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Alberta

Alberta government should pay dividends to Albertans from Heritage Fund

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From the Fraser Institute

By Tegan Hill and Joel Emes

Despite promising in February to rebuild the Heritage Fund to help eliminate Alberta’s reliance on resource revenue, last month Alberta Premier Danielle Smith said she plans to use income from the fund to “assist in de-risking projects” in the oil and gas sector (in other words, projects that can’t secure financing from private lenders). Clearly, if Alberta has any hope of building up the Heritage Fund, it needs robust fiscal rules to help ensure governments responsibly grow the fund—and don’t raid it for other purposes.

The Lougheed government created Alberta’s Heritage Fund in 1976 to save a share of the province’s resource revenue for the future. Since its creation, however, governments have only contributed resource revenue in 11 out of 48 years of the fund’s existence, and just 3.9 per cent of total resource revenue has been deposited in the fund over its lifetime. Instead, governments have largely spent away onetime resource revenues, contributing to Alberta’s boom-and-bust cycle, rather than saving a share of resource revenue to turn it into a financial asset that can generate steady income over time.

While Premier Smith says she wants to build up the fund so its investment income (i.e. earnings) can eventually replace resource revenue in the budget, the fund’s earnings in 2023/24 are a projected $2.1 billion compared to a projected $19.4 billion in resource revenue. Obviously, Alberta needs a new approach to grow the fund. On this front, it can look to Alaska’s experience with its Permanent Fund, which was also created in 1976 but has grown much larger over time.

Unlike Alberta’s Heritage Fund, Alaska’s fund operates under robust fiscal rules. First, according to Alaska’s constitution, the state government must deposit at least 25 per cent of all mineral revenues into the fund each year. Alberta could introduce a similar constitutional rule.

In addition, a share of the Alaska fund’s earnings are set aside each year to ensure that the principal of the fund is not eroded through inflation. Alaska also prohibits use of the principal without approval by a referendum; the government may only spend the earnings of the fund (minus what’s needed to inflation-proof the principal).

And crucially, there’s the dividends—a topic that would surely pique the interest of many Albertans. In Alaska, the government pays a share of the fund’s earnings to Alaskan citizens via a dividend, which has helped support growth in the fund over the long term. By giving citizens an ownership share in the state’s resource fund, Alaskans recognize their vested interest and demand that the state maximize returns. Put simply, due to the annual dividend, Alaskans want the government to maintain the Permanent Fund’s health. And any government that tried to use the fund for irresponsible purposes would face the ire of Alaskan voters.

Which brings us back to Alberta. If the Smith government began contributing 25 per cent of resource revenue to the Heritage Fund and inflation-proofing the principal this year, it could pay each Albertan a dividend worth between $148 to $297 in 2024/25, equivalent to $594 to $1,187 per family of four. From 2024/25 to 2026/27, each Albertan could receive a total of $571 to $1,108 in dividends, equivalent to $2,284 to $4,430 per family of four. And as the fund grows, so would the dividends.

The Smith government has promised to rebuild the Heritage Fund, yet at the same time wants to use the fund’s earnings to “assist in de-risking” energy projects in the province. Without a mechanism to ensure growth of the fund, it will remain vulnerable to the whims of governments. Alberta should learn from Alaska’s success and start paying annual dividends to Albertans.

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Alberta

Ford and Trudeau are playing checkers. Trump and Smith are playing chess

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By Dan McTeague

 

Ford’s calls for national unity – “We need to stand united as Canadians!” – in context feels like an endorsement of fellow Electric Vehicle fanatic Trudeau. And you do wonder if that issue has something to do with it. After all, the two have worked together to pump billions in taxpayer dollars into the EV industry.

There’s no doubt about it: Donald Trump’s threat of a blanket 25% tariff on Canadian goods (to be established if the Canadian government fails to take sufficient action to combat drug trafficking and illegal crossings over our southern border) would be catastrophic for our nation’s economy. More than $3 billion in goods move between the U.S. and Canada on a daily basis. If enacted, the Trump tariff would likely result in a full-blown recession.

