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Alberta has an $3 billion deficit!


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I agree. I still get upset thinking of the Ralph Bucks that flew out of the coffers back in 2006. It was nice getting the $400 but I have to beleive it was much better spent in infrastructure or saving it for the rainy day. Having said that Alberta has yet to be put in a situation where they truly have to be diligent and responsible. Big oil booms always fill the coffers and they get off from any true budgeting. So the Budgeting 101 class that our politicians take all say to ride the wave. This may haunt the province one day but until then they are just enjoying the ride.

They do so because the people don't care or are not willing to express their opinion. One day people will wake up and realize the money is gone and instead of having enjoyed the good times and planned for the bad they wasted their resources and their kids are going to suffer... "Those who don't know history are doomed to repeat it." It happens time and again when people think of the here and now without planning for the future, it is even worse when the here and now is just wasting money rather than investing in something positive for the future.

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They do so because the people don't care or are not willing to express their opinion.

I disagree. They do so only because the bar has been set so low so people don't know better. Most people here are content because we don't have sales tax and taxes are generally lower than other provinces. We look at that and say...hey, they must be doing a decent job. However, the whole time our provincial government is really not practicing fiscal responsibility. Once the profits go and true budgeting is required....then you will see the shortfalls. And trust me....there will be plenty of red neckers here that will voice their opinion.

Edited by Accountability Now
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I disagree. They do so only because the bar has been set so low so people don't know better. Most people here are content because we don't have sales tax and taxes are generally lower than other provinces. We look at that and say...hey, they must be doing a decent job. However, the whole time our provincial government is really not practicing fiscal responsibility. Once the profits go and true budgeting is required....then you will see the shortfalls. And trust me....there will be plenty of red neckers here that will voice their opinion.

It seems to me that the current generation is going to sellout the next generation for lower taxes today... The thing I don't get is even without any new provincial tax Alberta could still come out on top if they just reviewed their spending and cut waste. It will not matter one bit to complain 10,20 or 40 years down the road because the current generation decided to waste money and di not improve infrastructure or did not bother to stash away some money for the time when the oil stops being a revenue source...

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I grew up in Alberta. When I think of the way the Province has given its wealth away to oil companies, it makes me want to cry. Norway embarked on a strategy of extracting the greatest public wealth for its oil. It has a sovereign wealth fund of well over $600 billion (projected to exceed $1 trillion by 2019). Alberta, with roughly the same population, has squat in comparison. Production of the most valuable commodity, light crude, peaked years ago and they are reduced to producing some of the dirtiest, nastiest sludge on earth. In 50 years, after the oil companies have turned the northeastern part of the province into one big environmental nightmare, they'll leave and Alberta will return to the poverty from which it came. Hey, at least Albertans will be able to regale each other with stories about when that wacky buffoon Klein was premier.

Good luck with that.

Does Norway have a sales tax? As was mentioned, Alberta doesn't. So every year billions of dollars are kept by Albertans instead of taken out of the economy by another government tax. They get to keep that money instead of it being put in a 'rainy day' fund which usually ends up being spent on some pet project rather than an actual rainy day. Alberta doesn't need a rainy day fund, it rains oil there.

The problem is they are getting much less than market value for their oil product as was mentioned. I'm not sure what market forces are at play here, but it's why they are so badly wanting new pipeline capacity to the west or east coast. But it really looks like the Keystone project will be cleared by Obama. The US imports millions of barrels of oil that come in on tanker ships which is very dangerous, or so the environmentalists tell us. Much safer to have a supply that gets piped in. And fewer billions go to hostile countries. It's win win.

It's just sad that other provinces have a chance to get some benefit from Alberta's oil with pipeline projects but extremists protesting are allowed to prevail.

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It seems to me that the current generation is going to sellout the next generation for lower taxes today... The thing I don't get is even without any new provincial tax Alberta could still come out on top if they just reviewed their spending and cut waste. It will not matter one bit to complain 10,20 or 40 years down the road because the current generation decided to waste money and di not improve infrastructure or did not bother to stash away some money for the time when the oil stops being a revenue source...

Yup....this I agree on. There will come a day when the resources go away and then what? We need to develop ourselves in other areas either research, technology, manufacturing, etc. Resources are great as the leading industry for now but we need a significant alternative.

