Alberta headed for record deficit

[Cowboy89]

Originally Posted by Azure

They don't JUST invest in risk-less return options. Pretty sure they invest in a variety of different things. 10% return might be too much, but I still think we should build it up to the point where we can sustain deficits in a time of recession.

Sounds great in theory, until you realize that politicians will just budget for it and count on it as revenue even in good years and when there is a revenue shortfall in times of recession . . . voila another deficit! Instead of using the income generated from the assets they will have to take away from the principle of the assets to pay for the deficit.

[Azure]

Originally Posted by IliketoPuck

Absolutely. I'm not against having a large fund on which to draw, it is a great idea and is what the Heritage Fund was supposed to be when created.

I'm just fundamentally against hand outs, that's all. Even though I know they are a reality that can't be avoided.

Oh, I won't disagree there. I just think under the current political structure we won't be able to get around the handouts.

As long as the Heritage Fund is strong, and we remain a good province to want to do business in, both politically and economically, I'm happy.

[Azure]

Originally Posted by Cowboy89

Sounds great in theory, until you realize that politicians will just budget for it and count on it as revenue even in good years and when there is a revenue shortfall in times of recession . . . voila another deficit! Instead of using the income generated from the assets they will have to take away from the principle of the assets to pay for the deficit.

We should legislate a law then.

[IliketoPuck]

Originally Posted by Cowboy89

Sounds great in theory, until you realize that politicians will just budget for it and count on it as revenue even in good years and when there is a revenue shortfall in times of recession . . . voila another deficit! Instead of using the income generated from the assets they will have to take away from the principle of the assets to pay for the deficit.

"We can get away with poor planning and frivolous spending because we have the fund to fall back on."

O&G is a finite resource, I don't think it will disappear in our lifetimes, but Alberta needs to have a plan for the future. 15B won't go very far...

[WilsonFourTwo]

Originally Posted by Azure

I don't think it can be avoided either.

Yup.

Alberta owns the resources more than (for instance) Manitoba in the same way that Fort Mac owns them more than Calgary. That's what makes it impossible to literally share the wealth.

I would argue that the proximity to the resources and the commitment to exploiting them (among other things) garners us a greater share of the dollars, but we still gotta share!

[Azure]

Originally Posted by IliketoPuck

"We can get away with poor planning and frivolous spending because we have the fund to fall back on."

O&G is a finite resource, I don't think it will disappear in our lifetimes, but Alberta needs to have a plan for the future. 15B won't go very far...

Good point, actually.

Because I have honestly no idea what direction the province should even attempt to go trying to diversify our economy. Agriculture/ranching is obvious already, but that won't sustain us either.

Personally I think we should start building nuclear power plants up north in the middle of nowhere and sell our power to the US.

[WilsonFourTwo]

Originally Posted by IliketoPuck

"We can get away with poor planning and frivolous spending because we have the fund to fall back on."

O&G is a finite resource, I don't think it will disappear in our lifetimes, but Alberta needs to have a plan for the future. 15B won't go very far...

For perspective......$15 Billion is just under half of this year's budget.

According the the government projections, when the economy turns around is a couple of years, we'll have survived, but the Heritage Fund will be ~$2.8 Billion.

[IliketoPuck]

Could you imagine the ad campaign from that Seattle cat if we added Nuclear Power to our environmental pillaging list? It might affect tourism in Alberta by another .3%. That jackasstor still gets me going.

[Fozzie_DeBear]

Originally Posted by Azure

Good point, actually.

Because I have honestly no idea what direction the province should even attempt to go trying to diversify our economy. Agriculture/ranching is obvious already, but that won't sustain us either.

Personally I think we should start building nuclear power plants up north in the middle of nowhere and sell our power to the US.

This organization has a lot to do with the diversification efforts of the Alberta Government

[Azure]

Originally Posted by IliketoPuck

Could you imagine the ad campaign from that Seattle cat if we added Nuclear Power to our environmental pillaging list? It might affect tourism in Alberta by another .3%. That jackasstor still gets me going.

We would just have to be smarter and innovate a lot more.

The people who started the ad campaign have no idea how the oil sands, and the extraction process has changed over the past 30 years. Ignorance runs amok down there.

We're going to turn to nuclear power anyways down the road. So why not just get ahead of the curve.

[WilsonFourTwo]

Originally Posted by Azure

Good point, actually.

Because I have honestly no idea what direction the province should even attempt to go trying to diversify our economy. Agriculture/ranching is obvious already, but that won't sustain us either.

Personally I think we should start building nuclear power plants up north in the middle of nowhere and sell our power to the US.

Scary, isn't it. We have this glorious opportunity, and no idea what to do with it.

I think that regardless of the direction we go, a good chunk of money should be spent on long-term infrastructure and quality of life.

For example, I don't understand why (pretty much) every new new house doesn't rely on Geo-Thermal heating/cooling, while generating a small portion of their own power. I wouldn't want to add $40,000 to a $100,000 house.......but find me a newly built house for $100,000, so to speak.

[Azure]

Originally Posted by WilsonFourTwo

Scary, isn't it. We have this glorious opportunity, and no idea what to do with it.

I think that regardless of the direction we go, a good chunk of money should be spent on long-term infrastructure and quality of life.

For example, I don't understand why (pretty much) every new new house doesn't rely on Geo-Thermal heating/cooling, while generating a small portion of their own power. I wouldn't want to add $40,000 to a $100,000 house.......but find me a newly built house for $100,000, so to speak.

Take it one step further. Why can't we build massive geothermal plants up north to generate electricity for the whole province?

[REDVAN]

Didn't want to start a new thread for the discussion of a sales tax... which seems to be a consideration of the Tories right now, if you believe the press.

If they go down that route, I can definitely see the WAP gaining even more support. Especially if they are against it, I'm not sure the actual policy, but that could be a big election issue.

[IliketoPuck]

There are few things that would create more of a public outcry than introducing PST in Alberta. Stelmach might have to live off the grid after that one.

[albertGQ]

They might have to get rid of the flat tax and reimplement a more progressive one

[CaptainCrunch]

I remember it wasn't that long ago that the Alberta government was batting around the idea of going to a zero provincial tax.

Boys and girls the gravy train days are gone. Unfortunately there's not a viable political opposition in this province.

[SeeBass]

My vision for Alberta is to be the leader in green tech. We have the cash to start up our own version of a NASA/Manhattan project like science centre and draw the brains from around the world.

To be the region that leads in green tech we could have the next computer like tech corridor as they had in the Pacific Northwest. Imagine how wealthy Washington and Oregon would be if they also made the products that they developed.

Create the technology, make the technology, sell the technology, collect on the intellectual rights of the technology.

We need to take advantage today of the resource demand that we have and re-invest. If we dont prepare for what is next we will turn into Manitoba when the next fuel source comes. Many believe the next battle will be water, and if it is Alberta will be the poorest nation in the country then.

We just need the B's to make it happen.
We have the Brass
We have the Brains
Do we have the Balls?

[Azure]

Originally Posted by albertGQ

They might have to get rid of the flat tax and reimplement a more progressive one

Please no.

[bcb]

Originally Posted by SeeBass

My vision for Alberta is to be the leader in green tech. We have the cash to start up our own version of a NASA/Manhattan project like science centre and draw the brains from around the world.

FYI, a sub plan of the Manhattan Project was called "Project Alberta". Not sure why it was called that though.

[amorak]

Originally Posted by Azure

Please no.

As a financially literate person, I anticipate hearing what your reasoning for this.