It falls upon Canada’s leaders to prevent that from happening. That’s why Justin Trudeau flew to Florida two weeks ago to point out to the president-elect that the trade relationship between our countries is mutually beneficial.

This is true, but Trudeau isn’t the best person to make that case to Trump, since he has been trashing the once and future president, and his supporters, both in public and private, for years. He did so again at an appearance just the other day, in which he implied that American voters were sexist for once again failing to elect the nation’s first female president, and said that Trump’s election amounted to an assault on women’s rights.

Consequently, the meeting with Trump didn’t go well.

But Trudeau isn’t Canada’s only politician, and in recent days we’ve seen some contrasting approaches to this serious matter from our provincial leaders.

First up was Doug Ford, who followed up a phone call with Trudeau earlier this week by saying that Canadians have to prepare for a trade war. “Folks, this is coming, it’s not ‘if,’ it is — it’s coming… and we need to be prepared.”

Ford said that he’s working with Liberal Finance Minister Chrystia Freeland to put together a retaliatory tariff list. Spokesmen for his government floated the idea of banning the LCBO from buying American alcohol, and restricting the export of critical minerals needed for electric vehicle batteries (I’m sure Trump is terrified about that last one).

But Ford’s most dramatic threat was his announcement that Ontario is prepared to shut down energy exports to the U.S., specifically to Michigan, New York, Wisconsin, and Minnesota, if Trump follows through with his plan. “We’re sending a message to the U.S. You come and attack Ontario, you attack the livelihoods of Ontario and Canadians, we’re going to use every tool in our toolbox to defend Ontarians and Canadians across the border,” Ford said.

Now, unfortunately, all of this chest-thumping rings hollow. Ontario does almost $500 billion per year in trade with the U.S., and the province’s supply chains are highly integrated with America’s. The idea of just cutting off the power, as if you could just flip a switch, is actually impossible. It’s a bluff, and Trump has already called him on it. When told about Ford’s threat by a reporter this week, Trump replied “That’s okay if he does that. That’s fine.”

And Ford’s calls for national unity – “We need to stand united as Canadians!” – in context feels like an endorsement of fellow Electric Vehicle fanatic Trudeau. And you do wonder if that issue has something to do with it. After all, the two have worked together to pump billions in taxpayer dollars into the EV industry. Just over the past year Ford and Trudeau have been seen side by side announcing their $5 billion commitment to Honda, or their $28.2 billion in subsidies for new Stellantis and Volkswagen electric vehicle battery plants.

Their assumption was that the U.S. would be a major market for Canadian EVs. Remember that “vehicles are the second largest Canadian export by value, at $51 billion in 2023 of which 93% was exported to the U.S.,”according to the Canadian Vehicle Manufacturers Association, and “Auto is Ontario’s top export at 28.9% of all exports (2023).”

But Trump ran on abolishing the Biden administration’s de facto EV mandate. Now that he’s back in the White House, the market for those EVs that Trudeau and Ford invested in so heavily is going to be much softer. Perhaps they’d like to be able to blame Trump’s tariffs for the coming downturn rather than their own misjudgment.

In any event, Ford’s tactic stands in stark contrast to the response from Alberta, Canada’s true energy superpower. Premier Danielle Smith made it clear that her province “will not support cutting off our Alberta energy exports to the U.S., nor will we support a tariff war with our largest trading partner and closest ally.”

Smith spoke about this topic at length at an event announcing a new $29-million border patrol team charged with combatting drug trafficking, at which said that Trudeau’s criticisms of the president-elect were, “not helpful.” Her deputy premier Mike Ellis was quoted as saying, “The concerns that president-elect Trump has expressed regarding fentanyl are, quite frankly, the same concerns that I and the premier have had.” Smith and Ellis also criticized Ottawa’s progressively lenient approach to drug crimes.

(For what it’s worth, a recent Léger poll found that “Just 29 per cent of [Canadians] believe Trump’s concerns about illegal immigration and drug trafficking from Canada to the U.S. are unwarranted.” Perhaps that’s why some recent polls have found that Trudeau is currently less popular in Canada than Trump at the moment.)

