Alberta is rich with oil, but what has it got to show for it?

[Tingkai]

For just over 50 years, the Canadian province of Alberta has benefited from its massive oil reserves. The provincial government takes in about Cdn$2.5 billion in oil revenues every year. (For about five out of 50 years, a federal energy policy cut off this flow of money).

With all that money, after all this time, what does Alberta have to show for its wealth. What has its right-wing governments really achieved?

What could have been done?

There is no sales tax, but that is only because the government gets about $2-3 billion in oil revenues.

When oil prices collapse, the Albertan government runs a deficit.

People are currently moving to Alta because high oil prices have created a strong economy, but if oil prices drop to low levels for an extended period of time, the economy goes into a tailspin and people leave.

Living standards in Alta are not much different from B.C. or Ontario (at least from what I've seen).

The provincial education system is pretty much the same as elsewhere. The most respected Canadian universities are in other provinces.

Culture is pretty much marginal. Famous Albertan? I can't think of any.

Alta does have two NHL teams, which is quite an accomplishment for such a small population.

Billions of dollars have gone into the provincial government coffers. Where did it go? What has Alberta got to show for it?

[notyoueither]

0.01/10.

[notyoueither]

But oh, well.

You know squat about Alberta.

[Tingkai]

So tell us about all the great things that have been done with the oil money.

[Asher]

/me dons his combat helmet and prepares for war with the socialist.

Originally posted by Tingkai
For just over 50 years, the Canadian province of Alberta has benefited from its massive oil reserves. The provincial government takes in about Cdn$2.5 billion in oil revenues every year. (For about five out of 50 years, a federal energy policy cut off this flow of money).

That's it?

With all that money, after all this time, what does Alberta have to show for its wealth. What has its right-wing governments really achieved?

What could have been done?

There is no sales tax, but that is only because the government gets about $2-3 billion in oil revenues.

When oil prices collapse, the Albertan government runs a deficit.

Not exactly true. It is actually illegal to run a deficit in Alberta. By law, we cannot run a deficit. By law, 75% of all surpluses must go to paying down the debt too.
I would suggest you look up what the "Alberta Heritage Fund" and its purpose.

People are currently moving to Alta because high oil prices have created a strong economy, but if oil prices drop to low levels for an extended period of time, the economy goes into a tailspin and people leave.

Alberta's economy has diversified at an incredible rate since the early 80s, where we saw that weakness. Presently the technology sector in particular is soaring in Alberta, and the percentage of provincial revenue coming from energy shrinks every year.

Living standards in Alta are not much different from B.C. or Ontario (at least from what I've seen).

Anecdotal evidence. One might argue with awards like "Cleanest City in the World" going to Calgary, with the lowest taxes in the nation, etc, it could be better here. All subjective though.

The provincial education system is pretty much the same as elsewhere. The most respected Canadian universities are in other provinces.

There are only 3M people in Alberta, you know. And until recently Alberta wasn't exactly a happenin' place to live. So why is it surprising that the much, much older Ontario/Quebec/East coast universities have larger reputations?

Culture is pretty much marginal. Famous Albertan? I can't think of any.

Nickelback are from a town in Alberta. Love them or hate them, they're arguably the biggest Rock group right now.
Then there are also quite a few famous Albertans in the business sector in Canada if you've ever picked up a business magazine.
Plus James Gosling, creator of Java and a VP of Sun Microsystems, is an Albertan...

But this is truly a bullshit argument of yours. You're basing how much of a "culture" a province has based on the number of famous people it has? Especially when that province makes up only 3M people?

Alta does have two NHL teams, which is quite an accomplishment for such a small population.

Damn straight.

Billions of dollars have gone into the provincial government coffers. Where did it go? What has Alberta got to show for it?

Healthiest economy in the nation, best place to live in the nation.

By the way, Alberta's nearly debt free. No other US States or Canadian provinces can claim that.

What's missing?

[Asher]

Did I forget to mention the flat-tax rate for personal income at 10.5%, and lowest corporate tax rates in the nation also?

[Asher]

Some more fascinating statistics for you to munch on, Tingkai:
http://www.treas.gov.ab.ca/business/budget/index.html

A typical one-income family earning $30,000 with two children will pay 81% less in taxes and health care insurance premiums in Alberta than the average in other provinces.

A typical two-income family earning $60,000 with two children will pay 30% less in taxes and health care insurance premiums in Alberta than the average in other provinces.

Debt reduction has eliminated over $1.2 billion in debt servicing costs.

