It's going to take a long time for Premier Kenney to dig out of this mess.
The province will pay nearly $2 billion in annual interest on today's debt, estimated at $54 billion in the new budget year. By 2021, the annual interest charge will be $2.9 billion as debt hits $77 billion.
The budget doesn't show an interest calculation for 2023-24, when debt will be $96 billion.
But you can bet that by then, this province will be paying $5 billion a year.
Even now, it's clear the government is borrowing money to pay interest on money it has already borrowed. And the books also show the province has not been repaying any principal.
Math is Hard.
But not as hard as the aftermath.
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well, that's not good... i was gonna move
to alberta when ontario went bankrupt.
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This is yet more proof that the left has no concept of economics.
There isn't much in this world that's free, but that's something the Dippers haven't caught on to and, I doubt, ever will. For that matter, the civil service is equally as dim about such things.
One reason the Warsaw Pact countries imploded nearly 30 years ago was because they spent themselves into a fiscal black hole in order to show to the non-aligned nations that communism, and not capitalism, was the way of the future. Eventually, their version of bread and circuses failed to satisfy the proletariat and we know what happened after that.
Then again, Joe Cici makes Bill Morneau look like a fiscal genius.
Socialists and communists don't give a rat's behind about economics.
All they care about is gaining power and staying in power. They'll say all the right things and make promises that they have no intention of keeping.
In addition, they know that they can use the power of government to take money (i.e., the fruits of labour) from some people and give it, in all different kinds of ways, to the people they made promises to.
First, they get their cut, though, for their salary, gold-plated health benefits, and gold-plated pensions. What pittance is left is thrown to the crowd.
OMG - the author of that article believes that keeping, and then increasing, the carbon tax is our only hope to balance the budget. Notice how he/she/ze/it/they signals the public sector workers that the end is nigh if the NDP loses? Leftard author is actually suggesting to keep the NDP train wreck in power so that the NDP's master "plan" can right the provinces balance sheet without losing all of the "advancements" made. Hahahaha.
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kathleen wynndfarm believes that $8,000,000,000 worth
of wind turbines, solar panels and magical pixie dust
will get her corrupt ass elected yet again.
who knows? it's worked before.
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The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation. Vladimir Lenin
I'm not surprised at his statements. Don Braid never impressed me as playing with a full deck.
This is nothing compared to the abyss Newfoundland has fallen into. Expect that province to ask for afederal bailout in the next year or so.
Look, I can learn to live without "OK GOOGLE" (which is freakin' handy when you're driving), but you'll have to pry my Roomba out of my cold dead fingers.
Okay? Okay.
What? They have trashed the province. Does this mean Ottawa gets less?
We have to borrow to pay the interest, and nothing goes to the principle. This is a disaster. The budget will be balanced by 2023. The finance minister tried to sound like it was a positive thing, they are making a few cuts here and there. They are delusional, it's not enough. Are they squandering, living beyond their means? They hired all their friends. Nah, no worries, no new hiring.
We are doomed! So sorry.
It is what socialists do. Been tried before, is being done today. It failed without fail every bloody time that its been done.
How do you tell people that don't want to hear that it will not work.
The idiot socialist extremists that run the government of Alberta are one hundred percent willfully ignorant of the very basic economics.
In communist schools they taught the simplest economics where you have to have a surplus to operate otherwise you can't exist. Of course, they actually started to apply that when in a free fall.
Peasants will never listen to reason, as long as the free stuff is coming in everything is a OK.
Nobody will persuade them otherwise.
The decline is just around the next corner unless you and I can talk without fear of insulting the teacher, the nurse, the policeman, the bureaucrat and have a better argument. While they are important, there is no superiority in what they do.
The socialist extremists live in lap of luxury, who the hell cares about the producers?
Sadly a lot of this debt is the transfer payments to Quebec
3 BIG reasons Western Canadian pipelines are doomed
https://www.youtube.com/watch?v=IXJzaOT2K1M
Well, creating such a large debt is the single, most important goal of the nutleyjobs in power. They were at least smart enough to know they are a one term party and they must do as much damage as possible to handicap alberta as much as possible.
However, it is not really the difficult to pay back the debt, if you are a serious conservative.
1) reduce all government employees salaries by 50%, cut all their pensions by 50%, double their pension payments (this is the main bureaucracy I am talking about here, not teachers, nurse, etc). This includes all elected officials and their pensions as well.
