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Don’t use Alberta’s Heritage Fund to pick ‘winners and losers’


3 minute read

From the Fraser Institute

By Lennie Kaplan

During the mid- to late-1990s, Alberta taxpayers lost more than $2 billion from these failed loans, guarantees and share purchases in major business projects.

Remember the old adage from the writer and philosopher George Santayana that “those who cannot remember the past are condemned to repeat it.”

At a recent Calgary Chamber of Commerce event, Premier Danielle Smith indicated the Alberta government is looking at using Heritage Fund assets “to assist in de-risking projects that were finding it difficult to get financing.” This signals a return to the Alberta government’s industrial policy of the 1970s and 1980s of being in the business of being in business and government picking “winners and losers” as Premier Klein famously said.

A remembrance of the past is in order, so we aren’t condemned to repeat it. Between 1973 and 1992, the Alberta government took a very active role in cultivating economic development. The approach was highly interventionist and involved direct financial assistance through direct loans (even ones issued though the Heritage Fund), loan guarantees and share purchases. The risks attached to these transactions, particularly in a highly cyclical and volatile economy such as Alberta, were significant, generally unknown at the outset, and largely open-ended.

Sure, there were some notable exceptions, but the high degree of risk of direct intervention in the private sector was illustrated by the fact that during the mid- to late-1990s, Alberta taxpayers lost more than $2 billion from these failed loans, guarantees and share purchases in major business projects.

Most notable were losses incurred on such high-profile business projects as Novatel Communications ($556.0 million), the Lloydminster Bi-provincial Upgrader ($392.5 million), the Millar Western Pulp Mill ($244.2 million), Gainers ($208.3 million), the Magnesium Company of Canada ($164.0 million) and the Alberta-Pacific Pulp Mills ($155.0 million).

The premier makes a valid point that financial markets may be averse to financing large business projects because of the risks associated with intrusive federal climate change policies and regulations. Thus, the argument is there’s a need for the provincial government to get involved in financing market failures in the capital markets.

However, from our remembrance of the past practises, raiding the Heritage Fund to pick “winners and losers” is the wrong prescription to solving this problem. Let’s use the tried and true policies of cutting taxes and streamlining regulations to attract more investment capital to Alberta to support business projects. And let’s focus on building a Heritage Fund of $250 billion to $400 billion that will help secure our province’s fiscal and economic future and the future for our children and grandchildren.

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New surveillance teams led by the Alberta Sheriffs working with local police in rural communities

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More boots on the ground to fight rural crime

Rural crime continues to be a top concern among residents and businesses in rural Alberta, which is why Alberta’s government remains committed to addressing it through enhanced surveillance and other crime reduction initiatives. Alberta’s government invested $4.3 million for the Alberta Sheriffs to put more boots on the ground. This investment supported the establishment of two plainclothes teams – one in northern Alberta and one in southern Alberta – to support police in carrying out surveillance on criminal targets in rural areas.

Both teams are now fully staffed and operational, ready to fight crime in rural areas across Alberta. These rural surveillance teams will work to prevent crime, monitor agricultural theft and work in collaboration with local law enforcement to share intelligence and resources to keep Albertans and their property safe and secure.

“Criminals and organized crime are not welcome in Alberta. Full stop. The addition of two new surveillance teams will further support our law enforcement partners in stamping out criminal activity in Alberta’s rural areas. This is about supporting local investigations to address local crime in our smaller communities. Together, both teams will form another key component of Alberta’s efforts to combat crime and ensure Albertans feel safe at home and in their communities, regardless of where they live.”

Mike Ellis, Minister of Public Safety and Emergency Services

The Alberta Sheriffs have an existing surveillance unit that is part of the Alberta Law Enforcement Response Teams (ALERT) and focused mainly on serious and organized crime investigations. The new surveillance teams will fill a gap by helping rural RCMP detachments with local investigations.

“Through their specialized knowledge, training and experience, Alberta’s new surveillance teams are providing another important mechanism in the fight against crime in Alberta’s rural communities. Working in close collaboration with the RCMP and other policing agencies, their efforts will play a key role in gathering evidence and information that will help disrupt crime throughout the province.”

Mike Letourneau, superintendent, Alberta Sheriffs

“This announcement by the Alberta government and Minister Ellis is a positive step forward for the residents of Alberta, especially in rural areas. Targeting known criminals is a very effective way to reduce the level of crime taking place and will greatly assist the RCMP who have a vast area to police.”

Lance Colby, mayor, Town of Carstairs

“We are happy to hear about increased resources being allocated to assist our communities. Addressing rural crime is one of the top priorities of the Alberta RCMP, and our partners at the Alberta Sheriffs already play a vital role in keeping Albertans safe. The creation of these new surveillance teams will help augment our ongoing crime reduction strategies in Alberta communities, and we look forward to working with them going forward.”

Trevor Daroux, assistant commissioner, criminal operations officer, Alberta RCMP

The new surveillance teams are part of a suite of measures to expand the role of the Alberta Sheriffs and make Alberta communities safer. Other actions include the expansion of the Safer Communities and Neighbourhoods (SCAN) unit – which uses legal sanctions and court orders to target problem properties where illegal activities are taking place – and the expansion of the RAPID Response initiative with funding for the Sheriff Highway Patrol to train and equip members to assist the RCMP with emergencies and high-priority calls.

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