There are other elements to consider around the recent declaration by Premier Stelmach that there will be no tax increases on his watch. Deficits are also tax increases by other means because the pain is deferred to the future - usually to be repaid on someone else's watch. So it is arguable that running a deficit is a defacto tax increase just not on the current watch.
But there are other considerations too. The tobacco tax was not a money grab, it was a health promotion and prevention issue behind the tax increase last April. The research shows that more expensive smokes are and the less visible they are - like the elimination of the "power wall" displays, the less likely kids will start and get addicted to tobacco. There is also a health prevention argument around the liquor tax. Eliminating them both government reduces revenues to offset deficits (tax increases by other means) and increases the social and health risks associated with these legal but sometimes lethal products. I am not a prohibitionist just a realist.
The last additional point I think is worth noting about eliminating the revenue side from the fiscal took box of government is the issue of the role, efficiency and effectiveness of government. The old Klein approach of simple-minded across the board cuts and damn the consequences is not likely to be the Stelmach approach this time. However, there may be stuff government can do without, stuff we can do better and other stuff that needs doing particularly in a prolonged recession like we are in these days. This is the time to do that kind of revisiting and revamping of the relationships and roles we expect from government.
This recession is a perfect opportunity to revisit and redesign the role of government and our relations to it, as business, service providers and citizens. We can improve delivery and be clearer on what we expect of the public sector and our governance model. We can retool the private enterprise sector and community based social service sector too. The goal is not just efficiency, as important as that is, but it must be more focused on the effectiveness of the outcomes and how we achieve them using government as a vehicle.
This is a quest for better questions as much as it is better answers. We have the Governance Secretariat looking at these matters focused on agencies boards and commissions. We need the same thing to happen in the link between government and the social services sector and the private enterprise sector too.
Lets not squander this recession. Let's make sure we come out of it better focused, better equipped and better able to meet the challenges in the 21st century realities. It would be such a waste of an opportunity. We can't merely try to revive, restore and sustain the inadequate governance, economic, environmental, social and technological models of the past.
Premier Stelmach is hinting at this approach in some follow up comments to his no recent tax increase declaration. Lets hope he makes it more explicit and actionable.
Thursday, July 09, 2009
Wednesday, July 08, 2009
Comparing and Contrasting WRAP Leadership Candidates
Politics is an ever changing world and party leadership contests are windows into the culture of change - not just the change events themselves.
The Wildrose Alliance Party is going through a leadership contest with two main candidates, Danielle Smith and Mark Dyrholm. The Calgary Herald ran separate pieces by each candidate but both entitled "Why I Want to be Leader of the Wildrose Alliance." Since they were published over a month apart I thought it would be helpful for Albertans to see them at the same time and side by side for contrast and compare purposes.
I would never join the WRAP but found the candidate pitches to be very interesting at a few levels. First both candidates are Calgary based so they provide some insight into the right-wing sensibilities in that city. Then they were both once active Alberta Progressive Conservatives but became disillusioned in what they saw as a progressive shift in the PC Party post Ralph Klein and they left to join the WRAP.
That reasons for leaving the PC Party is the third interesting insight from the comments of these leadership candidates. Post debt and deficit Smith felt the PCs "..slowly began to lose their way." As for Dyrholm, he blames Stelmach for "devastating the oilpatch" claiming he "torn up contracts" which I presume is a comment from Mark about the new royalty regime. That was nothing close to tearing up a contract if my assumption is right about Mark's statement. The Calgary "Patch" players have declared the royalty changes to be the new NEP and facts to the contrary will not dissuade them.
I am intrigued by other reason for wanting to lead the WRAP where I agree with them. Mark is criticizing the PC government for "eroded democracy with the firing of the Chief Electoral Officer because recommendations made were not one he (Stelmach) wanted to hear." I agree this is an important issue and with Mark's assessment of the implications too.
