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Jeffrey Simpson (Brigitte Bouvier For The Globe and Mail)

Jeffrey Simpson

(Brigitte Bouvier For The Globe and Mail)

Save resource money for the future? Nah, says Alberta Add to ...

Dead on arrival. Such is the fate that awaits the report from a blue-ribbon panel on Alberta's future.

So radical is the report, from a group who are the antithesis of radicals, that it has no chance of being accepted by the bulk of Albertans. Why? Because the report, in essence, requires short-term pain for long-term gain, a recipe for political defeat almost anywhere.

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No one in Alberta politics with a hope of forming a government would dare offer that option to a public accustomed for decades to using natural resources revenues to pay for today's expenses while saving almost nothing for tomorrow.

Albertans don't tax themselves adequately to pay for the services they demand and use. Instead, governments present budgets - whether in surplus, balance or deficit - that use revenues from natural resources to pay for about 30 per cent of the services.

Long gone is former premier Peter Lougheed's grand plan to build a huge Heritage Fund with resource rents, the interest from which could be used to invest in the diversification of Alberta's economy. Since he departed, governments have largely ignored the fund. Indeed, the province's energy minister, asked about Norway's multi-hundred-billion-dollar savings and investment fund from oil revenues sniffed that Alberta had nothing whatsoever to learn from Norway.

Now, along comes this latest report, commissioned by Premier Ed Stelmach and written by former federal Conservative (and Liberal) cabinet minister David Emerson, working with 11 other great minds from Alberta, the rest of Canada and overseas. The group recommends that Alberta, in effect, do a Norway.

Recommendation One - dead on arrival - says: "stop diverting money received from the sale of non-renewable energy assets into the general revenue fund." In other words, stop paying for today's services with resource revenues, which are volatile, unpredictable and should be set aside for investments tomorrow.

Recommendation Two - also dead on arrival - says: "finance current expenditures using current revenue." Translation: raise taxes equivalent to about 30 per cent of expenditures. Further translation: impose a provincial sales tax and/or raise personal or corporate tax rates.

Consumption today, however, is always easier to sell politically than saving for tomorrow - in Alberta and elsewhere. Since Mr. Lougheed's departure, "services today and let tomorrow care for itself" has been the credo of all Alberta governments. It reached its nadir (or summit, if you prefer) when former premier Ralph Klein cut everyone a $200 cheque as a bonus for the province being flush with cash.

A while back, the estimable Canada West Foundation, recommended something more modest: that 30 per cent of the resource revenues be put into the Heritage Fund. That idea was ignored in the rush to keep taxes low today and forget largely about tomorrow. It's hard to imagine Albertans, having rejected putting 30 per cent aside, will embrace the Emerson report which goes much further.

The Emerson report is radical for another reason: It suggests that the government actively involve itself far beyond today's activities in planning for the province's future. It recommends setting up a fund to invest in the economy, with the money directed into water management, aboriginal education, community colleges and universities; in short, in human capital, environmental stewardship and industries other than oil and gas.

This kind of dirigisme has long fallen out of favour with conservative-minded governments, and is an absolute anathema to the proponents of free-market ideology. They prefer - and their ideas have ruled the roost in Alberta - to keep taxes as low as possible, the government's role as restricted as possible, and the size of government as small as possible.

The Emerson report dramatically challenges that way of thinking and, as such, will find little favour. Premier Stelmach, who asked for the report, is on his way out. Chances are that the contenders for the Conservative leadership will find the report too hot to handle. And the Wildrose Alliance, committed to the government doing even less in the economy, wouldn't dream of touching it.

The report, published several weeks ago, barely stirred a ripple in the province. It was too far-sighted and bold, challenged too many comfortable assumptions, asked for too many short-term sacrifices and, as such, was dead on arrival.

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