How to Squander the Public Interest – Kevin Taft: Follow the Money (2012)

Kevin Taft (Courtesy: members.shaw.ca)

Kevin Taft (Courtesy: members.shaw.ca)

Kevin Taft was the leader of the Liberal Party of Alberta from 2004 to 2008, and the MLA for Edmonton-Riverview from 2001 to 2012. He was born in Saskatoon, Saskatchewan, which merely enhances his credibility. Follow the Money, his fourth and most recent book, written with Mel McMillan and Junaid Jahangir, employs statistical analysis (2009 figures) and interpretation (2012 ideas) to argue that Alberta’s wealth, specifically its oil wealth, has left rather than remained in the province.

To reach his conclusion, Taft presents the following observations:

  • Follow the Money (Courtesy: amazon.ca)

    Follow the Money (Courtesy: amazon.ca)

    The numbers you select, and where you select them from, influence your conclusions.

  • Alberta’s oilsands, which are the second-largest oil reserve in the world, produce a very large economy with a provincial GDP per capita, at about $65,000, that is some 50% greater than those of the other provinces combined.
  • Alberta has no provincial debt; in fact, it has negative debt of about -$10,000 per capita, whereas other provinces combined have a per capita debt of about +$20,000.
  • Albertan government expenditure per capita is approximately the same as that of other provinces, but expenditure as a percentage of GDP is substantially lower than other provinces’, and declining.
  • Albertan government spending on health care, rather than skyrocketing, has actually displayed moderate growth, when adjusted for inflation and population. Moreover, health care spending exhibits the same characteristics as overall government expenditure.
  • Albertan educational expenditure is modestly greater than the other provinces’, but is partly attributable to a larger number of children in the population.
  • Expenditure on housing and social services displays the same characteristics as overall Albertan government spending.
  • The Albertan human services index (health, plus education, social services, and housing) is approximately as that of the other provinces combined.
  • Albertan government spending on infrastructure (highways, water pipelines, transit, telecommunications), though historically erratic, has risen to over twice per capita what other provinces combined spend. Environmental spending is consistently above average, but even higher is economic development support to corporations.
  • Total government revenues per capita are about 12% greater than the other provinces combined.
  • The Heritage Fund per capita is now worth less than when it was established.
  • Although Albertans’ personal income has risen over the years, taxation has remained relatively unchanged, and a significant proportion of the population, including those in major cities, continues to live on less than $20,000 p.a.
  • Corporate income has risen substantially and relatively steadily, while corporate income tax continues to be low, at about 7% of corporate profits.
Louis Riel

Louis Riel

Corporate profits increased from 1989 to 2008 from 9.6% to 22.8% of provincial GDP. Alberta’s economy is first in the nation in capital intensity, but last in productivity of that capital. Profits in Alberta are twice those elsewhere in Canada and in the United States, but capital is only three-fifths as productive. Corporate profits derive preponderantly from petroleum wealth, that is, from the publicly owned oil and gas resources. In other words, public wealth consistently moves to private shareholders, frequently outside the province (for Alberta has no state-owned oil companies), as a consequence of the unusually generous provincial tax and royalty regimes. This is not in the public interest.

Taft has an interesting closing chapter. Both Louis Riel and Donald Smith had been major delegates to the discussions on the future of Western Canada, at Fort Garry, in the Red River Colony, in the winter of 1870. Taft argues that Louis Riel, the Parliamentarian who was hanged for his efforts in Regina in November of 1885, did more for provincial rights and Canadian democratic rights than did Donald Smith, Commissioner of the Hudson’s Bay Company, federal and financial facilitator for the CPR, and Parliamentarian, who drove the Last Spike at Craigellachie in the same year, nine days before Riel was executed.

Donald Smith driving the Last Spike (Courtesy: sirjohn2015.ca)

Donald Smith driving the Last Spike (Courtesy: sirjohn2015.ca)

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s