Albertans being misled by talk of ‘bitumen bubble’
Real problems caused by low taxes, royalty giveaways and lack of upgrading strategy
Alison Redford's claims that Alberta's financial woes are caused by a 'bitumen bubble' are a distraction.
The 'bitumen bubble' Redford refers to is the difference between the price we get for our bitumen – known as Western Canada Select (WCS) – and the price of internationally traded oil – West Texas Intermediate (WTI).
"There has always been a difference in price between Alberta's bitumen and the West Texas Intermediate blend," AFL president Gil McGowan said, adding that the real causes of the budget deficit are royalty giveaways, tax cuts for the wealthy and the lack of a provincial upgrading strategy. "The budget crisis was not created by this. The real problem is the broken system for revenue generation in Alberta."
Although the difference in price between Alberta's bitumen and WTI crude has been around for a while, this is the first time an Alberta finance minister has raised it as a drag on the economy. In 2005 and 2006, the difference in price was larger than it is now, yet Alberta was enjoying massive surpluses.
"The difference might be greater than it has been for the last couple of years, but they're disingenuous to blame all their budget woes on this differential," McGowan said. "The government has always created budgets that take this difference in price into account. Last year, they delivered a budget that was exceedingly optimistic. Now they're acting shocked. It's a misleading distraction."
According to the government's own studies, Alberta could collect $11-billion more in taxes and still remain the lowest-taxed jurisdiction in Canada. If Alberta were to collect enough in taxes to cover its current projected deficit, we would still be the lowest-taxed province by about $8 billion.
"There have been successive years of massive tax breaks to Albertans who earn more than $250,000, there have been giveaways to mega corporations, and the royalty rates that Alberta charges for our resources are actually lower than they were under Ralph Klein," McGowan said. "If the government is going to tackle the deficit, they need to be honest about the causes, rather than hiding behind distractions."
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For a fact sheet on the bitumen 'bubble'
MEDIA CONTACTS:
Gil McGowan, President, Alberta Federation of Labour at 780-218-9888 (cell)
Olav Rokne, AFL Communications Director at 780-289-6528 (cell) or via email [email protected].
Public sector unions are girding to fight impending provincial cutbacks
Public sector unions are girding to fight impending provincial cutbacks driven by a multi-billion dollar cash crunch.
And a prominent economist says Premier Alison Redford's TV address to Albertans Thursday fails to come to grips with a looming budget shortfall larger than the province is letting on.
Even before Redford's speech, the Alberta Federation of Labour was readying a public relations offensive to offer alternatives to slashing spending on crucial programs, said AFL President Gil McGowan.
"The public sector unions have been meeting the past couple of weeks to discuss the implications of the budget and like a lot of Albertans, we're prepared for the worst," McGowan said Friday.
Alberta's fiscal chickens are coming home to roost after years of tax-slashing for wealthier Albertans and a resource revenue giveaway to a wildly profitable energy industry, he said.
"Our provincial GDP is literally 75 percent higher than the rest of the country yet we can no longer afford even to have run-of-the-mill services," said McGowan.
"I call it the great Alberta disconnect."
After meeting with Finance Minister Doug Horner last Tuesday, McGowan said it's clear areas like education and health care won't be spared drastic action in the budget expected in March.
"Everything we've heard is suggesting the budget won't be as bad as what we saw in the Klein years but worse than anything we've seen since," he said.
University of Calgary economist Dr. Jack Mintz said Redford's TV address muddied the fiscal waters, adding unmentioned obligations like financing requirements could see a shortfall of up $8-$10 billion.
"This government has considerable credibility problems as far as their budget plan," he said.
Even with budget cuts averaging 5% over all departments — or a $2 billion slim-down — an ocean of red ink will remain because the discount on Alberta bitumen will also persist for years, added Mintz.
"If they don't make major cuts this years, the sustainability fund will be depleted and they'll be borrowing because they don't want to take it from the heritage fund," he said.
