Alberta budget news

[crazy_eoj]

Originally Posted by Makarov

No, I haven't ever argued that. I have consistently argued that corporate and income taxes are only one source of provincial revenues in Canada and that, for example, provinces with sales taxes derive a significant portion of their total revenue from their sales taxes. Other provinces also have higher fuel taxes, etc. Therefore, I argued, it was very misleading of the WRP to conclude that Alberta did not have a revenue problem based solely on higher than average per capita income/corporate tax revenues. I suspected, and indeed, after further research it turned out to be true, that Alberta actually relies on non-renewable resource revenues to hide the fact that its per capita revenue from other non-resource sources like taxation is actually lower than other provinces like Ontario. This is clearly supported by the provincial budget numbrrs that I have provided. You, on the other hand, have provided nothing.

Yet, you still have failed to show what proportion of revenue most provinces derive from sales taxes or how that compares to the amount Alberta makes on our outstanding tax base. You most certainly have proven that Alberta spends far above what we tax, but that means nothing, we already know Alberta far outspends all other provinces, even without a sales tax.

Please, whenever you find the time, why not enlighten us all with some real data comparing provincial revenue breakdowns, focusing on the per capita effects of a sales tax. Since you seem to know the answer already you must have seen the data somewhere.. right? I might add there are ten provinces and Ontario is just one of those ten.

Once we have some real numbers we can discuss the differences instead of having only your opinion on a political party that you disagree with to discuss.

[Makarov]

Originally Posted by crazy_eoj

Yet, you still have failed to show what proportion of revenue most provinces derive from sales taxes or how that compares to the amount Alberta makes on our outstanding tax base. You most certainly have proven that Alberta spends far above what we tax, but that means nothing, we already know Alberta far outspends all other provinces, even without a sales tax.

Please, whenever you find the time, why not enlighten us all with some real data comparing provincial revenue breakdowns, focusing on the per capita effects of a sales tax. Since you seem to know the answer already you must have seen the data somewhere.. right? I might add there are ten provinces and Ontario is just one of those ten.

Once we have some real numbers we can discuss the differences instead of having only your opinion on a political party that you disagree with to discuss.

B.C. total non-resource, non-federal contribution, revenue in 2012: ~$31.5 billion (just for you: provincial sales tax accounts for $6 billion, or essentially as much as income taxes) (SOURCE).
B.C. population in 2012: 4.6 million people.
Per capita non-resource, non-federal contribution, revenue: $6,850. This is over $500 per capita more than Alberta.

Quebec total non-resource, non-federal contribution, revenue in 2012: $50 billion (provincial sales tax accounted for $14 billion of this, compared to $18 billion from income tax) (SOURCE).
Quebec population in 2012: 7.9 million people.
Per capita non-resource, non-federal contribution, revenue: $6,329. This is essentially the same as Alberta.

I have now accounted for 30 million Canadians, or over three quarters of Canada's population. In each case, income and corporate tax revenues only accounted for a portion of total government revenue (surprise, surprise.) In each case, sales taxes accounted for a significant portion of government revenue (surprise, surprise.) In each case, the province (in the case of Ontario and Quebec, both "have-not" provinces) examined received as much or more non-resource revenue than Alberta. Therefore, Danielle Smith's conclusion was flawed and clearly misleading. Indeed, Alberta may very well have a revenue problem.

Are you satisfied now? Good grief.

[Azure]

Originally Posted by Makarov

How do you know this?

Personal experience?

[Azure]

Originally Posted by Makarov

Nothing. But it has a lot to do with the fact that Alberta relies on resource revenue to replace revenue that it should be collecting from other sources (i.e., taxation), which is what I have been arguing this entire time.

I think most of us agree that resource revenue should be saved, and taxation should be used to fund the budget, but the overall point still is that regardless of where the money is coming from, WAY to much is being spent.

And yet all we hear is how we need this, that and the other service for this, that and the other reason....and yet in other provinces less money per person is being spent, and nobody is dying.

[Makarov]

Originally Posted by Azure

Personal experience?

Your personal experience working in the public sector was very different than mine, I guess (for the record, I no longer work for the government.)

[Makarov]

Originally Posted by Azure

I think most of us agree that resource revenue should be saved, and taxation should be used to fund the budget, but the overall point still is that regardless of where the money is coming from, WAY to much is being spent.

