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Wealth management: some observers say Alberta has so much money from its oil fields it doesn't know what to do with it all. Critics say the province needs to plan for the day the oil runs out.

Article Excerpt
Albertans are swimming in oil and gas money. The province's prosperity is tied directly to the sky-rocketing price of oil and gas; lately it has reaped enormous benefits from the royalties that are paid to the government. It is the only province to have no debt and no sales tax; it also has the lowest corporate and personal taxes in the country.

Private-sector forecasters expected Alberta's surplus to reach $7 billion in 2005. The government says it won't be that high but it has a reputation for underestimating the size of the surplus: last year (2004/05), the Alberta government received almost $10 billion in resource royalties, about double what was budgeted. Most of the surplus was used to retire the province's $3.7 billion debt but beyond that critics say the government doesn't know how to handle its amazing wealth. By August 2005, the province's Finance Minister was predicting a $2.8 billion surplus (based on oil averaging around $50 U.S. a barrel and natural gas at about $6 a gigajoule), almost double its $1.5 billion estimate in the spring budget.

Premier Ralph Klein announced in September 2005 that each person in the province will receive a government cheque in late December for $400. The money is known locally as "Ralph bucks," from the province's unbudgeted surplus. It will add up to a $1.4 billion giveaway. He also favours using cuts to both corporate and personal income taxes to continue attracting workers and investment to Alberta. The Calgary Chamber of Commerce (CCC) and Canada West Foundation (CWF), a western think-tank, both say the money could be better spent. The head of the CCC said the bonus cheques were "an opportunity squandered" and that the...

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