The problem with Alberta is that Calgary and Edmonton still compete so much for these alternate industries. Both cities want to be the main stage for any company coming to Alberta. In my mind the province should be pushing for the bigger picture. Let Calgary be the white collar city home to corporate headquarters and Edmonton the blue collar city home to manufacturing and gateway to Ft. Mac. Combine the two cities with a high speed train so that larger companies can have their corporate office in Calgary and a manufacturing office in Edmonton. Neither city will ever compete with Toronto, Montreal or Vancouver on their own. So why not combine them and make it possible to compete. That's where the provice needs to step up and sink money into the infrastructure to do this. Such a railline could run from airport to airport allowing the cities to work togehter to attract more international flights.

Maybe its a crazy idea and has all sorts of implications. But it seems good on paper. Lol.

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Deficit per person by province:

Alberta: $5.94

New Brunswick: $261.00

Nova Scotia: $345.00

British Columbia: $398.00

Quebec: $409.00

Manitoba: $792.00

Ontario: $955.00

P.E.I.: $541.00

Federal deficit: $751.00

Ho-hum. Another typical day in the minds of typical Canadians: Rip on Alberta because they like to attack someone and exercise their bigotry instead of actually critically thinking or being honest.

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Deficit per person by province:

Alberta: $5.94

New Brunswick: $261.00

Nova Scotia: $345.00

British Columbia: $398.00

Quebec: $409.00

Manitoba: $792.00

Ontario: $955.00

P.E.I.: $541.00

Federal deficit: $751.00

Ho-hum. Another typical day in the minds of typical Canadians: Rip on Alberta because they like to attack someone and exercise their bigotry instead of actually critically thinking or being honest.

What happens when the oil stops and they have done nothing to improve other industries to take up the slack? What happens when their infrastructure starts collapsing and there is no money in the coffers to fix anything? Its fine to stick your head in the sand but that deficit will grow exponentially when the oil runs out and now is the time to improve the conditions for other sources of revenue to move to Alberta. Wether the oil dries up in 5 years or 50 Alberta should be responsible with their budget and be reinvesting as possible in infrastructure to attract businesses or the next generation will be blaming their parents for the mess they inherit from their parents.

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The oil is not going to run dry one night with nobody expecting it. They've got so much oil there it bumps Canada up to top 5 in the world for oil deposits. Infrastructure collapsing? You should worry about Ontario collapsing with all of their manufacturing jobs disappearing now rather than what might happen in Alberta a lifetime from now. Oh, and they say Saskatchewan has more tar sands than Alberta lying undeveloped.

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The oil is not going to run dry one night with nobody expecting it.

Great so lets blow all the money on bloated budgets that do nothing for the province just because they have secure income for the next 20 or more years... let the next generation worry about it right?

They've got so much oil there it bumps Canada up to top 5 in the world for oil deposits.

Finite resource means it runs out eventually just because there is a lot of oil there doesn't mean they should be stupid about it and live for the moment without a worry about the future.

Infrastructure collapsing?

When money is wasted eventually people will find that infrastructure needs repair and no money to do it... see US and Canada for reference more infrastructure to be repaired than the available cash...

You should worry about Ontario collapsing with all of their manufacturing jobs disappearing now rather than what might happen in Alberta a lifetime from now.

So let Alberta get to the a shitty situation before we worry about them? Gee I love that theory ignore the problem until it becomes an emergency and then find someone else to blame.

Oh, and they say Saskatchewan has more tar sands than Alberta lying undeveloped.

Thats great for Saskatchewan, one question though... how does that help Alberta? My neighbours potential wealth does not do much to help me now does it?

Edited by Signals.Cpl
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Great so lets blow all the money on bloated budgets that do nothing for the province just because they have secure income for the next 20 or more years... let the next generation worry about it right?

Uh, no one is saying they should blow the money. Nor blow it on bloated budgets that have no benefit. I'm not sure where you're getting that odd idea from, but the reason the Alberta government is in a deficit is because they are getting far less than market value for the oil product that gets sent state side. They are not currently blowing the budget at all, Albertans don't put up with that kind of nonsense. Again, Alberta's situation is the best in the entire nation. They don't need any knee jerk panic over this which is mostly coming from uninformed environmentalists who hate oil while they drive vehicles , use natural gas to heat their homes, etc.

Finite resource means it runs out eventually just because there is a lot of oil there doesn't mean they should be stupid about it and live for the moment without a worry about the future.

No one is living for the moment. They are investing billions to reduce waste and improve efficiency. The car industry is producing hybrid and electric cars, and they will be more gas efficient by law in the upcoming years. Billions are being spent on research to get us off of fossil fuels. But it would be stupidity for Alberta to not develop their oil industry. Why should we buy foreign oil when we have sources here now?

When money is wasted eventually people will find that infrastructure needs repair and no money to do it... see US and Canada for reference more infrastructure to be repaired than the available cash...

