[PublicAnimalNo9]

andyt andyt:

PublicAnimalNo9 PublicAnimalNo9:

I'm not sure what lessons we can learn from Norway in this matter. Here's why Norway has been able to sock so much away into their fund:
A total tax burden of roughly 45% of the country's GDP
A massive 25% VAT
Personal income tax rates starting at 27% and going as high as 55%
Corporate profits tax ranges from 28% to as high as 78% for the oil industry
Norway even has a direct wealth tax

Further, when you look at the Norwegian economy the state drives nearly all of it with controlling interest in 8 of 10 of the largest employers in the country; Statoil, DNB and Norsk Hydro to name 3 of the largest.

Of course Alberta did itself no favours by deciding to do away with a PST because they were oil rich.

However, with the rest of Canada available, Alberta would have been hard pressed to generate any corporate interest in the province outside of the oil industry if they had supported their Heritage Fund with regressive tax rates like Norway has.

Regressive tax rates - practicing Newspeak now, are we?

Yes yes, and I'm sure you think a 55% personal income tax rate are the kind of "progressive" rates we should be aiming for. I'm sure you'd LOVE to pay 25% VAT on EVERYTHING you purchase(except transit, I believe it's only taxed at 15%) and think that 78% is a perfectly reasonable tax rate for oil company profits.

andyt andyt:

Norway has a very high standard of living - #1 in HDI. Seems those high taxes aren't a disaster for them.

No? Aside from the 3 aforementioned Norwegian companies, name me one other Norwegian company that you've actually heard of and didn't have to go searching Google for.
Innovation has been stifled in Norway for decades. Name a recent bit of Norwegian innovation that's of benefit to more than just Norwads. Again, without resorting to Google. I bet you can't.
With the direct wealth tax you're punished for financially getting ahead of everyone else. This leaves little to no incentive to better oneself or to improve one's job skills.
Jobs are looked at as little else than something you do for 31 hours a week to kill time between days off.

In effect, Norway is living in a bubble and their brand of socialism has basically made them "lazy".
When a country suffers from a lack of innovation and employs a system that literally discourages people from trying to get ahead of the game, those are signs of a potential disaster in the making.

[Thanos]

Canada also had the Foreign Investment Review Act that probably kept growth down by scaring away investors. Add to that the increasing regressive taxation of the Trudeau and Mulroney eras.

[JaredMilne]

Some food for thought on whether Alberta's oil money really pays for Quebec's social programs, courtesy of the Calgary-based Canada West Foundation:

$1:

Are Albertans really paying for Quebec’s social programs?

Release Date: April 20, 2012

Student protests in Quebec have triggered a curious response from some observers. Appalled that Quebecers have the audacity to protest tuition fees rising from the lowest in the country to possibly the second-lowest, they opine that the only reason Quebec can afford such fees in the first place is on the back of the Alberta taxpayer. As the narrative goes, Quebec’s low tuition, $7-a-day daycare and other generous social programs are all being paid for by hard-working Albertans who could only dream of affording such luxuries themselves.

This story appeals to Albertans convinced that Ottawa and Quebec are stealing our wealth, but this is simply not the case. Let’s start with the idea that Alberta sends money to Quebec. This is incorrect on two levels.

First, Ottawa charges people the same taxes regardless of where they live and puts all the money into a big pot called general revenue. Assuming a balanced budget, all federal program spending, including on transfers like equalization, comes out of that same pot. As such, federal taxes raised in Quebec help fund farm subsidies in Alberta. Taxpaying New Brunswickers contribute to Employment Insurance payments in Saskatchewan. And yes, federal taxes raised in Alberta help pay for equalization in Quebec.

Second is the mistaken belief that the Alberta government cuts a cheque to Ottawa to pay for equalization and other transfers. In fact, these are paid by federal taxpayers (including those in Alberta) with no involvement from the provincial government. Equalization does not affect the Alberta government’s bottom line. But at the same time, Alberta cannot therefore simply “opt out” of equalization.