Educators watched Redford with considerable interest, hoping the province's commitment made to them last year in a three-year funding pact will hold in March, said Calgary public school board vice-chairman Lynn Ferguson.
"We are certainly aware of the economic challenges facing the province," said Ferguson.
"I would hope since education is a consistent priority for Albertans, that value would be reflected even in a difficult budget year."
She noted there's a possibility the province could delay funding building projects, noting her district has 16 projects including modernizations and new schools, one of them a northeast high school.
"I would like them to know in a growing community like Calgary, new schools are always needed," she said adding 24 Calgary communities have no public schools.
Ferguson also voiced some concern about the fate of its full-day kindergarten program.
Redford said an unforeseen discount on the province's bitumen is largely to blame for the fiscal gap.
But the AFL's McGowan echoed right-wing critics like the Wildrose Party in arguing that situation has long existed.
"That differential between world oil and bitumen prices has existed for years," he said.
The Calgary Sun, Friday, Jan. 25, 2013
Byline: Bill Kaufman
Unions, economists blast Alison Redford's budget plans
CALGARY - Public sector unions are bracing to fight impending provincial cutbacks driven by a multi-billion dollar cash crunch.
And a prominent economist said Premier Alison Redford's TV address to Albertans Thursday fails to come to grips with a looming budget shortfall larger than the province is letting on.
Even before Redford's speech, the Alberta Federation of Labour was readying a public relations offensive to offer alternatives to slashing spending on crucial programs, said president Gil McGowan.
"The public sector unions have been meeting the past couple of weeks to discuss the implications of the budget and, like a lot of Albertans, we're prepared for the worst," McGowan said Friday.
Alberta's fiscal chickens are coming home to roost after years of tax-slashing for wealthier Albertans and a resource revenue giveaway to a wildly profitable energy industry, he said.
"Our provincial GDP is literally 75% higher than the rest of the country, yet we can no longer afford even to have run-of-the-mill services," said McGowan. "I call it the great Alberta disconnect."
After meeting with Finance Minister Doug Horner last Tuesday, McGowan said it's clear areas like education and health care won't be spared drastic action in the budget expected in March.
"Everything we've heard is suggesting the budget won't be as bad as what we saw in the (Ralph) Klein years, but worse than anything we've seen since," he said.
University of Calgary economist Dr. Jack Mintz said Redford's TV address muddied the fiscal waters, and unmentioned obligations like financing requirements could see a shortfall of $8-$10 billion.
"This government has considerable credibility problems as far as their budget plan," he said.
Even with budget cuts averaging 5% over all departments - or a $2-billion slim-down - an ocean of red ink will remain because the discount on Alberta bitumen will also persist for years, added Mintz.
"If they don't make major cuts this years, the sustainability fund will be depleted and they'll be borrowing because they don't want to take it from the heritage fund," he said.
Educators watched Redford with considerable interest, hoping the province's commitment made to them last year in a three-year funding pact will hold in March, said Calgary public school board vice-chairman Lynn Ferguson.
"We are certainly aware of the economic challenges facing the province," said Ferguson.
"I would hope since education is a consistent priority for Albertans, that value would be reflected even in a difficult budget year."
SunNews, Friday, Jan. 25, 2013
Byline: Bill Kaufman, QMI Agency
Unions, economists blast Alison Redford's budget plans
CALGARY - Public sector unions are bracing to fight impending provincial cutbacks driven by a multi-billion dollar cash crunch.
And a prominent economist said Premier Alison Redford's TV address to Albertans Thursday fails to come to grips with a looming budget shortfall larger than the province is letting on.
Even before Redford's speech, the Alberta Federation of Labour was readying a public relations offensive to offer alternatives to slashing spending on crucial programs, said president Gil McGowan.
"The public sector unions have been meeting the past couple of weeks to discuss the implications of the budget and, like a lot of Albertans, we're prepared for the worst," McGowan said Friday.
Alberta's fiscal chickens are coming home to roost after years of tax-slashing for wealthier Albertans and a resource revenue giveaway to a wildly profitable energy industry, he said.