Danielle Smith bemoans the fact "Teachers fear being hauled before the Alberta Human Rights Commission under an amendment to the legislation that no one I know was asking for." Even casual readers of this blog for the past 3 months know how much I agree with that concern and oppose the PC government's stand on Bill 44.
Both candidates are staunch fiscal conservatives and like very small government. Smith is much more socially moderate than Dyrholm who touts his support for many very right-of-centre groups and his active role in the former federal Reform and Alliance parties - now known as the Harper Conservatives.
As I reflect on the WRAP leadership race I note they are former PCs who left mostly for what they say as a lack of fiscal discipline in the "conservative" side of the PC party. They both have concerns with some social justice issues, and that is a subject matter that appeals to the "progressive" side of the PC party. What might a rise in the political influence of the WRAP mean for the future of the Progressive Conservative Party if the fiscal cons gravitate to them and the social progressives disengage or go elsewhere?
My final thoughts was about what was lacking in the political consciousness of these candidates based on their published pieces. There wasn't any commentary from either of them on the environment or the need to provide for vulnerable people in our society as a society. The fact that these issues are not on the radar screens of these leadership hopefuls is a surprise. It will likely prove to be a fatal flaws for future electoral success with the greater Alberta population for whomever becomes the WRAP leader. Of course they both have time to adapt and tell us more about their position on these serious public policy concerns.
The Wildrose Alliance Party is going through a leadership contest with two main candidates, Danielle Smith and Mark Dyrholm. The Calgary Herald ran separate pieces by each candidate but both entitled "Why I Want to be Leader of the Wildrose Alliance." Since they were published over a month apart I thought it would be helpful for Albertans to see them at the same time and side by side for contrast and compare purposes.
I would never join the WRAP but found the candidate pitches to be very interesting at a few levels. First both candidates are Calgary based so they provide some insight into the right-wing sensibilities in that city. Then they were both once active Alberta Progressive Conservatives but became disillusioned in what they saw as a progressive shift in the PC Party post Ralph Klein and they left to join the WRAP.
That reasons for leaving the PC Party is the third interesting insight from the comments of these leadership candidates. Post debt and deficit Smith felt the PCs "..slowly began to lose their way." As for Dyrholm, he blames Stelmach for "devastating the oilpatch" claiming he "torn up contracts" which I presume is a comment from Mark about the new royalty regime. That was nothing close to tearing up a contract if my assumption is right about Mark's statement. The Calgary "Patch" players have declared the royalty changes to be the new NEP and facts to the contrary will not dissuade them.
I am intrigued by other reason for wanting to lead the WRAP where I agree with them. Mark is criticizing the PC government for "eroded democracy with the firing of the Chief Electoral Officer because recommendations made were not one he (Stelmach) wanted to hear." I agree this is an important issue and with Mark's assessment of the implications too.
Danielle Smith bemoans the fact "Teachers fear being hauled before the Alberta Human Rights Commission under an amendment to the legislation that no one I know was asking for." Even casual readers of this blog for the past 3 months know how much I agree with that concern and oppose the PC government's stand on Bill 44.
Both candidates are staunch fiscal conservatives and like very small government. Smith is much more socially moderate than Dyrholm who touts his support for many very right-of-centre groups and his active role in the former federal Reform and Alliance parties - now known as the Harper Conservatives.
As I reflect on the WRAP leadership race I note they are former PCs who left mostly for what they say as a lack of fiscal discipline in the "conservative" side of the PC party. They both have concerns with some social justice issues, and that is a subject matter that appeals to the "progressive" side of the PC party. What might a rise in the political influence of the WRAP mean for the future of the Progressive Conservative Party if the fiscal cons gravitate to them and the social progressives disengage or go elsewhere?
My final thoughts was about what was lacking in the political consciousness of these candidates based on their published pieces. There wasn't any commentary from either of them on the environment or the need to provide for vulnerable people in our society as a society. The fact that these issues are not on the radar screens of these leadership hopefuls is a surprise. It will likely prove to be a fatal flaws for future electoral success with the greater Alberta population for whomever becomes the WRAP leader. Of course they both have time to adapt and tell us more about their position on these serious public policy concerns.
