Budget Archives - Page 2 of 9

Oil and Gas royalties, unpaid municipal taxes, and unaddressed reclamation

17Apr

By Bob AscahNo Comments

Agencies, Budget, Energy, Environment, Opinion/Research

Oil and Gas royalties, unpaid municipal taxes, and unaddressed reclamation

In June 2022, Alberta’s then Energy Minister Sonya Savage, a former executive with the Canadian Energy Pipelines Association, warned the federal government not to consider a tax on windfall profits of the energy industry. When asked about the oil industry’s record cash flows and remediation liabilities, Savage stated: “The current spike in oil prices isn’t enough reason to require the industry to spend more on cleaning up the tens of thousands of abandoned oil and gas wells in the province.” In reflecting on this statement, it suggests that expanded spending by Alberta’ producers on remediation expenses might imply royalty payments to Alberta might fall. In short, the province may have a short-term financial interest in not losing revenue when reclamation spending increases. This con...

28Mar

By Bob AscahNo Comments

Budget, Energy, Environment, Government Finances, Health, Opinion/Research, Politics

Solutions-based policy development and Some Modest Recommendations

There are major issues confronting Alberta- a massive understatement if there ever was! As a student, practitioner, and teacher of public policy for over 40 years, the following ideas are in a germination phase and readers are encouraged to comment and add their suggestions on the central germ of this idea. A solutions-based approach to government policy-making offers a means of identifying a small number of “problems” which require immediate attention and on which there is a consensus on the need for action. This approach starts with Problem identification. The government’s prerogative, but our current government arguably sees things much differently than a majority of Albertans- (e.g. the visceral hate of the federal government as represented by Mr. Trudeau.) In this blogpost, I set ...

<em>A Better Future </em>– Recommended Reading

26Mar

By Bob AscahNo Comments

Budget, Capital Spending, Fiscal History, Government Finances, Opinion/Research

A Better Future – Recommended Reading

Updated 27 March 2023 A Better Future: Fiscal Recommendations to Position Alberta for Success, authored by Todd Hirsch for NDP leader Rachel Notley was released Friday 23 March. Hirsch, ATB’s Chief Economist (2007-2022) is deeply knowledgeable about Alberta’s economy and the financial system having worked earlier in his career at the Bank of Canada (full disclosure: I hired Todd while I was at ATB Financial). In short, he is a respected economist and a consummate communicator, A Better Future is a valuable contribution to a long overview discussion of Alberta’s public finances. In the Introduction, Rachel Notley observes the following. Albertans want and deserve excellent healthcare and a top-flight education The Government of Alberta relies on natural resources revenue. Natural reso...

Budget Speech- Annotated and The Economic Consequences of Mr. Toews

9Mar

By Bob AscahNo Comments

Budget, Credit Ratings, Employment, Energy, Fiscal History, Government Finances, Intergovernmental, Opinion/Research

Budget Speech- Annotated and The Economic Consequences of Mr. Toews

Budget Speech delivered on Tuesday 28 February 2023, Legislative Assembly of Alberta Mr. Speaker, I count it a tremendous honour to rise in the House today to present Budget 2023 – the fifth I have presented on behalf of Albertans. In the fall of 2019, I put forward a four-year plan to bring the province back to fiscal responsibility and a balanced budget. In some respects, these past four years have felt like a century – in part, due to the extraordinary global challenges we faced but also because of how far we’ve come. When, as a government, we took office in 2019, Alberta had an economy that was flat-lined, and we were spending $10 billion more than comparable provinces on services, without better outcomes. Our plan to strengthen Alberta’s economic foundation was two-fold: First, t...

Budgetary advice from UofC and the Fraser Institute – cross-examined

15Feb

By Bob AscahNo Comments

Budget, Energy, Environment, Opinion/Research, Politics

Budgetary advice from UofC and the Fraser Institute – cross-examined

“Don’t Spend Away the Windfall: Better Options for Alberta’s Unexpected Revenues,” written by Jack M. Mintz, Trevor Tombe, Joel Emes, and Tegan Hill is timely asit arrives a few weeks before the provincial budget (28 February). This contribution, combining the right leaning Fraser Institute and two well-known University of Calgary economists offers three approaches for considering the windfall by Alberta’s finance minister Travis Toews. The paper’s moralistic title suggests politicians are not to be trusted with windfalls At this moment, we are also awaiting the report of Todd Hirsch who was engaged by the Alberta NDP to study “how an NDP government can stabilize the province’s finances and build a more resilient economy.” His mandate has been interpreted as what to do with the windfall ...