"Our provincial GDP is literally 75% higher than the rest of the country, yet we can no longer afford even to have run-of-the-mill services," said McGowan. "I call it the great Alberta disconnect."
After meeting with Finance Minister Doug Horner last Tuesday, McGowan said it's clear areas like education and health care won't be spared drastic action in the budget expected in March.
"Everything we've heard is suggesting the budget won't be as bad as what we saw in the (Ralph) Klein years, but worse than anything we've seen since," he said.
University of Calgary economist Dr. Jack Mintz said Redford's TV address muddied the fiscal waters, and unmentioned obligations like financing requirements could see a shortfall of $8-$10 billion.
"This government has considerable credibility problems as far as their budget plan," he said.
Even with budget cuts averaging 5% over all departments - or a $2-billion slim-down - an ocean of red ink will remain because the discount on Alberta bitumen will also persist for years, added Mintz.
"If they don't make major cuts this years, the sustainability fund will be depleted and they'll be borrowing because they don't want to take it from the heritage fund," he said.
Educators watched Redford with considerable interest, hoping the province's commitment made to them last year in a three-year funding pact will hold in March, said Calgary public school board vice-chairman Lynn Ferguson.
"We are certainly aware of the economic challenges facing the province," said Ferguson.
"I would hope since education is a consistent priority for Albertans, that value would be reflected even in a difficult budget year."
Sun News, Friday, Jan. 25, 2013
Byline: Bill Kaufmann
Oil differential darkens Alberta’s budget
It has been, for Alberta, a dismal new year. With pipelines out of the province effectively full, Canadian crude has become a discount brand, and once-expected money is evaporating. The future looks little better. Alberta's Finance Minister has taken to dramatic language to describe the financial duress striking his province.
"This is not an ordinary storm," Doug Horner said this week. The dipping price of Canadian oil will strip some $27-billion from the Canadian economy this year, he said in a speech to the Calgary Chamber of Commerce that was designed to soften the ground for what is certain to be a grim provincial budget on March 7.
Mr. Horner's argument hinges largely on "differentials." It's an industry term that describes, in the current context, price discounts. So for example, Canadian heavy oil – which is often traded as a blend called Western Canadian Select – has seen a differential of as much as $42 (U.S.) a barrel below the headline oil price numbers. In North America, the headline number is typically the "benchmark" West Texas intermediate (WTI) blend. A big dip away from West Texas intermediate means that Canadian oil is selling on the cheap – and cheap oil for buyers mean low prices for sellers, the reason Alberta is facing such dire straits.
Not everyone is buying it, though. Gil McGowan, president of the Alberta Federation of Labour, for example, says "the differential has been around for years, it's just now being used as a scapegoat to draw attention away from the government's failed revenue policies."
And it's true that differentials are nothing new. Canadian heavy oil takes more energy – and therefore more cost – to process into fuels like gasoline or diesel, so it's always sold for cheaper. According to Patricia Mohr, the Bank of Nova Scotia economist, that discount averaged $18.19 between 2005 and 2009. (Alberta budgets on a $15.97 differential.)
So a $40 discount for Canadian heavy oil is big – but nearly half that discount is perfectly normal. And over the past 12 months, the differential has averaged just over $25, which means it hasn't been much bigger than average.
Still, the current differential is obviously much bigger – and there are ways to sort out what it could be if there was plenty of space on pipelines. Take, for example, the differential between Louisiana light sweet oil (LLS) and Maya oil. Those two blends of crude traded on the U.S. Gulf Coast are roughly comparable to Canadian light oil and Western Canadian Select, respectively. In recent trading, the gap between LLS and Maya has been roughly $13. Some argue that in a logical world, the Canadian heavy oil discount would look more like that – a possibility that emphasizes how much is being lost today.
But the many different ways of calculating things have led to widely varying estimates of the missed revenues for energy companies today. The Canadian Association of Petroleum Producers did a back-of-the-envelope sketch and came to roughly $15-billion, based on current pricing. Martin King, a commodities analyst with FirstEnergy Capital Corp., pegs it at $18-billion.
