[Aeturneus]

If oil holds at an average of $130 a barrel for 2008, the provincial government will run a surplus of over $6 billion. How do you think it should be spent?

My personal preference would be to put at least a third of it (say, 2 billion) towards accelerating public rapid transit initiatives on a regional level within and around Calgary and Edmonton. The premier has already voiced his support for this kind of initiative, with the province footing the bill for a Calgary region study. Edmonton should undertake a similar regional study and try to capture some of the surplus funds for municipal LRT.

[Calgarian]

Hsr!!!

[dansk]

I think Natural Gas is where the money is this year as well?

[Coldrsx]

2billion to the heritage fund

2billion (1 each) to edm/cal for public transit initiatives (lrt more so)

and while i dont want to break more of that down i feel we need to focus on:

-child care
-policing
-the environment
-public housing

[lubicon]

I think Natural Gas is where the money is this year as well?

With prices currently up where they are you would think so. In recent years gas has brought more money in than oil has although that is slowly changing again as oilsands production increases. I am still hearing anectodal evidence though of reluctance of producers to drill for gas (shallow gas in particular) due to the new royalty rates coming into effect next year. Sounds like there is still a lot of number crunching going on before big decisions are made as far as exploration budgets go.

Furthermore a lot of these companies are going to be in for a big surprise (again) if/when they decide to ramp up their drilling plans and find out that a lot of the equipment is no longer available, and there are no people to run it anyhow. They never learn.

[0773|=\]

I think more investment in economic diversification should be a priority.

Once the oil dries up, what will keep people in Alberta?

[dansk]

Yeah, the drills are not in the ground yet from the reports I am seeing at work either. However they are showing trends that is changing.

[Claeren]

Regional Rail just promotes even more sprawl - so i am not for that. It takes away the transportation cost penalty from living far from the city, and that penalty in lifestye cost is the only thing holding our cities in at all (as much as they already sprawl...)


And HSR is fine in another 20 years, but a complete build out of LRT in both cities seems a far far more important use of dollars and would be used daily in numbers dwarfing HSR usage, with savings in fuel costs for consumers, less congestion for those remaining drivers and net environmental benefits FAR outweighing any other things those dollars could buy (including HSR).


So that leaves LRT for me.

Capacity over route penetration:

- 4 car (and 5 car if possible) trains at every stop.

- A bunch of new trains ordered.

- DT Tunnel in Calgary

- New inner city lines for both Edmonton and Calgary with a focus on getting traffic onto LRT before it hits innercity choke points and also connecting important inner-city area locations/employers/etc and not on serving far flung suburban communities.



- I would love to see a program that pays for doctors uni education, but only if they agree to stay in the province for say 20 years. If they leave they pay us back at ~$30,000 year but if they stay they can have gotten a free education with living expenses, etc.



- Paying off municiple debt and healthcare debt would be abother good use. The province likes to play Santa while starving the departments actually responsible for these things.

- And more in the Heritage Fund is always nice - so much of what is being spent is just being eaten up by inflaton. We need to let current projects finish before starting more.... that is a big one for me!


Claeren.

[agent_imperial]

Assuming that 6 Billion ends up being the final figure I would like to see at least 1/2 of it go into the heritage fund. This should be treated as a windfall, not as regular income.

The other 3 billion should go into infrastructure or pre-funded programs that will diversify and provide long term competitive advantages. None of it should go to partially fund on-going programs that require consistent long term funding (healthcare, education, etc) because if this windfall dries up the province will not be able to continue. That does not preclude specific funding for a new hospitals, equipment, or schools... I just mean that it should not flow into general income for those areas.

Every project that is given money should be able to prove that it is a worthy investment. If the project will not provide a long term economic benefit greater than a specific hurdle ROR then it should not be given funding.

[Kevin_foster]

Give every albertan a $2,000 rebate cheque!!~~~~``

Kidding.

I'd like to see more spent on transit.

[Kevin_foster]

Yeah, the drills are not in the ground yet from the reports I am seeing at work either. However they are showing trends that is changing.

I have heard that over 150 new drilling rigs are headed for Alberta as we speak (for the trinidads, nabors, etc. etc.)

[Boris2k7]

Aside from putting the money towards the Heritage Fund, I'd like to see a lot of the money go towards topping off the little projects scattered around the province that have been waiting for funding. The UofC has near a half-dozen different projects alone waiting for provincial funding, and the Telus World of Science (Calgary) only needs a few million more for their new building.

[0773|=\]

If money is given to transportation, I think it would be nice if some funds could help cities deal with aging neighbourhood infrastructure and bad streets. Alberta could also play a little catch-up on the state of their highways, perhaps finally bringing the QE2 up to full freeway standards right away.

[Slug]

We could buy the HNIC jingle off of CTV and play it in the background whenever special Ed speaks, people would think he is Don Cherry!:haha: On a more serious note, we should bank a significant majority of it and spend the rest on sustainable infrastructure.

[frinkprof]

I like the ideas brought up by Claeren.

However, for the sake of simplicity and the game of "Premier for a day," and assuming $6B:

-$3B to Heritage Fund

-$0.75B to Calgary, earmarked to pay for part of downtown subway, 4/5 car platforms, and a couple needed interchanges (like Heritage/MacLeod)

-$0.75B to Edmonton, earmarked for NLRT, needed road projects (sorry, not as familiar with Edmonton)

-$0.75B to rest of Alberta cities for transit/roads

-$0.75B to sustainable provincial capital projects (renovating inner-city schools, post-secondary campus projects, hospital renovations/expansions)

[0773|=\]

-$0.75B to Edmonton, earmarked for NLRT, needed road projects (sorry, not as familiar with Edmonton)
-

Whitemud from 53rd Ave to Terwilliger, and Terwilliger @ 40th Ave. Also Whitemud @ 17th street. After this, all new funding can be thrown at the Yellowhead, if the province doesn't take it over before then.

