Too Late To Separate – Alberta’s Resource Ride
“Stop the world, stop the world…I’m getting off…” Stone Roses rock song lyric.
Seems like a fitting sentiment for these angry post-election days.
Prairie alienation and anger are all the rage in the Canadian media. It reminds me of the 1990’s when Canadian publications exchanged vitriolic back and forth between the angry Westerners and angry Quebeçois. Reform vs. Bloc. Nationalist vs. Separatist. West vs. East.
All the drama sure sells newspapers. It’s mostly nonsense. Politically motivated. Over-dramatic grandstanding by opportunistic politicians. The ramblings of the political puppets.
Fast forward to today. The ramblings persist. Alberta’s political response to the Federal election? Tough talk on separation and another neoliberal-style austerity budget filled with threats of more pain to come.
What Albertans Under Pressure Do Not Need
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Increases to their personal income taxes through de-indexing and credit removal
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Higher costs throughout society
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Public sector layoffs
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Poorer students
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Delays to infrastructure renewal and expansion in a growing province
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Corporate tax cuts that put a $2 Billion hole in the budget
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No sales tax revenues
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More cycles of Household Wealth Evaporation
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A traveling roadshow through the province to sell a budget based on a trifecta of unlikely events: no global recession, no cancelled pipelines, rising resource revenue royalties. A gamble at best.
What Albertans Do Need
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Jobs. Income to spend to get the economy moving and on its way back to full employment…or at least down from 6.6% to 3%. 3% is the sweet spot where frictional unemployment exists but inflation is held in check.
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Policy ensuring a legislated portion of natural resource revenues are invested in the Alberta Heritage Trust Fund and that investment gains cannot be accessed / squandered by politicians and their handlers. For the post-oil future.
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A Provincial Sales Tax. A tax structure outside of resource revenues that supports the levels of government spending typical in the province.
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An end to Household Wealth Evaporation.
Full Employment or 3% Unemployment – How to get there
University of Calgary School of Public Policy states, “With global policies focused on decarbonization and technological innovations around shale oil and gas and fracking, the growth in the demand for oil from traditional oilsands projects is expected to decline.”
The election showed that, in Alberta, a majority of voters do not accept climate change and the resulting effects that this change is imposing on western world economic drivers.
Of course one can’t suddenly eliminate production of all oil and gas but the unwillingness to accept that change is occurring is essentially the major policy mistake Alberta is making.
This is difficult to understand looking at the leadership Alberta has displayed under past governments. For example, the first wind farm was set up by the Alberta government near Pincher Creek Alberta nearly 40 years ago.
Alberta, rather than fighting the changes that are coming, should be preparing for the ultimate reduction in oil and gas production and start encouraging job growth in new industries.
Research by economists Pollin, Heintz and Garrett-Peltier from the PERI Institute at the University of Massachusetts found that the best job creation investments by government are in the education and clean energy/efficiency/renewables sectors, not in fossil fuels.
Job Creation through each $1 Million in Spending
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Education – 26.7 jobs
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Clean Energy / Efficiency / Renewables – 16.8 jobs
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Military Spending – 11.2 jobs
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Fossil Fuels (oil, coal, natural gas) – 5.2 jobs