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.
...The vast majority of people are, well... people. Their motivations are much more complex. Recent research has refuted the lopsided and naive picture of humanity represented by Homo economicus. Interestingly, a lot of this research is taking place within the field of economics...
No sales tax until the oil runs out is a very short-sighted approach. Does Minister Snelgrove really believe that Albertans will have money to pay higher taxes when the oil is gone?
In today's budget it is expected again that the Tories will claim to be protecting health care spending but exercising fiscal austerity in other pieces of the budget. What the Tory government missed this year and last is that health care spending is not defined by what is spent on acute care.
Current Tory critics and leadership hopefuls including the Wildrose party have focused the 2011 budget debate on infrastructure spending - saying it is 'out of control.' Parkland's new research, released today shows clearly that infrastructure spending is not out of control...
On February 24, Alberta’s beleaguered Tory government will bring down its budget. In anticipation, much of the province’s pro-business/private sector establishment has given the government advice on “holding the line” or perhaps even making cuts to expenditures.
According to the Wildrose leader Danielle Smith, the Tory government should limit spending increases to the rate of inflation plus population growth and protract billions of dollars in capital spending to help balance the books (http://bit.ly/gESnpU). This shows a profound lack of understanding of Alberta's economy, spending levels and needs.
Already “under attack for allegedly being rude and dismissive when he was health minister,” current Energy Minister Ron Liepert conceded he hadn’t read the Parkland Institute’s new report on vast oilpatch profits but that didn’t stop him from dismissing it...