[Calgarian]

Okay, I would actually like to see the LRT in both Calgary and Edmonton finished, as well as the ring road in both cities finished. After that I would like to see the HSR go through. I had to commute to Edmonton for a 1 hour meeting last week, and taking a 45 minute train ride each way would have beat a 2.5 hour drive.

[Coldrsx]

^dont kid yourself...45min it would not be.

[Sir.Humphrey.Appleby]

Yeah, just under 2 hours is the market research driven number, while if the province built to the standard of new lines in France you could get an hour and ten minutes with stops. To go from TGV speeds up to Mag Lev doubles the cost .

[The Kid]

If I was premier I would give a billion to myself and put the rest in the Heritage fund, and then have said fund transfered into my name. Sounds reasonable.

[Coldrsx]

I like the idea of a one time payment for $2000.....

[Aylmer]

Or maybe giving it to other privinces to help them pay their debt (?) ...

Would't that be nice!

:)

[Markus41]

Or maybe giving it to other privinces to help them pay their debt (?) ...

Would't that be nice!

:)

No, now go away child.

[freeweed]

Once the oil dries up, what will keep people in Alberta?

The flying car factories, nuclear fusion plants, and possibly the space port dedicated to tourism.

3 things that we're likely to see long before oil runs out here.

[The Kid]

Or maybe giving it to other privinces to help them pay their debt (?) ...

Would't that be nice!

:)

NO! I'd rather blow it on popcorn and beer for Albertans first.

Don't worry, I'm sure the Feds and other provinces are busy trying to figure out a new way to swoop in and grab some more of that Alberta cash. Stay tuned!

[Wooster]

If the number is something like 6 Billion, I would:

- Put $3 billion in savings (and mandate at least $5 billion each year and a minimum 50% of any budget surpluses go to savings so that the province can raise at least $100billion in the next 20 years).

- $500 million into an Alberta Arts and Cultural Endowment

- $1.2 Billion for LRT - $600 million each to Calgary and Edmonton (In Calgary use it for moving forward with SE LRT, try to get some federal help with that $2 billion project).

- $500 million for post secondary infrastructure (like a new ACAD campus, Urban campus, U of A expansions)

- $300 million for economic diversification programs (funding alternative energy research)

- $300 million for community revitalization $100 million each for Calgary and Edmonton and another $100 million for smaller municipalities (In particular, downtown revitalization for things like public realm and large scale pedestrian infrastructure refurbishment.)

[0773|=\]

The flying car factories (...)

..mmm... don't know, they'll probably be busy shutting those down because Japanese flying cars are too competetive for their Albertan counterparts.

[Jasper and one o nin]

LRT and NOW

[Wooster]

Long term savings clearly has to become a priority for Alberta.

If I were premier, aside from making some badly needed short term infrastructure investments, I would begin to set up an endowment based long term funding strategy.

Over time, I would put billions into a particular area, which would make it essentially self sufficient.

For instance, if each post secondary institution had a large endowment (say $15 billion each for U of C and U of A) I believe they could probably sustain themselves financially over time, without funding coming from the regular budget.

Arts and culture could receive a $1-2 billion endowment and never have to receive funding from general revenue ever again.

And so on.

The more areas of provincial responsibility that get an endowment, the less has to be taken from general revenue, which increases the ability for the province over time.

The current Heritage fund could go to pay for research and economic diversification.

In 50 years, the cumulative savings (the combined amount of all these endowments) should equal something like $250 billion).

[tkoe]

These kinds threads always annoy me because people demand we build huge infrastructure projects without any thought to the consequences. Most Albertans seem to be unaware of the fact we do not pay enough in taxes to support the services we are accustom to. There is no question in my mind that as a province we must live within our means – like revenue generated from stable sources such as income tax. We can pretend that oil will last forever, but it won't and neither will the great things it pays for unless we invest our money properly.

Norway puts virtually all of its oil revenues into an investment fund and only uses a small portion of interest to pay for government programs. Rather than blowing our money on massive highway interchanges or pointless rebate cheques, we need to follow Norway’s example and create the wealthiest and most economically and socially progressive jurisdiction in North America.

…it is unfortunate that at the moment Alberta seems to want to be the podunk lotto winner spending his money on a new truck and a case of colt 45 instead…

[dansk]

It is annoying, people don't realise the amount of money being thrown around. Just giving money away like we do causes inflation.

[shogged]

I'm with just about everyone else on making LRT a priority. I'd go as far to say 1.5 Billion to each of the major cities, maybe even 1 billion for Calgary and 2 billion for Edmonton to do a little catch up (even though thats a big GFL convincing other albertans of that!)

As for new interchanges, I think the time lines for those are already appropriate and I don't see a huge need to fast track the majority of them (exempt maybe the heritage Macleod because of the LRT signal being a major cock block thats only to get worse very very quickly)

Ring road would be my next priority!

I think a better idea would have been to vote a little more liberal in the last election. Send the tories scrambling and we would have seen a rebate check for sure! :haha:

[Doug]

Given high prices for oil and gas, a surplus of only $6B is an embarassment. Ten years ago when oil was in the teens and gas somewhere between $2-$3 / gJ, the surplus was $2.8B. Spending has gotten way out of hand, but it doesn't seem to be delivering much in the way of results.

[korzym]

How about reduce the income tax?

Wouldn't it be great if current costs the provincial gov has could be covered by royalties?

Eliminating the personal income tax would have the greatest and most positive impact on Albertans.


-and while current projects are great and appreciated, IMO this province should become a little more conservative. All these proposed programs would give me a more socialistic view of this province. People should take care of themselves instead of asking for handouts.

