03/26/2013 07:40 EDT | Updated 05/25/2013 05:12 EDT

Alberta's Intergenerational Theft: We're Just Getting Started

Future Albertans, future children and grandchildren of this province call the cops, you have been robbed.

Actually, robbed may be too generous a term: this has been no shoplifting offense. You have been victim of grand larceny. This theft is on par with the scam pulled by Bernie Madoff. It makes the Great Train Robbery look like child's play.

You see, myself - in fact all citizens of this province - have stolen your inheritance. Over the course of the last 25 years, our province has taken in and spent all of the $150 billion in one-time resource revenue brought into the public purse. And, with the release of last week's budget, it looks like this inter-generational theft is just getting started. Instead of paying for what we use, we've opted to continue burning through a one-time source of revenue, start accumulating debt, and leave the next generation with the bill.

Call me crazy but I come from a school of thought, that it is not our God-given right to spend all of this one-time wealth as soon as we get the barrel of oil out of the ground. You sell a barrel of oil, you never have that barrel of oil to sell again: a prudent society, and a prudent government, would convert that resource wealth into another revenue generator.

Premier Lougheed understood this and established the Heritage Trust Fund in the late 1970s, but subsequent governments lost their way. That fund - designed to generate revenue and secure our province's future - is actually smaller today in real terms than it was when Premier Lougheed left office.

The budget recently introduced by Minister of the Treasury Doug Horner pays lip service to this problem by promising to save in the future, once the stars align and the coffers are full again. But this budget does little, if anything to address this issue in real terms and in many ways simply ensures this theft will continue.

Although the budget now has a theoretical savings component, let's be clear, it does not begin to reduce our reliance on fossil fuel revenues. Over the course of the three-year budget cycle we will continue to spend virtually all of the projected $26 billion in resource revenue expected to come in to the public purse, and even this windfall will not be enough to balance the books.

This budget not only ensures the continued spending of the oil wealth, but we will go into debt some $17 billion by 2016. Although the premier once stated that "we must ensure that our actions are not only fiscally responsible and fair, not only to this generation but to those that follow." This sentiment is not being acted upon.

Much ink has been spilled on whether Alberta has a spending problem or a revenue problem. Rob Anderson of the Wild Rose believes it is the former. I believe it is the latter. There may be some truth in both arguments: Alberta is the lowest taxed yet highest spending province in Canada. Our personal and corporate income tax revenue does not even cover the cost of Health Care, let alone any other government department. We fund this amazing situation not through genius or good planning, but by Inter-generational theft. Instead of paying for what we use through taxation or by going without public services we have said "we want it all". Frankly, let future generations take care of themselves.

Virtually every economist over the last 25 years, whether they be from the right side of the political spectrum like Jack Mintz from the Calgary School of Public Policy or from the left, like Greg Flanagan from the Parkland Institute, tax reform in one manner or another needs to happen. If this government and we the people of Alberta do not want to continue to be guilty of inter-generational theft, our fiscal structure needs to be reworked and we must pay for much more of what we use in government services with our taxes or, if we don't want to pay the taxes, go without the services. With the recent budget, we continue our unethical reliance on resource revenue to pay our daily bills. We as a society need to demand that our government put an end to this practice unless it we think it's okay to be guilty as charged.