Ablonczy Gay Grant Doesn't Embarass HarperCons - They Do It To Themselves.
What kind of people are we electing to Ottawa? A HarperCon backbencher, Brad Trost, is floating a rumour that Diane Ablonczy has been stripped of her responsibilities for overseeing major stimulus finding in tourism - her portfolio.
The reason being given is she approved a grant ot the Toronto Gay Pride celebrations. Of course the official PMO spin was that she was eventually going to relinquish this responsibility to Industry Minister Tony Clement...who is conveniently in Italy at the G8 and unavailable for comment.
So a $100m stimulus fund for "Marquee Tourism Events" is not properly positioned in the Ministry of Small Business and Tourism but better administered in the Department of Industry??? And that this was done weeks ago but Minister Clement has been too busy bailing out General Motors to pay attention to his tourism duties. Sure thing. That is why Ablonczy's Small Business and Tourism Department is no longer in the small business and tourism business so far as stimulus finding goes. Right!
The Harper Cons have tried to blow smoke that they are learning to become socially tolerant and even perhaps a bit moderate and inclusive. Well that is as any thinking Canadian expected. It is more political positioning that heartfelt values for the neo-Cons mini-Rovarian Republican wanna-be Harper Caucus.
What kind of people have we elected and do they reflect the kind of Canada we are and aspire to be? We need an election to clean out the House of Commons and get rid of these reactionaries and homophobes. That kind of discrimination must not be accepted in Canada anymore.
Canadians are clear they want the minority Parliament to work and don't want election right now. Everyday the Harper Cons provide more reasons as to why we need an election sooner than later - even if we don't want one right now.
The reason being given is she approved a grant ot the Toronto Gay Pride celebrations. Of course the official PMO spin was that she was eventually going to relinquish this responsibility to Industry Minister Tony Clement...who is conveniently in Italy at the G8 and unavailable for comment.
So a $100m stimulus fund for "Marquee Tourism Events" is not properly positioned in the Ministry of Small Business and Tourism but better administered in the Department of Industry??? And that this was done weeks ago but Minister Clement has been too busy bailing out General Motors to pay attention to his tourism duties. Sure thing. That is why Ablonczy's Small Business and Tourism Department is no longer in the small business and tourism business so far as stimulus finding goes. Right!
The Harper Cons have tried to blow smoke that they are learning to become socially tolerant and even perhaps a bit moderate and inclusive. Well that is as any thinking Canadian expected. It is more political positioning that heartfelt values for the neo-Cons mini-Rovarian Republican wanna-be Harper Caucus.
What kind of people have we elected and do they reflect the kind of Canada we are and aspire to be? We need an election to clean out the House of Commons and get rid of these reactionaries and homophobes. That kind of discrimination must not be accepted in Canada anymore.
Canadians are clear they want the minority Parliament to work and don't want election right now. Everyday the Harper Cons provide more reasons as to why we need an election sooner than later - even if we don't want one right now.
Tuesday, July 07, 2009
Budget Deficit + No Tax Increase = Serious Social Service Cuts for Albertans
Hunker down Alberta - and get ready for a raft of the public sector job cuts plus social services and community based program cuts. This is the only logical conclusion to come to based on the "no tax increase" announcement of Premier Stelmach today.
Given the game plan of the government, that stated with the Premier's reported comments today, of no tax increases, the multi-billion dollar budget deficit monster will only be tackled by program and staff cuts. Unless natural gas prices rebound dramatically, like right away, and they stay high for the rest of the year, Alberta has a chronic revenue problem. With a glut of natural gas on the market and stored oil supplies growing, prices for these commodities are not likely to escalate soon and not enough to deliver us from the fiscal evil we are facing.
Will there be a bunch of social services program downloading on municipalities too? This is going to be helpful just when as many as 60 Alberta municipalities are into formal dissolution processes that would terminate their municipal status. They are doing this because they can't sustain themselves on property taxes and current grant levels anymore. That should be interesting if social services downloading happens.