[Boris2k7]

How about reduce the income tax?

Wouldn't it be great if current costs the provincial gov has could be covered by royalties?

Eliminating the personal income tax would have the greatest and most positive impact on Albertans.

Oh, where to start... Let's decide our entire budget on royalties derived from a non-renewable resource. As the input costs rise over time, and the global supply dwindles, we can have fun pitting our fiscal situation against the multinational oil companies. As an added bonus, the fact that we can only rely on market projections means that come the end of the year, we can just tell whatever programs that we simply can't fund them this year due to a shortfall in cash, but maybe we'll make up for it next year, or the year after. And if that weren't enough, whatever savings people have from income tax deducations will be made up for readily in spiraling inflation.

-and while current projects are great and appreciated, IMO this province should become a little more conservative. All these proposed programs would give me a more socialistic view of this province. People should take care of themselves instead of asking for handouts.

Funny that. IMO, this province should become a little more socialistic. This current government, and past governments, gives me a very conservative view of this province. Oh, BTW, remember to pay your health care bill in full on the way out.

[korzym]

Oh, where to start... Let's decide our entire budget on royalties derived from a non-renewable resource. As the input costs rise over time, and the global supply dwindles, we can have fun pitting our fiscal situation against the multinational oil companies. As an added bonus, the fact that we can only rely on market projections means that come the end of the year, we can just tell whatever programs that we simply can't fund them this year due to a shortfall in cash, but maybe we'll make up for it next year, or the year after. And if that weren't enough, whatever savings people have from income tax deducations will be made up for readily in spiraling inflation.



Funny that. IMO, this province should become a little more socialistic. This current government, and past governments, gives me a very conservative view of this province. Oh, BTW, remember to pay your health care bill in full on the way out.


This province is responsible for Canada having the 3rd largest oil reserve in the world [yes children, Iraq officially has the most oil]. The oil we have will not just pop out of the ground, it will likely be mined for many decades [at least about 90 years assuming planned production were to begin immediately]. Once the province has caught up on the major infrastructure projects it should sit back and address the income tax situation by cutting spending and cutting taxes. An ideal scenario would be if they eliminated the personal income tax, but in this country, a reduction would be welcomed.

Your points just suck. Global supplies will dwindle...you haven't considered the price of oil will likely stay high under such a scenario? I hope you grow up if you ever go work for the city, you never consider all aspects, only the ones that support your commie views. But anyway...these surpluses are evidence that we can begin to consider lowering the personal income tax.

[Hillbillary]

Why don't we do something truly visionary and invest in provinces around us so that we'll have strong trading partners (markets for our value-added goods) when the world's economies become more regionalize because of high energy prices? Oh I forgot, we're Albertan.....let's just spend it on ourselves post haste.

[Boris2k7]

This province is responsible for Canada having the 3rd largest oil reserve in the world [yes children, Iraq officially has the most oil]. The oil we have will not just pop out of the ground, it will likely be mined for many decades [at least about 90 years assuming planned production were to begin immediately]. Once the province has caught up on the major infrastructure projects it should sit back and address the income tax situation by cutting spending and cutting taxes. An ideal scenario would be if they eliminated the personal income tax, but in this country, a reduction would be welcomed.

We will never "catch up" on major infrastructure projects, unless our population declines or stays stagnant for a long time, which opens up it's own set of problems. That's wishful thinking. And again, what is the point of lowering the income tax, thus freeing up disposable income, if it just drives up inflation further?

Your points just suck. Global supplies will dwindle...you haven't considered the price of oil will likely stay high under such a scenario? I hope you grow up if you ever go work for the city, you never consider all aspects, only the ones that support your commie views. But anyway...these surpluses are evidence that we can begin to consider lowering the personal income tax.

You are completely lacking in substance. Typical conservative. Have you ever considered that as the price of oil goes up, and supplies go down, that oil company profits will start to decline, ALONG with royalties? No, of course you never considered that. You see, it's this whole "Peak Oil" thing. You know, demand outstripping supply and all that jazz. Go read a book about it.

Maybe you should also go back to school and retake political science, because you clearly failed and can't figure out what exactly a "commie" is.

Why don't we do something truly visionary and invest in provinces around us so that we'll have strong trading partners (markets for our value-added goods) when the world's economies become more regionalize because of high energy prices? Oh I forgot, we're Albertan.....let's just spend it on ourselves post haste.

With some strings attached, I don't think there would be anything wrong with buying off some of our neighbouring provinces' debts (you know, other than Ontario coming along and demanding we bail them out). But, what "value-added' products are you speaking of? Just curious. We are at a distinct disadvantage compared to, say, Manitoba, when it comes to manufacturing.

[korzym]

You are completely lacking in substance. Typical conservative. Have you ever considered that as the price of oil goes up, and supplies go down, that oil company profits will start to decline, ALONG with royalties? No, of course you never considered that. You see, it's this whole "Peak Oil" thing. You know, demand outstripping supply and all that jazz. Go read a book about it.


lol

........first................when prices go up, usually more is produced. This decreases the price.

However, as you note, demand is outstripping supply. Prices go up when demand is higher than supply, and Buffettologists would refer to this as a "consumer-monopoly", essentially a favourable industry to be in, from an owners perspective. Albertans "own" the oil up north..

It doesn't seem like demand will back off, even as N.America is becoming more aware of being efficient, China and India likely will step up and make up for any possible decrease in demand for oil seen in the U.S. The Chevy Volt [good old American tech!], might change the entire game in 20-30 years, so for all we know, future cars will be powered by coal and nuclear energy..whatever utilities use to generate power. The US dollar's devaluation also plays a role, so in regards to oil prices it makes it that much more interesting.