What relationship does wasted money have to do with infrastructure maintenance/repair? Nothing. Good stewardship is good stewardship. Again though, financially Alberta is in the best shape in the nation. You should be saying this about Quebec, where overpasses collapse, but you ignore that because Alberta has oil.

So let Alberta get to the a shitty situation before we worry about them? Gee I love that theory ignore the problem until it becomes an emergency and then find someone else to blame.

Again, there are several other provinces you could worry about because they actually have financial issues right now. Alberta does not. Why you persist on worrying about the richest province is kind of silly.

Thats great for Saskatchewan, one question though... how does that help Alberta? My neighbours potential wealth does not do much to help me now does it?

Alberta does not need help. Until you can see the big picture your worries will continue to be baseless.

Edited by sharkman
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Uh, no one is saying they should blow the money. Nor blow it on bloated budgets that have no benefit. I'm not sure where you're getting that odd idea from, but the reason the Alberta government is in a deficit is because they are getting far less than market value for the oil product that gets sent state side.

Yeah that is the reason right? So if they received market value they will be ok and with a nice surplus? I doubt that at least for longer than a year or two.

They are not currently blowing the budget at all, Albertans don't put up with that kind of nonsense.

Are they seriously investing for a future with no oil revenue? If not then they are blowing their resources on the here and now without thinking about life after oil revenue.

Again, Alberta's situation is the best in the entire nation.

And again, now is the time to plan for something rather than waiting until the situation deteriorates to unsustainable level.

They don't need any knee jerk panic over this which is mostly coming from uninformed environmentalists who hate oil while they drive vehicles , use natural gas to heat their homes, etc.

No one is panicking, now is the time to plan for and build an that does not rely completely on oil revenue so that when it runs out people don't have to panic because the province just lost a substantial portion of their revenue.

No one is living for the moment. They are investing billions to reduce waste and improve efficiency.

Really? How is that working for them?

The car industry is producing hybrid and electric cars, and they will be more gas efficient by law in the upcoming years.

Great...how does that diversify Alberta's revenue sources?

Billions are being spent on research to get us off of fossil fuels. But it would be stupidity for Alberta to not develop their oil industry.

I am not suggesting not to develop it rather I am suggesting that they should develop their oil industry concurrently with other industries so that oil is one revenue source of many rather than the biggest chunk of the provincial revenue. One way would lead to poverty for the province when oil revenue dries up the other would be minor thing because they have diversified their sources of income.

Why should we buy foreign oil when we have sources here now?

Did I suggest they should not develop it?

What relationship does wasted money have to do with infrastructure maintenance/repair? Nothing.

Well when the infrastructure becomes poor/unserviceable the money wasted could have been invested in repairing and improving the infrastructure all along.

Good stewardship is good stewardship. Again though, financially Alberta is in the best shape in the nation.

And for the longest time that could have been said about Ontario right? Should Albertans wait until they get screwed up like Ontario before changing?

You should be saying this about Quebec, where overpasses collapse, but you ignore that because Alberta has oil.

Really? Is that so? The discussion here is about Alberta rather than Quebec but nice distraction... You know Greece has infrastructure in poor repair should I talk about that one as well?

Again, there are several other provinces you could worry about because they actually have financial issues right now.

The point here is prevention. You on the other hand are suggesting we fight the fire when it starts up but do nothing to prevent the fire from starting...

Alberta does not. Why you persist on worrying about the richest province is kind of silly.

Wasent Ontario the richest province at one point? I wish someone had worried about the economic wellbeing of Ontario decades ago but that requires some foresight but people like you seem to be lacking foresight.

Alberta does not need help. Until you can see the big picture your worries will continue to be baseless.

What is the big picture? Please enlighten me... does it involve sticking our heads in the sand and ignoring the fact that the economy of Alberta relies on a source of income that is finite and will runout eventually.The big picture is planning for an Alberta after the oil revenue is gone and they may have a year or them may have a century but the earlier they start investing and attracting businesses the more successful the transition will be...

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What is the big picture? Please enlighten me... does it involve sticking our heads in the sand and ignoring the fact that the economy of Alberta relies on a source of income that is finite and will runout eventually.The big picture is planning for an Alberta after the oil revenue is gone and they may have a year or them may have a century but the earlier they start investing and attracting businesses the more successful the transition will be...

Alberta's a microcosm of Canada as a whole. We need an increasing population to pay the taxes to look after our ever increasing elderly population, and they need jobs in order to pay those taxes. If not in resources, where? If it's not wood, hydrocarbons or minerals, where do the jobs come from?