Moody’s upgrades Alberta’s credit rating

11Feb

By Bob AscahNo Comments

Budget, Credit Ratings, Energy, Government Finances

Moody’s upgrades Alberta’s credit rating

After a decade of seeing its credit rating fall steadily from the coveted triple AAA rating to AA3, surging oil revenues have again lifted Alberta’s credit rating. Nature of credit ratings Credit ratings do matter to all governments which borrow on international and domestic capital markets. There is so much debt in the world that for large bond buying desks their analysts cannot focus on every credit in detail. These institutional investors count on rating agencies to undertake thorough, in some cases almost forensic work, to assure large institutional investors- think Vanguard, Swiss RE, J.P Morgan and the CPPIB- that the risks they are managing, including default risk, are fully understood and the debt/credit portfolios have risk limits understood by the bond buyers.. Credit ratings ...

22Jan

By Bob AscahNo Comments

Budget, Energy, Fiscal History, Government Finances

Lougheed letter publicizes the Alberta Oil and Gas Activity Plan- Summer 1982

This remarkable letter demonstrates how falling oil prices rang alarm bells in the Alberta government and was very much the result the effect of very high interest rates in North America driven by the U.S. Federal Reserve board and not the National Energy Program.. https://fred.stlouisfed.org/series/FEDFUNDS The above graph shows what governments and corporations were watching with alarm as the Fed would move rates up and down with rates nearing 20 per cent followed by a harsh recession which crippled America's auto business, At that time the auto business, like it still is today, is really a financing business based on lending on the security of these American cars. Crippling interest rates discouraged buyers and therefore oil prices. In addition, discerning American drivers were...

15Jan

By Bob AscahNo Comments

Budget, Capital Spending, Government Finances, Uncategorized

Hyndman Papers- Speech to Alberta Municipalities- 1982

Excerpt from Speech to Alberta Municipal Districts & Counties (pp. 12-16) (Undated- likely late November 1982 after 2 November 1982 provincial election) The following speech given by Peter Lougheed in November 1982 set the stage for the Alberta government's post election Alberta Economic Resurgence Program. (The PDF of the excerpt of the speech in below) The speech is notable as signaling the government's intention to restrain government spending and holding public sector wage costs to below the private speech. His language was unusually blunt to this gathering of Alberta's municipal councilors, reeves, and mayors. Crucial to the financing of the resurgence program was a return to direct borrowing of the province- a rare event in the post-war period- and tapping all investment inco...

Mid-year Financial Update- more spending, less revenue

5Dec

By Bob AscahNo Comments

Budget, Government Finances, Opinion/Research

Mid-year Financial Update- more spending, less revenue

Between the first quarter update at the end of August and the mid-year update of November 25th? a new premier took charge. In the tbf-2022-23-first-quarter (as its PDF is known) the province expected to collect $75.9 billion in revenue. In tbf-2022-23-mid-year total revenue is $76.9 billion. The Mid-term Update was called “Strong economy, strong Alberta” equating Alberta to economy. The press conference video is here. Spending Spending has increased from $62.1-billion in the 2022 Budget, including COVID-19 recovery spending, to $64.7-billion in the fiscal update or by $2.6-billion. Increased spending comes from $300-million in electricity rebates, “affordability initiatives” of $1.2-billion, $308 million for higher costs of selling oil, $340 million for Health including $174 million for t...

12Nov

By Bob Ascah2 Comments

Budget, Energy, Health, Opinion/Research

What does Danielle Smith think?

Updated and corrected 3 December 2022 See also a related BlogPost for the Parkland Institute What Was She Thinking? A Glimpse Into Danielle Smith’s Mind published 2 December 2022 Perhaps the best glimpse into Premier Smith’s thinking on a whole range of critical public policy issues is contained in a 20-page paper entitled “Alberta’s Key Challenges and Opportunities.” This paper was part of the School of Public Policy’s pre-publication series called the Alberta Futures Project. This paper was published in June 2021 before oil and gas prices rose substantially changing the province’s fiscal picture. What is surprising is the absence of a discussion of a sovereignty act and confronting federal overreach central to her winning the UCP leadership. In this article, I examine fundamenta...