Twilight of an energy boom: Alberta’s new fiscal challenge

Twilight of an energy boom: Alberta’s new fiscal challenge by Gordon Pitts and Nathan Vanderklippe, February 9, 2013, The Globe and Mail
The forlorn shell symbolizes the hollowing out of Alberta’s hopes and dreams, as it confronts an energy market that has turned dramatically against it. It is a signal of how fast Alberta has fallen, as it tumbles back to the pack of provinces with severe fiscal challenges. The provincial government has just seen $6-billion wiped off its revenues as a result of declining resource income – equivalent to the province’s annual education budget. Alberta has, in the past, seen salvation come in dramatic form: In 1999, it pulled in $2.4-billion in resource revenues. Two years later, $10.6-billion came clattering into a province that was riding a rise in natural gas prices. But the window appears to be rapidly closing on Alberta’s decade-long run, and its dream of being the economic driver of Canada in the 21st century. It may signal the end of the Alberta Advantage that has shifted the economic balance of the country westward. And if Ontario is on the ropes, and Alberta is wobbly, who will lead the country’s growth? Alberta has been here before, at the tail end of energy-fuelled booms that made its people very wealthy, but taught very little about building stable prosperity. Now, it appears to be entering a longer period of more profound decline, and, once again, it is caught unprepared.
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What’s more, Alberta’s track record in managing its bouts of economic whiplash is not promising. In the past, when a boom would end, there would be a resolve that hard-headed realism would assert itself the next time around. It never did. Indeed, the classic Alberta bumper sticker of the 1980s was “Please God, let there be another oil boom. I promise not to piss it all away next time.” But the danger now is that there will be progressively less to piss away each time, as energy returns keep getting smaller and smaller. [Emphasis added]