Accumulated debt, less cash set aside for future debt repayment, is forecast to be $5.8 billion at the end of 2002-03 and less than $5 billion by the end of 2004-05. (Note that we recently had a budget surplus of OVER $6B in one year alone, so this could be as good as gone if the economy worldwide picks up quickly)

[Tingkai]

Originally posted by Asher
Not exactly true. It is actually illegal to run a deficit in Alberta. By law, we cannot run a deficit. By law, 75% of all surpluses must go to paying down the debt too.
I would suggest you look up what the "Alberta Heritage Fund" and its purpose.

IIRC, the Albertan government had deficit budgets in throughout the first half of the 1990s.

It must been legal to have a deficit quite recently if you still are paying off a government debt.

Originally posted by Asher
Alberta's economy has diversified at an incredible rate since the early 80s, where we saw that weakness. Presently the technology sector in particular is soaring in Alberta, and the percentage of provincial revenue coming from energy shrinks every year.

I'll admit that I don't know anything about the IT sector in Alberta. What percentage of the Alberta GDP comes from IT?

Originally posted by Asher
There are only 3M people in Alberta, you know. And until recently Alberta wasn't exactly a happenin' place to live.

Why not? Alberta has a lot going for it. It has had tonnes of money for decades. Why has it failed to attract droves of people before?

Originally posted by Asher
Then there are also quite a few famous Albertans in the business sector in Canada if you've ever picked up a business magazine.
Plus James Gosling, creator of Java and a VP of Sun Microsystems, is an Albertan...

Yeah, there's the bastard Pockington.

Originally posted by Asher
But this is truly a bullshit argument of yours. You're basing how much of a "culture" a province has based on the number of famous people it has?

Fine, tell me about the great culture within Alberta.

Originally posted by Asher
Healthiest economy in the nation

Because of high oil prices.

[Asher]

Originally posted by Tingkai
IIRC, the Albertan government had deficit budgets in throughout the first half of the 1990s.

It must been legal to have a deficit quite recently if you still are paying off a government debt.

Look up the "Fiscal Responsibility Act" and read what it entails.

I'll admit that I don't know anything about the IT sector in Alberta. What percentage of the Alberta GDP comes from IT?

I have no idea off the top of my head.
But Alberta is intentionally spending TONS of money developing this sector. I'm seeing the effects first hand as a computer science student.

You should look up the Alberta "SuperNet", which guarantees broadband access to every resident of Alberta, and built a high speed fibre connection connecting the Universities in Alberta. They also just paid for a huge expansion building that just opened at the University of Calgary called the ICT building -- and its entire purpose is computer science and computer engineering and other IT work. And they're giving record amounts of money to SAIT (Southern Alberta Institute of Technology) to expand, as well as NAIT (Northern...etc), and University of Alberta is expanding its IT fields as well.

Why not? Alberta has a lot going for it. It has had tonnes of money for decades. Why has it failed to attract droves of people before?

Gee, I don't know.
Maybe it's crap like the NEP and the fact that the rest of Canada seems to think Alberta is full of religious rednecks?

Fine, tell me about the great culture within Alberta.

What's there to talk about?
We've got regular concerts flowing through here, festivals, the Stampede itself, etc.

Because of high oil prices.

What does this have to do with your thread?

[Asher]

More of what Alberta has to show, since you asked in this thread:

• Alberta continues to have the lowest debt per capita in Canada and the best credit rating. Accumulated debt is projected to be $5.9 billion by the end of the 2002-03 fiscal year and less than $5 billion by March 31, 2005.
  
• Alberta remains nine years ahead of its 25-year legislated debt retirement schedule.
  
• We have the lowest unemployment rate in Canada. Employment is expected to grow by an average of 2.2 per cent for the next four years.
  
• Albertans continue to enjoy the lowest overall personal and business tax load in Canada. Alberta has no sales tax, no payroll tax and no capital tax.
  
• Alberta has the highest GDP per capita among the provinces and based on the Fraser Institute’s 2001 Survey of Senior Managers, Alberta has the best investment climate in the country.
  
• In 2001, Alberta had a record 11.7 per cent of the workforce involved in research and development activities.
  
• Alberta continues to lead, as it has for decades, all provinces in total private sector investment per capita. For the last five years, it has been nearly double that of the next highest province.
  
• Over the last five years, our average growth in the number of businesses has been the fastest of any province in the country.
  
• Over the last eight years, Alberta has cut its debt by nearly 75 per cent or $16.7 billion and as a result.
  
