Blowing the bankroll, Alberta-style
“It’s hard to believe, but Alberta, the Wonderland of Canada — with its oil sands, no sales tax and debt-free balance sheet — has pissed away another oil boom.”
When I read that on Globe and Mail.com, it got my attention. It should get yours, too.
I spent my early adult years in Alberta. I got married there, and had my first newspaper and radio jobs in Edmonton. I remember being told by a callus-skinned laborer I’d encountered in one of the oil fields:
With all our riches, Alberta can be the wealthiest province in the world.
He was right. But you’d never know it by looking at Alberta’s financial position today. Staring at a $1 billion deficit, Albertans are wondering what hit them.
Two things: Collapse of world oil prices, and a decade of profligate over-spending by a government that was supposed to be committed to conservative values.
It reminds me that conservative parties, be they the PCs or the Conservatives in Canada or the Republicans in the U.S., have been guilty of the most invidious betrayal of their promises.
Whether it was Reagan’s “morning in America” in 1980, or Harper’s boast in 2008 that he’d never run a deficit, it’s the conservative parties that have been the big spenders and the big debtors. Of course, no one compares with “compassionate conservative” George Bush in the eocnomic insanity department.
Plus, conservative governments in the U.S. and Canada have wrecked the public treasuries through indiscriminate and unaffordable tax cuts.
Case in point: the Alberta Heritage Fund. When Premier Peter Lougheed set it up in 1976, the idea was to stuff it with 30% of the province’s resource revenues. By 1982 they’d cut that in half and were taking out the profits.

David Wood tells how the Fund was set up in his 1985 book.
In the past year, not a nickel’s gone into the Heritage Fund. It’s worth about $16 billion now. If the government had kept its original commitment and put in 30% of resource revenues while taking nothing out, the Fund would be worth $164 billion today. More than enough to see Alberta through the deepest of recessions.
Where did the money go? Taxpayer perks, mainly. At the peak of the boom, Ralph Klein wrote $400 checks for every Albertan, at a time when few really needed them. Government spending has gone up by 9.6% a year over the past three years.
Canada’s had only one fiscally responsible government in the past thirty years – the Jean Chretien/Paul Martin regime from 1993 to 2005. The deficit was tamed, taxes were cut, and our finances were put in the best shape of almost any industrial country in the world.
Then, when the Harper government took over, its combination of tax cuts and big-time spending sent Canada spiralling toward deficit hell even before the economic crisis hit.
Now, Alberta’s trying to get back on track. The Globe ROB Magazine article profiles Leo de Bever, the guy who’s been brought in from the Ontario Teachers’ Pension Fund to shape up the new Alberta Investment Management Corp. Its portfolio includes the Heritage Fund along with five other public endowments and investment plans.
It will take a long time to rescue the Heritage Fund. A recent study calls on the government to grow it to $100 billion by 2030.
If the politicians raid it any further — as they’re likely to if it’s the only way to avoid deep deficits in the next few years — it could take a lot longer.




I’ve been concerned that the Liberals didn’t extract a better stimulus package from the Harper budget. I had the chance to ask Iggy if he had any plans to pressure the government during second reading of the budget bill. I pointed out the budget was bereft of support for science and technology, for seniors, or the unemployed (in any meaningful way). It would have been nice to see a one-time partial rebate on our 2008 taxes paid.
The granddaddy of the papers was Hush. It was started in the 1920s by Strathearn Boyd Thomson as a stock market tip sheet. In a replay of the old “horsewhip the editor” plot, Thomson was beaten up by three men, including a couple of prominent Forest Hill individuals, while enjoying an afternoon at the races. They didn’t like something he’d written. They beat the assault charges laid by Thomson, but later had to pay him off in a civil settlement.