It is also untrue that equalization allows Quebec to afford services that are impossibly generous for Alberta. The equalization formula tells us that the Alberta government could collect twice as much revenue as Quebec (including its equalization payments) if both provinces had identical tax rates. In other words, Alberta could easily afford tuition rates lower than those in Quebec, and plenty more besides, if it was willing to pay for them.

This brings us to another misunderstanding about equalization. Its purpose is not to ensure a uniform level of provincial government services across Canada, but rather to ensure that provinces have the ability to provide comparable services at comparable tax rates. Each province can choose how much—and on what—to spend, but they have to pay for those choices. Yes, Quebec has more generous social programs than Alberta. It also has taxes that most Albertans would consider appallingly high.

But are we just confusing the issue? Do Albertans not contribute more to federal coffers compared to people living in other provinces? Of course we do. And Canadians across the country benefit from that contribution. But this is not the result of some elaborate plot to drain wealth out of the West and give it to welfare recipients in the East. It’s simply because our economy is strong. The “problem” is that wages and employment rates in Alberta are much higher than anywhere else in Canada. More of us have jobs and earn higher incomes, so we end up paying more in taxes.

Can we eliminate this “injustice?” Sure. One option is to shut down some of our industries to bring economic output and unemployment rates closer to the national average. Alternatively, all Albertans could take a voluntary pay cut to bring our salaries in line with those of other Canadians. Or, we could ask the federal government to implement a special “Alberta” set of tax rates—so that we can pay lower taxes than all other Canadians to compensate us for being richer than the rest of the country.

The bottom line is that Albertans contribute more to confederation because our economy is strong. Someone earning $100,000 pays more taxes than someone earning $50,000. Alberta is simply home to more 6-figure salaries.

Because of that wealth, the Alberta government could afford to provide social services that would make Quebec’s seem miserly by comparison. But Albertans have chosen a different path. If Quebecers wish to keep tuition low, enjoy $7-a-day daycare while paying high taxes that risk discouraging economic growth, that’s their decision to make. Besides, would you want to trade places?

Michael Holden is the Senior Economist at the Canada West Foundation. Canada West Foundation is the only think tank dedicated to being the objective, nonpartisan voice for issues of vital concern to Western Canadians.

The formula for equalization almost certainly needs to be revised, but the basic principle behind it is pretty much sound, in my view.

[JaredMilne]

And now, from yesterday's edition of the Globe and Mail...Globe and Mail...

$1:

Provincial budgets reversed: Alberta expects deficit, Quebec to see growth
LES PERREAUX AND JUSTIN GIOVANNETTI

Between the two budgets this week in Quebec and Alberta, one will show a deficit and dim immediate economic prospects as the province struggles to wrangle sacred cows chewing away at public finances.

The other will be Quebec.

The crash in oil prices and Quebec’s determined effort to improve its fiscal health will turn the usual order of provincial finances upside-down – at least for the short term – when the two provinces present their budgets on Thursday.

Alberta is expected to report a deficit of up to $7-billion and an economy bordering on recession. Quebec has promised a balanced budget and decent economic growth, with surpluses on the immediate horizon.

“It’s amazing what a $60 slide in oil prices will do,” said Robert Kavcic, a specialist in provincial economics at the Bank of Montreal. “In Alberta, the slide in oil is the story. In Quebec, they’ve been pushing restraint for a few years now, and got much more serious about it with the majority government. And it’s a pretty stiff dose of restraint.”

Heavily taxed, deep in debt and reliant on equalization payments from Ottawa, Quebec has long been seen as the financial hardship case among provinces. Awash in oil revenue, Alberta traditionally spends a lot but keeps taxes low.

Alberta Premier Jim Prentice, in a televised address on Tuesday night, promised his province was at a turning point. The economic dynamo that had led the country in growth now faces a shortfall that could top $20-billion over the next three years. Adding embarrassment, government spending has grown quickly and Alberta posted a string of deficits during the good times of the past decade.