2) for teachers and nurses etc, have a straight up discussion with them: you can either have a good salary or a good pension, but not both - pick one. Allow parent to withold taxes earmarked for education and spend on private education if they wish.
3) fire every social worker, every mid-senior level bureaucrat, and hunt down useless toads in the bureaucracy - just fire them. As a general rule, fire every gov't employee making more than 100K$, they are public servants after all, not public pigs.
Most of these people from 1-3 voted NDP, make them pay for it - they will never vote for you anyways. Why should they get all the sugar??
4) impose similar limits to municipalities and cities, if you can't legislate it - then 'encourage' them, just like the left is doing today, there are many ways to make a pig squeal.
5) tell all external debt holders you are shaving 20-30% off the debt, no discussion. Sure, you will take a credit rating hit- but as the aim is to permanently prevent any other gov't from borrowing to such stupidity again this will make all external lenders think twice before loaning again. Two can play this game.
6) cut tax, everywhere, and provide clear incentives for people and companies to invest and make money.
7) tell ottawa to just bugger off, every federal reg that is costing alberta money - just notwithstanding it, just don't do it.
8) find Omar Khadr and extract about 10 million from him, I don't care how!
"Sadly a lot of this debt is the transfer payments to Quebec"
Wrong. This is provincial debt, not federal debt. The Government of Alberta does not make any "transfer payments" to Québec out of provincial tax revenues. No province does.
"What? They have trashed the province. Does this mean Ottawa gets less?"
Only indirectly: if the provincial debt is so bad that it effectively reduces the incomes of Canadians in Alberta, or the profits of companies based there, then there will be a subsequent reduction in federal tax revenues as well.
JJM, aren't you being pedantic? Alberta pays taxes to the Federal government and the Federal government redistributes those taxes to the provinces through transfer programs. Some provinces receive almost three times more transfer money than Alberta per capita. Equalization is only one small part of the overall transfer program (at less than 10%). But if Alberta didn't have the money, the Federal government couldn't re-transfer it. So, yes, Alberta is making transfer payments to Quebec, only "indirectly" as you say.
Lucky thing for Alberta is that interest rates "will never rise" so the debt it is carrying will "never become a serious issue".
Any government running the finances of the public into the ground like this should be treated as criminal.
They should all be sent straight to jail.
These morons on the left are all playing the globalist Agenda 21, part of which is to bankrupt the west for future favors of debt relief from a communist one word government.
Sick of it.
Also, 2023 is the year the doomsday clock strikes midnight. The North American economy is basically a ponzi scheme with a teeter-totter at the top. So far we've been in teeter mode as the rich baby boomers, well into their peak savings years, are socking away money. The bulk of the baby boomers (1958 - 1962) will really start to retire starting in 2023 (1958 + 65). For the five years after 2023 there will be a relentless shift from making (and saving) money to needing money. Interest rates will rise, government revenue will fall and general mayhem and chaos will ensue. Don't be poor and don't get sick.
Any estimate of government debt by Alberta will need revising. Any conservative government elected to bring the debt under control will have to do far more than cut government salaries by 5%. So have a great day! We still have 5 years of oblivion to work through.
though I do I like that you've referred to Jason Kenney as Premier Kenney.
I'll be referring to him as such in the future.
I'm no supporter of the NDP but a lot of this debt was run up during the conservative years, when times were good. Stelmach and Redford set us on the debt trajectory and the NDP are just running with the ball. Ralph Klein was the last good premier Alberta had, maybe the last good one we'll ever have.
Premier Kenney.
I actually can't imagine which promises the NDP are going to run in the next campaign.
"JJM, aren't you being pedantic? Alberta pays taxes to the Federal government and the Federal government redistributes those taxes to the provinces through transfer programs."
No, I'm not. Alberta (the province) pays no taxes to the Federal government; Canadians, Canadian residents, companies and organizations* in Alberta do. And at the same tax rate as Canadians, Canadian residents, companies and organizations in Québec or PEI or any other province. For Federal tax revenue purposes, there are no Albertans - or Ontarians or Newfoundlanders - only Canadians.
So attempting to imply Alberta's provincial debt is somehow the fault of the Feds and Québec is a nonsense. It's an entirely homegrown problem: Albertans voted for a provincial NDP government and, by God - they got one (though previous Alberta "conservative" governments didn't exactly cover themselves in glory when it came to the provincial debt).