And yet all we hear is how we need this, that and the other service for this, that and the other reason....and yet in other provinces less money per person is being spent, and nobody is dying.

That's fine. Indeed, I agree (and have stated so several times in this very thread.) Spending needs to be cut in a reasonable way to bring it in line with other provinces (after adjusting for the higher cost of labour in Alberta of course.)

However, I object to the WRP's (disingenuous) attempts to avoid the other half of the conversation: bringing Alberta's non-resource revenue in line with other provinces as well.

[Azure]

Originally Posted by Makarov

Your personal experience working in the public sector was very different than mine, I guess (for the record, I no longer work for the government.)

I only worked with the public sector in the area of government assistance, and I know for a fact that the requirements the governments set forth for low-income housing are both ridiculous and costly, and provide absolutely no benefit at all to the person who lives in the house.

There is absolutely no effort made to provide the best 'value'....similar to what the private sector has to do, and instead insane specs are added simply because there is no budget to meet, and as far as the people working there are concerned, they have unlimited amount of money to work with.

Despite our company insisting that the required specs were not necessary and would only be costly to the taxpayer with no benefit at all gained by the person being 'assisted'....the government still went ahead with it. Hell, we invited our brass to the shop and provided them examples of what we meant, and they still didn't go for it.

[Makarov]

Originally Posted by Azure

... there is no budget to meet, and as far as the people working there are concerned, they have unlimited amount of money to work with.

This may have been your impression, by I find this very difficult to believe. In my experience, the one sacred thing for a government department is its budget.

Incidentally, this was my experience: I worked in the legal department of a provincial government for a number of years, and my clients came from a very broad range of government ministries and departments. The vast majority of the people I dealt with worked very hard and cared deeply about doing a good job and improving their province. Some did not. But that is hardly a problem that is unique to the public sector.

[Azure]

I have no doubt that many public sector employees care deeply about doing the best job possible. However, from my experience it is the culture they work in that is often the problem. The budget is there, but it increases year to year for no reason at all, without any attention being paid to value of the goods obtained, and less 'units' go for more money simply because of a higher spec standard.

A lot of private sector companies have the same problem. Lack of attention being paid to efficiency and obtaining maximum value which leads to stagnation or in some cases management being fired. With government I've found that while people may come and go, there is no constant effort being made to improve the efficiency part.

As in at work I'm constantly trying to figure out ways to cut costs, streamline operations and improve the value of our product. I realize government doesn't deliver a product, but the idea of 'cutting costs' is non-existent.

And it has to be, because governments tend to throw money at problems rather quickly these days.

[Rathji]

Originally Posted by Azure

I have no doubt that many public sector employees care deeply about doing the best job possible. However, from my experience it is the culture they work in that is often the problem. The budget is there, but it increases year to year for no reason at all, without any attention being paid to value of the goods obtained, and less 'units' go for more money simply because of a higher spec standard.

A lot of private sector companies have the same problem. Lack of attention being paid to efficiency and obtaining maximum value which leads to stagnation or in some cases management being fired. With government I've found that while people may come and go, there is no constant effort being made to improve the efficiency part.

As in at work I'm constantly trying to figure out ways to cut costs, streamline operations and improve the value of our product. I realize government doesn't deliver a product, but the idea of 'cutting costs' is non-existent.

As an example, school boards get certain amount of funding each year, and if the schools are able to deliver all services required to run their school with less money than allocated, they have the ability to 'waste' the rest of the money on things they don't really need, like iPads, TVs, etc, etc. And the next year? Funding increases despite the fact that schools can find way to operate more efficiently. That is the case in Manitoba at least.

Are you saying that departments within private business never run this way?

[Azure]

I edited my post, but to answer your question, considering private businesses TRY at ALL times to turn a profit, I would imagine that rampant spending from department to department on things not needed would be caught and shut down pretty quickly unless the business wants to go bankrupt or management fired.

Governments don't think that way, and I know here in Manitoba despite the constant deficit spending and possibility of a credit rating downgrade, there is absolutely NO attention being paid to the fact that there are places to cut spending, but nobody wants to shut down the government freebies.

