Government managed economic diversification? Been there, done that.

nutley

As Alberta’s economy continues to swirl down the fiscal toilet bowl, the increasingly ideologically driven Notley NDP is still insisting on proven socialism inspired failures. Notley’s insane insistence on trying to rip up PPA contracts is building an investment chill that even Naheed Nenshi is calling out.

A government study on the economic impact of the carbon tax was so damning, Notley’s administration refused to release it. Notley wont even share or acknowledge the outcomes of her own studies funded by the taxpayer.

The last faint hope that the Notley regime has in mitigating widespread economic damage from the carbon tax is that through massive corporate welfare programs they will be able to force economic diversification upon Alberta.

THE PROBLEM WITH THIS STRATEGY IS THAT IT HAS ALREADY BEEN TRIED AND IT FAILED TERRIBLY! 

getty lougheed

While self styled “progressives” in the Progressive Conservative Party like to wistfully look back on the glory days of old, they conveniently overlook the fact that Don Getty and Peter Lougheed led fiscally liberal governments that created the massive deficits and debt that forced us all into austerity in the 1990s under Ralph Klein. Much of that debt was due to the foolish pursuit of government guided economic diversity.

Billions of dollars were lost as loan guarantees and outright grants were given to dozens of failed ventures. When one considers how small Alberta’s population was at the time and what a dollar was worth, these were some very significant blows to the taxpayer.

In the usual progressive fashion, the progressives borrowed money to cover the losses and let the next generation take care of the bill in the 1990s.

Sound familiar?

Notley apparently is no student of recent history as she is bound and determined to repeat it.

A great piece on past diversification efforts was recently done by the UofC School of Public Policy with Ted Morton and Merideth MacDonald. It is well worth a read in its entirety. 

I will summarize below some of the brutal investments that the progressives of the time made in the name of economic diversity.

I have to start with MagCan as I passed by the site of that crumbling plant yesterday and had to get a picture taken with it where I could show my thoughts on that waste of dollars that has polluted the landscape for over 20 years.

corymag

1988 Magnesium Company of Canada (MagCan) Loss covered by taxpayers: $164 million

1984 Swan Hills Waste Treatment Plant Loss covered by taxpayers: $440 million

1989 NovaTel Loss covered by taxpayers: $544 million to $614 million (they screwed it so badly that the auditor general couldnt even figure out the total loss)

1987 Millar Western Pulp Loss covered by taxpayers: $272 million

1986 Gainers Loss covered by taxpayers: $209 million

1982 Ridley Grain Ltd. Loss covered by taxpayers: $161 million (though still considered an outstanding loan)

1991 Al-Pac Loss covered by taxpayers: $155 million

1977 Chembiomed Loss covered by taxpayers: $44 million

1981 Canadian Commercial Bank Loss covered by taxpayers: $56 million

1973 Northern Lite Canola Loss covered by taxpayers: $50 million

1983 General Systems Research Loss covered by taxpayers: $30 million

Ironically it was during the period of cuts and austerity led by Ralph Klein when Alberta moved closer to a diversified economy. Innovative ventures started and blossomed under a regime that was welcoming to business and investment. The lack of government interference in the market and lack of tax hikes attracted record numbers of new head offices to Alberta while existing businesses expanded and broadened their scope of products and services.

ralph

It has been proven that economic diversification through government trying to pick winners and losers in business is an utter failure.

It has also been proven that if left alone, business will expand and diversify all on it’s own.

Unfortunately this stark historical lesson is lost on Notley and those who call themselves the “progressive” element in the PC Party of Alberta.

We will cut back and our economy will rebound once we get Notley as far from the reins of power as possible. That will take the kind of partisan unity that Jason Kenney is offering though and that means that the “progressive” folks in the PC party cant be allowed to try and turn the clock back to the Getty days of fiscal liberalism.

Notley will do massive damage to us in the next few years with her attempts to make the first working socialist model. We simply cant take the chance that she may get 8 years to pursue this mad experiment.

Below is a list of smaller but still not insignificant government backed ventures that lost in that period for honorable mention.

Alberta Pacific Terminals $10 million

Alberta Terminals: $2.6million

Alberta White Wood Industries and Meunier Forest Products: $2.3 million

Alert Disaster Control: $2.6 million

Canadian Professional Munitions: $803,000

Carbovan: $5.9 million

Climate Master: $5 million

Dial Guard: $600,000

Emery Apparel Canada: $2 million

Fletchers Fine Foods: $13.9 million

General Composites Canada: $3.5 million

Myrias Research Corp: $9 million

Nanton Spring Water: $2.8 million

Norstar Recreation Products: $1 million

Northern Steel: $11 million

Peace River Fertilizer: approx $6 million

Ski Free Marine: $2.8 million

Teknica Resource Development: $1.9 million

Tomotechnology: approx: $1 million

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4 thoughts on “Government managed economic diversification? Been there, done that.

    • It lost money until government got out of it and I wouldn’t consider investments in the oil industry to be diversifying much.

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