The numbers are necessarily guesses, since they are based on estimates of what oil prices could be if pipelines weren't effectively full and product went to market unobstructed.
That said, the numbers can also be crunched to show much larger losses. If Canadian crude could make it to tidewater, it would access the kind of international prices that drive LLS and Maya. Compared to that, far more revenue is being forfeited – Mr. King puts it at nearly $30-billion, in the vicinity of the Alberta estimates. Still, that's far more hypothetical, since it's less certain that Canadian oil will achieve international prices, given the troubles industry has encountered building pipelines to the West Coast.
And at least part of the story is that the Alberta government didn't just underestimate differentials. It also overestimated the headline oil prices, expecting a WTI price of $99.25 when it's actually been about $93 over the past 12 months.
Either way, Mr. King said, current differentials are adding up to missed government tax and royalty revenues of about $4-billion to $6-billion. Most of that pain accrues to Alberta.
"You take the mid range of that; $5-billion that's wiped out just because we're taking a hit on spreads," he said.
The Globe and Mail, Tuesday, Jan. 22, 2013
Byline: Nathan Vanderklippe
Low oil prices darken Alberta’s fiscal forecast
While Horner blamed volatile world markets for the gloomy first quarter, opposition MLAs and other critics said the results are a vindication of their accusations the Redford government wildly overestimated its income projections in its pre-election budget last February.
"The bubble has officially burst on the 'Alison Wonderland' budget," Wildrose critic Kerry Towle said. "This government's inflated budget projection are now exposed for exactly what they were, a pre-election scheme to deceive Albertans and hide the true extent of their fiscal incompetence and mismanagement."
The February budget called for a relatively modest $886-million deficit, which the government promised was to be the last of five straight years of deficits before returning to a surplus in 2013-14.
The budget was based on the belief revenue would exceed $40 billion for the first time in the province's history, a target opposition critics said was unrealistic in light of the continued struggles of the global economy.
The results unveiled Thursday seem to uphold those arguments, as the province said revenue was off by $400 million in the first-quarter from April 1 to June 30. That now has the government on track toward a deficit of between $2.3 billion and $3 billion, triple what was initially estimated.
The biggest reason for the change is a massive drop in energy income. The province expected to take in almost $2.8 billion in non-renewable resource revenue during the first three months, but instead ended up with about $1.9 billion. Bitumen royalties alone were off target by about $550 million, while lease sales of Crown land were down about $215 million.
The decline was partially offset by better-than-expected revenue in other areas, including personal income tax and money from premiums, fees and licences.
Horner rejected the idea his department had been too optimistic in its revenue estimates.
He said the budget was based on a belief oil prices would average about $99 a barrel during the year, a prediction that corresponded with projections made by various banks and financial organizations.
However, prices in the first three months trended considerably lower, dropping as far as $77 in late June. Bitumen royalties were also affected by pipeline and refinery shutdowns. Horner said that inability to get product out means that Alberta gets a lower price for its oil than what is charged on the world market.
Standing in front of large coloured charts that showed the ups and downs of various fiscal updates over the past few years, Horner urged Albertans not to read too much into this year's first-quarter results.
He said the "roller-coaster" Alberta is experiencing is largely due to factors beyond its control, including economic uncertainty in the U.S. and Europe, political instability in the Middle East and massive growth in China.
"They can make it a challenge when it comes to forecasting revenues that will go into our coffers over the course of the full year," he said. "It's important to remember that much of the fiscal year is still ahead of us. This is a snapshot of a certain point in time and doesn't tell the whole story."
He noted oil prices have since returned to about $95 a barrel. For every $1 oil falls below the projected rate, Alberta loses about $220 million.
While revenue remains a challenge, Horner said the government does have control over its spending. Among the belt-tightening measures coming, the minister said he is asking provincial departments to come up with $500 million in savings this year, though it's not yet clear where those cuts will be applied.
