[Sunnyways]

OK, we all know Alberta is a province and gave up a fair whack of its oil revenue to spendthrift federal governments and equalization but what about the rest of the money? Is there nothing to be learnt from Norway’s good example?

[DrCaleb]

Sunnyways Sunnyways:

OK, we all know Alberta is a province and gave up a fair whack of its oil revenue to spendthrift federal governments and equalization but what about the rest of the money? Is there nothing to be learnt from Norway’s good example?

Norway is a small country with limited infrastructure, and Alberta is twice it's physical size. Not a fair comparison.

[llama66]

Still, we should have more than the $1.75 we currently have in the HF. I mean if the Norwegians can squirrel away $1,000,000,000,000, we should have been able to set aside at least $100,000,000,000...

[DrCaleb]

Very true. But they were diligent about not spending it before it grew enough that the dividends subsidized the government budget.

Now every Norwegian is a millionaire.

But our investment barely makes us thousandaires.

[Sunnyways]

DrCaleb DrCaleb:

Sunnyways Sunnyways:

OK, we all know Alberta is a province and gave up a fair whack of its oil revenue to spendthrift federal governments and equalization but what about the rest of the money? Is there nothing to be learnt from Norway’s good example?

Norway is a small country with limited infrastructure, and Alberta is twice it's physical size. Not a fair comparison.

We’re not comparing Singapore with Brazil here. They are both large and sparsely populated northern territories with a similar cultural heritage. Anyway, when it comes to managing resource wealth, everybody can learn from Norway.

[bootlegga]

llama66 llama66:

Still, we should have more than the $1.75 we currently have in the HF. I mean if the Norwegians can squirrel away $1,000,000,000,000, we should have been able to set aside at least $100,000,000,000...

Had governments from Getty to Notley simply left it alone and not raided it for nearly every cent it earned in interest, it would be in that realm. It sits at $17 billion in value today, and over the past 40 years, they withdrew $43 billion in interest!

Think of all the compound interest we lost on the $43 billion...

[bootlegga]

Sunnyways Sunnyways:

OK, we all know Alberta is a province and gave up a fair whack of its oil revenue to spendthrift federal governments and equalization but what about the rest of the money? Is there nothing to be learnt from Norway’s good example?

Comparing a province with a nation is an apples to oranges comparison - if you want to compare Alberta to a similar jurisdiction, look at Alaska. They've saved $60+ billion in their sovereign fund, as well as provided an annual rebate cheque to every Alaskan over the past 40 years.

The difference is they kept adding to the fund and never raided it for interest.

[DrCaleb]

bootlegga bootlegga:

Think of all the compound interest we lost on the $43 billion...

The HTF doesn't earn 'interest' in the conventional sense. AimCo invests it in things like real estate worldwide, or buying companies. Those investments tend to pay much more than Prime +3 or whatever.

You know those new buildings in the Ice District (not the bigger Stantec Tower). The one Edmonton City employees are moving to. Owned by you and me, through AimCo.

[bootlegga]

Thanos Thanos:

I don't know about Edmonton but the city council of Calgary is wildly irresponsible with tax dollars. I don't know about you but I'm not taking instructions on fiscal responsibility from the gang that wanted to spend billions on the damn Olympics in a town where too many people are barely getting by. I won't dispute that the province should kick in more but handing more money over to a city government that is simply untrustworthy would be a terrible thing to do.

I also don't argue in theory with the wisdom of a PST. I do note though that having a PST is no guarantee that the government still wouldn't keep increasing other taxes. BC has the PST but that hasn't ever stopped Vancouver from jacking the civic tax on gasoline through the roof, and then turning around to blame someone else (i.e. Alberta) when their fuel costs become the highest the entire continent has ever seen. The GST also never stopped the feds (liberal tory same old story) from increasing every other tax, surtax, or fee that they could, or from inventing new taxes to suit their whims (i.e. carbon tax).