“How on earth did we get here?” Mr. Prentice asked during a 16-minute pre-recorded address. “We hid from difficult decisions and we used our children’s inheritance to pay for it.”

Quebec has cut a number of programs that previously seemed untouchable. Along with a near-freeze on overall spending, Finance Minister Carlos Leitao froze hiring in the public service, increased fees on the provincial daycare system and cut publicly financed in-vitro fertilization. Cheaper oil has put money in the pockets of Quebec consumers, while the weaker dollar helps the province’s exports.

Alberta has some of Canada’s most expensive public services, but its residents pay the lowest taxes. To make up for the difference, Alberta has used energy royalties for decades to fund annual operations. As a result, it has put little in its rainy-day fund since the 1980s.

A TD bank report last week said the province faces the prospect of long-term deficits because it relies too much on oil and gas revenue. Economists say Alberta has chosen about the least effective way to collect taxes.

Mr. Prentice is vowing to change that with a 10-year plan that will shift the province away from what the Premier calls an “addiction” to energy royalties. Alberta will begin depositing energy royalties back into the province’s savings account after balancing the books in 2017. Eventually, Mr. Prentice would like to deposit half of each year’s haul into Alberta’s Heritage Fund.

In the absence of energy money, Alberta will need to start taxing more like a regular province again, but Mr. Prentice has made it clear he will never cede the Alberta Advantage of lower taxes. A provincial sales tax remains out of the question. He did announce Tuesday that Albertans would begin paying directly for health care again through a new tax or premium.

Finance Minister Robin Campbell has announced that he will effectively cut 9 per cent from the province’s spending.

A province-wide consultation showed most Albertans were open to higher personal income and corporate taxes. Despite it being anathema to the province’s ruling Tories, 48 per cent polled by the government backed the introduction of a sales tax.

Quebec still faces a steeper long-term challenge than Alberta. Quebec’s working-age population actually began to decline last year, putting the province at the forefront of a demographic crunch Canada faces as the baby boom generation heads off to retirement. Quebec is also saddled with a net debt that is about 50 per cent of gross domestic product, while Alberta will probably remain free of debt for at least a couple more years.

“As bad as it’s going to look for Alberta this year, the bigger picture is that Quebec is still in a much tougher situation over the long haul,” Mr. Kavcic said.

Quebec is considering a major overhaul of its tax system that would include boosting consumption taxes such as the provincial sales tax. Pushing the tax burden toward consumption and away from progressive income taxes may please economists such as Mr. Leitao, but it is sure to meet resistance in Quebec, where small daily protests have already started against Liberal austerity.

The province hired economist Luc Godbout to lead an examination of how the province collects money. Last week, he recommended the shift to consumption taxes and user fees saying corporate and income taxes that stifle economic growth. Mr. Godbout said the move would put hundreds of millions of dollars in taxpayers’ pockets and boost the economy.

Mr. Leitao said he views the report favourably but a wider discussion is required before the report is adopted wholesale. The province is expected to follow one recommendation and eliminate the $200-per-person health tax over several years.

“We often say Quebec has a weaker economy than its neighbours, one reason is our tax burden is heavy and poorly aimed. Heavy, because people pay a lot of taxes, and also because it sends the wrong signals,” Mr. Leitao said this week.

If Philippe Couillard and company stick to their guns, you have to wonder where la belle province will be in a few years, just as I can't help but wonder where Alberta's going to be if the price of oil doesn't go back up soon and/or we can't get our resources to market effectively...

[Thanos]

Today's budget made all that obsolete. The borrowing of $9 billion is going to be fodder for the opposition. The ring road completion being delayed for another decade is going to enrage the Tsuu Tina Natives and the people in SW Calgary will be so pissed off that there's now a chance that PC support south of the Glenmore Reservoir could collapse altogether. This is like the heavens opening up and shining down on the Wildrose. Prentice could have just done a major fuck up and in one stroke restored the Wildrose opportunities that were destroyed in the January betrayal.