Horner said department spending will also be capped at original budget allocations, meaning there will be no new money available for public sector contracts until the financial picture improves. He said that didn't necessarily mean a pay freeze for public sector workers, but departments will have to live within whatever funding they received at the start of the year.
"I think there should be a message in this for them (the unions) in the sense that we are going to hold the line on our spending. We are tightening our belts, so we would expect all others to do the same."
Furthermore, capital spending will also be reviewed. This week, the government announced it was cancelling a new police college for Fort Macleod, and Horner said he will as departments to look for similar projects that may not be needed right away. The new Royal Alberta Museum is safe, he said.
Shannon Phillips, a policy analyst with the Alberta Federation of Labour, said Horner's warning has produced concern that workers such as teachers and doctors — two groups currently in negotiations — will pay the price for government mismanagement of the books. She said the government wouldn't have such revenue problems if it took a fair share of royalties from oil companies, and increased taxes on wealthy corporations and individuals.
"Basing your budget on rosy oil prices is like basing your household budget on what you might win at a VLT terminal."
Alberta Teachers' Association president Carol Henderson said she expects the province to keep its promise to better fund education. She said as long as the government keeps to the budget that was already allocated, there shouldn't be an issue during negotiations.
Alberta Medical Association president Dr. Linda Slocombe said in statement it was unclear how Horner's warning might affect negotiations with doctors, who haven't had a fee increase since 2010.
While NDP critic David Eggen called on the government to fix the situation by taking in more royalties, Towle said the solution is to reduce spending. She said the financial problems will get worse as the premier tries to implement election promises, including scores of new schools and Family Care Clinics.
Any year-end deficit will be paid for out of the province's sustainability fund, which had declined to about $6.3 billion as of June 30.
Despite the government's struggles, Horner said the Alberta economy is doing well with low unemployment, and strong growth in housing starts and retail sales.
Much of 2011-12 was also gloomy and unpredictable, with the province initially projecting a $3.4-billion deficit. By year's end, the red ink was reduced to just $23 million, largely thanks to record land lease sales.
The Edmonton Journal, Thursday August 30 2012
Royalties and upgrading: Two words that politicians dare not utter
In the Harry Potter stories, characters are too afraid to utter the name of the villain, Voldemort.
Something similar appears to be happening in the Alberta election when it comes to two key issues related to the oil sands: upgrading and royalties.
Albertans clearly want to talk about these issues, but for some reason, most of our politicians seem unable or unwilling to speak.
Consider the results of two recent polls:
A Leger Marketing poll shows that about 60 per cent of Albertans don't think they're getting fair value for the sale of our province's collectively-owned energy resources. A ThinkHQ poll shows an even greater majority (81 per cent) would support some kind of government intervention to encourage upgrading and discourage raw bitumen exports.
Despite the clear weight of public opinion, only one of the five parties contesting the race (the NDP) says it would even consider increasing royalty rates. Most are also silent on the subject of upgrading.
Why the remarkable disconnect between what voters want and what parties are willing to offer? The answer can be summed up in two words: power and fear.
Everyone knows that oil and gas is Alberta's most powerful industry – and they have aggressively used that power to get a sweetheart deal for themselves.
They've also used their power to make sure that it's industry – not ordinary Albertans or their elected representatives – who decide how and when to develop our province's resources.
It was the industry, for example, that actually wrote the oilsands royalty regime that Ralph Klein implemented in mid-90s – a regime which, in most important respects, is still in place today.
How sweet is the deal? Oil companies pay a token royalty of as little as one per cent on gross revenues until all of a project's costs are paid off. Even after pay-out, royalties are dramatically lower than rates in other jurisdictions.
No other industry in Canada enjoys this kind of special treatment. It means developers get their main input – bitumen – virtually free.
To put it another way, it means that ordinary Albertans (who own the bitumen) are actually paying for the construction of all those oilsands facilities (in the form of foregone revenues).