I personally know of schools that bought a bunch of iPads with extra school board funding and they only had to 'cite' educational reasons. Now some of the iPads are being used for personal reasons that have nothing to do with school work.

[crazy_eoj]

Originally Posted by Rathji

Are you saying that departments within private business never run this way?

Every private business department I have ever worked in has zero based budgeting. Each and every expense is approved. Pretty much unheard of in the public sector.

[crazy_eoj]

Originally Posted by Makarov

B.C. total non-resource, non-federal contribution, revenue in 2012: ~$31.5 billion (just for you: provincial sales tax accounts for $6 billion, or essentially as much as income taxes) (SOURCE).
B.C. population in 2012: 4.6 million people.
Per capita non-resource, non-federal contribution, revenue: $6,850. This is over $500 per capita more than Alberta.

Quebec total non-resource, non-federal contribution, revenue in 2012: $50 billion (provincial sales tax accounted for $14 billion of this, compared to $18 billion from income tax) (SOURCE).
Quebec population in 2012: 7.9 million people.
Per capita non-resource, non-federal contribution, revenue: $6,329. This is essentially the same as Alberta.

I have now accounted for 30 million Canadians, or over three quarters of Canada's population. In each case, income and corporate tax revenues only accounted for a portion of total government revenue (surprise, surprise.) In each case, sales taxes accounted for a significant portion of government revenue (surprise, surprise.) In each case, the province (in the case of Ontario and Quebec, both "have-not" provinces) examined received as much or more non-resource revenue than Alberta. Therefore, Danielle Smith's conclusion was flawed and clearly misleading. Indeed, Alberta may very well have a revenue problem.

Are you satisfied now? Good grief.

Wow, finally some substance even if we are missing a majority of the provinces. But at least a decent starting point and only took about 10 times asking.

What you have shown is that sales taxes raise somewhere around $1200-1700 annually on a per capita basis. With Alberta's much superior tax base and no sales tax we still are only barely behind Ontario and BC in terms of revenues and exactly on par with Quebec.

And, of course, the real kicker is that all these numbers do not include resource revenues. If Alberta had stayed the course on saving non-renewable resource revenues we could easily fund this small difference simply off of the interest of the savings. But even all this is assuming we as provinces are spending a reasonable amount but that's a discussion for another day. It seems Danielle Smith was correct in showing that the Alberta Tax Advantage suggests there is no revenue shortfall at all in this province.

[Slava]

Originally Posted by Azure

I edited my post, but to answer your question, considering private businesses TRY at ALL times to turn a profit, I would imagine that rampant spending from department to department on things not needed would be caught and shut down pretty quickly unless the business wants to go bankrupt or management fired.

Governments don't think that way, and I know here in Manitoba despite the constant deficit spending and possibility of a credit rating downgrade, there is absolutely NO attention being paid to the fact that there are places to cut spending, but nobody wants to shut down the government freebies.

I personally know of schools that bought a bunch of iPads with extra school board funding and they only had to 'cite' educational reasons. Now some of the iPads are being used for personal reasons that have nothing to do with school work.

I don't doubt this at all. Thing is there are dozens of examples like that in the private sector. I have a tablet for business, and while I do definitely use it for that I also have no qualms about using it for personal things as well that have nothing to do with business. Private business isn't some bastion of efficiency and keeping all of the expenses for business only.

Originally Posted by crazy_eoj

Every private business department I have ever worked in has zero based budgeting. Each and every expense is approved. Pretty much unheard of in the public sector.

The province has moved to zero based budgeting over the past year or two I thought?

[Azure]

I have no problem with the public sector buying teachers laptops or other school related items that they can take home and use for personal reasons AS WELL. The point is that the items were not needed, but due to the budget being passed, and excess money being available, the items were bought through the school board and basically taken home, never to be used in a school again.

[crazy_eoj]

Originally Posted by Slava

I don't doubt this at all. Thing is there are dozens of examples like that in the private sector. I have a tablet for business, and while I do definitely use it for that I also have no qualms about using it for personal things as well that have nothing to do with business. Private business isn't some bastion of efficiency and keeping all of the expenses for business only.



The province has moved to zero based budgeting over the past year or two I thought?

I think they said they were moving towards "results based budgeting" over 3 years (starting last year). Didn't hear anything about it in this budget but could have been lost in all the noise regarding our return to debt financing.

