According to the recent royalty review in Alberta, a dramatic hike in the province's royalty rates on natural gas and oil resources could lead to $2-billion in additional revenue flowing to our government.

However, the impact on individual Albertans might be less rosy. The mere suggestion of a royalty increase immediately caused oil stocks to fall and put a chill in the province's investment climate. Those stocks recovered; but nevertheless the province should proceed cautiously.

The bottom line is: if you charge a higher rate for something, less of it is produced. This law applies to any commodity, including oil.

Many in government are no doubt frothing at the prospect that any changes to enrich Alberta's royalty take will give them more money to spend. That's the last thing they need - as non-renewable resource revenues are already spent recklessly.

In fact, our resource revenues have been so mis-managed since Alberta paid-off our debt; it hardly seems worth playing Russian roulette with a system that has produced such stellar results.

Yet, there is another way.

Take, for example, how Albertans deal with panhandlers.

Some Albertans give generously, trusting their contribution will be used to provide a hot meal or a place to sleep for the night. Some refuse to give, believing they would only be helping feed whatever addiction that panhandler may have.

Yet others, who can afford to do so (considering 46.5 per cent of our incomes are eaten in taxes each year), donate their after-tax dollars to various charities that provide food, shelter or addiction services to these people.

In Alberta, our panhandler is the Alberta government, and the addiction is to spending. But don't try telling this to some people.

There's a convenient myth still circulating in some sectors the government still hasn't made up for the spending cuts experienced in the early-to-mid '90s. It is a complete fabrication.

Pre-cuts, Alberta actually spent more per-capita than any other province in Canada. A spending level financed by borrowing and debt. In other words, Alberta lived beyond its means. Even in our leanest spending years, the government dropped from biggest spender in Canada to being the fifth - still ahead of Saskatchewan, Manitoba, Ontario, Nova Scotia and Newfoundland. Today, Alberta has rocketed to the top again, out-spending every other province in Canada.

The 2007 budget increased government expenditures by an eye-popping 17 per cent. Such unsustainable spending levels have put Alberta in a position, not unlike the 1980s, where the government was reliant on debt to balance the books. However, now we're reliant on one-time royalty revenues to keep us out of hock.

So, the question remains, do taxpayers take a leap of faith and hike royalty rates with the hope it will actually bring in an additional $2-billion while not harming our strong economy, just so our government can feed their addiction and drive up more unsustainable spending

Perhaps the risk of killing our golden goose might be more palatable if the government had a better track record on how they used the royalty revenues.

Yet, regardless of whether you change the royalty structure or not, the government cannot continue to recklessly spend non-renewable resource revenues.

Just like the charitable folks who invest their dollars into long-term help for those who suffer from addictions, Albertans need to invest into long-term savings to help those who suffer from high-taxes (all of us!).

If the Alberta government put only 50 per cent of royalty revenues into savings each year, the interest generated by those savings would be enough to replace health care premiums in only two years, or cut income taxes in half after eight years.

Plus, it would create a pool of revenues that could be drawn down in times of economic distress.

The current debate whether to increase royalty rates is important for taxpayers and business. But it will be pointless if our government immediately decides it will spend its apparent new found fortune.