In a similar way, the energy industry has been successful in discouraging government from implementing policies aimed a increasing value-added production – even though such measures were instrumental in creating Alberta's successful petrochemical industry in the 70s and 80s.
To defend the status quo they've created, the industry and its defenders employ several fear-based arguments. For example, they say that ultra-low royalties are needed to attract investment to a high-cost sector like the oilsands. This argument may have carried some weight when the oilsands were a marginal industry and oil was trading at $15 a barrel, as it was when the current royalty regime was introduced in 1997. But should we continue the giveaways when oil is trading at $100 a barrel and the industry is making profits of $32 billion a year, as it did in 2010?
The industry also argues that their prescription of low royalties, limited government oversight and quick project approvals (a strategy recently embraced with gusto by the Harper government) means "jobs, jobs, jobs" as far as the eye can see.
But this strategy has several obvious downsides. For example, it means that more and more potential jobs in upgrading will be sent down the pipeline to place like Texas and China. It also means that the province doesn't get the revenue it needs for things like high-quality health care and education and care for seniors and the kids of working parents.
Ever wonder why Alberta, Canada's wealthiest province, is running multi-billion deficits and saying it can't afford to maintain middle-of-the-road spending on vital public services? Or why the Heritage Fund is worth less on a per capita basis today than when it was established 35 years ago?
That's what happens when you sell your most important assets for a song. So why won't Alberta politicians speak out and demand a better deal on royalties and jobs?
The problem is that they are taking their cue from Ed Stelmach when they should be looking for inspiration in bolder (and much more successful) former Conservative premiers like Peter Lougheed and Newfoundland's Danny Williams.
Unlike Stelmach – who didn't fight back when a recession-induced slowdown in investment was used by industry as proof that royalties should never be raised– Lougheed and Williams both understood that you have to bargain the best possible deal with energy companies, not simply cater to their every whim.
As Lougheed famously said, Albertans need to think like owners. Owners know that sometimes they need to accept less. But they also know that, when conditions improve, they can and should demand more. Anything less would amount to being played for a sucker.
These are the keys to breaking the spell that has rendered most of our politicians mute: they need to remember that Albertans, not oil companies, are the owners of their resources and they have to find the will to bargain hard on behalf of the people they represent.
Gil McGowan is president of the Alberta Federation of Labour, representing 145,000 unionized Alberta workers.
Edmonton Journal, Wed Apr 4 2012
Byline: Gil McGowan
Alberta Election 2012: Albertans OK with tax increases to fund essential services: poll
EDMONTON - Are Albertans ready to embrace the idea of tax increases?
New polling suggests they might be, as long as the money is used for essential services and infrastructure.
"It's definitely surprising in this province that there appears to be a willingness to pay higher taxes from more than half of Albertans," said Ian Large of Leger Marketing, which conducted the poll for the Edmonton Journal and the Calgary Herald.
"This isn't an invitation to raise taxes; it's more of a tolerance for a tax increase."
The poll, conducted March 22-25, asked participants if they would be amenable to paying higher taxes if they were guaranteed the money would go to government programs and improvements to schools, highways and hospitals.
A full 56 per cent of respondents answered yes, while 42 per cent said no. Support was highest in Edmonton with 59-per-cent support for the idea, followed by Calgarians (56) and people living outside the two cities (53).
While not an overwhelming endorsement, the result is nonetheless unexpected in a province where any mention of tax hikes has been considered a non-starter, Large said.
"The critical component here is that it's for services and improvements that affect people's lives," he said. "That's where people want to see their tax dollars spent, and I think there is a recognition there is a bit of infrastructure deficit in the province and people believe there might be a need to raise taxes for that."
Among decided voters, 40 per cent of Wildrose supporters said yes to the tax question. Support was higher among respondents supporting the Progressive Conservatives (59), the Liberals (82), the NDP (83) and undecided voters (53).
Alberta has the lowest tax regime in the country, including low corporate rates, a flat, 10-per-cent income tax rate and no provincial sales tax.
Some opposition parties, including the Liberals and NDP, have pushed for a more progressive structure that would charge a higher rate to large corporations and high-earning Albertans.