[andyt]

PublicAnimalNo9 PublicAnimalNo9:

andyt andyt:

PublicAnimalNo9 PublicAnimalNo9:

I'm not sure what lessons we can learn from Norway in this matter. Here's why Norway has been able to sock so much away into their fund:
A total tax burden of roughly 45% of the country's GDP
A massive 25% VAT
Personal income tax rates starting at 27% and going as high as 55%
Corporate profits tax ranges from 28% to as high as 78% for the oil industry
Norway even has a direct wealth tax

Further, when you look at the Norwegian economy the state drives nearly all of it with controlling interest in 8 of 10 of the largest employers in the country; Statoil, DNB and Norsk Hydro to name 3 of the largest.

Of course Alberta did itself no favours by deciding to do away with a PST because they were oil rich.

However, with the rest of Canada available, Alberta would have been hard pressed to generate any corporate interest in the province outside of the oil industry if they had supported their Heritage Fund with regressive tax rates like Norway has.

Regressive tax rates - practicing Newspeak now, are we?

Yes yes, and I'm sure you think a 55% personal income tax rate are the kind of "progressive" rates we should be aiming for. I'm sure you'd LOVE to pay 25% VAT on EVERYTHING you purchase(except transit, I believe it's only taxed at 15%) and think that 78% is a perfectly reasonable tax rate for oil company profits.

andyt andyt:

Norway has a very high standard of living - #1 in HDI. Seems those high taxes aren't a disaster for them.

No? Aside from the 3 aforementioned Norwegian companies, name me one other Norwegian company that you've actually heard of and didn't have to go searching Google for.
Innovation has been stifled in Norway for decades. Name a recent bit of Norwegian innovation that's of benefit to more than just Norwads. Again, without resorting to Google. I bet you can't.
With the direct wealth tax you're punished for financially getting ahead of everyone else. This leaves little to no incentive to better oneself or to improve one's job skills.
Jobs are looked at as little else than something you do for 31 hours a week to kill time between days off.

In effect, Norway is living in a bubble and their brand of socialism has basically made them "lazy".
When a country suffers from a lack of innovation and employs a system that literally discourages people from trying to get ahead of the game, those are signs of a potential disaster in the making.

What an absolute pile of tripe. Norway uses max 4% income from their wealth fund and invests the fund only out of the country to prevent Dutch disease. That means the country is affording it's super high standard of living (much higher average net percapita income than Canada) on the economic activity it generates. They are saving like mad because they know the oil will end one day. They are a small country, with a difficult topography stuck out of the way. Yet they do so well.

Can you actually back up the claims you've made here?

[bootlegga]

Thanos Thanos:

Today's budget made all that obsolete. The borrowing of $9 billion is going to be fodder for the opposition. The ring road completion being delayed for another decade is going to enrage the Tsuu Tina Natives and the people in SW Calgary will be so pissed off that there's now a chance that PC support south of the Glenmore Reservoir could collapse altogether. This is like the heavens opening up and shining down on the Wildrose. Prentice could have just done a major fuck up and in one stroke restored the Wildrose opportunities that were destroyed in the January betrayal.

You should have read the budget better.

The SW Ring road is still going ahead because it has to - the province only has 7 years to build that portion after the land agreement is finalized (expected sometime this summer).

It's the West Ring road section that has been delayed by a couple years - and I almost guarantee that as soon as oil prices stabilize and the 'crisis' is over, money will be found to build that too. I'm pretty sure the 2025 completion date is a worst case scenario, not written in stone. If PC support evaporates in the soon to be expected election, I wouldn't be surprised if Prentice & Co. change their minds and build it on schedule.

As for restoring the Wildrose, I doubt it. Most of the big money support has switched back to the PCs now that they have the Calgarian corporatist premier they've wanted since Dinning lost to Stelmach. The Wildrose will probably survive, but they'll remain a rural-based party, as they have very little support in the major urban centres.

