How to manage a ‘pink tide’ of corporate bankruptcies, job losses in Alberta
Posted On July 15, 2021
With the provincial government looking to take on the biggest challenges of its life, it has a lot of money to spend on infrastructure.
And it’s spending it on the wrong stuff.
The province is spending more than ever on infrastructure, but the money is going towards projects that are mostly unnecessary and are likely to cost more in the long run than the money would be worth.
And as we’ve seen in the last few years, there’s little reason to believe the government is saving the money on things that might actually be of value.
What are some of the most common projects that the province has been investing in to address its infrastructure woes?
Read moreThe $30 billion provincial budget has earmarked $1.2 billion for projects such as a new toll road on the Peace River in Kamloops, and the development of the Peace Bridge, which will eventually link the Peace Region to the oil and gas hub of Fort McMurray.
The money also went towards $2.5 billion for the construction of a new airport in Burnaby.
But those projects are largely pointless, as they have little or no value.
The $2 billion that the government has been spending on the pipeline project, for example, is going toward the expansion of the oil pipeline network in the north, not improving the infrastructure in the south.
That’s because the existing pipeline will not be upgraded, which is why it was cancelled in the first place.
And because of that, the pipeline is only going to be a marginal improvement to the infrastructure of the region, with its only benefit being the increased transportation capacity.
The $50 billion provincial capital budget has allocated $5 billion to infrastructure projects, but in total the province is only spending $3.5 million a year on those projects, while spending $13.7 billion on the rest of the province’s infrastructure.
The most expensive project in the province, the $80 billion Trans Mountain pipeline expansion, has a $1 billion price tag.
And the government’s $20 billion plan to build the new North American headquarters for Boeing is not a priority.
There is nothing for the government to spend the money to improve infrastructure, because the only way to do that is to spend money on more infrastructure projects.
So the $50 and $60 billion budgets that have been allocated to infrastructure and infrastructure improvement projects are not going towards anything worthwhile.
And that’s because they’re going to make the problems worse.
The province is also spending almost $1 trillion on public transit and transportation projects, which include the $2,500 tax hike that was implemented on November 18, but which is likely to be offset by other transit levies that are being implemented.
That means the province will end up spending about $3,200 per resident per year on transportation, which could make things worse for the people who live in the region.
The transit levys also are going to increase the price of housing, as prices in the city of Edmonton are already going up.
And with the Alberta government trying to cut the cost of housing in order to make room for the Trans Mountain expansion, there are also plans to increase prices in other areas of the country, as well.
What’s the problem?
Alberta’s infrastructure woes are largely caused by the fact that the provincial economy is not strong enough to sustain them.
Alberta’s economy has shrunk by about $1,400 billion since 2000, and that’s largely because of the decline in oil prices, which has meant less revenue coming in.
The oil and oil-related industries have shrunk by almost 20 per cent over the same period.
In other words, Alberta has lost nearly $1 million in real income per person every year since 2000.
That money has been used to pay for infrastructure and education, and in many cases those are also projects that have no significant impact on the economic health of the people living in the regions.
The only way Alberta could afford these massive infrastructure spending is if it was looking to diversify its economy away from the oil industry.
But that’s not happening, as the province continues to pump more money into its infrastructure programs to the tune of more than $200 billion in total.
There are two ways that the state can reduce its dependence on oil.
One is to stop spending money on infrastructure and instead focus on investing in more sustainable, renewable energy.
That could mean building renewable power plants, such as wind turbines or hydroelectric dams.
The other is to create more job opportunities in the areas of technology and the arts.
These are the kinds of opportunities that can help people in the communities in Alberta and the provinces around the country who depend on Alberta for jobs and revenue.
And if we’re not careful, those kinds of things are just going to cause Alberta to be more reliant on oil, and we’re going be in a very bad place for long-term economic development in the future.