Alberta's Exploding Debt


mentalfloss
#1
Taxpayers in Alberta are on the hook for more debt than ever, says the Canadian Taxpayers Federation as they are set to send their debt clock on tour through a long list of communities.

The CTF launched the Debt Clock Tour to raise the alarm over Alberta’s exploding debt, which surpassed $10B at 10 p.m. on Thursday night.

“Making our great province debt-free once again is the number one priority for the CTF in Alberta right now,” said CTF Alberta Director, Derek Fildebrandt in a release. “We are going to take the fight to as many towns and cities as we can to rally support and put the heat on politicians to take a stance.”

The organization says that the province is on target to reach $21B by 2016-17, with the debt load increasing by $4.7B this year alone.

This weekend also marked a bittersweet anniversary for the organization, where it’s been 10 years since Premier Ralph Klein proclaimed that the province’s debt was ‘Paid in Full’.

Fildebrandt says that the province has made poor decisions since that time, spending most of the Sustainability Fund.

During the tour, the CTF is inviting all MLAs to take a pledge to strive for a balanced budget and a debt-free Alberta.

Wildrose Finance Critic Rob Anderson and Liberal Finance Critic Kent Hehr have both already signed the pledge, and Wildrose leader Danielle Smith is expected to sign it later this afternoon.

For more information on the Debt Clock Tour, click here.

A complete schedule is available here.

Some quick fact about the CTF’s Debt Clock:

Alberta’s debt is increasing:
$150.37 per second
$9,022.07 per minute
$541,324.20 per hour
$12,991,780.82 per day
$4,742,000,000.00 this year

Provincial debt clock making the rounds in Alberta | CTV Calgary News
 
Most helpful post: The members here have rated this post as best reply.
IdRatherBeSkiing
+6
#2  Top Rated Post
The clock will likely be going at a snail's pace compared to Wynn's Ontario clock which can double as a fan on a real hot day.
 
Kreskin
+2
#3
We probably spent that this afternoon in BC.
 
mentalfloss
+1 / -1
#4
Quote: Originally Posted by IdRatherBeSkiingView Post

The clock will likely be going at a snail's pace compared to Wynn's Ontario clock which can double as a fan on a real hot day.

Shifting the blame to another province is something Albertans usually mock Ontarians for.

Talk about hypocrisy.
 
B00Mer
Republican
+1
#5
LOL Talk about exploding... debt.

Exploding sperm whale real time amp slow motion - YouTube

 
petros
+3
#6
$10B? That's it?
 
IdRatherBeSkiing
+2
#7
Quote: Originally Posted by mentalflossView Post

Shifting the blame to another province is something Albertans usually mock Ontarians for.

Talk about hypocrisy.

Alberta has a little problem that I am sure this or the next conservative government will correct. Ontario has a huge problem which Wynn is making bigger. 2 distinct problems.


Now what else about Alberta's temporary problems do you wish to discuss? And where was your headline about Moodies downgrading Ontario's debt rating?
 
captain morgan
Bloc Québécois
+2
#8
Quote: Originally Posted by petrosView Post

$10B? That's it?


What the OP fails to consider is that it makes perfect sense to use cheap debt capital (and I mean real super low interest rates) to fund select expenditures, meanwhile, investing the many billions annually from oil/gas royalties into higher yielding investments.

Ultimately, the province is able to use the bank's (primarily intl capital funds) money for free (actually making profits from it) while being able to fast track necessary expenditures for the province.

That's another thing that the CTF failed to mention... Much of this debt capital is for critical infrastructure that is amortized over many years and will also have a tangible return for all Albertans.

It's simple, and smart economics
 
petros
+2
#9
The lad is jealous.

Crack open old newspapers from 120 years ago and you'd read the same complaints and western jealousy as today. If things are so bad, hop on VIA, the same tracks still head west to a better life.

Quote: Originally Posted by captain morganView Post

What the OP fails to consider is that it makes perfect sense to use cheap debt capital (and I mean real super low interest rates) to fund select expenditures, meanwhile, investing the many billions annually from oil/gas royalties into higher yielding investments.

Ultimately, the province is able to use the bank's (primarily intl capital funds) money for free (actually making profits from it) while being able to fast track necessary expenditures for the province.

That's another thing that the CTF failed to mention... Much of this debt capital is for critical infrastructure that is amortized over many years and will also have a tangible return for all Albertans.

It's simple, and smart economics

More like banks come knocking with bags of cash for those P3s that are finally opening the west. Low interest yes but great, steady profits in the long run that keep paying and employing.
 
captain morgan
Bloc Québécois
+1
#10
Quote: Originally Posted by petrosView Post

The lad is jealous.

