The Alberta government as custodian of Albertans natural resource revenues should be acting to extend the Alberta Advantage well beyond the day our derricks pump dry. The Alberta Advantage is more than receiving a one-time prosperity bonus. The Alberta Advantage is more than not paying a sales tax. The Alberta Advantage should be about creating long-term prosperity for future generations.

To date, capitalizing our "Advantage" has meant more government spending and lots of it. The Alberta government has increased spending by 93% since 1996-97. This number continues to outpace both inflation and population growth. Had the Alberta government held the line on spending increases, Albertans would have been debt-free years ago, and well on our way to establishing long, sustainable prosperity.

Albertans have told their government, time after time in surveys like "Talk it up, talk it out", and "It's your money," once our debt is paid off, they want personal tax cuts. It's not that Albertans are greedy, they just believe, rightfully so, they know better than the government how to spend their own money.

The government already saw the wisdom of paying off our debt. Being debt-free now saves Albertans nearly $1.5 billion each year in debt servicing costs. Those savings should be passed on to Albertans. $1.5 billion could eliminate the health care premium tax, the 3% sales tax on insurance, and even give a small bump to the Basic Personal Exemption. This would save most families over $1,000 a year in taxes.

But the frequent refrain thrown back to the CTF when we plead with the government to control spending and cut taxes, is how can we afford to cut taxes with one-time dollars

Simply put: save it.

In 2001 the CTF commissioned a study by Dr. Jean-Francois Wen of the University of Calgary. Dr. Wen was asked if it would be possible for Alberta to build up the Heritage Fund such that interest income could replace personal income taxes. Remarkably, Dr.Wen discovered it would not be difficult at all, especially with a little bit of political will.

Dr. Wen determined if the government held the line on spending increases starting in 2000, and dedicated 50% of all resource revenues to the Alberta Heritage Savings Trust Fund (AHSTF), along with retaining all of the interest generated by the fund, Alberta could eliminate personal income taxes by 2015. Furthermore, his study was based on oil priced at $18/barrel and natural gas at $2.35/mcf and increasing only at

the rate of inflation. As we have seen this year with oil over $60/barrel and natural gas over $11/mcf, the time-line suggested by Dr. Wen in 2001 could be substantially ramped up.

If the Alberta government had followed Dr. Wen's advice and invested half of all royalty revenues starting in 2001 as well as retaining the interest generated by the fund, we would already have over $35 billion in the AHSTF and be well on our way towards the $55 billion target and elimination of personal income taxes. Moreover, Dr. Wen determined if resource prices stayed at 2000 levels, our debt could have been eliminated in 2002 and income taxes could have been eliminated in 2005.

Obviously, the Alberta government squandered an excellent opportunity to truly repay Albertans for their years of penny-pinching. But it's not too late to ensure we don't fully - as Brian Mulroney might say - "piss away" another oil boom. But to do so, the Alberta government is going to have to put the reigns on their recent wild spending spree and make a firm commitment to cut taxes by saving our royalty revenues.