[GullFoss]

Originally Posted by Frequitude

1) Agreed. Why should the integrateds pay for MEG’s poor strategy?

It's not "paying for MEGs poor strategy" so much as ensuring the governments don't continue to get shortchanged on royalties and taxes.

As an aside, its not a poor strategy to think that the price of oil should reflect either the cost of rail ($15) or the cost of pipe ($8) depending on the situation of pipeline egress. Its also not a poor strategy to build upstream production in 2010 when pipeline egress for their project existed. MEG also protected 90% of their production through pipeline contracts by 2020. So it's not really fair to say MEG's strategy was bad.

Originally Posted by Frequitude

2) The integrated are not “shifting” their profits from the refineries which benefit from the diff (the Edmonton ones) to other jurisdictions. They are paying provincial and federal income taxes on those profits. As for royalties, I don’t follow since royalties have absolutely nothing to do with refining profits. Royalties are bitumen based.

These companies are literally shifting their profits from upstream to downstream. And the Alberta government is getting destroyed on royalties.

Royalties and taxes on upstream profits are paid in Alberta and are based on the "Price of WCS - Cost of producing WCS". Royalties are based on upstream revenues, which once again are driven by WCS pricing. So because WCS is artificially low because the differential is artificially wide, royalties and taxes are artificially low.

Refining profits are paid wherever the refinery is located. Most refining of Alberta oil takes place outside of the province. Because WCS is artificially low, refiners are paying higher taxes because they are getting windfall profits. But those taxes are paid where the refinery is located. Most of Imperials/Suncors/Huskys/Cenovus's refineries are located in Saskatchewan, Ohio, Texas, Colorado, Quebec, Ontario, Indiana, etc. So those jurisdictions are getting more taxes while Alberta is getting ####ed. This is the number one reason the Alberta government needs to intervene; because right now, its getting boned hard.

Originally Posted by Frequitude

4) You are correct. That’s not the integrated’s fault though. Why should they pay for the sins of the upstream producer who overinvested? What signal does that send to anyone who might want to invest here in the future?

If you look at who's responsible for this situation (production growth) its mostly Suncor (Fort Hills; 280 mbbl/d of pipe required) and Imperial Oil (Kearl/Nabiye; 280 mbbl/d of pipe required), with Cenovus (FCCL) and CNRL (Horizon/Kirby) being smaller players, while MEG and Husky were only bit contributors (MEG because its small and Husky because they're incompetent). Yet among those suffering are (1) People of Alberta (2) Conventional producers

Suncor and Imperial invested massively in upstream since 2010, without the guarantee of pipeline takeaway capacity because they had an integrated strategy. In other-words, they knew that things got bad, they would be protected while their E&P peers would not be. It is literally these two integrated producers' fault more than anyone else that there isn't sufficient pipe. Conventional production in this province hasn't grown in 15 years, so its hard to blame these guys.

Originally Posted by Frequitude

5) My whole argument is that this whole “program” should not exist. So no, I don’t believe the integrateds should prop up any unsustainable failing business.

Its not about the businesses so much as it is about (1) the industry as a whole and (2) the government getting their fair share. And again, because the government owns the resource, they should be doing everything they can - as any other actor would do - to make sure they're getting full and fair prices for the resource.

Originally Posted by Frequitude

7) Sounds like capitalism to me. The strong and those who made smart decisions survive. And Husky is buying MEG at a premium to their current market value.

The funny thing is that of the four integrated, only one is actually any good. It's probably more lucky than anything else that they're integrated. Husky is a joke. Cenovus is a joke. Suncor is integrated by accident. That leaves Imperial as the only company that actually positioned themselves this way on purpose.


I think that perhaps the conclusion should be that:

1) This is a complex issue and no party is fully innocent or guilty. But they're all in this together and should be trying to find a solution that's in the best interest of stakeholders at large, rather than be narrowly focused on just themselves.

2) As the owner of the resource, the government needs to do everything it can to get a full and fair price for its product. If it can't convince companies to do their part, the government will do all the lifting itself (by buying rail cars), but this ends up costing the taxpayer.

3) When markets fail, governments need to intervene.

[iggy_oi]

Originally Posted by crazy_eoj

Public sector employees in Alberta, who are generally Unionized, enjoy (compared to their private sector counterparts):

10% more pay for similar work
5 more personal days off per year
6 times less likely to experience job loss
10 times more likely to have defined benefit pension (ie: Gold Plated)
Retire 2 years earlier

That's just the facts, jack.

Wow I never would have expected such a pro-union post from crazy_eoj.

You forgot to mention that the majority of their private sector counterparts are non-union. It’s an important detail since it most likely factors into the size of their wage and benefit gap

[GGG]

Iggy do you have stats on pay comparisons between Public Union positions and private union positions.

I remember seeing it somewhere but can't find it. I recall that private sector union positions make less than their public sector counterparts for comparable jobs.

So while unionization benefits the worker it shows that the government does not fight back hard enough in negotiations or that due to the lack of moral hazard the unions are more likely to negotiate harder.

[crazy_eoj]

Originally Posted by GGG

Iggy do you have stats on pay comparisons between Public Union positions and private union positions.

I remember seeing it somewhere but can't find it. I recall that private sector union positions make less than their public sector counterparts for comparable jobs.

So while unionization benefits the worker it shows that the government does not fight back hard enough in negotiations or that due to the lack of moral hazard the unions are more likely to negotiate harder.

That's really the entire point. Any private business that is forced to pay these outrageous union demands will go under.

In the public sector, the unions openly bleed taxpayers dry. But they don't really care about the sustainability of government, there's no competition, and as long as their members are better off than the general public, they really don't care about the long term. Taxdollars going towards bloated salaries and pensions that should be building schools, roads and hospitals makes absolutely no sense in the current environment. Public sector unions need to be reigned in, and the UCP has some great ideas on how to remove their influence. That's why you're seeing the panicked public unions use so much of their forced union dues for political advertising lately.

[Flamenspiel]

No chance a sales tax gets implemented and they would just augment spending( or the feds will confiscate it)anyway.
Kenny will find a way to swallow the existing carbon tax, which is really a sales tax anyway.