Alberta’s revenue ‘gusher’ may fuel tension with have-not provinces, finance …
Finance Minister Ron Liepert says the province needs to prepare for billions in revenues gushing from the oilsands, leading to hefty government surpluses that will exacerbate tensions between Alberta and other less-wealthy provinces.
Speaking to the Calgary Chamber of Commerce a day after releasing his first budget, the finance minister also suggested the countrys have-not provinces should have to justify their spending on programs paid for by equalization dollars.
Liepert said the contrast between resource-rich provinces like Alberta and the rest of the country will become more stark in future years. Soaring bitumen royalties will pave the way for annual surpluses here that could jump to $10 billion or more, he said.
I dont think any of us realize what kind of – Ill call it a gusher – is coming out of the oilsands, Liepert told the audience Friday. If oil prices continue to stay very strong, we could be in a situation where a $5-billion surplus is literally nothing.
Alberta – also benefiting from a shift in population growth from east to west, highlighted in the census release this week – needs to be seen as contributing to the country as a whole and using these resources in some national way, he said.
Liepert, who has served as MLA for Calgary-West for two terms, is retiring from politics and will not run again in this springs provincial election.
In Thursdays budget, he forecast a $886-million deficit in 2012-13, but predicted Alberta will be back in the black the following year.
By 2014-15, the minister said the surplus should hit $5.2 billion, powered by an eyepopping $16 billion in projected resource revenues.
But as the money rolls in, Liepert said some Albertans are frustrated with what other provinces do with the dollars they receive through equalization payments.
Liepert said Albertans dont agree with many programs offered in other provinces, mentioning Quebec (which famously has a $7-a-day child care program).
Have-not provinces that receive equalization should have to prove they are getting results from using those dollars, he added.
I get the sense from Albertans that theres a growing resentment to just continuing to have money flow into other provinces without some accountability behind it, said Liepert.
But Roger Gibbins, president and chief executive of the Calgary-based Canada West Foundation, didnt have kind words for Lieperts idea to demand accountability from provinces receiving equalization.
This year, the equalization program will redistribute $15.4 billion in federal tax dollars to every province but BC, Saskatchewan, Newfoundland and Labrador, and Alberta. However, there is no direct transfer of cash from one province to another.
I cant think of a worse idea, Gibbins said of Lieperts proposal. Its not our money.
However, he agreed Albertas relative wealth will continue to be a major strain on the federation. Gibbins said Alberta could spread its wealth and garner goodwill from the rest of Canada by establishing a national environmental trust or major scholarship, akin to the Rhodes Scholarship.
Its not easy to do so in a way that doesnt buy you even more bad will . . . like a rich uncle coming into town and taking everybody to dinner, he said.
The situation, Gibbins said, is complicated by the fact there growing concerns about the environmental impact of the oilsands and associated pipeline projects, such as the proposed Gateway line through BC
When we went through the boom in the late 1970s, the money we were getting didnt seem to be as tainted, Gibbins said. Now with the oilsands contributing more and more to that surplus . . . the wealth will seem less legitimate.
But Gerald Baier, a political scientist at the University of British Columbia who studies Canadian federalism, said Alberta has more allies now than in past years because provinces such as Saskatchewan are raking in resource dollars, as well.
Albertas spending benefits all of us, in ways, Baier added.
However, he said other provinces will be concerned about Canadas international reputation if pushback against Albertas oilsands grows.
kcryderman@calgaryherald.com