From a personal finance perspective, this can be a depressing time of the year, with all those Christmas bills arriving in the mail. But if you live in Alberta, winter is rebate time — and an excuse to go shopping.
The provincial government is in the process of mailing each and every Albertan — the kids, too — a cheque for $400. For a family of four, that adds up to a very nice New Year’s bonus of $1,600. And all manner of businesses — from furniture stores to Rocky Mountain resort hotels — have been thoughtfully suggesting ways to spend it.
It’s officially called a “resource rebate,” courtesy of the province’s booming energy revenue and the subsequent $6-billion surplus sloshing around in the Alberta treasury. Premier Ralph Klein prefers to call it a “prosperity bonus,” but, whatever you want to call it, the total cost will be around $1.3 billion. Eat your heart out, Newfoundland.
It gets better, I’m afraid. The rebates are not subject to provincial or federal income taxes. However, this being Alberta, people “convicted of a crime and incarcerated in prison as of Sept. 1, 2005,” will not be eligible for the rebate. But if you got busted after that, you’re OK.
Believe it or not, there was a vigorous debate in the media last fall over whether or not Albertans wanted a prosperity bonus. A significant number of people wrote to newspapers and called radio talk shows to say they would like to see this money spent on education or health care instead.
But, as the premier pointed out, the government is already spending additional billions on those programs and others. The provincial debt has also been eliminated — all of it — and there is only so much you can stuff into contingency funds and endowments for this, that and the other.
I am also embarrassed to report that this isn’t the only rebate Albertans are receiving this month. There’s also the Natural Gas Rebate Program, designed to lower the cost of fuel for heating during the winter months. In January, the program will shave about $50 off the average home-heating bill.
There is, of course, a very sound political reason for this. As an energy-producing province, the Klein government has promised Albertans lower energy costs at a time when those costs are rising everywhere else. “Our unique and responsive rebate program is an example of how Albertans benefit from resource ownership,” says Klein.
Darned right. Most Albertans expect to get a break on energy prices, and we do. Last year, we paid, on average, 14% less for natural gas than Canadians as a whole.
Of course, the rebate program comes with a hefty price-tag. By the time the rebates end in March, total cost for the 2005-06 season could be upward of $500 million. But without the warmer-than-usual winter weather throughout most of North America, it could have been a lot more expensive.
Some Tory members of the Alberta legislative assembly and even a few members of Klein’s cabinet mutter privately about having warned that this would happen. A rebate program that was introduced to help Albertans cope with temporary high natural gas prices has become a winter fixture — with no painless way for the government to kill it.
But this is a philosophical debate rather than a practical one. The fact is 2005 was a banner year for natural gas, with revenue in the fall running about double that of the previous year.
And even though most Canadians assume Alberta’s prosperity is a result of rising oil prices (actually, a lot of Albertans assume the same thing), about three-quarters of the province’s energy revenue comes from the sale of natural gas these days.
So, the gas rebates will continue. However, Premier Klein has gone out of his way to warn that there is no guarantee that the prosperity bonus will be repeated. “Energy revenues can go down as quickly as they go up,” he says.
He is right, of course. But are Albertans listening?
Are you kidding? They have all gone shopping. IE
Eat your heart out, Canada
Albertans go on a shopping spree as “resource rebates” arrive
- By: Paul Stanway
- February 3, 2006 October 29, 2019
- 10:54
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