Crack open old newspapers from 120 years ago and you'd read the same complaints and western jealousy as today. If things are so bad, hop on VIA, the same tracks still head west to a better life.


Well said.

I also think that MF has choked that provinces like Sask and AB that have experienced wild cyclical swings in their pasts have learned their lessons and are now sailing on calm waters with strong winds.

Any jurisdictional gvt can do this very same thing, all you need are 2 critical elements:
  1. Strong bond rating
  2. A GDP that illustrates that you really don't need their money.
Simple, really

Quote: Originally Posted by petrosView Post

More like banks come knocking with bags of cash for those P3s that are finally opening the west. Low interest yes but great, steady profits in the long run that keep paying and employing.

You see it too....

These lenders (and pension funds, and iBanks, and Soverign Capital Funds) absolutely love it when they can allocate vast sums of money somewhere and not have to worry about default.

... Hell, they'll even drop the rates for ya just on that basis alone
 
petros
+1
#11
Quote: Originally Posted by captain morganView Post

Well said.

I also think that MF has choked that provinces like Sask and AB that have experienced wild cyclical swings in their pasts have learned their lessons and are now sailing on calm waters with strong winds.

Any jurisdictional gvt can do this very same thing, all you need are 2 critical elements:

  1. Strong bond rating
  2. A GDP that illustrates that you really don't need their money.
Simple, really

You see it too....

These lenders (and pension funds, and iBanks, and Soverign Capital Funds) absolutely love it when they can allocate vast sums of money
somewhere and not have to worry about default.

... Hell, they'll even drop the rates for ya just on that basis alone

I remember SK being $32B in the hole 30 years ago with crazy interest rates in the teens.

It took getting rid of dead weight and pushing the Feds to break the western bottlenecks

When AP Gateway is complete AB and SK will dominate the Canadian economy for the next 100+ years.
 
captain morgan
Bloc Québécois
#12
No doubt... They are already the economic engine of Canada and the combined corporate presence on the TSE makes up in excess of 30% of that exchange.

.. And the Flossy's of the world detest that fact... Apparently enough to demand that their nose be cut off to spite their face
 
JLM
No Party Affiliation
#13
Not too surprising..............for awhile there recently Alison was spending money like a drunk wh*re on a Saturday night.
 
mentalfloss
#14
Quote: Originally Posted by petrosView Post

$10B? That's it?

Per year?
 
captain morgan
Bloc Québécois
#15
Alberta Energy: Revenue Collected
(millions)
Natural Gas & By-product Royalty
2010/11 $1,416
2011/12 $1,304
2012/13 $954
Conventional Oil Royalty
2010/11 $2,236
2011/12 $2,284
2012/13 $1,881
Oil Sands Royalty
2010/11 $3,723
2011/12 $4,513
2012/13 $3,560

Coal Royalty
2010/11 $31
2011/12 $29
2012/13 $-3
Bonuses & Sales of Crown Leases
2010/11 $2,635
2011/12 $3,312
2012/13 $1,053

Rentals & Fees
2010/11 $161
2011/12 $169
2012/13 $176

Special Royalty Features (the Drilling Royalty Credit and New Well Royalty Rate program)
2010/11 -$1,774
2011/12 $25
2012/13 $0
Non Renewable Resource Revenue
2009/10 $6,768
2010/11 $8,428
2011/12 $11,636
Net Non Renewable Resource Revenue
2010/11 $8,428
2011/12 $11,636
2012/13 $7,622
Freehold Mineral Tax
2010/11 $127
2011/12 $129
2012/13 $119
Departmental Revenue
2010/11 $8,555
2011/12 $11,765
2012/13 $7,741
 
Tecumsehsbones
+1
#16
Two problems with debt.

1. It's bad. Depresses the economy and limits your future options.

2. Noboby ever deals with it. As this thread shows, folk just line up and start yelling. And the debt grows.

Best time to get at it is early. Good luck with that.
 
captain morgan
Bloc Québécois
#17
Quote: Originally Posted by TecumsehsbonesView Post

Two problems with debt.

1. It's bad. Depresses the economy and limits your future options.

2. Noboby ever deals with it. As this thread shows, folk just line up and start yelling. And the debt grows.

Best time to get at it is early. Good luck with that.


You're right, no 2 ways about it.

That said, AB has (had?) legislation that required to province to maintain a balanced budget. In light of this and the pressure on gvt to upgrade, acquire and develop new infrastructure, it was/is a great time to engage these with debt and get things done now rather than over the next 10 years.

I am completely on the same page as you in terms of the debt comments you made, but in this instance, I can see the logic that is being used
 
Tecumsehsbones
+1
#18
Didn't take you long to find a second way about it.
 
mentalfloss
#19
A debt in Alberta looks even more egregious when you consider it's supposed to be the source of this country's economic growth.
 
