Alberta budget news

[darklord700]

Originally Posted by Roughneck

Assuming we can take the specific role of being a provincial government trade envoy and take it to mean a lobbyist for a private company in an an emerging foreign market, yes. The private sector would pay Garry Mar with a housing allowance to do that job.

I can see a big company like Encana spending $500K a year to send a person to HK basically wine and dine the tycoons there. And I can even see that person being Gary Mar. But the one difference is, the private sector Gary Mar must bring in business and revenues to justify his expenses there. I don't see that is what the public sector Gary Mar is doing.

[Roughneck]

Originally Posted by darklord700

I can see a big company like Encana spending $500K a year to send a person to HK basically wine and dine the tycoons there. And I can even see that person being Gary Mar. But the one difference is, the private sector Gary Mar must bring in business and revenues to justify his expenses there. I don't see that is what the public sector Gary Mar is doing.

While EnCana is wine and dining tycoons, a political envoy is wining and dining the policy makers so that Alberta companies (like EnCana) can get a better deal, and make more money, which benefits Albertans. We have envoys in the U.S. to make sure that there's a political voice in Washington to help with stuff like Keystone XL, who's main purpose is to provide an oil source to be sold at Brent prices to Asia (where we also have a trade envoy).

The EnCana employee would, presumably have to clear $500K in increased revenues for EnCana to justify their role. A provincial trade envoy would then only need to create a $500K net benefit to Albertans from all industries. In that case, what would be the problem?

[yads]

http://www.justice.gov.sk.ca/provcou...20MCMillan.pdf

According to that, Per capita incomes in Alberta have gone up from 30K to 48K from 2000-2010. In 2000 the population was about 2.88 million and in 2010 it was 3.725 million. In 2000 we were spending $6,800 million on public sector salaries and in 2010 it was $14,900 million. So on a per capita basis we were spending $2,361 in 2000 and in 2010 it was $4,000. A growth of 69% while all per capita income increased 60% in the same time span.

Keep in mind that public sector salaries are included in the per capita salary. If you take those away, private sector salary increases are even less.

[crazy_eoj]

Originally Posted by yads

http://www.justice.gov.sk.ca/provcou...20MCMillan.pdf

According to that, Per capita incomes in Alberta have gone up from 30K to 48K from 2000-2010. In 2000 the population was about 2.88 million and in 2010 it was 3.725 million. In 2000 we were spending $6,800 million on public sector salaries and in 2010 it was $14,900 million. So on a per capita basis we were spending $2,361 in 2000 and in 2010 it was $4,000. A growth of 69% while all per capita income increased 60% in the same time span.

Keep in mind that public sector salaries are included in the per capita salary. If you take those away, private sector salary increases are even less.

Statistics Canada data shows that the average wage in alberta increased 50% in the decade following 2000, but that Alberta public sector wages also increased by 77%. In fact, the "provincial public administration" wage growth in Alberta was the second fastest of all the major categories tracked by Statistics Canada over the past decade, exceeded only by “Management of Corporations and Enterprises.” Pretty much a similar job...?

Also, it should be noted that many public sector employees are 'specialist' in that they don't compete with the Private Sector for jobs (Teachers, Doctors, Nurses) and really only with other provinces; of which Alberta far out pays most provinces including our closest neighbors.

[Bend it like Bourgeois]

Originally Posted by fotze

I think more importantly for attracting talent is to have jobs that are not soul sucking. That would probably help more than greater pay (that would help as well).

With my lame spreadsheet I was not saying that there is no fat to be cut, I have little doubt there is fat to be cut that may take care of about 5-10% of the problem if it was to be cut. There are three steps that need to be taken in order of how much it will help the situation.

1) Revenue increase - 65% However you want to achieve this?
2) Game changing spending cuts - 28% Complete elimination of things the gov't provides.
3) "Cut fat" - 7% Need to change the Alberta departmental budgeting mindset where reducing costs and finding efficiencies is actively discouraged by the process. Good luck with that happening though.

