For years, economists and environmentalists alike have argued Alberta is too dependent on money from non-renewable resources. For much of the past couple of decades, money from the oil and gas industries has made up the biggest piece of the province’s revenue pie.
A 2010 paper from the C.D. Howe Institute noted that Alberta has much more volatile revenue than its fellow provinces. The paper recommended a “resource revenue stabilization fund” with a cushion of savings to prevent wild swings funds (others have since made similar proposals).
This year, a study from the Centre for Policy Alternatives put the case in much more strident terms, calling that royalties dependence a “staples trap.”
Citing price volatility and “environmental constraints, the authors warned that “Canada’s economy may inherit an economic structure that is increasingly vulnerable to the dramatic but predictable economic changes ahead (as the world adapts to a carbon-constrained future).”
“The Government of Al¬berta has become, for all intents and purposes, a ‘petro-state,’” the paper later added.
The Progressive Conservative government probably wouldn’t see it the same way. But Premier Alison Redford and Finance Minister Doug Horner have said they want the province to rely less on the fossil fuels dug out of its ground.
The government is investing in the refinery business, hoping that upgrading bitumen to diesel will boost margins. A sales tax is out, Ms. Redford has said, and Finance Ministry spokeswoman Robyn Cochrane said the government is “in very early stages” when it comes to finding new ways to make money.
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