It's best to save on personal income tax, allow families to generate wealth that they can pass down. The point is, the surplus money can be put towards any provincial costs by cutting personal income tax, we're being over-taxed. I'm not even saying cut programs here, why continue to take so much money from Albertans when the same achievements can be financed at a smaller cost to average Albertans? It makes no sense to go on fantasy shopping sprees to justify over-taxing your citizens

[Boris2k7]

lol

........first................when prices go up, usually more is produced. This decreases the price.

However, as you note, demand is outstripping supply. Prices go up when demand is higher than supply, and Buffettologists would refer to this as a "consumer-monopoly", essentially a favourable industry to be in, from an owners perspective. Albertans "own" the oil up north..

It doesn't seem like demand will back off, even as N.America is becoming more aware of being efficient, China and India likely will step up and make up for any possible decrease in demand for oil seen in the U.S. The Chevy Volt [good old American tech!], might change the entire game in 20-30 years, so for all we know, future cars will be powered by coal and nuclear energy..whatever utilities use to generate power. The US dollar's devaluation also plays a role, so in regards to oil prices it makes it that much more interesting.

Prices can only keep going up and up until, eventually, it is hardly affordable. And the prices of everything that relies on it will go up as well. Nothing that comes out from the car manufacturers is going to keep people driving at current rates as the the cost of filling up will inevitably be higher, not that it's relevant to the oil discussion really. Point being, that oil is a dwindling resource, that it's only going to be more expensive to obtain from this point onwards, and that it is going to be an even harder fight to squeeze royalties out of energy companies once their inputs are rising faster than than they can sell the damn stuff. That party is fading fast, and in forty years might indeed be over. It's not a sustainable future.

It's best to save on personal income tax, allow families to generate wealth that they can pass down. The point is, the surplus money can be put towards any provincial costs by cutting personal income tax, we're being over-taxed. I'm not even saying cut programs here, why continue to take so much money from Albertans when the same achievements can be financed at a smaller cost to average Albertans? It makes no sense to go on fantasy shopping sprees to justify over-taxing your citizens

I would question you on how you arrive at the conclusion that Albertans are overtaxed, and how lowering taxes would help anything. There is no point in arriving at such a "conclusion" if your entire premise is invalid.

Remove income taxes and we would be totally dependent on big oil (gaining them unprecedented political power to the point of making an elected government irrelevant), also making us also totally vulnerable to changes in the market.

I will say one thing: I am glad that you and I can carry on a reasonable conversation despite some initial sparring. Unlike some other people on my ignore list.

[JBinCalgary]

fcuk the train idea

[Markus41]

Why don't we do something truly visionary and invest in provinces around us so that we'll have strong trading partners (markets for our value-added goods) when the world's economies become more regionalize because of high energy prices? Oh I forgot, we're Albertan.....let's just spend it on ourselves post haste.

Which provinces and why?

[Bassic Lab]

lol

........first................when prices go up, usually more is produced. This decreases the price.

However, as you note, demand is outstripping supply. Prices go up when demand is higher than supply, and Buffettologists would refer to this as a "consumer-monopoly", essentially a favourable industry to be in, from an owners perspective. Albertans "own" the oil up north..

It doesn't seem like demand will back off, even as N.America is becoming more aware of being efficient, China and India likely will step up and make up for any possible decrease in demand for oil seen in the U.S. The Chevy Volt [good old American tech!], might change the entire game in 20-30 years, so for all we know, future cars will be powered by coal and nuclear energy..whatever utilities use to generate power. The US dollar's devaluation also plays a role, so in regards to oil prices it makes it that much more interesting.

It's best to save on personal income tax, allow families to generate wealth that they can pass down. The point is, the surplus money can be put towards any provincial costs by cutting personal income tax, we're being over-taxed. I'm not even saying cut programs here, why continue to take so much money from Albertans when the same achievements can be financed at a smaller cost to average Albertans? It makes no sense to go on fantasy shopping sprees to justify over-taxing your citizens

That is the most irresponsible idea ever, it isn't conservative or liberal, just foolish. Do you really think it is a good idea to piss away all of Alberta's wealth on basic operating expenses? We have inherited a windfall and you'd have us respond by refusing to invest it or continue to raise revenues through alternative channels.

Tax rates in this province are already too small when compared to spending, we rely too heavily on resource revenues that should belong to every Albertan, not just those around now.

[Claeren]

Given high prices for oil and gas, a surplus of only $6B is an embarassment. Ten years ago when oil was in the teens and gas somewhere between $2-$3 / gJ, the surplus was $2.8B. Spending has gotten way out of hand, but it doesn't seem to be delivering much in the way of results.

I agree generally speaking but it is worth noting that the Canadian dollar is worth ~50% more than it was then. It is basically a $10B surplus comparatively...



Claeren.

[lubicon]

Or maybe giving it to other privinces to help them pay their debt (?) ...

Would't that be nice!

:)

We already do that. All the workers that come here from out of province on a commuter basis pay income tax to the province they reside in, not Alberta. We are also buying a ton of stuff from suppliers in other provinces, who also pay taxes to those provincial governments.

[lubicon]

Yeah, the drills are not in the ground yet from the reports I am seeing at work either. However they are showing trends that is changing.

State/Province Rig Count
Western Canada
Report Date: June 3, 2008
State/Province Drilling Down Total % Drilling
Alberta 94 583 677 13.9
British Columbia 25 71 96 26.0
Manitoba 8 3 11 72.7
Northwest Territories 1 5 6 16.7
Saskatchewan 58 36 94 61.7
Totals 186 698 884 21.0

Currently 94 of 677 rigs in Alberta are working, and only 186 of 884 are working in western Canada.

[dansk]

That's what I am saying, there isn't much going on right now. But that is about to change from numerous reports I am seeing across my desk.