I think we could have a damned good discussion about equalization payments which I feel are deeply dysfunctional. But these come out of Federal revenues, so that's a discussion we should have as Canadians, not as Albertans or New Brunswickers. Mind you, any discussion over the merits of government cash handouts over cash isn't likely to be too edifying, given our very Canadian propensity for them and our jealous regard for our own privileges.
* About the only way the Government of Alberta would officially be remitting taxes to Ottawa would be through Crown corporations it owns or GST on anything it sells, and associated Federal levies. But then, this makes it no different than the government of Québec or Nova Scotia.
After the performance of the NDP and the historical vote pattern of Albertans , I suspect the conservatives will have about 40 years to fix the debt/deficit problem.
As for equalization, yes all Canadian taxpayers pay into the federal equalization pot but not all Canadian taxpayers benefit. When the fiscal capacity is measured by the economic strength of the *province* and equalization payments are doled out to the *provinces* then I failed to be convinced that it isn't a provincial redistribution project. If it was a welfare payment that equalized the difference between poor Canadians and rich Canadians, regardless of provincial residency, then it wouldn't be seen as a fight between provinces.
Example - a university claws back the wages of all faculty of all departments. They then give all that money to the physics and chemistry department that uses it to give money to bombardier and free childcare for the science employees. Do you think the social science and humanities department would object? Would they be satisfied with "it isn't an unfair departmental transfer because all university staff paid the clawbacks." The $100,000 per year chemist is getting free childcare while the janitor in the history department gets nothing.
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"jjm says... Alberta pays no taxes to
the Federal government"
yeah... just like that "free" health care
we all have.
socialism is a wonderful idea... until you
run out of other people's money.
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Ha ha ha ... cross off another potential destination of my California-flight.
Taxpayer.com has a debt clock for all the provinces in Canada. Some province's numbers are simply awful. Choose your post-retirement province wisely, looking at debt to gdp and unfunded liabilities. Spend as much time out of Canada as possible after retirement to avoid energy poverty and excessive sales taxes and fees. Minimize property taxes, maintenance and insurance costs by downsizing, choosing affordable cities/towns or selling and renting. That's our plan.
Saskatchewan's move to a defined contribution pension plan decades ago, for almost all public employees, looks like it will pay off for both the province and employees, as long as you protect yourself from another big market crash. It will be stressful to be in a defined benefit plan when the can can't be kicked down the road any further. Retirees, taxpayer or both will get fleeced.
Ah, you are being pedantic. Yes the government of Alberta does not pay taxes directly to the Federal government. But the people of Alberta do (the difference between the Alberta government paying and the people of Alberta paying is pedantic IMO). The Federal government gives back or does not give back some of Albertans' tax money in the form of transfers. The method determining how much of that money is returned does not favor provinces with low taxes because the formula for transfers is based on the ability of each province to generate tax revenue. Low tax jurisdictions like like Alberta are seen to have a higher capacity to pay into the system while high tax jurisdictions end up receiving the highest transfer payments.
I do agree that the Alberta debt is an entirely made in Alberta problem. The government is knowingly spending more than it takes in.
The Federal transfer payments are calculated based on a province's ability to generate revenue. For provinces with lower tax rates, their ability to generate revenue is higher (think of a pig with 3 legs). Provinces (like Quebec) with higher tax rates have a lower ability to generate revenue (because residents are already highly taxed - think of a pig with one leg).
As long as Alberta has lower tax rates it will be a net contributor to Federal transfer payments. As debt increases and the economy tanks, the ability to generate tax revenue will diminish and transfer payments from Alberta residents (through their taxes) will be reduced.
This is a system that punishes low tax jurisdictions and rewards poor governments.
You are being obtuse.
If equalization did not exist Alberta government would be getting more money into its coffers when the feds give them their portion of taxes collected every (the feds administer tax collection on Alberta’s behalf - if alberta collected their own like Quebec does the Alberta government would have to cut the feds a check.
Alberta - albertans until recently effectively contributed 4000$ PER CAPITA more into equalization than it recieved. If equalization didn’t exist a family of four could have recieved $16000 after tax annually. And without equalization Quebec would either have to incur more debt and/or raise taxes to fund their spending.
So for all intents and purposes. Albertans pay into equalization and quebecers receive funding from it.
"So for all intents and purposes. Albertans pay into equalization and quebecers receive funding from it. "
I agree, whatever someone else wants to call it! Alberta money is being taxed out of Alberta and spent elsewhere.
Perhaps if that money was not taxed out of Alberta then Nutley still would have wasted it just like Quebec does, but that is beside the point. The point is that Alberta didn't have a choice as to where it was going, it was just taken.