The Wildrose has promised no tax hikes. The PCs have also vowed no increases for three years, though Alison Redford's government has said it wants to have a "conversation" with Albertans about the province's financial structure.
Large noted the poll question did not mention a specific type of tax increase, whether it be income tax, a sales tax or corporate taxes.
The poll also found Albertans are generally not in favour of cuts to services and programs to balance the budget.
About 39-per-cent of respondents said they would cut to get the province out of deficit, while 54 per cent said no.
Support for cuts was strongest from respondents outside the cities (44), followed by Calgarians (41) and Edmontonians (31).
In a somewhat unexpected result, just 49 per cent of decided Wildrose voters said they would trim program costs. That was ahead of backers for the PCs (42), Liberals (30), NDP (19) and undecided voters (35).
The telephone survey of 1,215 Albertans has a margin of error of plus or minus 2.8 percentage points, 19 times out of 20. The margin increases when results are broken down by region or demographic.
Edmonton Journal, Fri Mar 30 2012
Byline: Keith Gerein
Alberta election rivals applaud fiscal blueprint
NDP opposes environmental rule changes
While Ottawa and the province have clashed in the past, the Conservative federal budget released Thursday received a warm reception from Alberta's two main contenders for the premier's office.
The budget's highlights include raising the age for Old Age Security from 65 to 67 for those currently under the age of 54, the elimination of nearly 20,000 civil service jobs over three years and cuts to program spending, though overall expenditures will continue to climb as the government projects being out of deficit in 2015-2016.
The federal Tories are also promising a new shortened environmental review process for major natural resource industrial projects, including the proposed Northern Gateway pipeline to British Columbia, and to put some environmental reviews strictly under the provinces.
With a provincial election underway, both Progressive Conservative Leader Alison Redford and Wildrose Party Leader Danielle Smith linked themselves to the budget's measures.
Redford said her PC government has been working with the federal government to streamline environmental regulations and is similar to measures undertaken already in Alberta.
"We know that industry thinks this is a better way to be competitive. I think we'll see not just on the Gateway project but on other projects, this will be a tremendous improvement," she told reporters in Edmonton.
Redford praised the federal government's plans to balance the budget in three years without tax increases and noted her government's projection of a balanced budget in 2013, with no tax hikes.
In a news release, Smith - who has slammed the PCs for out-of-control spending - compared the federal financial document to Wildrose's budgetary plans.
She applauded the Tory budget for reducing "wasteful government spending and . . . unnecessary levels of bureaucracy."
Ben Brunnen, chief economist of the Calgary Chamber of Commerce, said "this is a good budget for Alberta business."
The changes to OAS include allowing for recipients to defer receiving their payments for up to five years with no penalty.
That's an incentive for those wanting to stay in the workforce to do so, helping to ease the labour shortage that is beginning to bite the province and is expected to get worse.
Raising the eligibility age in 2023 should also have a positive effect in the longer term on the labour pinch, said Brunnen.
While details are lacking, Ottawa has also pledged to make the temporary foreign worker program more aligned with labour market needs and to work with the provinces on improving the recognition of foreign credentials.
"This is just a full-marks budget," said Brunnen.
A spokesman for the Public Service Alliance of Canada said there has been no indication yet where the planned federal job cuts will take place, meaning the impact on Alberta civil servants is uncertain.
Alberta Federation of Labour president Gil McGowan said the Conservatives are destroying jobs, cutting services and making life harder for seniors for no good reason given the relatively healthy state of the government's books and the Canadian economy.
"These cuts are particularly galling because they're so unnecessary," he said. "This is a road map to a more conservative future where corporations matter more than citizens."
Redford said the government would review the impact on Alberta seniors of raising the age for OAS.
Ted Menzies, the MP for MacLeod and minister of state for finance, said the budget was designed to ensure there was no downloading to provinces.
The federal government will work with the provinces to ensure that changes to OAS don't affect provincial programs that kick in at age 65.