[IKAN104]

I'd like to see the Heritage Fund balloon to the point where income taxes can be eliminated. But how big does it need to get for that to happen?

[IKAN104]

I found some numbers to answer my own question.

Provincial Personal Income Tax Revenue Forecast (2008/09): $8.6 Billion
Heritage Savings Fund current value: $16.6 Billion
Heritage Savings Fund is projected to earn in 2008: $1.1 Billion

So all things being equal, the fund would have to increase in value approximately eight fold to $132.8 Billion to make it possible to replace the revenue from personal income tax with revenue earned by the fund.

If you then also want to inflation proof the fund and continue to increase the value of the fund a much higher number would be required.

[WeavedWeb]

The provincial government is already way overspending. The only project that I think is actually worth funding through a surplus is the downtown U of C campus/educational centre. The rest should go into the Heritage Trust Fund.

[dansk]

UoThe more I think of it, the Hertitage fund should be getting 90% not budgeted revenue. This also keep budgets more accountable on the front end.

[240glt]

Both major U of A projects should be funded in full (Edmonton Clinic especially as it will serve all Albertans) I'd like to see the NAIT south campus come to life.

K-12 schools in this province are in sad sad shape also. Some of the deferred maintenance should be completed

LRT, obviously.

[Sir.Humphrey.Appleby]

The cutting income tax thing is interesting, but remember when you start to provide services for nothing, demand sky rockets.

Even now Albertans have the disconnect of the lowest tax combined with the highest spending. If conservatives really want to lower spending, tax the entire amount like Norway does, and put all resource revenues in the Trust Fund.

While we could replace income tax, it would require relative austerity now to build up the savings. Once there is no income tax, it may create an in flow of people necessitating higher spending, at which point taxes would have to be reintroduced.

A mixture of savings, capital project spending where the project does not require operating funds after construction (transit would be an example, since the province doesn't pay the operating subsidy, roads would be another since the subsidy is paid by gas taxes), and endowment creation in targeted areas would do a whole lot of good.

[nasdaq]

State/Province Rig Count
Western Canada
Report Date: June 3, 2008
State/Province Drilling Down Total % Drilling
Alberta 94 583 677 13.9
British Columbia 25 71 96 26.0
Manitoba 8 3 11 72.7
Northwest Territories 1 5 6 16.7
Saskatchewan 58 36 94 61.7
Totals 186 698 884 21.0

Currently 94 of 677 rigs in Alberta are working, and only 186 of 884 are working in western Canada.

Thats just seasonal. April, May and June have the lowest utilization rates and it picks up from here (although the heavy rain could impact that). As of yesterday, utilization is only down 1% from last year. However, the number of active rigs are down 12% from this time last year.

[lubicon]

The cutting income tax thing is interesting, but remember when you start to provide services for nothing, demand sky rockets.

Even now Albertans have the disconnect of the lowest tax combined with the highest spending. If conservatives really want to lower spending, tax the entire amount like Norway does, and put all resource revenues in the Trust Fund.

While we could replace income tax, it would require relative austerity now to build up the savings. Once there is no income tax, it may create an in flow of people necessitating higher spending, at which point taxes would have to be reintroduced.

A mixture of savings, capital project spending where the project does not require operating funds after construction (transit would be an example, since the province doesn't pay the operating subsidy, roads would be another since the subsidy is paid by gas taxes), and endowment creation in targeted areas would do a whole lot of good.

There is another alternative that may be worth considering. You CAN eliminate income tax and replace it with a sales tax as many states have done (Texas and Florida for example). While a sales tax may not be all that enjoyable for Albertan's to think about you might be able to get away with it if you combine it with the elimination of income tax. The downside is that the revenues to the province wil rise and fall with consumer spending.

[Boris2k7]

Another problem with the sales tax is that it disproportionately affects lower incomes, though there are exceptions on some staples. Income tax is fair, as you pay what is in your ability to pay.

[lubicon]

Another problem with the sales tax is that it disproportionately affects lower incomes, though there are exceptions on some staples. Income tax is fair, as you pay what is in your ability to pay.

While I won't disagree with your statement Boris, you can also argue that our current income tax system does the same in that it disproportionately affects those with higher incomes as they pay higher rates. Of course that only is true for our federal taxes since we pay a flat rate in Alberta.

There are a lot of us who don't think that income tax is exactly fair (other than the flat tax portion).

[korzym]

I found some numbers to answer my own question.

Provincial Personal Income Tax Revenue Forecast (2008/09): $8.6 Billion
Heritage Savings Fund current value: $16.6 Billion
Heritage Savings Fund is projected to earn in 2008: $1.1 Billion

So all things being equal, the fund would have to increase in value approximately eight fold to $132.8 Billion to make it possible to replace the revenue from personal income tax with revenue earned by the fund.

If you then also want to inflation proof the fund and continue to increase the value of the fund a much higher number would be required.

It's not the fund's income that draws my attention, its the surpluses such as the one mentioned in the first post of this thread! Imagine what good it would do to maybe reduce income tax to say $5B, and put the rest of the surplus into the fund. The money's there to do this, for the last few years we have steadily been witnessing these large surpluses. Consider this, we just raised the royalty rate, production will basically double over the coming decade in this province, oil prices being held up by world demand namely China and India---why not look at reducing the personal income tax?

Some people say we can't rely on 'evil big oil companies/industry' to cut income tax, but when it comes to going on non-conservative shopping sprees suddenly it changes and we can rely on big oil, on one industry. What I propose is truly intelligent, a reduction in the personal income tax by a couple billion, while putting the excess into the fund: the short-term and long-term are benefited, both deserving. The single greatest area where you can have an impact on every Albertan is reducing the income tax. Not to mention this would attract more labour to the province, and more wealthy people to the province [which increases the tax base, hate them or love them].