I know there will always be other jobs, in service, tourism, some manufacturing, etc, but those are not enough to keep our economy moving.

I agree the prospect of dealing with the resource running out is daunting, but unless we are willing to compete with the third world for manufacturing jobs, we aren't going to create them.

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Alberta's a microcosm of Canada as a whole. We need an increasing population to pay the taxes to look after our ever increasing elderly population, and they need jobs in order to pay those taxes. If not in resources, where? If it's not wood, hydrocarbons or minerals, where do the jobs come from?

I know there will always be other jobs, in service, tourism, some manufacturing, etc, but those are not enough to keep our economy moving.

I agree the prospect of dealing with the resource running out is daunting, but unless we are willing to compete with the third world for manufacturing jobs, we aren't going to create them.

We have to do something, because putting all of your eggs in one basket has rarely turned out too well for anyone.

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Sure, but there doesn't have to be a solution.

If you come up with something you can make and sell, another country will make and sell it cheaper. And most of the people in this country will buy the cheaper product instead of the homemade one.

It might be that we just live from selling our resources until they run out and then we go bankrupt and starve.

We might be due some foreign aid.

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Alberta's a microcosm of Canada as a whole. We need an increasing population to pay the taxes to look after our ever increasing elderly population, and they need jobs in order to pay those taxes. If not in resources, where? If it's not wood, hydrocarbons or minerals, where do the jobs come from?

I know there will always be other jobs, in service, tourism, some manufacturing, etc, but those are not enough to keep our economy moving.

I agree the prospect of dealing with the resource running out is daunting, but unless we are willing to compete with the third world for manufacturing jobs, we aren't going to create them.

There is a specific number that I can't remember right now. It' the population of a city, and past which the city's size is enough to self sustain employment. I thought it might have been 100,000, but it's something small like that. Anyway, all Alberta needs is new capacity in their pipeline system, and it looks like Obama will okay Keystone because even he realizes it's better/safer to get oil from Alberta than from hostile nations who deliver it with tankers.

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What happens when the oil stops and they have done nothing to improve other industries to take up the slack?

Oh Toronto just STFU. You babble like you have something to show for it and you don't. You've had 100 years....ONE HUNDRED YEARS to create a manufacturing sector and you can't. Are you even the worlds No.1 hockey stick producer? No, you're not. Because you can't. You can't get it off the ground and it's been like that for a century which is why it's even funnier now to hear you all cry and moan and blame your lackluster manufacturing on the "Petro Dollar".

You're an utter failure Toronto. You're in no position to be advising anyone.

You see the deficit other provinces are in compared with Alberta. Where's their "they-don't-know-what-they're-doing" thead? Hmm? Where's Ontario's "they're-so-stupid" thread? Alberta's deficit is $5.95 per person, Ontario's is $955.00, so where do you get off thinking you have the foggiest notion how to run anything besides your mouth? For crissakes you don't even have a freakin hockey team. You're nowhere. Just a dirty city with a skinny phallic symbol as their only distinguishing feature.

What a joke Canadians are. Regional bigotry. Jealously. Shallow schadenfreude. So pathetic.

Edited by Claudius
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The oil is not going to run dry one night with nobody expecting it. They've got so much oil there it bumps Canada up to top 5 in the world for oil deposits. Infrastructure collapsing? You should worry about Ontario collapsing with all of their manufacturing jobs disappearing now rather than what might happen in Alberta a lifetime from now. Oh, and they say Saskatchewan has more tar sands than Alberta lying undeveloped.

The question isn't whether the oils is there - it's who is going to benefit from it. The distrust Albertans have for governments - even ones they themselves elect - runs so deep that they'd rather have foreign billionaires get the money. Most people don't get a lot out of a booming economy and there are a sizable number (renters, for example) for whom it is a big problem.

Some of you might recall when Premier Klein was caught berating and throwing coins at people in a homeless shelter. You may or may not recall that some of those people were working full time but couldn't afford a place to live.

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What happens when the oil stops and they have done nothing to improve other industries to take up the slack? What happens when their infrastructure starts collapsing and there is no money in the coffers to fix anything? Its fine to stick your head in the sand but that deficit will grow exponentially when the oil runs out and now is the time to improve the conditions for other sources of revenue to move to Alberta. Wether the oil dries up in 5 years or 50 Alberta should be responsible with their budget and be reinvesting as possible in infrastructure to attract businesses or the next generation will be blaming their parents for the mess they inherit from their parents.

Maybe they will end up like the perpetual have-not province of Quebec and demand that the rest of the county support them financially.