MHz
#20
$10B is chump change in this day and age.
It certainly doesn't put us at the front of any line let alone the one to suffer dire consequences for poor money management. (really to decide that you would have to see if the spending is for more new golf courses of some social programs that help the least important to society) Bacl in the day when there was money for such things why did they come before the social programs and the spare money went away when it came time to spend that much on programs that wouldn't benefit TPTB. Probably not a fluke if it was really investigated.

Quote: Originally Posted by TecumsehsbonesView Post

Two problems with debt.

1. It's bad. Depresses the economy and limits your future options.

2. Noboby ever deals with it. As this thread shows, folk just line up and start yelling. And the debt grows.

Best time to get at it is early. Good luck with that.

1. It is the banks pulling in the loans that depresses the economy. JFK bankrolled a trip to the moon in the 60's. The amount of money spent was equal to that spent when fighting a war. There is enough money to do something similar in that it takes a decade and uses up a lot of money so the banks can earn their usury.

2. That was 1913 for the US and they shot JFK because he was going to do something about it. Canada gave up that right in 1972 I believe.




Jordan Maxwell would do a brisk business here. Just sayin .....
 
B00Mer
Republican
#21
Quote: Originally Posted by TecumsehsbonesView Post

Two problems with debt.

1. It's bad. Depresses the economy and limits your future options.

Have you been to Alberta.. depressing the economy here is a good thing, otherwise housing prices would be crazier...

Alberta economy is wild!!! Best in North America.

Alberta Top Economic Freedom in North America 2012

Alberta top labour market in North America: report | Financial Post
 
captain morgan
Bloc Québécois
+2
#22
Quote: Originally Posted by TecumsehsbonesView Post

Didn't take you long to find a second way about it.


It is what it is... Fact is, the prov is going about this in a smart and responsible way.

Debt becomes a huge problem when you run the risk of struggling to pay, this isn't the case in AB.

... And yes, the response to the next predictable question of; 'why not alter the rules and go back to deficit budgets'?.. Well, that's debt, right, you'd be right back to square one. So the real question is, does it make sense to act on the need for capital spending on infrastructure today and take advantage of the very low rates?

This makes sense and further, you'd be stupid not to borrow money for far less than what you can invest your discretionary/disposable income today.
 
Walter
+2
#23
ON's debt will be over $300,000,000,000.00 this fiscal year. AB's debt is 3% of ON's debt.
 
MHz
#24
Quote: Originally Posted by mentalflossView Post

A debt in Alberta looks even more egregious when you consider it's supposed to be the source of this country's economic growth.

If the rest of the country was not drowning in debt the spending being done in Alberta would be a lot higher in some areas. In a depression (like North America is in now) if you have money you can buy a lot of things rather than just a few things. Say Alberta went on a big spending spree where they even (permanently) fixed all the pot-holes and the resit of the civilian infrastructure. At some point the oil in the ground is going to be sold to pay for that, other Provinces do not have a natural resource at the moment.
The east has the Great Lakes but how much fish farming is done there where harvest is done and the breed of the catch means the load is paid for by the company running that part of the co-op fish farm that sees 20 species released into the 'wild', or something along that line. (that's assuming fish can even survive in those waters today) That is one potential for the east that would allow a big debt be taken on because in the end it will pay for itself if. If the costs associated with feeding them and enriching the water with 02 can be brought down the profits go up. Being fish they can probably be trained to swim right into the processing factories along the shores if not caught in the open water.
If that isn't an option for the east to move into the next phase then looking north and south means moving goods and to do that you need a vibrant economy and if any spending means more debt (that can't be paid off) then the roads to take the fish harvest south and west and east would not be built even though the cost of food would tumble because there was now access to an over abundant supply as long as you liked fresh water fish. (going north could solve the salt water products and both have a consumer that will be around for a long time so 20 years building the business will mean it is still running 100 years down the road and should the international market stop the locals still survive the hardships that automatically comes with a reduction in free money, at least they are eating.
 
Tecumsehsbones
#25
Quote: Originally Posted by captain morganView Post

It is what it is... Fact is, the prov is going about this in a smart and responsible way.

Debt becomes a huge problem when you run the risk of struggling to pay, this isn't the case in AB.

... And yes, the response to the next predictable question of; 'why not alter the rules and go back to deficit budgets'?.. Well, that's debt, right, you'd be right back to square one. So the real question is, does it make sense to act on the need for capital spending on infrastructure today and take advantage of the very low rates?

This makes sense and further, you'd be stupid not to borrow money for far less than what you can invest your discretionary/disposable income today.

Got a plan to pay for it?
 
MHz
#26
Quote: Originally Posted by B00MerView Post

Alberta economy is wild!!! Best in North America.