We have been told by our government that they are going to run some serious operational budget deficits right now and looking forward into the next few years. Cumulative deficits have a nasty habit of tuning into long term debts. We're Albertans. We know that because we have been there.
What a difference from February 2008, just before the last election, when Premier Stelmach said our PC government would never put Alberta back into a deficit position. Now he is saying deficits are back. The Premier's response to new deficits has been to reaffirm that there will be "no tax increases" on his watch. And to ensure the message hits home he is going the extra mile. He is actually reversing the recent tax increase on liquor that was passed in the April 2009 Budget.
News reports indicate that the liquor tax cut will cost the public purse $180m a year - just at a time when Alberta needs all the revenues it can get its hands on. This tax cut is even more unnecessary than Bill 44 was. It is enough to drive you to drink.
Media reports also quote the Premier as saying the liquor tax decrease can be in place this weekend. Funny how we cut a sin tax so assuredly and so swiftly but we can't figure out to ensure we are getting all our non-renewable energy resource royalites accounted for and properly collected.
What is going on? We have serious problems balancing the public purse. Understood!. We are running large deficits in health care. Shift happens! We have record deficits in our general accounts and they are getting larger. And our policy response is to absolutely rule out tax increases?
Not only that, but our official government policy is to go a step further to prove the point that taxes are not going to increase in Stelmach's Alberta. Damn the torpedoes. We have to put some serious emphasis to the political point about no tax increases. We have to announce an immediate reduction a liquor based sin tax? What gives? Is this the essence of the new fiscal plan for Alberta?
The only other option left, and that is actually within our control, is for Alberta us to get after the record deficit by government dramatically reducing social program spending. The biggies of health, education, children's services, seniors and social services can't be protected from cuts - especially with this brand of fiscal folly.
Our most vulnerable citizens, like the sick, elderly, children-at-risk and the disabled have just been put on notice that they are going to become even more vulnerable. Their caregivers, especially those community based not-for-profit agencies, have just been put on notice. They already have to squeeze their nickles until the beaver shits. More program and other cuts have yet to come, but rest assured, they are coming! So theses social service agencies better get a firmer grip on that nickle and start squeezing that beaver even harder.
This is ridiculous. All options need to be on the table to help Alberta address the fiscal force fields we are facing. Eliminating tax policy entirely as an budget option is all about pure political ideology and illogical fiscal policy. What is going on? I see half a policy step forward and three policy steps back these days in Alberta.
Given the game plan of the government, that stated with the Premier's reported comments today, of no tax increases, the multi-billion dollar budget deficit monster will only be tackled by program and staff cuts. Unless natural gas prices rebound dramatically, like right away, and they stay high for the rest of the year, Alberta has a chronic revenue problem. With a glut of natural gas on the market and stored oil supplies growing, prices for these commodities are not likely to escalate soon and not enough to deliver us from the fiscal evil we are facing.
Will there be a bunch of social services program downloading on municipalities too? This is going to be helpful just when as many as 60 Alberta municipalities are into formal dissolution processes that would terminate their municipal status. They are doing this because they can't sustain themselves on property taxes and current grant levels anymore. That should be interesting if social services downloading happens.
We have been told by our government that they are going to run some serious operational budget deficits right now and looking forward into the next few years. Cumulative deficits have a nasty habit of tuning into long term debts. We're Albertans. We know that because we have been there.
What a difference from February 2008, just before the last election, when Premier Stelmach said our PC government would never put Alberta back into a deficit position. Now he is saying deficits are back. The Premier's response to new deficits has been to reaffirm that there will be "no tax increases" on his watch. And to ensure the message hits home he is going the extra mile. He is actually reversing the recent tax increase on liquor that was passed in the April 2009 Budget.
News reports indicate that the liquor tax cut will cost the public purse $180m a year - just at a time when Alberta needs all the revenues it can get its hands on. This tax cut is even more unnecessary than Bill 44 was. It is enough to drive you to drink.