Is there a plot that traces from just before the Klein era into current that has three lines Gov't revenues, Expenses, deficit?

Would be interesting how volatile the revenues are due to the commodity prices?

i think what you areasking about is here - in table form http://www.rbc.com/economics/market/pdf/prov_fiscal.pdf

I think it would be interesting to take program expenses from the 90s, adjusted them for inflation and population growth, and compared them to today. How much has Alberta really changed from a small government place?

[Julio]

Originally Posted by yads

http://www.justice.gov.sk.ca/provcou...20MCMillan.pdf

According to that, Per capita incomes in Alberta have gone up from 30K to 48K from 2000-2010. In 2000 the population was about 2.88 million and in 2010 it was 3.725 million. In 2000 we were spending $6,800 million on public sector salaries and in 2010 it was $14,900 million. So on a per capita basis we were spending $2,361 in 2000 and in 2010 it was $4,000. A growth of 69% while all per capita income increased 60% in the same time span.

Keep in mind that public sector salaries are included in the per capita salary. If you take those away, private sector salary increases are even less.

Good points, but 2000 is a convenient point to start at. As I recall, it was around 2002 or so when public sector unions started getting really good contracts, in part because of the concessions that were made at the start of the Klein government.

Those good contracts, however, definitely had a knock on effect in other provinces.Unions in Saskatchewan and BC (and probably farther afield) definitely used them as a base to get better contracts for their memberships.

[Northski]

A good place to start with is to read the Drummond report that gives recommendations for Ontario to balance the budget over the next 4 years. Of course we don't need to take as drastic action as Ontario.

http://www.fin.gov.on.ca/en/reformco...ers/report.pdf

Its only 500+ pages...

A few highlights on revenue:
-Full cost recovery for government services unless there is case for subsides. This includes electricity, water, sewer, drivers license, roads etc.
-Cancel environmental subsidies (carbon sequestration) and instead use a carbon tax to reduce consumption.

On the spending:
-Staving the beast doesn't work you have to reduce demand for government services or reduce the cost of delivery for the services. For healthcare, spending less money just causes long line ups to build up in the heath system which eventually cause the government to catch up to the status quo growth sometime in the future. Reducing infrastructure spending and maintenance just cause traffic to get worst which leads to catch up spending later.

Anyways a lot of the report applies to Alberta especially the sections on heath and education.

[Tinordi]

Excellent suggestion on the Drummond report. For those who think that cutting waste is simple take a look at the recommendations contained within that report. You're going to be cutting waste until you feel some serious pain. Not that I would disagree with them, but to say that cutting spending is not without the same intensity of pain that tax increases would leave is just being naive.

[Knalus]

Originally Posted by Tinordi

Excellent suggestion on the Drummond report. For those who think that cutting waste is simple take a look at the recommendations contained within that report. You're going to be cutting waste until you feel some serious pain. Not that I would disagree with them, but to say that cutting spending is not without the same intensity of pain that tax increases would leave is just being naive.

I don't think that "serious" pain would be as bad as the serious pain increased taxes would result on me.

We have so much here in Alberta, and yet there are so many ungrateful people who think it's bad. It's not that bad, it's pretty great.

[chemgear]

http://www.calgaryherald.com/news/Di...905/story.html

Despite a projected $3-billion deficit, however, Premier Alison Redford has firmly ruled out tax increases or any new taxes.

“My preference is clear, I don’t want to see new taxes,” Redford said earlier this month. “I have a commitment and I’m sticking to my commitment — tax revenue won’t change.”

But look no further than her former finance minister Ron Liepert for a different view.

“I’m not saying Albertans are screaming to have new taxes,” Liepert says. “But if framed properly, they’d be prepared to engage in a discussion of what is the right level for paying for services.