That isn't saying it isn't a trickle of what it once was. The boom of construction was the first one and the Gov paid the iol companies to build the roads to the most remote locations first and then the feeder roads could be build if the demand was there and at a cheap rate becuse they were all short distances. That kind of rate will never come back as servicing doesn't take a lot of people but it does involve a bit of work in many areas rather than a lot of work in a few areas.
Once the servicing is done the only task is removal and that is avoided if at all possible. If that goes from 100 people down to 10 people having jobs then the 90 that will lose theirs either has to be able to find another one even if that means moving or the money saved should support paying the people to not work and they need to find a hobby. (and have some funds to follow through on that)

Quote: Originally Posted by captain morganView Post

....go back to deficit budgets'?..

If I have a farm and grow hay and cattle I can claim an increase in the value of the cattle based (partly) on the feed I give to them compared to if I sold it on the open market.
Investment in the infrastructure goes on the books as an increase in assets that belong to the people of Alberta (tax-payer), loans to have-nots that do not get repaid are not classified as assets. We should spend till our credit is no better than anybody else and sit back for 20 years until the pot-holes reappear.
How will the other Provinces be doing then, debt-free or looking for loans from others that will never be paid back?
Last edited by MHz; 6 days ago at 08:08 AM..
 
taxslave
No Party Affiliation
+1
#27
Good Debt: Infrastructure
Bad Debt: Social programs

Does Alberta have a Provincial sales tax yet?
 
captain morgan
Bloc Québécois
#28
Quote: Originally Posted by WalterView Post

ON's debt will be over $300,000,000,000.00 this fiscal year. AB's debt is 3% of ON's debt.


Relative to GDP, AB comes in at $331.9 billion for 2013

Quote: Originally Posted by taxslaveView Post

Does Alberta have a Provincial sales tax yet?


No, at least not yet... Won't take long for the do-gooders to find a social program that is perfectly suited for a PST
 
taxslave
No Party Affiliation
+3
#29
Quote: Originally Posted by captain morganView Post

Relative to GDP, AB comes in at $331.9 billion for 2013




No, at least not yet... Won't take long for the do-gooders to find a social program that is perfectly suited for a PST

No PST is a good indicator that the debt is not a problem. The best cure for social problems is high pay and high employment. Thr freeloaders need not apply.
 
MHz
#30
Quote: Originally Posted by taxslaveView Post

Good Debt: Infrastructure
Bad Debt: Social programs

Does Alberta have a Provincial sales tax yet?

We prefer to call them subsidies. The companies that 'paid' $M's to build a road to one well that was not even connected to any method that one truck every 3 weeks. Everybody made money, a bottle of aspirin was available at 3AM with one phone call, that it cost $500 wasn't even an issue. Hookers at the well-site when the super's wife comes for a visit is another story completely, lol. Completely paid for by the Provincial Govt (taxpayer lost revenue) and the cut Ottawa in at the same time.

Social programs should have an endgame that is factual down the road. The $5B spent on Syncrude to produce axle grease is a good investment as that is the main ingredient. Spending $500B more to get 3 gallons of low grade gas is stupid when you are burning off NG to get the gasoline, a lot of NG. What is burned off in flares to keep the pressure low in the lines would power a lot of engines, for free. That isn't a very good reason not to do it.
Social programs seems to include education. Rather than spend more on the current system where endless money has a population of university grads with nothing to do with those skills. Kids don't really pay attention until they are about 12 so start grade 1 at 12 years old and by 20 they have high school and 2 years advanced education or 2 years on the job training. Both paths lead to the same income if they both worked until 55 and then both retired. On the job means the cash comes faster at the start and slower at the end of that period of 'being useful'.
Below 12 send them all to the mall and lock the doors for the day. First-aid and such would make better educational classes for that age group and the staff would be the older workers that are unable to keep up with the faster paced segments of society (the ones in society needing first-aid the most). The very young and the very old will find their own balance.

The PST might even be a hidden tax. When the Social Credit got in by cancelling all private debt that load actually got transferred to the Govt books and was paid off by the taxpayer over the coming decades. Since Alberta is a consumer destination perhaps there is a different delivery charge to us than there is to places with PST. Wouldn't that make having a warehouse in AB that sells through a server in Alberta be the way to sell to Ontario and save them some money so they would order from AB rather than do it locally at a higher price. (assuming shipping doesn't suck that savings up, which it does)

Why couldn't I set up a company in Alberta where members would log onto their $3/mo membership and they could shop using the 'no PST' Alberta address for the purchase but the 'delivery' was to an address that just happened to also be in Ontario so the shipping was next to zero?

Unless it has changed I can order from Ontario but not pay PST because I am from AB.
Last edited by MHz; 6 days ago at 09:50 AM..
 

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