Media reports also quote the Premier as saying the liquor tax decrease can be in place this weekend. Funny how we cut a sin tax so assuredly and so swiftly but we can't figure out to ensure we are getting all our non-renewable energy resource royalites accounted for and properly collected.
What is going on? We have serious problems balancing the public purse. Understood!. We are running large deficits in health care. Shift happens! We have record deficits in our general accounts and they are getting larger. And our policy response is to absolutely rule out tax increases?
Not only that, but our official government policy is to go a step further to prove the point that taxes are not going to increase in Stelmach's Alberta. Damn the torpedoes. We have to put some serious emphasis to the political point about no tax increases. We have to announce an immediate reduction a liquor based sin tax? What gives? Is this the essence of the new fiscal plan for Alberta?
The only other option left, and that is actually within our control, is for Alberta us to get after the record deficit by government dramatically reducing social program spending. The biggies of health, education, children's services, seniors and social services can't be protected from cuts - especially with this brand of fiscal folly.
Our most vulnerable citizens, like the sick, elderly, children-at-risk and the disabled have just been put on notice that they are going to become even more vulnerable. Their caregivers, especially those community based not-for-profit agencies, have just been put on notice. They already have to squeeze their nickles until the beaver shits. More program and other cuts have yet to come, but rest assured, they are coming! So theses social service agencies better get a firmer grip on that nickle and start squeezing that beaver even harder.
This is ridiculous. All options need to be on the table to help Alberta address the fiscal force fields we are facing. Eliminating tax policy entirely as an budget option is all about pure political ideology and illogical fiscal policy. What is going on? I see half a policy step forward and three policy steps back these days in Alberta.
You are a wiser man than that Premier Stelmach. Reconsider your comments and conclusions. Do it right away before even more irreparable damage is done to the Progressive Conservative brand in Alberta. Bill 44 was bad enough. This is beyond the pale.
HERE IS AN UPDATE LINK TO THE CANADIAN TAXPAYERS FEDERATION NEWS RELEASE PRAISING PREMIER STELMACH FOR ANNOUNCING NO TAX INCREASES AND QUOTING MINISTERS LIEPERT, SNELGROVE, MORTON, EVANS SAYING ALL OPTION TO ADDRESS DEFICITS HAVE TO BE OPEN. Note to Reader - all these Ministers sit on Treasury Board with Premier Stelmach. The plot thickens.
Alberta Must Fix its Own Fiscal House Now & Not Pass the Problems on to Future Generations.
Alberta's Fiscal Challenges!
I am confused by the fiscal messaging coming out of Alberta these days. Albertans are into some tough times and more to come from what we are being told. With chronic low natural gas prices and other adjustment in our budget assumptions we can’t expect to rely on resource revenues to sustain our program spending.
There are some other realities that have put us in an operating accounts deficit position. However, let’s be clear Alberta has billions stashed away in various accounts – other than the Heritage Fund. We are borrowing the short fall instead of using the cash reserves. I think that is a good idea given the extremely low interests rate these days.
We are told we have almost a $1B of deficit from last year, then $4.7B in this year and now ballooning to $6.2 B. We can expect an even larger deficit next year even after we cut $2B of spending and Health Minister Liepert is reported to say he doesn’t think you can make that kind of cut in the system in one year in a recession. Recently we have been told by Minister Liepert that our leaner more efficient new health care system will tack on another $1B of deficit this fiscal. That is ironically the same amount as health care premiums used to generate before we scraped them.
What Can Be Done?
Go To Ottawa for More Money!
Part of the deficit “solution” being considered by the Alberta government is to go to Ottawa for more money to help out cash strapped Alberta, particularly for health care. Ottawa has rightly told Alberta we must be a “have-not province” before that would happen. Alberta is far from being a “have-not” province so we will have to find our own solutions to the health care budget shortfall.
