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Saying the province is broke misses the point. Alberta has the lowest provincial tax rate in North America, has the lowest personal tax rate in Canada, and has

Saying the province is broke misses the point. Alberta has the lowest provincial tax rate in North America, has the lowest personal tax rate in Canada, and has no provincial sales tax. All of these because of a reliance on Oil and Gas royalties. Calgary has a similar dynamic with over reliance on commercial real estate for major oil and gas companies. Alberta is an outlier in how it finances public services. These are structural problems which won't be solved by public sector taking 5, 10, or even 20% reduction.

izend 6y ago
Please take a look at the latest Alberta government 2020-2021 budget update [1], the resource revenue has collapsed to a mere $1.5 billion which is 2% of government expenditures. Also, the government is running a pre-Covid deficit of $8 Billion which has ballooned to $24 Billion due to Covid. The government must raise taxes or reduce expenditures or face more indebtedness than Quebec per capita. [1] https://open.alberta.ca/dataset/9c81a5a7-cdf1-49ad-a923-d1ecb42944e4/resource/df5d0611-2278-4fdb-aa7b-0c71932479cb/download/2020-21-first-quarter-fiscal-update-and-economic-statement.pdf https://open.alberta.ca/dataset/9c81a5a7-cdf1-49ad-a923-d1ec...
- NotSammyHagar 6y ago
  So in Canada, unlike most or all us states, Alberta can run a budget deficit, they can just get loans? What if they declare bankruptcy or can't pay some bills?
  - izend 6y ago
    Yes, in Canada the provinces can run deficits and all of them have quite large debt loads but eventually the debt loads become too large as the interest payments grow. In the 90s Canada had to cut government services due to an extremely high debt load [1]. [1] https://www.reuters.com/article/us-crisis-timeline/timeline-how-canada-tamed-its-budget-crisis-idUSTRE7AK0FF20111121 https://www.reuters.com/article/us-crisis-timeline/timeline-...
    - thedmstdmstdmst 6y ago
      Canadian Provinces also do the bulk of the spending compared federally with US States.
- thedmstdmstdmst 6y ago
  I have looked at the budget update before. Taking your linked budget update the three highest expenditures being Health (which is not just wages) $20B, Education $8B, and Advanced Education $5B amount to $33 Billion. How much would you have to reduce public sector wages as a percentage (note not all those expenses are wages) to cover the $8 Billion pre-covid deficit. Now how much would you have to do to cover the $24 Billion deficit? The budget update mentioned there is only an additional $3 Billion in post-covid recovery spending but somehow an additional $21 Billion in deficit? Seems like the deficit is coming from revenue collapse. There is no doubt they will have to increase taxation or reduce spending. My point is that there is perhaps there is no longer any 'Alberta Advantage' allowing for the special taxation status of the province.

izend 6y ago

Please take a look at the latest Alberta government 2020-2021 budget update [1], the resource revenue has collapsed to a mere $1.5 billion which is 2% of government expenditures. Also, the government is running a pre-Covid deficit of $8 Billion which has ballooned to $24 Billion due to Covid. The government must raise taxes or reduce expenditures or face more indebtedness than Quebec per capita. [1] https://open.alberta.ca/dataset/9c81a5a7-cdf1-49ad-a923-d1ecb42944e4/resource/df5d0611-2278-4fdb-aa7b-0c71932479cb/download/2020-21-first-quarter-fiscal-update-and-economic-statement.pdf https://open.alberta.ca/dataset/9c81a5a7-cdf1-49ad-a923-d1ec...

NotSammyHagar 6y ago
So in Canada, unlike most or all us states, Alberta can run a budget deficit, they can just get loans? What if they declare bankruptcy or can't pay some bills?
- izend 6y ago
  Yes, in Canada the provinces can run deficits and all of them have quite large debt loads but eventually the debt loads become too large as the interest payments grow. In the 90s Canada had to cut government services due to an extremely high debt load [1]. [1] https://www.reuters.com/article/us-crisis-timeline/timeline-how-canada-tamed-its-budget-crisis-idUSTRE7AK0FF20111121 https://www.reuters.com/article/us-crisis-timeline/timeline-...
  - thedmstdmstdmst 6y ago
    Canadian Provinces also do the bulk of the spending compared federally with US States.
thedmstdmstdmst 6y ago
I have looked at the budget update before. Taking your linked budget update the three highest expenditures being Health (which is not just wages) $20B, Education $8B, and Advanced Education $5B amount to $33 Billion. How much would you have to reduce public sector wages as a percentage (note not all those expenses are wages) to cover the $8 Billion pre-covid deficit. Now how much would you have to do to cover the $24 Billion deficit? The budget update mentioned there is only an additional $3 Billion in post-covid recovery spending but somehow an additional $21 Billion in deficit? Seems like the deficit is coming from revenue collapse. There is no doubt they will have to increase taxation or reduce spending. My point is that there is perhaps there is no longer any 'Alberta Advantage' allowing for the special taxation status of the province.