There’s nothing like a good market meltdown and commodity collapse to get people talking about our economic stability. Oh wait, we’re not talking about it … at least not yet.
Six years ago, the price of oil went from $140 to $40 in six months. We seem stunned and aghast when our budget forecasts didn’t materialize, although history shows that predicting the price of oil is harder than predicting a winning lottery number. Blame it on a Bitumen Bubble. Blame it on the Middle East. Blame it on the USA commercializing our fracking technologies. Blame it on our lack of diversification. Blame it on us being landlocked. Blame it on our economists. Blame it on whoever or whatever you want.
I blame our budget instability squarely on our dependence on resource royalties, our unstable revenue model and our inability to plan properly for the future.
Yes, the future. Our current taxation policy is punishing future generations … the generation who will look back on our era and ask, “Grandpa, do you think it was smart to spend all the non-renewable resource revenues on yourselves every year, without asking people to pay for things they were using?”
To which I will likely respond, “Hey, it was a really good party until the free booze ran out. In fact, we invited all our friends from other provinces to the party and didn’t charge them either. But the liquor cabinet’s bare now, so why don’t you get to work and start replenishing it? ‘Cause your grandpa needs another drink … Remember who built this great province, dammit!”
Over the past two years we have had two economic summits where some of the best and brightest had the courage to call for stability in our revenue line. At the same time, Jack Mintz presented a revenue-neutral plan to eliminate personal income tax for 70% of Albertans and lower corporate taxes to the lowest in Canada, while implementing an 8% consumption (sales) tax. The Alberta Advantage was being talked about. The Alberta Advantage was almost within grasp.
Shhh … crickets.
How do you legislate a balanced budget without control over your revenue line? How do you provide long-term predictable funding for schools, universities, hospitals and municipalities without a long-term predictable revenue model?
It’s time to slay the dragon. It’s time to lose the historical pride of “we’re the only province without a sales tax” and start managing the province for our future generations.
Or do we not need to worry about them?
“Ahhh, don’t worry, oil at $80 is simply a dip. It’ll come back? Hey Boy, get over here and pour your old granddad another drink, dammit.”