[Boris2k7]

Well, I disagree that the income tax is unfair by any means, as I think that the rich should help the poor. Having a large wealth gap is certainly not a good thing. (http://www.thestar.com/comment/columnists/article/164866)

[240glt]

There are a lot of us who don't think that income tax is exactly fair (other than the flat tax portion).

One might argue that those who pay higher income taxes do so because their higher incomes have been facilitated by the services that taxes pay for.

[MichaelS]

Services such as what for example? I tend to think it is unfair to tax someone more, simply because they earn more.

As for the surplus, I am in the camp with those who say put it into savings/endowment funds. As for the person who said build capital projects that don't have maintenance costs, I can sort of see what you are saying but you need to realize that someone has to pay for that maintenance. You cited LRT as an example, and though it would be great if the Province gave both Edmonton and Calgary full new lines, I would hope that they might also help out in paying for their operations, as many city budgets are already to small for maintenance and operations, and transit fairs don't come close to covering the costs.

[240glt]

^ Look at the government institutions that are set up to aid business developments, Roads & transportation networks & other infrastructure, the legal system etc etc. High income earners benefit exponentially from the services and infrastucture that the government provides.

[DizzyEdge]

Well, I disagree that the income tax is unfair by any means, as I think that the rich should help the poor. Having a large wealth gap is certainly not a good thing. (http://www.thestar.com/comment/columnists/article/164866)

I like the idea of a flat tax as well, as long as the 'personal amount' is high enough that a person could realistically live on that amount, even if it's a complete no-frills survive existance, then it's a persons 'disposable income' that's taxed. Also even with a flat tax the wealthy pay more. if the tax is 20%, and the personal amount is $15,000.. then someone making 20,000 pays $1000 tax, = 4% of total income, whereas someone making $150,000 pays $27000 = 18% of total income.. but this is kinda offtopic I suppose.

[Aylmer]

How about reduce the income tax?

Wouldn't it be great if current costs the provincial gov has could be covered by royalties?

Eliminating the personal income tax would have the greatest and most positive impact on Albertans.

Why does everyone think that no taxes will solve all life's problems
(BTW, did you ever notice that EVIL backwards is LIVE?) BUT IT IS NOT!!!
It helps people who don't get to splurge in the surplus or earn hundreds a
day! It helps you when you have a suddent cardiac arrest when they
announce a proposal for a 100 storey scraper and when, god forbid, you
decide that today more of a day to take transit than your Hummer.


I like taxes, but I don't pay them.

You should like having taxes.


and while current projects are great and appreciated, IMO this province should become a little more conservative.

Ha ha ha!!!! Ha! HA! HA! HAAAAAAAAAAHAHAH!!!!!!!!!!1

Whoooo!

*snif* no, but seriously, you can't be serious!

:)

[korzym]

Why does everyone think that no taxes will solve all life's problems
(BTW, did you ever notice that EVIL backwards is LIVE?) BUT IT IS NOT!!!
It helps people who don't get to splurge in the surplus or earn hundreds a
day! It helps you when you have a suddend cardiac arrest when they
announce a proposal for a 100 storey scraper and when, god forbid, you
decide that today more of a day to take transit than your Hummer.


I like taxes, but I don't pay them.

You should like having taxes.




Ha ha ha!!!! Ha! HA! HA! HAAAAAAAAAAHAHAH!!!!!!!!!!1

Whoooo!

*snif* no, but seriously, you can't be serious!

:)
^This has to be the most incoherent message ever written.

[Aylmer]

^This has to be the most incoherent message ever written.

This has to be the post which I least understand.

Elaborate, my dear Watson!

:)

[MichaelS]

I like taxes, but I don't pay them.

You should like having taxes.




I am curious to see if you have a change in heart once you do start paying taxes.

[MichaelS]

^ Look at the government institutions that are set up to aid business developments, Roads & transportation networks & other infrastructure, the legal system etc etc. High income earners benefit exponentially from the services and infrastucture that the government provides.

I can see your point, but the argument can also be made that every citizen, rich or poor, has equal access to all of these services and infrastructure.

[Aeturneus]

I can see your point, but the argument can also be made that every citizen, rich or poor, has equal access to all of these services and infrastructure.

Hard time using a ring road if you don't own a car. Though you still draw indirect benefits from living in a city where people who do own cars can use them efficiently. Much like how people who only use cars draw an indirect benefit from people using public transit. Let's work together people - individualism is good to a point, but we won't get far as a province if we don't look out for each other's interests.

[freeweed]

I like taxes, but I don't pay them.

That's par for the course, chuckles.

[tkoe]

I don't get why people bitch on and on about taxes. I pay a boat-load of taxes and it isn't something that I enjoy necessarily, but I understand why we need them. How farkin' greedy can a person be to expect to pay nothing for infrastructure, education, health care, etc.?

[freeweed]

I don't get why people bitch on and on about taxes. I pay a boat-load of taxes and it isn't something that I enjoy necessarily, but I understand why we need them. How farkin' greedy can a person be to expect to pay nothing for infrastructure, education, health care, etc.?

The problem is that for whatever reason, people seem to try to organize this into 2 camps: those that are happy to pay 100% of their income in taxes, and those that only want to pay 0%.

I've never expected to pay nothing (not even close), yet if I make the merest suggestion of a tax reduction I usually get placed into that group.

Taxation is a lot more complicated than "farkin' greedy bastards never wanna pay one red cent" vs "stupid commies want to steal my entire paycheque" - yet this thread certainly isn't atypical in terms of how these discussions end up.

[Boris2k7]

A problem I will bring up again, is that a tax reduction really only helps in cases where people are actually being overtaxed. And how do you decide if people are overtaxed? If you ask them, 95% will probably say they are, but are they?

