Parkland blog entries by
David Campanella is the Public Policy Research Manager for the Parkland Institute and is based in Calgary. David holds a Master’s degree from York University (MES), where he focused on political economy, and an undergraduate degree from the University of Waterloo (BES, Economics Minor).
In his recent column in the Calgary Herald, “Don’t grumble about lower corporate tax rates,” Rob Breakenridge would like to have his cake and eat it too – corporate tax cuts and higher revenues. Conservatives love promoting corporate tax cuts because it enriches their corporate friends and ultimately means less money to support a generous welfare state.
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This letter to the editor was submitted to the Calgary Herald on July 17, 2012.
One wonders if Mark Milke was still suffering the after-effects of a Stampede-filled weekend when he wrote his terribly one-sided review of Premier Klein's ad-hoc and short-sighted decision to sell-off Alberta's liquor stores, a decision which continues to be a major headache for Albertans.
Incredibly, Milke denies privatization has meant lost revenue. This assertion ignores the fact that today Alberta earns nearly 25% less revenue per litre of alcohol sold than prior to privatization. In fact, Albertans would have enjoyed the benefit of an extra $1.3 billion if government revenue from liquor sales had continued to be generated at pre-privatization levels.
This revenue loss is largely due to the gradual erosion of Alberta's real, inflation-adjusted liquor tax rate. So lower taxes means cheaper booze, right? Wrong. Despite Milke's claim to the contrary, recent research indicates that Albertans pay among the highest liquor prices in the West – prices higher than those on offer in the publicly-owned stores of BC and Saskatchewan.
Alcohol consumption is inextricably linked to health and crime-related problems, primarily involving the occasional heavy-drinker. As a result, rational liquor policy promotes limits on consumption and generates sufficient revenue to address alcohol's consequences. Privatization has meant the opposite in Alberta: higher consumption and diminished public revenue. Is this really worth toasting?
In reality, the real kudos belong to Saskatchewan, where the (primarily) public liquor stores earned the province an extra $9.4 million last year despite selling 135,000 less litres of pure alcohol. More revenue from less consumption? That's a feat worth celebrating.
Public Policy Research Manager at the Parkland Institute
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On Tuesday, July 10th, the Calgary Herald published a column by Matthew Fisher entitled “Norwegians pay a price for saving oil revenues,” found here. Below is my response.
I believe Herald readers can be forgiven if they were confused after reading Matthew Fisher's Tuesday column, for the title promised one thing and the column delivered something quite different.
The headline reads that Norway's determination to sock away vast sums of its oil wealth is less than ideal -- that such a policy comes with a “price.”
The column, however, is largely a description of how the country boasts both a $600 billion savings account and the world's highest living standards.
It would appear that, in Fisher’s view, the hitch with such a remarkable achievement is that Norwegians choose to collectively fund it through taxes. But it's hard to see such a decision as anything other than wise financial planning, since in addition to preventing their economy from overheating and protecting themselves from “dutch disease,” Norwegians have established an inheritance capable of ensuring that the benefits of their finite, fossil-fuelled fortune continues for generations to come. Robust savings, high living standards, and an assured future? Surely this is a “price” most Albertans would be happy to “pay.”
Perhaps Fisher should have mentioned that Norway has a state-owned oil company that returns all oil profits to its citizens, whereas the royalties for Alberta's privately-developed oil, gas, and bitumen resources last year delivered only 9% of the revenue back to Albertans. As this province rapidly burns through its natural wealth, Albertans can only look on with envy as Norwegians enjoy the benefits of wise financial planning.
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