• Calgary has the second highest number of head offices of any city in Canada, behind Toronto. Toronto has approximately 5 times the population of Calgary, so on a per capita basis, Calgary exceeds any other city by far.
  
• In 2001, Alberta's 1.8% growth in population also led the provinces. The fastest growing city in Canada is currently Calgary, Alberta. The second fastest growing city in Canada is currently Edmonton, Alberta.
  
• From July 2000 to June 2001, a net of 25,748 migrants came to Alberta from other provinces, almost 8,000 more than second place Ontario.
  
• Alberta has the best educated workforce in Canada. Approximately 65% of Alberta's population aged 25 to 54 has post-secondary education.
  
• Alberta has the youngest population among the provinces. About 61% of Albertans are under the age of 40. (Sorry notyoueither )
  
• Alberta has the highest labour force participation rate in Canada.
  
• Based on KPMG's study of business costs in North America, Europe and Japan, Edmonton is the least expensive city in which to do business out of 86 major cities in nine countries. Calgary rates in third place.
  

All and all, I'm seeing lots to show for it. What do you think?

[Asher]

Regarding culture:
Alberta continues to stay at the top for private sector support of the performing arts, according to the most recent data.


Alberta's net debt has been eliminated, with total financial assets exceeding total liabilities.


And as for your comment about the education system, Alberta students are leading the nation in Math scores...

And finally, you said that Alberta brings in $2.5B in oil revenues per year, and went on to describe how the world would end in Alberta if the oil price plummets. Did you know that if Alberta adopted Ontario's tax system, our revenue would increase $4.3B, and if we adopted Quebec's tax system, our revenue would increase $8.8B. That would offset the maybe $1B less in revenue from half of the oil prices, no? (Source is here: http://www.treas.gov.ab.ca/publicati...002/abadv.html). The thing is, Alberta's government is lean. It's been right wing for as long as everyone can remember, and it's extremely efficient.

Any more questions?

[notyoueither]

Originally posted by Asher
About 61% of Albertans are under the age of 40. (Sorry notyoueither )

Whoaaa. Don't push me into the grave quite so soon son.

Not yet wise enough to be 40. Not quite.

[markusf]

what exactly are "fine arts" LOLOL I have never seen or heard of a good example.


Klien should take over the Alliance or whatever they call themselves now and run for prime minister. He may be a drunk but he sure can get the job done.!

[notyoueither]

Day came from his cabinet. Fortunately for the govt of Alberta (he's gone now).

[Asher]

I think Klein's quote on "Eastern bums and creeps" will bury his campaign in a national election, even though the comment was somewhat misunderstood by most of the nation.

And he has a tendancy to go into a homeless shelter and tell them to get jobs.

[markusf]

Originally posted by Asher
I think Klein's quote on "Eastern bums and creeps" will bury his campaign in a national election, even though the comment was somewhat misunderstood by most of the nation.

And he has a tendancy to go into a homeless shelter and tell them to get jobs.

make them work to stay in the shelter, have them clean the sidewalks and stuff.

Atlantic canada is useless... but with the support of ontario he could win easy.

As for day... That was just plain stupid, peachers and politics don't match he should never have been elected.

[Asher]

Originally posted by notyoueither
Day came from his cabinet. Fortunately for the govt of Alberta (he's gone now).

Day made a good finance minister, not much more.

He's kinda a whacko when it comes to anything other than numbers.

[notyoueither]

I think the federal Liberals would love to have him at this point in time, in comparison to Jean the Mangler.

After all, his worst offences have been the aforesaid quote, the finger at the conference, and the tipsy visit to the homeless shelter.

Don't the Liberals love leaders who have displayed 'the bird' in public?

[markusf]

yes but who would be left to rule alberta? maybe you can have day back?

[Asher]

Originally posted by markusf
yes but who would be left to rule alberta? maybe you can have day back?

I wouldn't mind Al Duerr. He did a great job as Mayor of Calgary. Every election he won more and more votes, and he quit last year at the end of his term to enter the private sector.

Mayors of Calgary have an excellent track record for becoming Premier of Alberta. The last time a former Mayor became Premier was Klein...

[notyoueither]

Errrrrrmmmmm. Stop asking awkward questions!

To be honest, we've been very well served by our premiers for a very long time. We may be tempting fate.

Lougheed was not perfect, but was a very good leader. Getty was a bit of a twit, he didn't last long. Then we got Klein. He's not perfect either, but he's a hell of a leader. I do not wish to contemplate what comes next. It's such a crap shoot when one party dominates for so long.