[Thanos]

We shall find out soon, as word is that the election writ gets dropped tomorrow. I think you're underestimating the amount of genuine anger out there over the budget. To me it seems deeper and more intense than the type of ranting stupidity the SUN likes to stir up. If early estimates are correct I'll bet we'll end up with a PC barely-a-majority, followed by a restored Wildrose and a NDP that has most of the Edmonton area seats in their pocket.

[bootlegga]

Thanos Thanos:

We shall find out soon, as word is that the election writ gets dropped tomorrow. I think you're underestimating the amount of genuine anger out there over the budget. To me it seems deeper and more intense than the type of ranting stupidity the SUN likes to stir up. If early estimates are correct I'll bet we'll end up with a PC barely-a-majority, followed by a restored Wildrose and a NDP that has most of the Edmonton area seats in their pocket.

I know there is a lot of anger about the budget - I'm in that camp myself, mainly because I think he didn't go far enough on the revenue side of things.

Given that only the PCs and NDP have a full slate ready to go and that Wildrose just picked their leader last weekend, I doubt that the Wildrose will do much if/when the election is called. They may still have a decent sized warchest, but without candidates (nevermind quality ones) in many ridings, they probably won't do very well. They will likely carry the seats they have now and maybe even pick up a few new ones, but I don't think they'll retain the title of Official Opposition.

As for the NDP, they typically ebb and flow and appear to be on the rise again. But they have done well in Edmonton before, but have never fared very well outside Edmonton and as such, they remain a regional party much like the Wildrose. The one thing they will probably benefit from is the vote split on the right (that's the reason why Tony Vandermeer lost to Deron Bilous in Edmonton-Clareview-Beverly last election).

Personally, I don't care for Notley, but I may not have a choice as only the NDP and PCs have a candidate in my riding right now.

No, sadly the sheep in this province will likely vote PC simply because like you, they largely refuse to vote anything other than conservative and the Wildrose simply doesn't have the capability (or leader) to win their vote this time around.

[Thanos]

1) I haven't voted PC since the second or third Klein election.

2) I've stated this repeatedly.

3) Quit calling me a liar.

4) Go fuck yourself, Andy Jr.

[2Cdo]

Thanos Thanos:

1) I haven't voted PC since the second or third Klein election.

2) I've stated this repeatedly.

3) Quit calling me a liar.

4) Go fuck yourself, Andy Jr.

[BartSimpson]

PublicAnimalNo9 PublicAnimalNo9:

In effect, Norway is living in a bubble and their brand of socialism has basically made them "lazy".

When a country suffers from a lack of innovation and employs a system that literally discourages people from trying to get ahead of the game, those are signs of a potential disaster in the making.

Sounds like a page from the third volume of Gibbon's "Decline and Fall of the Roman Empire".

[Alta_redneck]

Thanos Thanos:

1) I haven't voted PC since the second or third Klein election.

2) I've stated this repeatedly.

3) Quit calling me a liar.

4) Go fuck yourself, Andy Jr.

Didn't he confess to voting PC in the last 2 elections the last time you 2 got at it.

And then he went on about how Albertans are afraid to give the Dippers or Libs a chance but yet said he voted PC's because the WR scares the shit out of him.

[Thanos]

Unlike him I don't care who he voted for or why. And, certainly unlike him, I didn't opt to slander him over his choice either.

[bootlegga]

Thanos Thanos:

1) I haven't voted PC since the second or third Klein election.

2) I've stated this repeatedly.

3) Quit calling me a liar.

4) Go fuck yourself, Andy Jr.

No, you go fuck yourself you dumb fucking redneck - but first you might want to take some remedial reading classes!

bootlegga bootlegga:

No, sadly the sheep in this province will likely vote PC simply because like you, they largely refuse to vote anything other than conservative...