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The Guardian (UK): Albertan oil flows reversed as windfall goes to its citizens: “Each Albertan is to receive a so-called "prosperity bonus"…: Friday September 23, 2005


Ashley Seager and Catherine Maddox


The western Canadian province of Alberta has just made a move that the British public, squeezed by rising fuel costs and too much debt, can only dream of. The oil and gas-rich part of Canada, home to just under three million people, has decided that some of its bumper inflows of cash from the doubling of energy prices over the last year will be directly handed over to its lucky citizens. Each Albertan is to receive a so-called "prosperity bonus", a one-off payment of hundreds of Canadian dollars as the province's premier, Ralph Klein, struggles to find things to do with his growing budget surplus.


That should bring a warm glow to the inhabitants of the capital, Edmonton, where temperatures regularly fall to -50°C in the winter. Alberta, which sits on some of the world's largest oil and gas reserves, is Canada's biggest oil producer by far, though neighbouring British Columbia and Saskatchewan have also enjoyed windfalls from the rise in oil prices, which three weeks ago set an all-time high above $70 a barrel. Prices are expected to rise even higher if Hurricane Rita wreaks anything like the havoc Katrina did on the US Gulf coast.


Mr Klein can look forward, it is estimated, to a budget surplus of C$8bn (£3.8bn) this year, of which half would be due to the oil windfall. The province is already debt-free (something that would change Gordon Brown's frown to a broad grin) and has the lowest taxes in the country, so Mr Klein, a conservative, has decided that about a third of the unexpected extra cash will be mailed to grateful citizens early next year.


Local media have calculated that the cheque each person gets could be in the region of C$300-C$400 but Mr Klein has suggested that the amounts could be "significantly larger". In fact, he said, the media guesses are not "even in the ball park".


You might think Canadians would be cock-a-hoop about the handout and, indeed, Mr Klein says people have been calling him asking "where's my cheque?". But maybe it's the long, dark nights of winter that make some Albertans grumpy. Some have complained that with unemployment at zero and retail spending also high, the last thing the government should be doing is giving people more money for flat-screen televisions and SUVs.


Business leaders have urged that the money be spent on corporate tax cuts while some economists say all, rather than some, of it should be spent on infrastructure such as roads and schools, which suffered big spending cuts in the 1990s as the Edmonton government moved to pay off its budget deficit.


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