Capital Spending Archives - Page 2 of 2

12Jun

By Bob AscahNo Comments

Capital Spending, Energy, Fiscal History, Investment

Hyndman Papers: public vs. private investment and rising interest rates

Private sector investment has been the main driver of the Alberta economy over the past half century. Private investment in Alberta is highly correlated to secular movements in oil prices. Interest rates too play a major factor in driving economies. Low interest rates make investing in capital assets such as energy projects and housing more viable than when interest rates rise dramatically as they did in the early 1980s. The global economy is facing rising interest rates and a current boom in commodity prices including oil, natural gas, potash and grain prices. The two documents below illustrate the nature of Alberta's capital investment stock relative to other provinces. Alberta in 1981 had double the per capita private sector investment of the next province Saskatchewan. As a conse...

1Mar

By Bob AscahNo Comments

Budget, Capital Spending, Energy, Fiscal History, Government Finances

Budget 2022- Analysis and Opinion

The Alberta government’s recent budget reveals- once again- the provincial treasury’s over-dependence on non renewable resource revenue. This budget continues a six-decade tradition of resource revenue making up for a deficient, unstable revenue base to produce budget balance. However, as the chart below illustrates Alberta has never had a budgetary surplus, when excluding resource revenues since 1965-66. The surplus targets for fiscal years 2022-25 also produce the same results. This year, Albertans are expected to only contribute 78 cents on the dollar to Alberta’s expected revenues. If oil persists at an average of $90 U.S. per barrel over the whole fiscal year beginning April 1, then an extra $10-billion will be received meaning taxpayers will only foot 59 per cent of the bills. C...

28Feb

By Bob Ascah1 Comment

Budget, Capital Spending, Government Finances

Alberta Budget 2021-Analysis

Highlights Economic assumptions on balance appear realistic with some upside Spending kept flat mainly through cuts to ministries except Health, K-12 Education, and Social Services Capital spending to remain elevated although next two years see a significant reduction. No new taxes or tax increases- nothing on revenue structure review Debt levels will rise to close to government’s fiscal anchor Economic Assumptions The Government seems to be following the playbook from Ralph Klein's early years in leading the province out of what had been chronic deficits. Conservative resource revenue forecasts based on past history rather than hoped-for future prices helped return the provincial government to balance quickly. These conservative revenue forecasts restrained the public and v...

7Feb

By Bob AscahNo Comments

Budget, Capital Spending, Fiscal History, Government Finances

Hyndman Papers- 1982-83 Budget Deliberations

1982 was a pivotal year for Alberta as the twin effects of a world recession and falling oil investment forced Alberta policy-makers to pull out all the stops. Western separatism was a worry for Peter Lougheed when Gordon Kessler of the Western Canada Concept party won a February 1982 by-election in the rural constituency of Olds-Didsbury. This was also a time for budgetary largesse. In a 2011 article in Policy Options, economists Herb Emery and Ron Kneebone: Provincial support for the industry included a $5.4-billion program, introduced in 1982, consisting of royalty reductions and grants designed to increase the flow of revenue to the industry. In the same year the federal government would supplement this effort with its own $2-billion assistance plan. Measured in 2008 dollars, these t...

25Nov

By Bob Ascah1 Comment

Capital Spending, Economic Data, Energy, Environment, Fiscal History, Government Finances, Politics

Presentation to EQUS directors- 23 November

EQUS is a small, co-operative distributor of electricity to 12,000, mostly rural, customers. The organization is the product of a series of mergers of rural electrification co-operatives over the past two decades. EQUS employs about 100 staff with its head office in Innisfail. The presentation, provocatively entitled "Alberta's Crumbling Economic and Fiscal Foundation" builds on concerns about the future health of Alberta's economy in a world where international financial capital places more emphasis on renewable energy solutions. The presentation highlights the pivotal role of capital expenditures of the oil and gas sector which have driven the Alberta economy since 1947. Alberta's gross fixed capital formation (oil and gas, institutional, industrial, residential and non-residential bui...

1981- Economic Downturn and Accelerated Projects

16Aug

By Bob AscahNo Comments

Capital Spending, Energy, Fiscal History, Government Finances

1981- Economic Downturn and Accelerated Projects

The fall and winter of 1980-81 was a very unsettling time for provincial politicians. The Alberta public, politicians, and senior public servants were furious at the indifference of federal politicians' plans to redirect oil revenues from producers and the provincial government. Unemployment insurance claims rose from about 10,000 in September 1980 to over 17,000 in January 1981. Alberta's unemployment rate increased from 3.4 per cent in September to 4.5 per cent in January, further causing concern in a province which had recorded rapid economic growth since the early 1970s. In this climate of uncertainty, Treasurer Lou Hyndman had requested his cabinet colleagues to provide suggestions on how to get idle human and physical capital to work again. In these two memoranda from the Hyndman pap...

Budget 1981-82: Communications objectives

9Aug

By Bob AscahNo Comments

Budget, Capital Spending

Budget 1981-82: Communications objectives

The April 1981 was a pivotal budget for the Province of Alberta. Every budget has key communications objectives, as Lou Hyndman's one-page memorandum to his Treasury Board and cabinet colleagues, reveals. This budget was Alberta's first after the National Energy Program was announced. As last week's Abopecon.ca reported, the previous month, the Treasury department was wary about providing any economic forecasts and the prevailing mood in the provincial government and the whole economy was grim. The situation back in 1981 is analogous to the circumstances facing the current government. For the Conservative government, re-elected for the third time in 1979 with 74 of 79 seats, it was clear that the government would use its considerable fiscal resources to maintain public services an...

14Oct

By albertarecessionwatchNo Comments

Capital Spending

Capital spending

For the Notley government, infrastructure spending has been a distinctive marker of its fiscal choices. Support from a report last year by former Bank of Canada Governor David Dodge along with the Trudeau government's big infrastructure program has continued a ten year spell of high public spending on capital commenced by their Tory predecessors. (more…)