Alberta: more bad news coming

bob vernon
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Alberta: more bad news coming

Post by bob vernon »

Jason Kenney's budget comes down on Thursday, October 24. Normally, this budget would have been much earlier, but there was a federal election on and Jason didn't want to be the bearer of bad news during the campaign. Naturally, the blame for the dismal situation will be given to Justin Trudeau and the rest of Canada, instead of Alberta who has squandered the golden egg of petroleum for decades now.

Could have stashed away billions in a fund for the future, but instead let the money all flow down to head office in Houston. The raging against everybody but themselves began the minute the election results came in. Who should Alberta blame? Themselves. The cuts will be deep, the deficit will be massive, the blame will be thrown at the NDP, the Liberals, pretty much everybody but themselves. Jason might even put in a sales tax. He can always just blame somebody else.
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Re: Alberta: more bad news coming

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bob vernon wrote:Jason Kenney's budget comes down on Thursday, October 24. Normally, this budget would have been much earlier, but there was a federal election on and Jason didn't want to be the bearer of bad news during the campaign. Naturally, the blame for the dismal situation will be given to Justin Trudeau and the rest of Canada, instead of Alberta who has squandered the golden egg of petroleum for decades now.

Could have stashed away billions in a fund for the future, but instead let the money all flow down to head office in Houston. The raging against everybody but themselves began the minute the election results came in. Who should Alberta blame? Themselves. The cuts will be deep, the deficit will be massive, the blame will be thrown at the NDP, the Liberals, pretty much everybody but themselves. Jason might even put in a sales tax. He can always just blame somebody else.

Kinda hard to keep flourishing given the rest of the Country keeps playing games to block your natural resources getting to the market in a safe and efficient manner.
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The Green Barbarian
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Re: Alberta: more bad news coming

Post by The Green Barbarian »

bob vernon wrote:, instead of Alberta who has squandered the golden egg of petroleum for decades now.


Really. Squandered eh? Think of all the more money they could have had if they had a pipeline to Tidewater, like the Norwegians do.

Could have stashed away billions in a fund for the future,


Like this?

https://www.alberta.ca/heritage-savings-trust-fund.aspx

but instead let the money all flow down to head office in Houston.


All of it eh? Nothing stayed in Alberta, at all. That's so strange.

The raging against everybody but themselves began the minute the election results came in.


Yes, the election in 1968. And 1972. And 1974. And 1980.

Who should Alberta blame? Themselves.


So it's their fault that BC won't let them build a pipeline. Interesting theory. Pretty silly theory too.

The cuts will be deep, the deficit will be massive, the blame will be thrown at the NDP, the Liberals, pretty much everybody but themselves.


Makes sense.

Jason might even put in a sales tax. He can always just blame somebody else.


They probably should have a sales tax. And they have JT in Ottawa to blame it on. Makes sense.
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Re: Alberta: more bad news coming

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^^ trying to blame Ottawa for Alberta's problems is just an Alberta blood sport. Alberta politicians have been doing it all my life - right back to the bronze age.

Peter Lougheed had it started in right direction with the Heritage fund, with the notion you pay as you go for regular services and stuff, and build the Heritage Fund as an ongoing source of future funding from investment returns. Peter understood that ALL resource industries are boom and bust.

Unfortunately future Conservative Premiers thought "to heck with prudence - let's party and get elected time and again" and then quit the Heritage Fund. So those Conservative Premiers bought voters with unsustainable tax cuts and unsustainable program spending and spoiled the voters of Alberta rotten.

Norway's "Heritage Fund" is now $1.22 Trillion (with a T!). 4-5% return on that would cover a LOT of Alberta's deficit. Plus if Alberta had not been selling out their future for a party time today, the deficit would have been much, much smaller - if there at all.

Alberta is the only province without a sales tax. Alberta also has the least progressive income tax of any provinces (although Ontario's isn't great either - and surprise, surprise, Ontario is a sea of red ink).

If Moe can balance Saskatchewan's budget without draconian stuff, so can Alberta. But I doubt any politician in Alberta would survive "pay as you go". Jim Prentice tried, and the Alberta voters went so far nutso they elected the NDP.