Smith said that Trudeau’s criticisms of the president-elect were, “not helpful.” And on X/Twitter she said, “Now is the time to… reach out to our friends and allies in the U.S. to remind them just how much Americans and Canadians mutually benefit from our trade relationship – and what we can do to grow that partnership further,” adding, “Tariffs just hurt Americans and Canadians on both sides of the border. Let’s make sure they don’t happen.”

This is exactly the right approach. Smith knows there is a lot at stake in this fight, and is not willing to step into the ring in a fight that Canada simply can’t win, and will cause a great deal of hardship for all involved along the way.

While Trudeau indulges in virtue signaling and Ford in sabre rattling, Danielle Smith is engaging in true statesmanship. That’s something that is in short supply in our country these days.

As I’ve written before, Trump is playing chess while Justin Trudeau and Doug Ford are playing checkers. They should take note of Smith’s strategy. Honey will attract more than vinegar, and if the long history of our two countries tell us anything, it’s that diplomacy is more effective than idle threats.

Dan McTeague is President of Canadians for Affordable Energy.

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Alberta

Your towing rights! AMA unveils measures to help fight predatory towing

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From the Alberta Motor Association

Know Before the Tow: Towing Rights in Alberta

Predatory towing is a growing concern in major cities across the province. The Alberta Motor
Association (AMA), in partnership with the Calgary Police Service and Calgary Fire Department,
wants to ensure Albertans are not only aware of this emerging issue but also know how to stop
it.

Today, AMA launches Know Before the Tow—a new, provincewide awareness campaign that
empowers Albertans with the knowledge needed to stay confident and in control when faced with
a tow scam. The campaign features a list of five key towing rights that every Alberta driver should
know:

1. You have the right to refuse unsolicited towing services.
2. You have the right to choose who tows your vehicle, and where, unless
otherwise directed by police.
3. You have the right to access your vehicle to retrieve personal items during a
storage facility’s business hours.
4. You have the right to ask if the towing company receives a kickback for taking
your vehicle to a particular storage facility or repair shop.
5. You have the right to a quote prior to service, and an itemized invoice prior to
making payment.

“Being in a collision or broken down at the roadside is stressful enough; the last thing any Albertan
needs is high pressure from an unscrupulous tower,” says Jeff Kasbrick, Vice-President,
Advocacy and Operations, AMA. “These towing rights are clear and remind every Albertan that
they’re in the driver’s seat when it comes to who they choose to tow their vehicle.”

Edmonton and Calgary in particular are seeing increasing reports of predatory towing. Unethical
operators will arrive at a collision or breakdown scene uninvited, create a false sense of urgency
to remove the vehicle, and ultimately leave drivers facing huge fees.

Starting today, Albertans can visit ama.ab.ca/KnowBeforeTheTow to download a digital copy of
their towing rights, helping them feel confident if faced with a tow scam. And soon, all AMA centres
will offer free print versions, which are small enough to tuck in a glovebox.

“Alberta’s towing industry is still highly reputable, with the vast majority of operators committed
to fair and professional service. In fact, AMA and our roadside assistance network is proud to
represent 80% of all private-passenger tows in the province, so our members can be confident
that we’ll always protect them—just as we have for nearly 100 years,” says Kasbrick.

“By knowing your rights and choosing trusted providers like AMA, you can avoid unnecessary
stress, costs, and uncertainty. Because the road to recovery after a collision shouldn’t have to
include fighting for your vehicle.”

Sergeant Brad Norman, Calgary Police Service Traffic Section, says law enforcement continues
to work diligently with first responders and community partners like AMA to put the brakes on
predatory towers, who “are showing up at collision sites and pressuring overwhelmed and
frightened victims into paying high towing rates.”

“Our priority is to ensure the safety of collision victims, the public, and first responders at
collision sites. Part of this effort is educating motorists about their rights so that they Know
Before the Tow that they can say no to unsolicited towing services and choose a reputable
tower of their choice instead,” says Norman. “No one deserves to be taken advantage of after
being involved in a collision.”

To learn more, and to view an expanded version of Alberta towing rights, visit
ama.ab.ca/KnowBeforeTheTow

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