Where to find the money for infrastructure

The game is on. Now that the newly installed premier and his formerly unelected ministers have won their seats in the legislature

The game is on.

Now that the newly installed premier and his formerly unelected ministers have won their seats in the legislature and the full provincial cabinet assumed their “elected” positions – meaning the process of having to please the voters is now over – we have begun to hear how the new PC leadership will try to tackle our problems.

As it was widely reported in the provincial media, Mr. Prentice and his ministers have floated the idea of user fees and toll roads to generate funds for vitally needed new infrastructure construction and upgrades of aging roads and transportation network.

They were responding to municipal representatives during a ministerial forum at the fall convention of the Alberta Association of Municipal Districts and Counties (AAMDC) in Edmonton last Thursday.

Predictably, there was reaction from all opposition parties, asking Albertans to resist the indirect form of taxation while Mr. Prentice said he would not make any move without consulting the electorate.

Obviously, the PC leadership is scrambling for a steady source of income given the downward spiral of the oil prices in the international markets and consequent decline of bitumen royalties flowing from the oil sands.

Although nothing has been cast in iron yet, as the electorate, we should be mindful of the fact that the discussion on user fees and toll roads may just be a harbinger of worse days to come and that Albertans must keep themselves informed not to blindly agree to what politicians tell them.

With growth in the energy-hungry China noticeably slowing, and a range of oil producers from Russia to Mexico to Nigeria promising to increase their production just to be able keep their revenues steady, thereby driving down the price further, the possibility of at least a partial shutdown of the operations in the oil sands is closer to reality than it has ever been.

Unfortunately, the problem is not the only in the energy sector.

With the US greenback getting ever stronger, commodity prices are also being hit, and among those negatively affected are also agricultural commodities. While the strong US dollar may seem to be an advantage for Canada’s exporters, the fact that all commodity trading is done with the use of American dollars, that advantage is being wiped out in the international markets.

With our province’s economy basically relying on energy and agriculture, the picture is not very bright and there may be some hardship ahead, and when there is hardship, there is one way to get out of it: hard work and austerity.

But as Albertans, before agreeing to endure the difficult days that might come, we have a right to know how we reached this point: When oil prices were hovering about $110 per barrel in 2011, the then Premier Ed Stelmach was boasting about a more than $20 billion Heritage Fund.

We know understand that it is down to around $17.5 billion and that much of this money has been invested, bringing in meager revenues in this low interest environment.

The question of what happened to the more than $ 2billion aside, one cannot help asking why the provincial government is not using at least part of the Heritage Fund to launch its infrastructure building program and resorting instead to new ways of taxing the people of the province.

Personally, as a voter, I would expect the premier to convince me of the necessity to pay for using the province’s highways before he comes and asks for my vote in the next election.

– Mustafa Eric

 


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