$2,280 in ‘Ralph bucks’ or $2 Billion Buried in the Ground?

-- (historic), Climate Change, Commentary, Energy, Environment, Regulation, Role of Government, Uncategorized

Life provides us with many choices but the difference between personal decisions and the policy choices of politicians is that the latter have an effect upon millions of people.

A perfect example of this distinction is now before Albertans, especially relevant given the tête-à-tête between Premier Ed Stelmach and Calgary Dave Bronconnier over provincial cash. Bronconnier wants more money from the province for more cops (among other priorities); Stelmach had downgraded Calgary city hall’s requests given the mayor’s past rancorous and high-profile methods of placing the blame for city finances on the premier.

I doubt the dispute will last forever. And anyway, transferring more money between governments is often a bad choice; voters forget which level of government is responsible for what service and accountability can suffer as a result.

But concerns about exact accountability aside, here’s another example of a questionable and costly choice: the province’s plans to spend $2 billion to bury carbon emissions—this in an effort to combat global warming some assert is unquestionably man-made. There’s a useful debate there but that’s another column. For the moment, consider other possible options for such money.

The province could write out $2 billion worth of cheques in a new round of “Ralph bucks.” For those new to Alberta or with short memories, “Ralph bucks” refers to the $400 given to each Albertan in 2006 when Ralph Klein was premier. The money came from the surplus. Klein’s choice meant $1,600 for a family of four. It was nothing to sniff at, though the critics did.

That’s one option for the $2 billion now planned for the ground. The new cash distribution would amount to $570 per man, woman, and child, or $2,280 per family of four.

For those who don’t care for that option, there are others. Think of health care or highways. The province could, and this is an admittedly rough ballpark estimate, hire 500 new general physicians at an all-in, all billing and benefits included of $200,000 each (a $100 million per-year cost to the province). That leaves $1.9 billion.

In addition, the provincial government could hire 500 specialist physicians ($300,000 each) and 2,000 more nurses ($100,000 per nurse). Such choices tally to $150 million and $200 million respectively for one year. That still leaves $1,550,000,000 left to allocate.

To spend more, some cash could be used to expand parts of the highway between Edmonton and Fort McMurray beyond existing plans. I don’t know how far $250 million would go; I assume it buys at least a few four-lane sections. That leaves $1.3 billion.

How about eight urban parks at a price tag of $25 million each? That buys a few decent trees, trails, and green patches in various Alberta cities. Deduct $200 million and $1.1 billion is left in the former bury-the-carbon kitty.

Now double the amount currently devoted to winter gas rebates (i.e., plus $330 million), end land title fees for one year ($80 million), and slash crop and hail insurance premiums for farmers by just over half ($90 million). There goes another $500 million.

That leaves $600 million. How about a suspension of motor vehicle licence fees and taxes for one year, this to help out drivers hit by high pump prices? Consumers would save $365 million.

We’re now left with $235 million: One could almost double the budget of the ministry of Tourism, Parks and Recreation for one year. Or the money, if allocated to Sustainable Resource Development or the Environment ministry, would mean budgetary increases of 63 per cent or 58 per cent respectively. Choose one such option of those three and $2 billion has now been spent.

Of course, there are other potential policy choices for $2 billion. Every penny could be plunked into the Heritage fund. Or fuel taxes could be stopped for two-and-a-half years. Or liquor taxes could be suspended for three years. Here’s another option: The province’s portion of the education property tax could be halted for one year; that would still leave over half a billion dollars to allocate somewhere else.

The possible – and practical uses – for $2 billion are almost endless. Or the provincial government could stick with its existing policy plan and bury $2 billion in the ground.