After a bruising ride on roller-coaster markets, the treasurer of Canada’s chief natural gas- and oil-producing jurisdiction is urging its residents to think about weaning public services off a reliance on resource windfalls.

In his 2012 Alberta budget address on Thursday, which kicked off the ruling Conservatives’ campaign for an election required this spring, Finance Minister Ron Liepert stopped short of raising taxes. But he delivered a cross between a realistic warning and an appeal for support from fiscal conservatives offended by government deficits.

“We know that a discussion on taxes must lie in Alberta’s future,” Liepert told the provincial legislature. “For too long, we have used all our resource revenues to pay our day-to-day expenses. These revenues rise and fall with global economic fluctuations that we cannot predict and we sure can’t control.”

His budget documents included a graphic portrait of the province’s roller-coaster ride on gas and oil royalties and auctions to industry of leases to produce government-owned minerals.

The provincial government’s resource income was C$11 billion in 2007, peaked at C$12 billion in 2008, tumbled to C$6.8 billion in 2009 and C$8.4 billion in 2010, then recovered to C$11.3 billion in 2011 and is expected to hover at C$11.2 billion this year.

Natural gas has gone through the most dramatic swings, Liepert observed. He cited a severe drop in gas royalties to their current annual C$1.2 billion from C$5.8 billion in 2008.

The provincial government, like the industry, is braced for more lean times for gas. Liepert’s budget forecasts anticipate a 2012 annual average Alberta price of C$3.00/gigajoule (US$3.15/MMBtu).

The Alberta budget also highlighted the province’s vulnerability to global oil politics. Provincial resource revenues are projected to hit a new high of C$16 billion as of 2014 — but the recovery relies entirely on bitumen, the product that international environmental movements love to hate as “dirty oil” and are committed to stop from growing.

Provided the “eco-warriors” fail, Alberta government royalties from oilsands production are forecast to climb from C$4.4 billion last year to C$5.6 billion in 2012, C$7.6 billion in 2013 and C$9.9 billion in 2014.

Alberta’s resource treasure chest stands out as by far the largest source of provincial revenues, currently 28% and at times as high as 40%, while second-place personal income taxes are 23% and corporate income taxes are 11%.

The province’s heavy reliance on serving as a Canadian and North American energy supply mainstay — half or more of Alberta livelihoods are related directly or indirectly to oil and gas, economists estimate — ripples across every aspect of the public finances. Only banked stockpiles of cash surpluses from former fat years, in an account known as the Alberta sustainability fund, have enabled the province to weather the last few years of economic storms without going deeply into debt.

“Like energy companies, banks and other investors, Alberta must assess the degree of risk it is willing to take associated with its revenue outlook and spending decisions. Revenue in 2012-2013 could be as much as 10-20% higher or lower than estimated, depending on variations in energy prices, exchange rates, economic growth or equity markets.”

While pledging to embark on a quest for a “predictable, sustainable revenue base,” Liepert’s budget gave no hint of how it might be built apart from adding a second promise to consult all the province’s economic interest groups.

For this year at least, Liepert said, “We will continue to have the lowest fuel tax, no payroll tax, no capital tax and no sales tax.” Alberta’s low tax regime “is one of the things that sets our province apart, and gives us a competitive edge that must be preserved,” said the Conservatives’ 2012 provincial budget.

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