That's the problem with spoiling folks. If you give away the farm, they will expect that forever. https://www.macleans.ca/economy/economicanalysis/the-winners-and-losers-if-alberta-returns-to-a-flat-tax-system/

Somehow Albertans seem to think the oil sands boom is just around the corner again. It isn't. It ain't coming back, and it doesn't matter who is Ottawa or who is power in Alberta. There is a global oil glut, a chunk of it fed by shale oil, and $trillions of dollars fleeing investments in oil. Yes, building the TMX makes sense, and it will help some, but the boom times look like they are toast.

Alberta is going to have to get used to "pay as you go" like the rest of us.

2 decades ago if Iran had blown up a bunch of Saudi oil capacity - the price of oil would have shot to moon. Today? Meh. Barely a ripple. That is clear evidence of the global over supply.
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Re: Alberta: more bad news coming

Post by vegas1500 »

bob vernon wrote:Jason Kenney's budget comes down on Thursday, October 24. Normally, this budget would have been much earlier, but there was a federal election on and Jason didn't want to be the bearer of bad news during the campaign. Naturally, the blame for the dismal situation will be given to Justin Trudeau and the rest of Canada, instead of Alberta who has squandered the golden egg of petroleum for decades now.

Could have stashed away billions in a fund for the future, but instead let the money all flow down to head office in Houston. The raging against everybody but themselves began the minute the election results came in. Who should Alberta blame? Themselves. The cuts will be deep, the deficit will be massive, the blame will be thrown at the NDP, the Liberals, pretty much everybody but themselves. Jason might even put in a sales tax. He can always just blame somebody else.


*removed* Maybe we should quit paying the billions of dollars to be part of Canada and the equalization payments. Keep that money “in house” and we will prosper just fine. *removed*
Last edited by ferri on Oct 22nd, 2019, 6:11 pm, edited 1 time in total.
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Re: Alberta: more bad news coming

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vegas1500 wrote:*removed* Maybe we should quit paying the billions of dollars to be part of Canada and the equalization payments. Keep that money “in house” and we will prosper just fine. *removed*


What are you talking about and how do propose to keep that money in house? Alberta doesn't make equalization payments, never has, never will.

Alberta just gave Husky energy a 233 million dollar tax break for the year. Does that mean more money in house? Nope, https://www.msn.com/en-ca/money/topstor ... es-layoffs it means Husky is going to cut spending and lay off employees. Husky, of course, has a controlling ownership by a company called CK Holdings, registered in the Cayman Islands. Li Ka-Shing has no interest in keeping the money in Alberta's house. That's just silly. He prefers to do his banking in the Cayman's because he doesn't like taxes of any type cutting into his 25 billion dollar empire.
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Re: Alberta: more bad news coming

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Got a fiver? Five bucks will get you a pirate pack from McDonalds in Alberta.

That same 5 bucks pays Li Ka-Shing's annual land lease for about 2.5 hectares. That's one those statements that's only funny because it's true. :smt045
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Re: Alberta: more bad news coming

Post by Gilchy »

I think many people underestimate how much global oil supply is out there now that the shale nut has been cracked. That is the real source of declining oil prices everywhere, and a pipeline expansion would help, but not fix, this fundamental issue.

Outside of the odd dramatic swing (like Fall 2018), the price of WCS (Canadian oil) usually has a ~$10 discount to WTI (Texan oil), partially because WCS requires more refining. WTI has endless ports in Galveston, but is still priced a bit cheaper the Brent (EU) oil.

Simply getting more oil to port doesn’t guarantee a “world price”, all it would do is allow more oil to be shipped at the same relative price it is today.

The O&G easy money gravy train is done, everywhere. The sector is out of favour for institutional investors, and we likely won’t see a mid-2000s like boom again, especially in the oil sands.

Is Alberta, and B.C. for that matter, treated entirely “equally” under the current equalization program? Not entirely, but the biggest issue is equalization is calculated on a trailing basis (in a formula designed in part by Kenney), and so will be up for correction in the future if AB’s revenues and abilities to service fall enough.