The biggest thing too is this - we'll always be over-taxed compared to our neighbours in the US. Yeah, we can't and shouldn't cut taxes to the bone (especially for the already wealthy) in order to match what the Americans do. But our uncompetitiveness is born first and foremost from our excessive level of taxation. It wouldn't be that bad if we were part of Europe. But we're not. We'll always be a glaring example of taxes being too high just because of who we live next door to. Saying, as some do, that we should pay taxes like the Europeans do is sheer insanity, especially when it was those traditionally high taxes that led to a flood of jobs fleeing Britain and Europe in the first place. High taxes are and will always be a job-killer.

Edmonton has had its fair share of boondoggles (just try building a bridge in this city), and taxes have increased rapidly over the past decade, but overall, many problems that both Edmonton and Calgary suffer from is that they have only one tax option (property taxes), and get to little in the way of transfers from the provincial government.

Had the province lived up to Lougheed's vision, each city would already have an extensive LRT network, which would reduce congestion. Each city would have its ring road built long ago. Each city would have adequate hospitals and plentiful schools. Students wouldn't be carrying $50,000 student loans to get a bachelors degree. All those things are funded largely (or entirely) by the province, and austerity by 20 years of PC governments made all of those things lag far too long, causing all sorts of problems in the cities.

And I fully agree that anyone who thinks we should have the same level of social programs as Denmark or Norway is crazy - I support a small PST (say 3-5%), but not a VAT of 25% like in many of the Scandinavian countries.

[bootlegga]

DrCaleb DrCaleb:

bootlegga bootlegga:

Think of all the compound interest we lost on the $43 billion...

The HTF doesn't earn 'interest' in the conventional sense. AimCo invests it in things like real estate worldwide, or buying companies. Those investments tend to pay much more than Prime +3 or whatever.

You know those new buildings in the Ice District (not the bigger Stantec Tower). The one Edmonton City employees are moving to. Owned by you and me, through AimCo.

That's true, we also own forests in Australia, New Zealand and the US, as well as utilities in Chile, pipelines in the US (ironic), and a portion of the London City Airport.

But AIMCO does earn income from fixed income assets, currency plays, and equities (pages 11 & 12):

https://open.alberta.ca/dataset/3675e47 ... report.pdf

That is what governments have been transferring out of the HTF since 1982. Had we left that income in the fund to grow, it almost certainly would have increased in value (like mutual funds do), though maybe not at the same rate of return as the initial investments.

[DrCaleb]

I think it would have been far above Mutual funds. Those have the addition of fees, but earn income from similar sources.

We could have a $100B nest egg too. But, like usual, it got squandered for short term political gains.

[BRAH]

llama66 llama66:

Still, we should have more than the $1.75 we currently have in the HF. I mean if the Norwegians can squirrel away $1,000,000,000,000, we should have been able to set aside at least $100,000,000,000...

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[FieryVulpine]

bootlegga bootlegga:

Had the province lived up to Lougheed's vision, each city would already have an extensive LRT network, which would reduce congestion.

Do cities the size of Red Deer, Lethbridge, and Medicine Hat need LRT though?

[llama66]

[Sunnyways]

bootlegga bootlegga:

Sunnyways Sunnyways:

OK, we all know Alberta is a province and gave up a fair whack of its oil revenue to spendthrift federal governments and equalization but what about the rest of the money? Is there nothing to be learnt from Norway’s good example?

Comparing a province with a nation is an apples to oranges comparison - if you want to compare Alberta to a similar jurisdiction, look at Alaska. They've saved $60+ billion in their sovereign fund, as well as provided an annual rebate cheque to every Alaskan over the past 40 years.

The difference is they kept adding to the fund and never raided it for interest.

All comparisons are apples to oranges. Governments of every type work within constraints. I’d take a Canadian example if I could find one but Alaska would do fine too. My basic point is that I don’t hear a lot of self-criticism from Alberta for its poor stewardship of the public finances over many decades. Of course, it is not alone in this regard. The Scandinavian virtues of humility and frugality need to be practised more often by all our municipal, provincial and federal leaders.