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Alberta

Our sports history has value

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Simple confirmation that the Alberta Sports Hall of Fame has been operating without its standard financial aid from the provincial government prompted some interesting response during the last few days.

In a casual conversation, executive director Tracey Kinsella mentioned last week that COVID-19 made it necessary to cancel at least two annual fund-raisers – the Hall of Fame induction ceremony and its annual invitational golf tournament in Red Deer – and she was concerned about meeting routine expenses.

Consistently, the government’s contribution of $302,000 a year has been in the hands of Hall of Fame officials before the middle of the year. She expressed only mild frustration,, understanding that the coronavirus pandemic and other major financial issues have created major problems far from the world of sports. She did state that government staff members, working below the level of elected or appointed officials, have told her of their efforts to have the money forwarded as quickly as possible.

Perhaps this delay must be seen as part of a long and ongoing drop in Alberta’s financial support to amateur sports at all levels. In the 10-year period ending in 2019, the reduction reached $5.1 million – an average of $500,000 per year. We should hope not.

Some comparative figures seem to be well worth serious study:

* The economic impact of the 2019 Canada Winter Games in Red Deer was $110 million; impact of the 2018 Alberta Winter Games was $3.4 million for the Fort McMurray-Wood Buffalo area and $5.6  million for this host province;

* In 2018-19, Alberta Sport Connection, a sport delivery system disbanded months ago by the UPC, provided $7.2 million to be shared among 80 provincial sport organizations that delivered programming to more than 788,000 Albertans;

* Leduc hosted the 2016 Alberta Summer Games with an economic impact of $3.6 million for the area and $4.9 million for the province.

Still, government aid has dropped. Some citizens suggest minor and amateur sports should not receive government support during troubled times. Today it might be wise to ask Fort McMurray if that community will value the 2022 Arctic Winter Games? The record shows that numerous small- and mid-sized business stepped up during the 2018 Games, a difficult time for fire victims and petroleum companies that have served as a backstop to countless community and area projects.

After the severe floods earlier this year, it’s safe to guess that any international program that will improve community morale while adding some vital dollars to the public purse will be welcome. Incidentally, they’re headed to Wood Buffalo because COVID-19 forced cancellation of the scheduled 2020 event in Whitehorse. Fortunately, some of the dollars set aside and unused in the Northwest Territories have already arrived in Fort McMurray.

These days, surrounded by a crippled economy, I wonder if Alberta now wishes the 2026 Commonwealth Games were headed for Edmonton and 2026 Winter Olympics were coming to Calgary. Both possibilities were seriously discussed before being nixed.

During my five-year term as chair of Alberta Sport Connection, the organization received steady criticism for finishing third of fourth – usually in the rear of Quebec and Ontario – in provincial medal counts. I tried regularly to help almost any government official to focus on the cost of doing business.

It made no impact to point out that Alberta’s per-capita investment in sport programs is (or was) the second-lowest in Canada. Sorry, I can’t remember which province spent less, but I am sure that Saskatchewan receives $24.39 per capita and Newfoundland gets $8.36 per capita.

Alberta receives $3.85 per capita although 82 per cent of Albertans say in polls that they believe sport contributes to quality of life. And those I have spoken to say clearly that the Alberta Sports Hall of Fame has value.

John Short on Edmonton’s baseball debate

 

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Alberta

Albertans still waiting for plan to grow the Heritage Fund

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From the Fraser Institute

By Tegan Hill

In February 2024, the Smith government promised to share a plan to grow the Heritage Fund—Alberta’s long-term resource revenue savings fund—with the public before the end of 2024. But 2025 is upon us, and Albertans are still waiting.

The Lougheed government originally created the Heritage Fund in 1976/77 to save a share of the province’s resource wealth, including oil and gas revenues, for the future. But since its creation, Alberta governments have deposited less than 4 per cent of total resource revenue in the fund.

In other words, for decades successive Alberta governments have missed a golden opportunity. When governments make deposits in the Heritage Fund, they transform onetime (and extremely volatile) resource revenue into a financial asset that can generate more stable earnings over time. Eventually, the government could use annual income from the fund to replace volatile resource revenue in the budget.

Historically, however, rules that would have helped ensure the fund’s growth (for example, a requirement to deposit 30 per cent of resource revenue annually) were “statutory” rather than “constitutional,” which meant Alberta governments could easily disregard, change or eliminate these rules once they were no longer convenient.

And they did. The government changed that 30 per cent requirement to 15 per cent by 1982/83, and after an oil price collapse, eliminated it entirely in 1987/88. Due to a lack of consistent deposits, paired with the real value of the fund eroding over time due to inflation, and nearly all fund earnings being spent, the Heritage Fund is expected to be worth less than $25 billion in 2024/25.

Again, while Premier Smith has promised to grow the fund to between $250 billion to $400 billion by 2050, we’ve yet to see how she plans to do that. Whatever plan the government produces, it should heed lessons from other successful resource revenue savings fund such as Alaska’s Permanent Fund.

The Alaska government created its fund the same year Alberta created the Heritage Fund, but Alaska’s fund is worth roughly US$80 billion (or C$113 billion) today. What has the Alaska government done differently?

First, according to Alaska’s constitution, the state government must deposit 25 per cent of all mineral revenues into the fund each year. This type of “constitutional” rule is much stronger than a “statutory” rule that existed in Alberta. (While Canada does not have separate provincial constitutions, it’s possible to change Canada’s Constitution for province-specific measures.) Second, the Alaska government must set aside a share of the fund’s earnings each year to offset the effects of inflation—in other words, “inflation-proof” the principal of the fund to preserve its real value. And finally, the government must pay a portion of fund earnings to Alaskan citizens in annual dividends.

The logic of the first two rules is simple—the Alaskan government promotes growth in the fund by depositing mineral revenue annually, and inflation-proofing maintains the fund’s purchasing power. But consider the third rule regarding dividends.

The Alaska government created the annual dividend, paid out annually to Alaskans, to create political pressure for future governments to responsibly maintain the fund. Because citizens have an ownership share in the fund, they’re more interested in the state maximizing returns from its resource wealth. This has helped maintain and reinforce robust fiscal rules that make the Permanent Fund successful.

Based on this success, if the Smith government began contributing 25 per cent of resource revenue to the Heritage Fund and inflation-proofed the principal, it could pay each Albertan a total dividend between roughly $600 to $1,100 from 2024/25 to 2026/27, or roughly $2,300 to $4,400 per family of four. And as the fund grows, so would the dividends.

Almost one year ago, the Smith government promised a new plan for the Heritage Fund. When the plan is finally released, it should include a constitutional requirement for consistent contributions and inflation-proofing, and annual dividends for Albertans.

Tegan Hill

Director, Alberta Policy, Fraser Institute
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Alberta

Wonder Valley – Alberta’s $70 Billion AI Data Center

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From the YouTube page of Kevin O’Leary

Interview with Kyle Reiling, Executive Director of the Greenview Industrial Gateway. 

“This is the only place on earth that can do something this scale”

When Kevin O’Leary heard Alberta Premier Danielle Smith reveal just how much energy Alberta has, he knew Alberta has the solution for the coming explosion in energy consumption.

Kevin O’Leary: The demand for AI is skyrocketing—and America is out of power. Enter Alberta, with abundant natural gas and a bold premier. I’m raising $70 billion to create the world’s lowest-cost, highest-efficiency data center. Hyperscalers like Tesla, Microsoft, and Google need it, and we’re making it happen. This is how you lead the AI revolution.

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