Fraser Institute: Alberta squandered it's oil wealth

mentalfloss

mentalfloss

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Jun 28, 2010
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...unlike that socialist country, Norway....



Alberta squandered oil wealth with big spending, Fraser Institute says

In the next week, Alberta will release its third-quarter fiscal update. It's not going to be pretty.

Premier Jim Prentice says the drop in energy prices, particularly for oil, has drained $7 billion from government revenues. This fiscal update is widely expected to show the province sliding into a deficit for the current fisca

A report from the Fraser Institute says it didn't have to be this way, and that with some restraint, Alberta could still be in surplus and have saved billions in the Heritage Savings Trust Fund.

Spending surge

Here's the math of authors Mark Milke and Milagros Palacios.

Ten years ago, before the boom started in earnest, Alberta spent $8,965 (in 2013 dollars) per person in program spending. This does not include capital spending on items like hospitals, schools and roads.

The report argues that had the province increased program spending in the following years at the rate of inflation plus population growth, it would have spent $295 billion on programs over the next nine years.

Norway model may have saved $101B

The report also examines the savings plan of three oil-producing jurisdictions: Alberta, Alaska and Norway. As you can imagine, Alberta doesn't show well.

In Alaska, a minimum of 25 per cent of resource revenues are deposited into its Alaska Permanent Fund. The income generated from the fund can be used by the state government, but not the principal. As of June 2014, the fund stands at nearly $64 billion US.

In Norway, 100 per cent of net proceeds from resource revenue are supposed to flow into a fund. According to Milke, that doesn't happen every year, but Norway has gotten close to that ideal. The Norwegian Petroleum Fund sits at $759 billion as of Sept. 30, 2014.

http://www.cbc.ca/m/news/business/a...-big-spending-fraser-institute-says-1.2963338
 
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Cannuck

Cannuck

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This highlights two popular misconceptions that I've been arguing against for years. The first is at Alberta is a conservative province. The government continues to grow and there is no outrage here. On the contrary, people want more. The second is that just having the name Conservative Party implies that you're a better fiscal manager. We've heard this silliness from conservative party supporters all the time. In fact the conservative party supporters on this forum absolutely refused to except the horrible job that the conservative party has done fiscally not just in Alberta But federally as well
 
taxslave

taxslave

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What the spirts forget is that unlike Alaska and Norway Alberta has had to adjust to a rapid population growth. No one is flocking to Norway for the newly created good job. Once production and population stabilizes the expenses will drop.
 
Cannuck

Cannuck

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taxslave said:
What the spirts forget is that unlike Alaska and Norway Alberta has had to adjust to a rapid population growth. No one is flocking to Norway for the newly created good job. Once production and population stabilizes the expenses will drop.
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Had you bothered to read the OP, you would have understood that there is a growth rate per person that exceeds the inflation rate and that they are looking at program spending alone and not infrastructure. You have proven my point quite nicely and I thank you.
 
taxslave

taxslave

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Cannuck said:
Had you bothered to read the OP, you would have understood that there is a growth rate per person that exceeds the inflation rate and that they are looking at program spending alone and not infrastructure. You have proven my point quite nicely and I thank you.
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Had you any economics education at all you would know that in a rapidly expanding population the per capita cost is going to rise dramatically. Now go back to the recycling depot and mop the stale beer off the floor.
 
Cannuck

Cannuck

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taxslave said:
Had you any economics education at all...
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You mean if I thought like you. Look, I understand that you would like us all to believe that you, some lumberjack with a grade 9 education t(hat believes in the homeopathy cult) knows more about this stuff than the Fraser institute. I doubt you're going to be all that successful. I don't doubt that the only ones that will buy into your silliness are other Conservative party supporters. Agreeing with you, while making them look foolish, is probably easier to stomach then admitting their guys and gals in Ottawa and Edmonton are incompetent.
 
MHz

MHz

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bill barilko said:
Albertans pissed away everything?

Imagine that!?
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Just like the last time and then we'll do it again the next time it booms for a bit. Just becaise the rest of the country never gets ant booms anymore, pissed that away in one go it would seem. lol

You should be more concerned about the dollars leaving the country rather than how Albertains spend the last of their lotto money. If it wasn't for being overpriced in the first place there would be no 'fall'. Spend it or lose it to the east, what would you do?
 
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