Quote:
Originally Posted by Doug
A few points:
1) AB has plenty of room to reduce health and especially education spending. It vastly out spends all Provinces per capita on education. Some of that is due to younger demographics but spending has still grown much faster than school enrollment plus inflation. On health, AB spending is similar to NL and SK, which have poorer, older and more dispersed populations. BC and ON spend considerably less and do not experience meaningfullly worse outcomes.
2) Even with freezes since 2012, AB's public sector is still far more bloated than those in other provinces. A teacher, for example, earns 10-20% more in Calgary than they would in Toronto or Vancouver
3) Freezes can rake many years to restore balance. For example when I worked as a medical lab tech in the early 90:s, the HSAA pay scale had been frozen since 1982. Even after the 5% roll backs in 1993, the scale in AB was still roughly 5‰ ahead of BC or ON. I also worked for AB Health under a AUPE contract that had been frozen since 1983 and still vastly out earned counterparts in other provinces. The City was even more restrained. Under Mayor Duerr employment fell slowly between 1989 and 2001. Wages were mostly flat. The legacy of that can be seen today in the almost complete absence of Gen X'ers working for the City. For example, the police and fire departments hardly hired anyone during the 90's.
4) As construction shares larfely the same resource poosl as O&G development, Infrastructure costs have declined substantially. Combined with reduced population growth, AB could easily cut 15.to 20‰ from the capital budget with negligible impact
5) The NDP is not on track to a balanced budget. It's tax increases have not brought in additional revenue. Each budget update presents ever deteriorating finances.
6) AB sits on a massive pool or cheap and largely stranded natural gas reserves. Power generation would likely have transitioned away from coal with no government action. The NDP's climate actions are largely symbolic and unnecessarily expensive.
7) The structural deficit us more like $10B. Coincidentally if AB spent the same per capita as BC that deficit would be sub $2B
8) The luxury or waiting to acknowledge AB's dire finances is rapidly disappearing as the bond market turns. Expect significantly higher interest rates and worsening deficits due to rapidly rising interest payments
The solution would be definitely action to restore finances and eventually a friendlier investment climate:
1) Absolute hiring freeze. The deficit would be substantially lower if AB has froze hiring in 2014. Instead the provincial payroll has grown by tens of thousands
2) Present a - 5% wage roll back followed by 4 years of freezes and substantial cuts to pensions and benefits as union contracts expire. The government has all the negotiating power as the public backlash to strike action would not be sympathetic. A Calgary teacher with 6 years education and 10 years experience earns over $100k per year plus generous time off and benefits. The real kicker is the pension plan which awards 75% of a teacher's best 5 years of salary. Given that a teacher could be retired for as long as they worked, the all in compensation approaches $200k which would make it close to the highest paying profession. The thousands of Education new grads each year and slowly rising school enrollment would suggest supply would equal demand at much lower levels or compensation
3) The US is likely headed towards lower corporate taxes and less activist climate policy. AB will almost certainly follow to remain competitive
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Yeah. I'm here in BC and have always been an avid follower of AB politics/finances/economy.
Have always noticed that the AB public service is "gold-plated" - best in Canada in terms of both wages/salaries/benefits and per capita. Have never begrudged AB on same.
Have seen the left-wing ideological BCTF (BC teacher's union) for example, want similar salary scales as AB teachers during contract negotiations, which would have hit the BC treasury hard. At end of day, never happens. BTW, the same BCTF locals oppose all resource development in BC, which would provide the revenue for same.
In any event, when AB was hit hard, economically speaking, by the oil price collapse, the AB NDP gov't:
1. Increased corporate taxes;
2. Brought in carbon tax; (wait for gas/natural gas consumer price spike in January, 2017)
3. Brought forward oil/nat gas royalty review - while no relevant changes, the uncertainty thereto was also a "tipping point";
4. I can go on and on in terms of the "social engineering";
The entire AB gov't is full of misfits - social activists, enviro activists, and public sector union activists. The same modus operandi of the 1990's BC NDP gov't, which saw a 77-2 rout back in 2001.
Funny thing. The higher echelons of the AB NDP gov't is infested with BC NDP party hacks. Have given a detailed schedule of names/positions in a previous post.
And in my life-time, have never seen such abnormal provincial relations between BC and AB. Frankly, they are non-existent. Hell, SK is suing the AB gov't as result of defying the New West Trade Partnership. Cool.
Even today, Eisenbergs' Fine Furniture closed after nearly 100 years in Calgary. A little thing but epitomizes what's going on in AB. A "tipping point", so to speak, as a result of AB NDP gov't social engineering policies? You betcha!
Fast forward to the future. The Kinder Morgan pipeline twinning (TMP) to the BC west coast will likely be approved by the feds next month in December. To preface, I have been following this matter for years and opinion polls in BC consistently have ~21% "Strongly" opposed. Just a minority. Yes minor voices are also the loudest but are also mostly fringe.
BTW, most Fist Nations in BC have already signed (or will be signing) project benefit agreements with TMP as a result. The remaining FN minority have been consulted in good faith as required by SCC legal principles.
Even the BC gov't, with its own 5 conditions, is moving toward "yes" on the KM twinning.
Now let's look at AB polis in this matter. Prentice, during his short AB preem stint, came to Vancouver and attempted to sell the KM twinning to the Vancouver Board of Trade. Made major news in BC.
Calgary mayor Nenshi was just in Vancouver as well, attempting to sell the KM twinning:
Quote:
Don't stand in the way of national interests on Kinder Morgan, Calgary mayor tells Vancouver
Vancouver Sun
JEFF LEE
November 17, 2016
The national imperative of expanding the Kinder Morgan pipeline from Alberta to the West Coast should not be hijacked by parochial opposition from Metro Vancouver residents, Calgary Mayor Naheed Nenshi said Thursday.
Nenshi, who was in Vancouver this week to speak to the Canadian Club, told the editorial boards of The Vancouver Sun and The Province that he worries decisions about the future of Canada’s energy sector will be influenced by regional political concerns rather than what is in the best interest of the country.
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http://vancouversun.com/news/local-n...ells-vancouver
As for AB NDP preem Notley? Shouldn't she be in Vancouver as well selling the KM twinning, both before and after the feds approve same? Would definitely help AB's interests in same. Seriously.
But will she ever show up in Van City though? NADA. Notley is obviously more concerned about the NDP's interests in both BC and AB than Albertan's interests. No doubt about that. Kinda pathetic, don't you think? No other premier in Canada has ever operated/operates akin to that. But I digress.