[Tingkai]

All of the budget numbers, low taxes and economic growth are largely tied to high oil prices. When oil prices drop, the Albertan economy has traditionally gone in the tank, government finances go in the red, and people start leaving the province.

The question is: after 50 years of oil revenues, are there any signs that Alberta is no longer a boom-or-bust economy?

EDIT: private contributions to culture may also simply reflect an economy boosted by high oil prices.

[Asher]

Originally posted by Tingkai
All of the budget numbers, low taxes and economic growth are largely tied to high oil prices. When oil prices drop, the Albertan economy has traditionally gone in the tank, government finances go in the red, and people start leaving the province.

The question is: after 50 years of oil revenues, are there any signs that Alberta is no longer a boom-or-bust economy?

That wasn't your question. If it was, perhaps you should have asked it in your original post.

And no, it's no longer a boom or bust economy at anywhere near the scale it was in the 80s. There are safeguards in place to prevent that from happening again.

I encourage you to do your research and look up the purpose of the Heritage fund (it actually is a massive fund of billions of dollars that the province can dip into when energy revenue takes a nosedive -- call it the life savings).

Alberta's not stupid, Tingkai. You seem to assume that nothing's changed since the 80s, where a combination of weird international events and federal government stupidity trashed the Alberta economy. Alberta's far more cautious now. We know the Federal government is full of incompetent morons, we know that international events are impossible to predict.

And if you'd look at Alberta's provincial revenue percentages since 1980 you'll consistently see the "energy resources" part of the pie chart shrinking with each passing year. This is a direct result of a larger, more diverse economy. Ever since the early 80s, the Alberta government has been forcefully diversifying the economy to ease dependence on resource revenue. And it's working.

Alberta's economy is far, far more mature now than it was. It's diversified, it's larger, and it's got the financial reserves to ride out a prolonged "bust" period in the energy market.

EDIT: private contributions to culture may also simply reflect an economy boosted by high oil prices.

So you make a thread asking what oil revenues have to do with how Alberta is, then you make excuses for everything by saying "Only because of Oil revenue!". WTF?

[notyoueither]

Tingkai. You haven't a clue what you're talking about.

Alberta is more than oil. Is that simple enough for you? Sorry. I'll repeat with single syllables.

Bad guys have more than oil. Go play on road.

[Tingkai]

Oil revenues for Alberta work out to about $760 a person.

If the government did not have that revenue, and had to raise taxes to maintain the same level of revenue, then a two-income family would pay about the same amount of taxes in Alberta as they would in Ontario and close to what they would pay in Saskatchewan and BC.

The Alberta government looks efficient only because it has massive oil revenues. Take away the oil revenues and the Alberta governments would look no different than other provincial governments -- okay, no one could look as bad as Bill Vander Zalm, but you get my point.

[notyoueither]

The point on your head?

[Asher]

Originally posted by Tingkai
Oil revenues for Alberta work out to about $760 a person.

So $2,280,000,000 out of a $20,000,000,000 budget is from oil revenues. Therefore, assuming we got $0 from oil, we'd only have to raise taxes to get $2.2B more. Which is pretty damn easy to do. A simple small sales tax would do it.

Alternatively, if it was a 'bust' cycle in the economy, we could simply dip into the heritage fund and keep all taxes the same.

Look at Alberta's expenses vs. BC's expenses. Tell me that it's only lean because of oil revenue.
Hell, BC's current deficit alone is twice Alberta's oil revenue.

[Asher]

Tingkai, here's a link about the Heritage Fund: http://www.revenue.gov.ab.ca/business/ahstf/

And here is an FAQ for it: http://www.revenue.gov.ab.ca/business/ahstf/faqs.html

Note that since this fund is an investment, it grew $706.2 million alone in 2000. Without us touching it.

As a combination of Alberta paying down debt (greatly reducing debt overhead on the budget), our heritage fund keeps growing in value so if we ever do run into a large "bust" situation, we'll have less overhead costs on top of a huge pile of money that we can draw from to stabilize the provincial revenue without running a deficit.

A detailed breakdown of where the heritage fund is invested, and what it's used for, can be found here: http://www.treas.gov.ab.ca/publicati.../heritage.html

[notyoueither]

Shhhh. Mentioning the concept that a government might actually save money tends to send some other... entities into to tizzies of enraged social angst.

[Asher]

An interesting tidbit is Alberta could pay down our debt in its entirety right now and still have about $7B in cash in the heritage fund.

But since we're making more money off of the investments in the fund than we would be by saving the debt overhead, we're opting to keep the fund as it is while quickly paying off the debt with surplusses, as originally planned.