Alberta's Exploding Debt

mentalfloss

Prickly Curmudgeon Smiter
Jun 28, 2010
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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
 

mentalfloss

Prickly Curmudgeon Smiter
Jun 28, 2010
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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.
 

IdRatherBeSkiing

Satelitte Radio Addict
May 28, 2007
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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

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Mar 28, 2009
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$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

The Central Scrutinizer
Nov 21, 2008
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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.

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

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Mar 28, 2009
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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

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

The Central Scrutinizer
Nov 21, 2008
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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

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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

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Not too surprising..............for awhile there recently Alison was spending money like a drunk wh*re on a Saturday night.
 

captain morgan

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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

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Mar 18, 2013
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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

Hall of Fame Member
Mar 28, 2009
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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
 

mentalfloss

Prickly Curmudgeon Smiter
Jun 28, 2010
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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

Time Out
Mar 16, 2007
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Red Deer AB
$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.

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 .....