Study says boom is being mismanaged

gondola

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Full report is here  http://www.ualberta.ca/~parkland ... amingTempestWeb.pdf
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May 9, 2007 - Edmonton - Alberta's economy is quickly overheating but nothing is being done to stop it or prepare for a downturn, says a new study from the Parkland Institute.
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The University of Alberta research institute released a report today entitled Taming the Tempest: An Alternative Development Strategy for Alberta, which argues that the government is neither managing the boom nor preparing for its end.
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"The Alberta government's mishandling of the boom has resulted in growing homelessness, skyrocketing inflation and an economy that is entirely vulnerable to the whims of international energy markets," said Diana Gibson, the institute's research director.

With $169 billion worth of projects slated to go forward in Alberta, including $100 billion for fossil fuels, the province is struggling to keep up with infrastructure demands. Because the province began the boom with an infrastructure deficit, taxpayers are now paying a premium for infrastructure development at the height of the boom.

  q) d: I& J9 ]. Y0 f# u/ _The boom is heavily driven by the construction sector "which makes us quite vulnerable, because a construction phase of a boom is short-lived," said Gibson.

When things cool off, the number of construction jobs will diminish, and workers will seek employment outside of the province, having a negative impact on the economy.

3 P0 V4 Z$ k+ ?, |' {& g" \$ YAdditionally, the province is not moving up "the value-added ladder," she added. The province should send less raw exports south for processing and refining, says Gibson.

"If Alberta were to focus on having those processing, upgrading, refining operators here, we would have more jobs per dollar invested and a higher profit margin," she said, adding that it also reduces the province's vulnerability to oil price changes.
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% M3 M, H5 a! a9 ]) _# SAnd the province is failing to save money for an economic decline, which some experts say could come as early as 2008.
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2 }7 j* J% J6 o3 _"The government itself is projecting steep revenue drop-offs as we switch from conventional oil and gas to tar sands, and yet has no plan in place for sustaining the public sector or the economy post-boom."

Unlike other countries with oil, such as Norway, a large portion of Alberta's fossil fuel revenues contribute to its current operating budget.

$ k1 @' w7 N! `"Alberta has currently only about $14 billion in the Heritage Fund. This compares with Norway which has $300 billion (US) in their resource revenues fund."

  h. z3 h! m) {But Alberta is in an excellent position to make changes to lengthen the boom, prepare for the future, and create a plan for managing infrastructure and employment during the downturn. Right now, convention oil and gas are getting harder to find, and oil exploration is becoming higher risk.

"That's just not the case for Alberta's tar sands - we know where the oil is, and we know how to get it out," said Gibson.
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# C# D/ C5 a- b  @; h3 KThe report states that Alberta can use its unique position to its advantage by charging higher royalties to resource companies, saving 90 per cent of resource revenues for the future, and ending subsidies to oil and gas companies, which are making record profits.
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Other recommendations are made to maximize the boom, including pacing projects by forcing companies to bid for construction permits. Selection criteria would be based on labour market constraints, environmental concerns and a project's value-added characteristics.
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; t; {4 V. k' ~& A9 G) B"The Alberta government does have options right now," said Gibson.
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She argued that the province is out of line with international trends in managing natural resources and wealth.
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4 T4 a2 E) D1 W7 |1 a"Alberta is under-selling its resources and mismanaging the economy, exacerbating the boom-bust cycle. This report shows there are clear alternatives and makes strong recommendations for an alternative path."

smalltown

Average Albertans didn't benefit from this boom. Where did oil money go?

smalltown

The quality of life is dropping with the boom. What's going on?

BaiLing

原帖由 smalltown 于 2007-5-14 09:21 发表
The quality of life is dropping with the boom. What's going on?

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" T$ `$ t6 Y3 ZEXECTELLY,WHAT' GOING IN ON?

forestcloud

inflation