That said, the AB government has long spent the most per capita of any provincial government with no sales tax and a low income tax, based on resource royalties. They are going to have to make up those lost royalties and boost taxes, or cut. We’ve seen what long term cuts result in; Klein famously cut to pay off the debt, which is well and good until roads, schools and hospitals are literally crumbling and the government has to spend more to simply catch up.

A lot of the frustration coming from Albertans is the slow realization that the party is over, and they’re looking for someone to blame.
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Re: Alberta: more bad news coming

Post by AlienSoldier »

The oil pipeline will add valuable support to Alberta as the price discount can be minimised, the cost of transportation can be reduced, the risk of spills is reduced (oil by rail and truck is much more risky) and so are the green house gases. This is something we as Canadian's should be doing no matter what. Heck use the money you make from it for green initiatives and try and make it carbon neutral, that might be a really cool exercise!

As for Alberta leaving, it will not solve it's problems. It would need to increase its government employees, establish borders, sign treaty's so that they can transport and import anything into the new country. They would also be looking at many of the head offices moving to Sask, or BC or Ontario as companies don't like new countries, they want to move to a stable country where they know the rules, even if they are not in favour of them.
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Re: Alberta: more bad news coming

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We have known for years that the heydey of oil production was drawing down. and that there are vast reserves of natural gas, which will supply much of energy needs in the future (other alternatives in the works). So this is no one's fault, it has become less and less cost effective to extract and ship the oil. There's been other years of boom and bust as oil producers elsewhere in the world have a grip on this industry. Alberta was managing just fine without a pipeline before, now it isn't, Why? IT's not the rest of Canada that is holding it up, the courts want more consultation with indigenous (and others) as to environmental and land rights concerns. This is not something that will be solved in a few months.
Yes foreclosure and unemployment/underemployment is up in Alberta, and a few other places. We can't just snap our fingers and fix this. Alberta may have to diversify its economy as other provinces have had to do while adjusting. All Canadians need to buckle up, this problem wasn't created overnight, it won't be solved overnight.Alberta certainly could separate, I don't see how that would help it get a pipeline across Canada. They are in a competitive market and threaten to turn off the tap to the province they want to negotiate with. Good luck with that. I want to sell you a pair of shoes in a world awash with shoes, if you don't help me build my store, I refuse to sell you my shoes.
Further thought, as far as how this affected the election, Cons got about 1/3 of the popular vote, and about 1/3 of the seats in the election. So they are adequately represented, let them do with it what they will. They can cooperate with the other 2/3 of Canada or not, their choice.
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Re: Alberta: more bad news coming

Post by AlienSoldier »

In a competitive market the most efficient and fastest way to get your product to the market wins. That is what Alberta wants to do with its oil.

Oil is still growing in demand worldwide, just not at the scale and scope it was anticipated or initially thought. Even if cars go EV, it will take decades to make a dent in the demand for oil as a transportation fuel, or for products. By getting our oil through a pipeline to the markets faster and more efficiently, we give our business a competitive boost. It cuts down on the price discount, and reduces the amount of management needed (rail transport can be very complex).

Through BC we have an opportunity to win the share of oil for the fastest growing economies (Asia), we are much closer than other oil area's and already have trade with these countries. Right now we are producing oil, but do not have a way to get it to market.
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Re: Alberta: more bad news coming

Post by kgcayenne »

I would be alright with the pipeline were there a commitment to ensure any leaks and future remedial works are covered by them and NOT US. It should not be up to British Columbians to pay for the damage when the pipeline or the tankers leak or fail.

Remember, it's not a matter of if, but when.

As usual, however, the people making all the money don't want to be responsible for when things go wrong. Forge that agreement of responsibility, and I think the resistance will abate.
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Re: Alberta: more bad news coming

Post by AlienSoldier »

kgcayenne wrote:I would be alright with the pipeline were there a commitment to ensure any leaks and future remedial works are covered by them and NOT US. It should not be up to British Columbians to pay for the damage when the pipeline or the tankers leak or fail.

Remember, it's not a matter of if, but when.

As usual, however, the people making all the money don't want to be responsible for when things go wrong. Forge that agreement of responsibility, and I think the resistance will abate.