[freeweed]

A problem I will bring up again, is that a tax reduction really only helps in cases where people are actually being overtaxed. And how do you decide if people are overtaxed? If you ask them, 95% will probably say they are, but are they?

The way I see it, and of course this is the rub, is I'm overtaxed when tax money is being wasted.

The rub being that everyone has their own definition of "wasted". ;)

[Bassic Lab]

It's not the fund's income that draws my attention, its the surpluses such as the one mentioned in the first post of this thread! Imagine what good it would do to maybe reduce income tax to say $5B, and put the rest of the surplus into the fund. The money's there to do this, for the last few years we have steadily been witnessing these large surpluses. Consider this, we just raised the royalty rate, production will basically double over the coming decade in this province, oil prices being held up by world demand namely China and India---why not look at reducing the personal income tax?

Some people say we can't rely on 'evil big oil companies/industry' to cut income tax, but when it comes to going on non-conservative shopping sprees suddenly it changes and we can rely on big oil, on one industry. What I propose is truly intelligent, a reduction in the personal income tax by a couple billion, while putting the excess into the fund: the short-term and long-term are benefited, both deserving. The single greatest area where you can have an impact on every Albertan is reducing the income tax. Not to mention this would attract more labour to the province, and more wealthy people to the province [which increases the tax base, hate them or love them].

You're treating royalties like it is normal revenue, which it isn't. Royalties are the result of a one time sale of a provincial asset. It is stealing from future Albertans to use the money made from the sale of an asset for any thing that is not also another asset of some kind. That asset can to some degree be infrastructure (hospitals, roads, transit, schools, etcetera), so long as general revenue can continue to pay for operating expenses, but really the best use is savings that will generate revenue for the province. To blow it on tax cuts is unethical. The money is not surplus and should not be treated as such. If the feds sold all crown corporations and made, lets say, 100 billion in a year, that does not mean taxes should drop to a corresponding degree. To argue so is laughable.

[lubicon]

I don't get why people bitch on and on about taxes. I pay a boat-load of taxes and it isn't something that I enjoy necessarily, but I understand why we need them. How farkin' greedy can a person be to expect to pay nothing for infrastructure, education, health care, etc.?

I have no problem paying taxes as long as I perceive that I am getting good value for the money. It's when I see how some of our tax dollars are being spent that I will complain.

[Aylmer]

I am curious to see if you have a change in heart once you do start paying taxes.

I make less than my cat.

:)

[MichaelS]

I make less than my cat.

:)

Hopefully that won't be the case for your whole life.

[freeweed]

Hopefully that won't be the case for your whole life.

Doesn't really matter, that's what taxes are for after all.

[KrisYYC]

$4000 rebate cheques for anybody 18 and over :D:D

j/k

I'd like to see most of go into the Heritage fund, with between $1 billion and $1.5 billion go to Calgary and Edmonton so the cities can start going apeshit with LRT expansion.

I'd like to see some things done more efficiently as well, why is it we spend more per capita on health care than any other province? Even with the premiums? There's some mismanagement going on somewhere.

[chenmau]

Using the oil and natural gas price sensitivities noted in the 2008-2009 provincial budget, if the oil price stay at $130 and the natural gas prices stay at $12 for the rest of this year, we are looking at a $13 Billion surplus. That grows to a $21 Billion surplus in 2009-2010, if prices stay this high.

[korzym]

Frankly, lets buy our own air force.

[Hillbillary]

Originally post by Hillbillary:
Why don't we do something truly visionary and invest in provinces around us so that we'll have strong trading partners (markets for our value-added goods) when the world's economies become more regionalize because of high energy prices? Oh I forgot, we're Albertan.....let's just spend it on ourselves post haste.


With some strings attached, I don't think there would be anything wrong with buying off some of our neighbouring provinces' debts (you know, other than Ontario coming along and demanding we bail them out). But, what "value-added' products are you speaking of? Just curious. We are at a distinct disadvantage compared to, say, Manitoba, when it comes to manufacturing.

Which provinces and why?

this thread has moved on a bit since these posts but for the courtesy of a reply:

I should have included Services (Financial & High Tech etc.) as exportable commodities of Alberta but "Value-added" products Alberta currently offers include chemicals, plastics and Ag business, granted they are small compared to Manitoba's manufacturing hopefully they will grow and spin off tertiary industries...beats shipping raw resource straight out of the province.

I was thinking in terms of "investments" in perhaps Saskatchewan's uranium and potash industries or Manitoba's Aerospace and Transportation sectors (with returns, of course, not blank cheques).

I think rising transportation costs are starting to change trade patterns around the globe. I'm not sure we will be able to rely on Europe and Asia as customers as we have in past. by strengthening our "homies" we strengthen ourselves, no?

What sort of investment vehicles does the Heritage Trust fund current use, does anyone know?

[Aeturneus]

Yep, looks like we're on track for a $12 billion surplus

http://www.canada.com/topics/news/national/story.html?id=bafab47e-1924-485c-8a70-dacd3eeba7d5

[Doug]

^Until $2B in unbudgeted spending goes through to cover cost overruns on infrastructure projects and to cover the decifits of the the health regions and school boards. When was the last time that Alberta's spending come in even close to that budgeted?

[Wooster]

I do think that spending needs a certain degree of restraint, especially the proportion of the budget that is covered by non-renewable resource revenue. Perhaps they should put in place a policy that specifies that no more than 20 or 25% of the budget is covered by royalties, with that proportion sliding down to say 15% or 10% over a period of time. Wean ourselves off of this unreliable revenue source so to speak. Eventually it would basically all go to savings/endowments like I proposed a page back.

How much of the budget is currently being spent with royalties?