[jammies]

Originally Posted by crazy_eoj

Every private business department I have ever worked in has zero based budgeting. Each and every expense is approved. Pretty much unheard of in the public sector.

Have you ever worked at a really big company? I have, more than once, and your assertions are ludicrous.

"Zero based budgeting" is more "well except for all these capital projects, new hires we need, and the yearly raises everyone gets". And "expenses approved" means "my boss cursorily looks them over for anything labelled 'strippers' and vetoes that, otherwise it's all good."

Inefficiency is a hallmark of large organizations. Once you have enough people that you have to use a rule-based system to manage them all, this is inevitable, as humans will gladly spend unbelievable amounts of energy figuring out how to circumvent and exploit those rules. Anyone claiming that government should act more like private business as a "solution" has no more credibility than a random homeless guy shouting on a streetcorner about black helicopters coming for his precious bodily fluids.

[Azure]

Except despite the fact - which I agree with - that private businesses tend to become more inefficient as they get larger, they can't operate with yearly losses and sustain it over the long-term. The whole health of the business depends on being able to turn some kind of profit or keep recording growth.

Because the government is not in the business of turning profits, it is essential that they figure out a way to constantly increase efficiency and keep spending in line. There has been no attempt to do that in Alberta or many other provinces in Canada for years now.

I find it fascinating that people complain so much that it is impossible to cut spending without sacrificing our likelihood, yet the Liberals under Chretien/Martin cut spending like crazy, and we all managed to survive, and are much better off because of it. Yes, I know they did it during a relative period of economic growth, but people still lost their jobs, and different departments found ways to restructure and provide the same services with less people and less money.

[jammies]

Originally Posted by Azure

Except despite the fact - which I agree with - that private businesses tend to become more inefficient as they get larger, they can't operate with yearly losses and sustain it over the long-term. The whole health of the business depends on being able to turn some kind of profit or keep recording growth..

How is that relevant to how a government works? It is not a money-making proposition, so that's a false equivalency. You might as well compare how a government works with how a chess club operates and conclude that since membership dues are paid yearly on January 1st, so taxes should be too.

edit - and to elaborate and make clearer, there are valid arguments to make as to how government should be more efficient, but that businesses need to make money or die is not one of them. It is completely irrelevant, and that the idea of "profitability" ever enters the conversation is a major failing of popular political discourse.

Government is not a business and has far more differences than similarities to one. Ideologues like crazy_eoj who cannot understand this, and thus make ridiculously vague suggestions as to what to do to "fix" government issues by applying business solutions, are a major cause of how these issues get fubared in the first place. Sorry Azure, I know that wasn't your intent, but as soon as someone goes even partway down that path it really gets on my man-tits.

[crazy_eoj]

Originally Posted by jammies

Have you ever worked at a really big company? I have, more than once, and your assertions are ludicrous.

"Zero based budgeting" is more "well except for all these capital projects, new hires we need, and the yearly raises everyone gets". And "expenses approved" means "my boss cursorily looks them over for anything labelled 'strippers' and vetoes that, otherwise it's all good."

Inefficiency is a hallmark of large organizations. Once you have enough people that you have to use a rule-based system to manage them all, this is inevitable, as humans will gladly spend unbelievable amounts of energy figuring out how to circumvent and exploit those rules. Anyone claiming that government should act more like private business as a "solution" has no more credibility than a random homeless guy shouting on a streetcorner about black helicopters coming for his precious bodily fluids.

Well besides your sideways tosses I too have experienced working in several large corporations and budgeting definitely didn't go the way you describe. Budgeting usually worked from a project up basis and, outside of human resources, budgets certainly were not rubber stamped for increases year after year without constant analysis and vigilance, haven't heard much of that going on in the provincial government. It wasn't uncommon for budgets to disappear entirely, and that certainly hasn't happened in the government lately. But I doubt I'm going to convince you of anything anyways.

Of course, the hallmark of private corporations is the profit motive, and we know the government doesn't operate on those guidelines. It doesn't mean we shouldn't strive to limit out of control spending, eliminate waste, and force the public sector to live within reasonable means instead of accumulating debt for future generations. Spending for the sake of spending, and not having any increase in outcomes despite huge increases in public salaries over the past decade should be troubling for all of us.