Since Harper is now known to be low-balling his own budget deficit estimates according to the Parliamentary Budget Office who predict a structural deficit will prevail until at least 2014 the likelihood of Canada bailing out Alberta are between slim and nil.
Lots of Room to Raise Taxes & Still be Competative!
Alberta’s taxes are also extremely low compared to the rest of the country. Perhaps our taxes are too low especially if we can’t sustain our quality of living and public services as a result. Minister Evans noted in a Calgary Herald Opinion Piece in May 2009 that “…if Alberta had the same tax system as other provinces, Albertans and Alberta businesses would pay between $10B and $18B more in taxes every single year….”
Ted Morton is recently quoted in the Calgary Sun saying Alberta will have to cut spending and raise taxes. “The shortfall is so big. We can’t keep loading debt on the next generation. That is not what conservatives do” according to Minister Morton.
Why Not Charge and Collect Responsible Royalty Rates?
Well let’s talk a bit more about intergenerational fairness and the fiscal realities of Alberta today. What if we actually collected the royalties owed by the energy sector and stopped the high subsidy rates. The Auditor General estimates the Alberta government leaves about $2B per year on the table from uncollected royalties in the conventional oil and gas sector every year from 2006. In addition we subsidize natural gas drilling between $1.5B to $3B in foregone royalties. We are doing this at a time when commodity prices and supply gluts tell us it is folly to drill for more gas because all more supply will do is ensure prices stay low and Alberta’s royalty take will continue to languish.
By not charging reasonable royalties and not collecting those royalty rents on the non-renewable resources owned by Albertans the government is irretrievably squandering the birthright of future generations of Albertans. That is something Minister Morton says Conservatives don’t do.
Eliminate Flat Tax or Keep it & Put in a Sales Tax!
The other thing we could do is to eliminate the flat income tax and return to a progressive tax model. Alternatively we can retain the flat tax but institute a sales tax based on consumption and add a progressive tax element back into our system and raise much needed funds. This would bring in enough money to cover the deficits and still leave Alberta as the most tax competitive province overall.
Can we Look Our Kids in the Eye if we Don't Resolve the Problem Now?
It was way back in 1994-94 when our government consciousness caught up with the fiscal sentiments of Albertans and took on the challenge to eliminate the accumulated debt and stop deficit budgeting. One of the key motivations of the people of Alberta at the time was the unfairness debt and deficit was to future generations. Debt and deficits were seen as mortgaging the future of our children. When the task was accomplished Premier Klein said “we can look our kids in the eye again.”
Well we have the same shame now in looking future generations in the eye as we fail refuse or neglect to charge and collect responsible and reasonable royalty rents from our non-renewable resource energy sector. By failing to require and enforce restoration and reclamation practices for roads, wells sites, seismic lines and other disturbances inherent in the development of the energy sector we leave a negative legacy for our children to contend with. By not having adequate protection and enforcement of land, water and air standards we put an additional burden on future Albertans.
The 2010-11 Alberta Budget cycle has just started. The news is not good but the solutions are in the hands and within the power of Albertans to take on, control as resolve “adults.” It will take political will to accomplish the tasks but Albertans forced the political will on its politicians before - in 1993-94 over debt and deficit. Will Albertans once again take personal responsibility to resolve and adjust to the current fiscal realities and choose not to delay or defer them as a burden on future generations?
I am confused by the fiscal messaging coming out of Alberta these days. Albertans are into some tough times and more to come from what we are being told. With chronic low natural gas prices and other adjustment in our budget assumptions we can’t expect to rely on resource revenues to sustain our program spending.
There are some other realities that have put us in an operating accounts deficit position. However, let’s be clear Alberta has billions stashed away in various accounts – other than the Heritage Fund. We are borrowing the short fall instead of using the cash reserves. I think that is a good idea given the extremely low interests rate these days.