[Doug]

2008 budgeted expenses are $37B.
2008 budgeted non-renewable resource revenue is $11.7B.

So ~30% of budget is being covered by a non-recurring revenue stream. Bringing that down to 10% would require spending restraint of $8B.

Health spending is a whopping $13.5B up from $6.9B in 2001 (so much for underfunding).

Non-health related infrastructure is budgeted at $7.4B ($8.7B including health which is also counted in the $13.5B figure).

As a comparison to other provinces, Ontario's total budget is $97B while that for BC is $37B. Per capita that works out to ~7,500 per person in Ontario, ~8,400 in BC and $10,600 in Alberta. It is worth pointing out that the Ontario and BC numbers include debt servicing costs. If Alberta were to reduce its spending by $8B, it would be spending roughly the same as BC (although BC would still be spending $525 per capita in debt servicing while Alberta would be spending close to zero.)

[KrisYYC]

^^ What is driving the health spending so high? Is it just the growing pains of expanding the system?

I keep seeing those stupid union commercials on TV about how Stelmach is underfunding the Health Care system. Well obviously it's not underfunded, mismanaged is more like it.

It'd be interesting to see the labour costs of our heavily unionized public sector in relation to their productivity.

[You Need A Thneed]

$12B Surplus? Get rid of it by picking the names of 12,000 random Albertans, and giving them a million dollars each.

[MichaelS]

Oh that could be fun with the right stipulations. It has to be spent entirely in the province, and you have a time limit to do it....

[canucklehead2]

Like some sort of "Eddie's big give?" jeez....

[e909]

I'm probably going to be lynched for saying this, but eliminate corporate taxes in Alberta.

[Sir.Humphrey.Appleby]

I'm probably going to be lynched for saying this, but eliminate corporate taxes in Alberta.

As long as you have a flat withholding tax on profits paid out as dividends outside of the province, that is equal to the provincial personal tax that would be paid on dividends by individual Albertans that plan should be fine (you would have to tinker with rates to make it revenue neutral).

A problem with this is that incentives for research, or environmental initiatives would have to be given in real money, instead of tax write offs. For some reason the media sees tax incentives as forgone revenue, and therefor not a real 'cost'.

Alberta doesn't really need any more stimulation right now, and the best course of action would be needed infrastructure to help adapt to a low carbon future, including a CO2 pipeline network, mass transit, and new commuter rail networks feeding a moderate speed Calgary-Edmonton train.

All other excess revenue should be used for out of province investment, or preferentially out of country investment to help avoid dutch disease.

[Aralaus]

Yeah i dont like the idea of eliminating corporate taxes. Our economy is doing just fine thank you very much, and supercharging it would only send us on another boom like '06. The money needs to be invested in Alberta and Albertans.

Infrastructure funding based on a more regionalized economic model, focusing especially on mass-transit and utility projects like district heating/cooling plants.

I would also love to see them invest heavily in affordable housing and creating meaningful tax incentives for creating local-based communities (ie - short walk to necessary services, or easily accessible through transit). Let the people who want to drive drive, but dont make it a forgone conclusion for those of us who dont as to what mode we have to live with. Plus investing in housing would be a great idea that would serve as an effective policy to bring minimum wage a bit closer to a living wage by allowing people to get homes for less money (thus not transferring the cost of it onto businesses by haivng higher min. wage) and creating a housing stock that will exist physically for the next generations of Albertans.

But most importantly, put money into savings. We will not always be the rich province we are today, and having money around will be great for a post-oil economy.

[Aylmer]

Maybe you should go through a massive economy transformation, like in Dubaĩ!
You only have oil for around another eight years... (Dubaĩ drys up in 20 years)

:)

[MichaelS]

Maybe you should go through a massive economy transformation, like in Dubaĩ!
You only have oil for around another eight years... (Dubaĩ drys up in 20 years)

:)

8 years? Are you high?

[e909]

For the most part half the mines in Fort McMurray won't even be active for another 8 years.

[WeavedWeb]

2008 budgeted expenses are $37B.
2008 budgeted non-renewable resource revenue is $11.7B.

So ~30% of budget is being covered by a non-recurring revenue stream. Bringing that down to 10% would require spending restraint of $8B.

Health spending is a whopping $13.5B up from $6.9B in 2001 (so much for underfunding).

Non-health related infrastructure is budgeted at $7.4B ($8.7B including health which is also counted in the $13.5B figure).

As a comparison to other provinces, Ontario's total budget is $97B while that for BC is $37B. Per capita that works out to ~7,500 per person in Ontario, ~8,400 in BC and $10,600 in Alberta. It is worth pointing out that the Ontario and BC numbers include debt servicing costs. If Alberta were to reduce its spending by $8B, it would be spending roughly the same as BC (although BC would still be spending $525 per capita in debt servicing while Alberta would be spending close to zero.)

It's even more ridiculous when you compare these numbers to a state like California:

Total Budget (2008): $110 Billion
Total Pop. (2006): 36 457 549
Budget per person: $3,017

However, healthcare should be taken out of the equation, so:

Alberta w/o healthcare: $23.5B
Alberta w/o healthcare per person: $7,142

Ontario w/o healthcare: $56.6B
Ontario w/o healthcare per person: $4,654

The numbers speak for themselves.

[freeweed]

You only have oil for around another eight years...

:haha: :haha: :haha: :haha: :haha: :haha: :haha: :haha: :haha:

I think it's safe to say we can all disregard every piece of information you try to pass on, if this is truly what you believe.

[korzym]

:haha: :haha: :haha: :haha: :haha: :haha: :haha: :haha: :haha:

I think it's safe to say we can all disregard every piece of information you try to pass on, if this is truly what you believe.

lol, i guess thats what they like to tell themselves in onterrible