[GP_Matt]

My biggest worry with new taxes is not the increase itself, but what will happen when/if resource revenue rebounds. If the taxes are to replace the reliance on resource revenue then I don't want the government spending the resource revenue on program spending. I would love to see something setup that if the resource revenue is above a certain low level the money will automatically go into the Heritage fund or some other source that can't be easily touched. Ideally, there would be something preventing them from using it unless resource revenue dropped below a certain threshold.

I would also be okay if all the resource revenue was directed towards a monolith of astronomic proportions and no practical use. Something on the scale of the Great Pyramids (both in terms of cost, practical usage and longevity).

[Tinordi]

Good points about resource revenue. We must resist the temptation to spend it. It's an inheritance that all Albertans current and future need to enjoy. That means you create an endowment and live off the dividend. IN the end, the debate is so skewed and perverted by the sense that royalties be treated just as another source of general revenue that we are blinding and deluding ourselves into thinking that we're paying for the services we're demanding. We aren't.

[Jacks]

I would actually be open to higher taxes if it meant that we were building the Heritage Fund. The sad fact is that the more money you give this government the more they will spend.

[chemgear]

http://www.cbc.ca/news/canada/calgar...-minister.html

Alberta Finance Minister Doug Horner told a crowd in Calgary Monday there will be no tax hikes in this year's budget to be delivered on March 7.

But the minister did not rule out the possibility of tax increases in the future.

[yads]

It's from the Fraser institute, so take it with a grain of salt.

http://www.fraserinstitute.org/uploa...in-alberta.pdf

After controlling for such factors as gender, age, marital status, education,
tenure, size of firm, type of job, and in dustry, public sector workers (including federal,
provincial, and local) located in Alberta in April 2011 enjoyed, on average, a 10.3
percent wage premium over their private sector counter parts. When unionization is
factored in, the premium is reduced to 7.5 per cent.

As of 2011, 81.4 percent of public sector workers in Alberta were covered by a registered pension compared to 21.5 per cent of private sector workers. In addition, 97.2 per cent of the Alberta public sector workers who were covered by a pension enjoyed a defined benefit pension plan compared to 43.5 per cent of private sector workers.

On aver age, between 2007 and 2011, public sector workers in Alberta retired 2.0 years earlier than private sector workers.

So basically public sector workers are not only enjoying better retirement benefits, which were long seen as the main benefit of working in the public sector, they are now enjoying greater wage compensation too.

[Jacks]

Premier Redford to outline Alberta’s financial woes in TV speech Thursday
http://www.theglobeandmail.com/news/...rticle7721986/

Premier Alison Redford is going to use a television broadcast to outline her government’s financial problems to Albertans.

The Premier’s Office says Ms. Redford will speak about the effect of rapidly falling resource revenues on Alberta’s long-term economic plan. Her eight-minute speech is to be broadcast on CTV stations Thursday night across the province.

Maybe Allison can tell us what has changed in the last 8 months?

“This is not going to be a fun budget. This is going to be a budget that will show that we are serious about reining in spending,” Mr. Horner told a Calgary business audience on Monday.

In the medium term, he said, there’s still the opportunity to trim spending and work to make sure government services are being delivered in the most efficient way possible.

“And then you can probably have a discussion about whether or not we have the right mix of taxation to accomplish the job, but that’s a little ways out yet.”

Translation: Increased taxes next budget.

Mr. Horner said there are serious structural issues with the province’s finances.

That would be the PC's

[chemgear]

Heh, "bitumen bubble". Here comes the "let's get our fair share"?

http://www.calgaryherald.com/news/Re...413/story.html

[Skootenbeeten]

Even when there isn't a bust Alberta is having financial difficulties, it really makes you wonder how fast this province would go downhill if the oil price was to take a serious dip. I am really curious where all of that cash is going because it certainly isn't going into the roads lol

[darklord700]

I have a hard time deciphering what she's saying. We can't cut spending and we don't raise taxes and there're 95000 more Albertans every year. So what do we do then?

[Azure]

Nothing.

You keep spending the money in savings. And in the meantime people will keep claiming you can't cut spending even though Alberta spends a frack of a lot more than anyone else.