Alberta’s Fiscal Responses to Fluctuations in Non-Renewable Resource Revenue
We investigate how successive Alberta governments have responded to shocks in non-renewable resource revenue over the period 1970 to 2017. Our results show that Alberta governments have increased spending by 63 cents in the fiscal year following a one dollar increase in real per capita non-renewabl...
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| Format: | Article |
| Language: | English |
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University of Calgary
2018-09-01
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| Series: | The School of Public Policy Publications |
| Online Access: | https://dev.journalhosting.ucalgary.ca/index.php/sppp/article/view/43432 |
| _version_ | 1797754430222761984 |
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| author | Ergete Ferede |
| author_facet | Ergete Ferede |
| author_sort | Ergete Ferede |
| collection | DOAJ |
| description |
We investigate how successive Alberta governments have responded to shocks in non-renewable resource revenue over the period 1970 to 2017. Our results show that Alberta governments have increased spending by 63 cents in the fiscal year following a one dollar increase in real per capita non-renewable resource revenues. On the other hand, when non-renewable resource revenues have declined year over year, Alberta governments have not adjusted spending or other own source tax revenues. As a result of these asymmetric responses to fluctuations in resource revenues, the province’s stock of financial assets has declined and its net debt has increased by $10,834 per capita or in total $46 billion dollars. The policy implication of our results is that provincial governments should put increases in non-renewable resource revenues in a fiscal stabilization fund or Alberta Heritage Saving Trust Fund rather than spending two-thirds of any short-term increase in revenues. This would result in a less volatile spending pattern and a sustainable fiscal policy with better services and lower tax rates.
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| first_indexed | 2024-03-12T17:33:22Z |
| format | Article |
| id | doaj.art-284c6ba2c1b94c54a2cb5f00460dda2a |
| institution | Directory Open Access Journal |
| issn | 2560-8312 2560-8320 |
| language | English |
| last_indexed | 2024-03-12T17:33:22Z |
| publishDate | 2018-09-01 |
| publisher | University of Calgary |
| record_format | Article |
| series | The School of Public Policy Publications |
| spelling | doaj.art-284c6ba2c1b94c54a2cb5f00460dda2a2023-08-04T15:51:32ZengUniversity of CalgaryThe School of Public Policy Publications2560-83122560-83202018-09-0111Alberta’s Fiscal Responses to Fluctuations in Non-Renewable Resource RevenueErgete Ferede0MacEwan University We investigate how successive Alberta governments have responded to shocks in non-renewable resource revenue over the period 1970 to 2017. Our results show that Alberta governments have increased spending by 63 cents in the fiscal year following a one dollar increase in real per capita non-renewable resource revenues. On the other hand, when non-renewable resource revenues have declined year over year, Alberta governments have not adjusted spending or other own source tax revenues. As a result of these asymmetric responses to fluctuations in resource revenues, the province’s stock of financial assets has declined and its net debt has increased by $10,834 per capita or in total $46 billion dollars. The policy implication of our results is that provincial governments should put increases in non-renewable resource revenues in a fiscal stabilization fund or Alberta Heritage Saving Trust Fund rather than spending two-thirds of any short-term increase in revenues. This would result in a less volatile spending pattern and a sustainable fiscal policy with better services and lower tax rates. https://dev.journalhosting.ucalgary.ca/index.php/sppp/article/view/43432 |
| spellingShingle | Ergete Ferede Alberta’s Fiscal Responses to Fluctuations in Non-Renewable Resource Revenue The School of Public Policy Publications |
| title | Alberta’s Fiscal Responses to Fluctuations in Non-Renewable Resource Revenue |
| title_full | Alberta’s Fiscal Responses to Fluctuations in Non-Renewable Resource Revenue |
| title_fullStr | Alberta’s Fiscal Responses to Fluctuations in Non-Renewable Resource Revenue |
| title_full_unstemmed | Alberta’s Fiscal Responses to Fluctuations in Non-Renewable Resource Revenue |
| title_short | Alberta’s Fiscal Responses to Fluctuations in Non-Renewable Resource Revenue |
| title_sort | alberta s fiscal responses to fluctuations in non renewable resource revenue |
| url | https://dev.journalhosting.ucalgary.ca/index.php/sppp/article/view/43432 |
| work_keys_str_mv | AT ergeteferede albertasfiscalresponsestofluctuationsinnonrenewableresourcerevenue |