But that was already being agreed to by the Liberals. They were willing to invest to update and upgrade the spill responses on the coast. Most of the tankers coming in are not owned by large oil firms but contracted to them. Holding them responsible is just an exercise in paper pushing as they will just leave port if they can and we can't hold them accountable.

I believe what the liberals did by upgrading the spill responses plans and equipment was the right move. They also updated the requirements to have double haul ships which are less likely to leak due to accidents.
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Re: Alberta: more bad news coming

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hobbyguy wrote:
Norway's "Heritage Fund" is now $1.22 Trillion (with a T!). 4-5% return on that would cover a LOT of Alberta's deficit. Plus if Alberta had not been selling out their future for a party time today, the deficit would have been much, much smaller - if there at all.


Alberta has to sell their product at a massive discount because they are land-locked and have no pipelines to tidewater. Meanwhile Norway gets top dollar for their oil, because they had the brains to build under-water pipelines all over the place, and so they get the Brent price. You can't whine and complain about Alberta, and then pull Norway out of your behind. It's not apples to apples comparative, and do you know why??? Because of idiot enviro-lunatics!!!
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Re: Alberta: more bad news coming

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Rex Murphy:

Snip

Among the most ludicrous of campaign pitches, and there were so many to choose from, was the latter-day lunacy that if you, the voter, wanted to save the planet, you had to vote Liberal. The hubris in that claim was equal to its idiocy.

Canadian elections are not about the world. It is not ours to save, or (all deference to Greta the Grinch) to destroy. Canadian elections are about Canada, how to make it better, stronger, more healthful and secure for its citizens. They are — or should be — exercises where party leaders refresh our sense of Canada’s aspirations and ideals as a country, a nation.

Above all they should be about making sure the arrangement we have with ourselves — the Confederation — goes through an ever-necessary renewal, answers to contemporary challenges, and continues to secure the peaceful, prosperous and highly successful country that Canada is.

Well … a person can dream, can’t he?

For the election we have had, the clumsy, trivial, demeaning and small election just over, answers none of these qualifications. It was a scramble between mediocrities. And the morning after, what do we have?

The frictions and anxieties out West over the deplorable treatment of its main industry, the harassment of regulations and protest and court delays that have paralyzed development and driven billions of capital away from Alberta, had — before the election — produced a mood and sentiment of near universal anger about the West’s place in Confederation.

Alberta in particular has very justifiably — as anyone who pays any real attention to the province would know and care greatly about — seen itself as a target, as subsidiary to the concerns of the centre in Ottawa, an afterthought in any of the great schemes proposed by a very “progressive” Trudeau government. It saw from the very beginning of Trudeau’s first government — with its grandiose global posturing, its almost camp presentation of itself as the champion of the global-warming frenzy — that this playacting was going to be at the expense, and to the detriment, of its concerns, its employment, its industry.

When Catherine McKenna waltzed off to Paris with nearly 400 delegates to yet another Save the Planet summit, that was much more a message to Albertans, than it was to some assumed global audience. She certainly wasn’t going to show up in Fort McMurray with 400 true believers to see what could be done for unemployed oil workers after the fire and before the carbon tax.

I rehearse this fragment of background just to hint at the consequences of last night’s vote. Things were hot before Monday. Now they are molten. There will not be a single major Western figure in whatever cobbled together coalition comes into being. No Western voice at all. Ontario and Quebec have once again determined who holds the levers of power, and who is left standing in line, or out in the cold altogether.

Furthermore, the most likely combination in a coalition, that of progressive Liberals and even more progressive NDPers, is like an El Greco sketch — one of those really gloomy ones — for the West. Citizens on the Prairies will be asking themselves — where are we in this combination? How high, now that we’re past the need to be cute about it, will the next carbon tax be? How much harder will Trudeau/Singh be pushing for the “transition” — read shutdown — of the oil industry?

The juvenile and reckless policies of the amateur Trudeau government — a government of butterflies in its early yoga and selfies days — has brought the country to a terrible pass, where the only elements that really count in a nation — its cohesion, its sense of common endeavour, of all its parts and regions acting on the great issues in concert, as one — these elements are shattered.[/quote]

https://nationalpost.com/news/politics/ ... its-molten
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