The debt was run up during the leftist Stelmach and Redford years. They were not conservatives. Running as a candidate under a conservative banner doesn't mean crap. Most politicians and citizens in this country are leftists and the party name doesn't change that.
The Provincial debt is sometimes broken down to a "per capita" figure. Just think of what it must be on a "per taxpayer" basis that removes all those who don't pay taxes and all those who may pay taxes but receive even more money in taxes than they pay from the equation.
Yup.
It is true the AB Conservatives had run up debt instead of preparing for contingencies such as lower oil revenues.
But they did manage to balance the budget (ie run large enough surpluses to cover spending and debt service).
No great feat I agree, but the NDP, like their collectivist cousins in ON and Ottawa, immediately exploded deficits.
Given our demographics, this is unsustainable. But collectivists are one trick ponies - their solution is always bigger government ie more political power to them. Their stupidity, political distortions and the overall dampening effect of their taxaction lowers productivity, even more than indebted millennials and aging boomers could ever dream.
So, despite raising taxes/rates, revenues are always lower than expected/before, aka negative marginal tax revenue.
Of course the capitalists are to blame, so let's punish them with higher taxes, which aren't received, and...
Hayek was right, failure is inevitable, it is built into statism. Their fatal conceit seals our fate.
Where has democratic socialism succeeded, where disaster didn't ensue without an escape to limited government?
There are plenty of examples where it has failed - especially when pursued vehemently - miserably.
But, the search for political power trumps all; so out come the CRA letters and eventually the water cannons.
Or worse? All in the same of social justice of course and social license granted with impunity but without inquiry.
Confused? No it's easy. Safe pipelines partnering and enriching all Canadians. Bad. Oil tankers running over belugas in the Montreal polluted St Lawrence River, bringing us what we already have. Good. Just ask Jean Chretien and Power Corp. Talking over the PM at debates? Good. Making prejudiced judgments about others concerning their "worst instincts." Good too.
The future of Canada and the real state of affairs during the last election? Forget that, let's head over to the Duffy Trial.
The court jesters prepare the acts as we speak; nothing has changed, don't be fooled by these charlatans.
Besides it's way easier to make up the news than to actually cover it. That might make them late for Rudy's dinner party.
Unfortunately the voter is like the frog in the pot. By the time they realize it's too hot, it's too late to jump out.
Many wise people are saying we are entering a no go zone of debt, a tipping point, of depravity and stagnation.
One more term of those regressives in ON, AB or Canada will seal our ill fate as a nation, imho; as I join that chorus.
Rachael has protected her base. No cuts to the unionized labour force = government employees. No sir, pain can only be endured in the private sector.
She is campaigning attempting to paint the UPC as job cutting not to be trusted right wing....well you know the drill.
She will not be easily defeated. Her husband Lou Arab is a provincial union thug who's job will be to deliver the vote. I suspect he will.
It's ramping up folks. This will be the nastiest campaign we have witnessed here. Rachael is no shrinking violet and like bongo the parties fortunes rest entirely on her. No cream has risen to the top in her cabinet - ditto bongo.
She can turn on the charm but under that fake smile lies an evil heart. Her entire life has been spent fighting capitalism, the O&G industry and the creation of wealth. Her accidental premiership has caused her to soften her message. I don't believe a bloody word of it.
Much of the voting public see nothing wrong with this, just like ringing up the credit cards. It's somebody else's fault when the bill comes due and the payment can't be made. So more borrowing, more debt, more deficits. Followed by lower credit rating, higher interest payments and higher taxes, lower foreign investment and fewer (private sector) jobs. I'd venture that at least 1 out 3 voters don't understand this and just don't care.
Be prepared for the huge 3rd-party public service "non-partisan" PR campaign; we'll all suffer if the nasty UCP cuts spending.
"Many wise people are saying we are entering a no go zone of debt, a tipping point, of depravity and stagnation."
This quote comes to mind.
The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation. Vladimir Lenin
And if Vlady were alive today, he might say:
"The way to crush Alberta is to grind it between the millstones of Ottawa and Quebec."
Separate!
And Free The West!
All Alberta needs is a 5% sales tax. Deficit woes solved!
Yes, the neoLenins have their useful global village idiots in place. Not a comforting thought though.
Can the frog jump out of the pot before it becomes too hot for him to do anything about the heat?
I'm not sure at all voters will be able to jump out either.