We are told we have almost a $1B of deficit from last year, then $4.7B in this year and now ballooning to $6.2 B. We can expect an even larger deficit next year even after we cut $2B of spending and Health Minister Liepert is reported to say he doesn’t think you can make that kind of cut in the system in one year in a recession. Recently we have been told by Minister Liepert that our leaner more efficient new health care system will tack on another $1B of deficit this fiscal. That is ironically the same amount as health care premiums used to generate before we scraped them.
What Can Be Done?
Go To Ottawa for More Money!
Part of the deficit “solution” being considered by the Alberta government is to go to Ottawa for more money to help out cash strapped Alberta, particularly for health care. Ottawa has rightly told Alberta we must be a “have-not province” before that would happen. Alberta is far from being a “have-not” province so we will have to find our own solutions to the health care budget shortfall.
Since Harper is now known to be low-balling his own budget deficit estimates according to the Parliamentary Budget Office who predict a structural deficit will prevail until at least 2014 the likelihood of Canada bailing out Alberta are between slim and nil.
Lots of Room to Raise Taxes & Still be Competative!
Alberta’s taxes are also extremely low compared to the rest of the country. Perhaps our taxes are too low especially if we can’t sustain our quality of living and public services as a result. Minister Evans noted in a Calgary Herald Opinion Piece in May 2009 that “…if Alberta had the same tax system as other provinces, Albertans and Alberta businesses would pay between $10B and $18B more in taxes every single year….”
Ted Morton is recently quoted in the Calgary Sun saying Alberta will have to cut spending and raise taxes. “The shortfall is so big. We can’t keep loading debt on the next generation. That is not what conservatives do” according to Minister Morton.
Why Not Charge and Collect Responsible Royalty Rates?
Well let’s talk a bit more about intergenerational fairness and the fiscal realities of Alberta today. What if we actually collected the royalties owed by the energy sector and stopped the high subsidy rates. The Auditor General estimates the Alberta government leaves about $2B per year on the table from uncollected royalties in the conventional oil and gas sector every year from 2006. In addition we subsidize natural gas drilling between $1.5B to $3B in foregone royalties. We are doing this at a time when commodity prices and supply gluts tell us it is folly to drill for more gas because all more supply will do is ensure prices stay low and Alberta’s royalty take will continue to languish.
By not charging reasonable royalties and not collecting those royalty rents on the non-renewable resources owned by Albertans the government is irretrievably squandering the birthright of future generations of Albertans. That is something Minister Morton says Conservatives don’t do.
Eliminate Flat Tax or Keep it & Put in a Sales Tax!
The other thing we could do is to eliminate the flat income tax and return to a progressive tax model. Alternatively we can retain the flat tax but institute a sales tax based on consumption and add a progressive tax element back into our system and raise much needed funds. This would bring in enough money to cover the deficits and still leave Alberta as the most tax competitive province overall.
Can we Look Our Kids in the Eye if we Don't Resolve the Problem Now?
It was way back in 1994-94 when our government consciousness caught up with the fiscal sentiments of Albertans and took on the challenge to eliminate the accumulated debt and stop deficit budgeting. One of the key motivations of the people of Alberta at the time was the unfairness debt and deficit was to future generations. Debt and deficits were seen as mortgaging the future of our children. When the task was accomplished Premier Klein said “we can look our kids in the eye again.”
Well we have the same shame now in looking future generations in the eye as we fail refuse or neglect to charge and collect responsible and reasonable royalty rents from our non-renewable resource energy sector. By failing to require and enforce restoration and reclamation practices for roads, wells sites, seismic lines and other disturbances inherent in the development of the energy sector we leave a negative legacy for our children to contend with. By not having adequate protection and enforcement of land, water and air standards we put an additional burden on future Albertans.
The 2010-11 Alberta Budget cycle has just started. The news is not good but the solutions are in the hands and within the power of Albertans to take on, control as resolve “adults.” It will take political will to accomplish the tasks but Albertans forced the political will on its politicians before - in 1993-94 over debt and deficit. Will Albertans once again take personal responsibility to resolve and adjust to the current fiscal realities and choose not to delay or defer them as a burden on future generations?
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