Aug
24
(2006)
Myth of the rich Albertan?
Filed under: Uncategorized. Tags: rants.
I’ve gotten absolutely sick of hearing about how wealthy Albertans are. On the news tonight, every other story was about how we’re so stinking rich. We’re buying everything in BC. We’re buying new cars. We’re buying so many new mansions that there aren’t enough tradespeople to build them.
Janice and I walked through the showhomes in our neighbourhood on the weekend to see what’s up. These are the same builders we used when we built our house in 2000. Except, now the price of the lots are higher than what we paid for our whole house package. The “starter” homes in our community now begin at $450,000 - almost 3x what ours cost just 6 years ago. That’s absolutely insane. We fell in love with one of the homes - but at $650,000 it’s not bloody likely. But someone’s buying this stuff.
But, here’s the thing. I don’t know anyone that’s gotten rich off of oil. An old family friend spent decades in the oilpatch, and did OK, but he retired before things got insane. My closest connection to the oilpatch is through my brother, but he’s living in Asia, not Alberta. He did help start an oil company, and sold it a few years ago. He had a nice Porsche and house, but he left the province for greener pastures. Most of his small personal fortune was made in the insurance industry, not the oilpatch.
So, now there’s a majority of the population being affected by the few who struck Texas Tea, driving up the prices of everything. And making the rest of the country envious of the “wealthy Albertan” - but I’d like to meet one of those.
I obviously move in the wrong circles. Someone’s obviously able to afford all of the irrationally extravagant stuff. Escalades and Hummers are rolling off city lots. These McMansions are being sold faster than they can be built.
Our provincial government was able to pay off the debt due to unbudgeted and unpredicted revenue surpluses of billions of dollars every fiscal quarter. Something like $20B per year that just falls into their lap. A trained chimp could balance a budget with these surpluses. And yet we don’t have enough schools, or hospitals, or public transportation. They’re building new super-ring-roads like they’re going out of style, though. Gotta have someplace to drive those Escalades…
Talking to my dad last night, he mentioned that if he didn’t already own his home, he wouldn’t be able to live in Calgary on his retirement income. Crazy.
If I hadn’t bought my house when I did - by total dumb luck and good fortune - I would never be able to afford to buy here. I’d be renting forever. There is a large portion of the city now in that boat.
In Saskatchewan, we have a variation called the “Everything is better in Alberta” myth, which is perpetuated primarily by the Saskatchewan party, essentially the provincial wing of the Reform-Conservative party. I think the error in most people’s thinking is that they hear about the revenue generated by the oil industry or they hear about the wages that others make in Alberta, without looking at the expenses for necessities like food and shelter. Supply and demand dictates that in an economic boom with many people rushing to an area to find jobs the cost of real estate or rental accomodation is going to skyrocket.
The misinformation that always makes me shake my head in disbelief here in SK is the mistaken belief that the average person in AB is much better off because of the lack of provincial sales tax. What most people here (and maybe in the rest of the country) fail to realize is that Alberta requires that people pay health care premiums. My wife and I worked it out when we first lived in Saskatoon, and calculated that we’d each have to buy about $500 worth of provincial sales taxable items every month (groceries and books, for example, are non-taxable; new computers, alas, are taxable) for our sales tax payments to equal the Alberta health care premium.
Hmm - this seems to have turned into an anti-Alberta rant. I should point out that I grew up in Alberta, I have many family and friends there, and we love visiting them and Alberta as often as we can. What raises my ire is the “everything is better in Alberta - why don’t y’all come join us by the cement pond” myth. I think it diminishes the rest of Canada, and as you point out so well, D’Arcy, it hurts most Albertans as well. But it is a myth that the Alberta Conservative party under Ralph Klein has used to its advantage.
“A trained chimp could balance a budget with these surpluses.”
Uh - isn’t that what happened? Or do you consider Ralph untrained since he left school after grade 8? ;^)
I wish we had a trained chimp at the helm. instead, we have to settle for an alcoholic dropout plagiarist…
Before anyone reading this starts to laugh at that description, I’d like to point out that its actually entirely accurate.
I’m laughing because it is entirely accurate.
Incidentally, I just saw a news story this morning about how even though the province is richer, the poorest families are suffering more, because the cost of living has risen so much but their family incomes haven’t. (Seems pretty obvious to me.) Wish I could find a link to the story - it would augment all the comments above.
Yeah you’re moving in the wrong circles - Higher Education! Saw a Lamborghini today - it looked nice. I don’t think it was being driven by an educator…
Those house prices and lack of school places are why we tried and failed to move back to Calgary. We thought the house bubble in England was crazy, unfortunately in the space of 2 years homes in Calgary went from affordable to “need to win the lottery”. None of my relatives in the province seem to have benefited, after all even if your house does appreciate in value it does you know good because the next one has gone up in value too.
I keep meaning to take a picture of this, but every morning I pass a bus stop with bench advertising from a local realtor. It basically suggests that when your kid gets drafted #1 in the NHL, to call the realtor. Basically the same as winning the lottery.
I think you hit the nail right on the head - the oil boom is affecting some people, but the vast majority don’t see much from the “trickle down” effects. Even if the average person does benefit somewhat from it, almost all the profits are going to the oil companies, who are making sums of money that I can’t even imagine.
Well said!!
Here’s that bus stop advertising.
1 year on
“He had a nice Porsche and house” I dont think that is the basis of wealthy Albertans. But the lack of provincial sales tax has helped, and this has show all through 2007.