Ummm maybe I shouldn't pick on Quebec so much as once mighty Ontario will likely be in the same boat for many years to come(Thank you Dalton McGuinty,Kathleen Wynne).

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The oil is not going to run dry one night with nobody expecting it.

I agree but I think that the government should try to base its budget on sustainable revenues. Have an idea in mind for what you beleive is going to be achieved and then slice 20% off just to be sure. If you have a surplus at the end of the year then great. You will then have money to add to the wish list. However, banking on volatile oil revenues just doesn't seem to be the way to go even if you have a long term supply of it.

I do beleive the Alberta goverment (in conjunction with the cities of Edmonton/Calgary) are doing a lot with infrastructure right now. Edmonton is on the verge of completing a ring road (Anthony Henday) which already has vastly improved transportation in the city. Calgary has just started their expansion with the Stony Trail. They have also come close to twinning the highway from Edmonton to Grande Prairie. Of course the largest travesty is that Highway 63 (Edmtonon to Fort Mac route) remains a single lane highway. I can also say that the City of Edmonton is vastly increasing its LRT (subway) system to reach out across the city via multiple train lines. Perhaps these expenditures have caused some of the deficit.

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  • 5 months later...

What happens when the oil stops and they have done nothing to improve other industries to take up the slack? What happens when their infrastructure starts collapsing and there is no money in the coffers to fix anything? Its fine to stick your head in the sand but that deficit will grow exponentially when the oil runs out and now is the time to improve the conditions for other sources of revenue to move to Alberta. Wether the oil dries up in 5 years or 50 Alberta should be responsible with their budget and be reinvesting as possible in infrastructure to attract businesses or the next generation will be blaming their parents for the mess they inherit from their parents.

(shrugs)

I dunno. Probably the same thing that happens when Ontario runs out of nickle to mine, or BC runs out of trees to cut down or Newfoundland runs out of fish. Your question is irrelevant. The piont of contention was albertas debt - today - currently - in relation to other provinces. Not "golly gee but what happens when a meteor drops onto Calgary? Huh? What kind of debt will you be under then?"

Stick to the subject. Something people on this forum can never seem to do (that or udnerstand the purpose of ratios and many other simple things).

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Don't fret... they budgeted 3.8 billion for a pipeline.. cost savings might be found :)

Yeah this one doesn't make much sense, my guess would be keep towing the line but a couple bit spending items and Calgary becoming a new body of water.

Overview

Operational Plan

  • Operational expense is $36.4 billion – same as the 2012-13 forecast.
  • Continued investment in core areas like health and education, support for municipalities and vulnerable Albertans.
  • Alberta’s bitumen continues to sell for a larger discount to North American and global benchmark oil prices. The resulting decrease in bitumen royalties has led to an expected drop in resource revenue of $6.2 billion from the 2012 budget’s forecast for 2013-14.

Savings Plan

  • Annual legislated savings plan will see the province’s savings and endowment funds grow to $24 billion over the next three years.
  • Starting in 2014-15, a portion of non-renewable resource revenue will be taken off the top of government revenue and put into savings.
  • In 2014-15, the Alberta Heritage Savings Trust Fund will retain 30 per cent of its income. By 2016-17, the fund will retain 100 per cent of its income.

Capital Plan

  • $5.2 billion invested in 2013-14 – $15 billion over the next three years.
  • Major commitments include funding for:
    • 50 new schools and 70 modernizations,
    • New facilities for six post-secondary educationinstitutions,
    • Twinning of Highway 63,
    • Stable MSI funding for municipalities - $2 billion over three years, and
    • $2.1 billion for healthcare facilities.

It doesn't make sense... they say they are saving the money.. .... I've seen conflicting reports that they are taking on debt.. it makes no sense to borrow money when you have it? Or are they borrowing for less than they are investing?

None the less, it makes no sense.

I'll leave you with this as I am off for a week or so

BALANCED BUDGET AND SPENDING
MANAGEMENT RULES
Alberta’s new fiscal framework includes legislated rules on both balanced
budgets and in‑year increases in operating expense .
The purpose of the new Contingency Account is to cover any deficit in the
province’s operational balance . Non‑renewable resource revenue set aside as
savings under the savings policy will not be considered ‘operational’ revenue,
and will not affect the operational balance . Nor will revenue or expense
relating to capital (with the exceptions of revenue set aside for the servicing of
capital debt and capital debt principal repayment) enter the calculation of the
operational balance
Do me a favour and make a post in federal if the US bombs syria while I am out of touch.
Edited by AlienB
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