New Democrat Linda Duncan, Alberta's lone Opposition MP, said the federal promise of "one window" for environmental regulation is full of smoke given issues of federal, provincial and aboriginal jurisdiction.
The claim that major projects are hamstrung by red tape is a fallacy, she said.
"Show me one single project that's been denied. Show me an oilsands project that's been denied," said Duncan.
Calgary Herald, Fri Mar 30 2012
Byline: James Wood
Harper budget proves the old adage: “Tory times are tough times”
Spending cuts, OAS changes and giveaways to corporations are unnecessary and irresponsible, say Alberta unions
Based on the magnitude of the cuts and changes contained in today's federal budget, you'd think that Canada was about to "hit the debt wall."
But the truth is that Canada has weathered the global recession better than almost any other industrialized country – thanks largely to its natural resource wealth, decisions made by previous governments and pressure from opposition parties that stopped the previous minority Harper government from enacting harsh cuts at the height of the recession.
"Given the reality of Canada's current economic situation, there's no good reason why we should even be contemplating cuts on this scale," says Gil McGowan, president of the Alberta Federation of Labour.
"What we see with today's budget is a plan that will turn a rough patch into really tough times. It's the opposite of what this country needs. It's both unnecessary and irresponsible."
If there's a problem, McGowan says it's that the Harper government's various tax cuts have cost the federal treasury more than $200 billion since 2006. For example, the effective federal tax on corporate profits has dropped to its lowest rate since before the Second World War.
"The only reason that the Harper government isn't looking at a balanced budget right now, or at least in the very near future, is because it has given away literally hundreds of billions of dollars in revenue in a very short period of time," says McGowan.
"If there's a crisis, it's a crisis caused by the Harper government's irresponsible tax giveaways, especially to profitable corporations that are no longer being asked to pay their fair share of the cost of keeping this country running. The crime in this budget is that ordinary Canadians – especially seniors – are being forced to pay the price for Stephen Harper's ideologically driven irresponsibility."
Despite Finance Minister Flaherty's argument that the cuts really only amount to "backroom efficiencies," McGowan says ordinary Canadians will feel the bite of this budget in three important ways.
First, there will be a real and noticeable erosion in the quality of service provided by the federal government. With fewer workers, the government simply won't be able to provide the same level of service that Canadians need and expect in everything from handling passport applications to inspecting food.
(over)
Second, the Harper government's plans to restrict payments to the provinces and remove the "strings" attached to the remaining dollars will mean it will become even more difficult for provinces to pay for things like health care and more likely that governments like ours in Alberta will resort to increased privatization.
Third, by increasing the age of eligibility for OAS from 65 to 67, the Harper government will be taking thousands and thousands of dollars out of the pockets of seniors. This will force many seniors into poverty or to the brink of poverty.
"As it stands right now, Canadians between age 65 and 67 get an average of 25 per cent of their income from OAS," says McGowan. "By taking that income away, we run the risk of reversing one of the biggest public policy successes of the 20th century: which was the use of GIS and OAS to pull almost all Canadian seniors out of poverty."
McGowan points out that the attack on OAS is particularly galling because the federal government's own Parliamentary Budget Officer has concluded that the current OAS system is affordable and that increasing the eligibility age to 67 is unnecessary and unwarranted.
"The real thread that runs through this budget has to do with gifts and giveaways to Stephen Harper's corporate friends," concludes McGowan.
"The cuts to public-sector jobs and benefits are being made so Harper can finance his tax giveaway to big business. His changes to OAS eligibility rules are being made to address business concerns about a looming labour shortage – just make seniors work longer! And the so-called streamlining of approvals for resource projects is really a gift to oil companies so they no longer have to worry about pesky things like environmental impacts and the public good.
"In many ways, this is more than a budget: it's a road map towards a conservative future in which corporations matter more than citizens. The Harper government should be ashamed of itself ... and ordinary Canadians should be deeply concerned."
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CONTACT: Gil McGowan, AFL president, 780-218-9888