Prosperity Bonus

The Prosperity Bonus, also nicknamed Ralph bucks, announced in September 2005, is the name given to a program designed by the Government of Alberta to pay a dividend to residents of the Canadian province of Alberta as a result of a massive oil-fueled provincial budget surplus.

Background

2004 general election

Main article: 2004 Alberta general election

Notice for Klein's prosperity bonus would come less then a year following the 2004 Alberta general election which saw the Progressive Conservative Party of Alberta elected for the tenth consecutive majority government, and Klein continuing as Premier for the fourth straight term. Despite retaining power in Alberta the election showed cracks in the popularity of Premier Klein and the Progressive Conservative Party, which saw their share of the popular vote drop from 61.9 percent in 2001 to 46.8 percent.

Prosperity bonus announcement

In September 2005, Alberta Premier Ralph Klein would announce in an open letter to Albertans that the province was expecting significant higher than expected revenue from energy royalties and the government would be creating a program to return a portion of the surplus to Albertans in the form of a one-time CA$400 payment sometime in January 2006.[1] Previous government estimates had placed the 2005-06 budget surplus as $2.8-billion, however rising oil and gas prices had inflated this number to approximately $6.8-billion. The prosperity bonuses would total approximately $1.4-billion or 20 percent of the province's $6.8-billion surplus. The remainder of the $5.4-billion was allocated to other projects in the province. Prosperity bonuses were not subject to taxation by either the federal or provincial governments.[1]

The prosperity bonus cheques were commonly referred to as Ralph Bucks which was coined by Calgary Sun columnists Rick Bell and Chris Nelson after searching for a term to describe the payment.[2]

After the announcement Klein would leave the door open for the possibility of annual prosperity cheques similar to the annual dividends provided by the government of Alaska through the Alaska Permanent Fund since 1982.[3] However no other cheques would be provided as Ralph Klein's popularlity continued to fall. Klein would announce his intentions to resign at the end of his term in October 2007, however following an underwhelming 55 percent approval during the leadership review at the March 2006 Progressive Conservative Party Convention, Klein would hasten his resignation as party leader to almost exactly a year following the announcement of prosperity bonus on September 20, 2006, and he would resign as premier on December 14, 2006.[4] The Progressive Conservative dynasty would be weakened under Premier Ed Stelmach, Allison Redford and Jim Prentice, and would eventually fall in the 2015 Alberta general election.[4]

Eligibility

All Albertans who were residents of the province as of September 1, 2005, and filed a 2004 tax return with the Canada Revenue Agency received the bonus, except for prisoners, who did not qualify. Cheques for Albertans under 18 years of age were payable only to their primary caregiver (the mother in most cases), thus leaving parents to determine how their children's share was to be distributed or used.[5] Homeless Albertans also qualified—the government pledged to work with inner-city agencies to ensure that the homeless receive their money. Other questions were unanswered. For example, it was unknown how spouses fleeing abusive relationships would receive their bonus if they were housed in a shelter.

Criticisms

The program generated controversy both inside and outside Alberta. Although few Albertans turned down their cheques, some residents criticized what they saw as a pointless giveaway, and preferred to see the excess money put toward long-term benefits such as tax cuts[6] or the abolition of health care premiums.

Outside Alberta, some believed that the program would generate resentment from Canadians who saw cheques delivered to every Albertan.

Ralph Bucks also made it into national media after a handful of non-Albertans came forward to admit they had received cheques to which they were not entitled, prompting criticism from the Canadian Taxpayers Federation.

In the years following the prosperity bonus program there has been a significant change in approval by Albertans, which began viewing the $400 cheques negatively in light of falling oil and gas prices in 2008, and again in the 2010s, which led to growing provincial debt and deficits in following years.[2][4]

I think we missed some great opportunities to invest in our post-secondary education systems; instead, we frittered away our money. People got a couple of dinners and put some gas in their Hummer, and that was about it.

— ATB Financial's Economist Todd Hirsch

Charity

In a web poll by CTV Calgary, 5% of respondents said they would donate their prosperity bonus to charity.

See also

• Alaska Permanent Fund
• Alberta Heritage Savings Trust Fund
• Prosperity certificate - a similar dividend paid by earlier Social Credit governments in Alberta

References

1. Klein, Ralph. "Alberta's Surplus". Office of the Premier - Government of Alberta. Archived from the original on 2005-10-29. Retrieved 2017-09-20.
2. Nelson, Chris (February 7, 2019). "Nelson: Ralph Bucks and the fine art of frittering away $1.4 billion". Calgary Herald. Retrieved 7 August 2020.
3. Harding, Katherine (September 13, 2005). "Alberta to cut 'prosperity bonus' cheques". The Globe and Mail. Cold Lake. Retrieved 7 August 2020.
4. Black, Matthew (January 14, 2020). "'Ralph Bucks' 14 years later: Could the Prosperity Bonus have saved Alberta's bottom line?". CTV News. Edmonton. Retrieved 7 August 2020.
5. "Millions of Albertans receive resource rebate". Government of Alberta. 2006-01-31. Archived from the original on 2006-02-04. Retrieved 2017-09-20.
6. Harding, Katherine (2005-09-13). "Alberta to cut 'prosperity bonus' cheques". The Globe and Mail. Archived from the original on 2017-01-14. Retrieved 2017-09-20.