% The Flaming Right by Rudy de Haas

The budget blues

12:41 Feb 13, 2015

Mr. Prentice and various proxies are all running around telling us that Alberta has to raise most taxes and fees. That's very liberal of them, but if anyone should bite the bullet on the budget deficit it isn't us - it's the bureaucrats and the politicans who spent the oil boom money as if tomorrow would never come.

Except, of course, that it did, so now what?

First, symbolism counts - and a 5% MLA paycut is very nice as a symbol (although it should be 17% to match the tax increases they're budgeting for) but I'd like to suggest taking that idea a step further.

Right now every Department and major agency has people dedicated to dealing with staff working in MLA and ministerial offices whose constituents labor under the delusion that their elected representatives have a right to expect real actions or answers from the bureaucracy. Fire them all.

Their direct cost is trivial in the budget context - there are perhaps 500 or so jobs here but, by the time the dust settles, I'd bet on fewer than a hundred actual layoffs. Still, it's the symbolism that counts; and if the PCs want to see a resurgence in their popularity, removing two entire layers of chatterimg impediments to constituent service is a good place to start.

Second, reality counts even more: every boom ends, and so does every recession. Eventually, something will change, and whether that turns out to be a supply crunch as Obama manages to kill fracking while setting off a general conflagration in the middle east, or rapidly expanding demand after the Americans elect an actual American as president in 2016, doesn't really matter: either way, the recession will end and Alberta will be rich again. Meanwhile, however, we're not exactly poor: even Stelmach couldn't spend all of the Heritage fund, our credit is good, and the agricultural sector is on a long term upswing.

So lets look at using that idled oil industry infrastructure to build a few things that might make the next boom both healthier for Alberta and more sustainable - and if we have to commit Alberta's credit resources to making these things happen then we should do that.

There are lots of good ideas out there - a pipeline along the Alaska highway is attractive because it might be politically possible, ties in Peace River resources, and could be branched to bring McKenzie gas south - but my favorite is a joint project with Manitoba and Saskatchewan to build a pair of honking big refineries on the Pembina Escarpment right next to the American border. With much of the infrastructure needed for supply from Alberta, Saskatchewan, the Dakotas, and Montana already in place and NAFTA protecting market access for refined product travelling by truck, rail, barge, and pipeline, we won't have to pay off a lot of "special interests" to get it done - and, of course, a key benefit of using government guaranteed bonding for this kind of thing is that the longer term obligations incurred ensure against arbitary action by a future government.

And you know what they say about selling a million barrels a day here, and another million there? Keep it up, and pretty soon, you're talking long term balanced budget.