Will Albertans finally look in the mirror?
JEFFREY SIMPSON
The Globe and Mail
Published Friday, May. 08 2015
Last glances in the rearview mirror of Alberta politics …
Premier Jim Prentice remarked just before the election campaign he unwisely called too early that Albertans should “look in the mirror” for the answer to why the province had a serious budgetary problem.
Mr. Prentice’s remark underscored the perils of telling the truth in politics, especially when the truth is hard. Voters prefer to believe the fault lies exclusively with politicians, forgetting who elected them.
Albertans had been electing second-rate Progressive Conservative governments (although they are are not alone in having settled for second-rate governments) that let major policy questions slide or ignored them altogether. These omissions and commissions caught up with the province.
Albertans were (and are) so deeply opposed to a sales tax that they frightened politicians of every stripe from introducing one. This omission contributed to leaving the province’s budget more vulnerable than necessary to the vagaries of world oil prices. Even the new walk-on-water Alberta leader Rachel Notley has avoided proposing a sales tax, presumably because she does not wish to challenge this deeply held – and deeply wrong – opposition.
Albertans also allowed governments – indeed encouraged them – to keep personal income taxes and business taxes very low. This was what former premier Ralph Klein boasted was the “Alberta Advantage.”
This “Advantage” was not built upon superior management of public affairs but the good fortune of geography that put so much oil and natural gas in the ground, which, in turn, poured revenues into the provincial treasury. Depending on the year and the oil and natural gas prices, 20 to 30 per cent of government revenues came from these fossil fuels.
That dependence produced two unhappy consequences. First, not nearly enough money from fossil fuel revenues was placed into the Heritage Fund for future savings. Second, the budget was far too dependent on world oil prices, so that Alberta’s finances swung wildly from surplus to deficit, which is what the unfortunate Mr. Prentice was attempting to say with his “mirror” remark. He didn’t put it this way, but the inference was correct: We Albertans had seen the results of this dependence many times before but did nothing to prevent it.
These fiscal swings happened periodically, and yet no social or political movement formed to yell, “enough!” Instead, there was always the sense that good fortune would return, that difficult times were temporary, that spending could go on as before, and that the tax system could remain largely unchanged. Better still, when times were really good, a premier such as Ralph Klein could cut cheques for Albertans and invite them to enjoy themselves.
Similarly, on the environment, Albertans convinced themselves (or at least many of them did) that the world (and especially the United States) needed its bitumen oil, would pay a high price for it, would appreciate Alberta’s efforts to reduce carbon emissions from its production and would therefore make way for the pipelines to get bitumen to markets.
All of these assumptions were contestable, as became apparent in recent years when pipelines stalled or were entirely blocked in the face of environmental and aboriginal opposition, U.S. domestic oil supplies soared and, more recently, world prices sank.
A look at the map ought to have signalled Alberta’s problem. Being landlocked, the province relied on support and approval from other jurisdictions. Rather than listening to what others needed before giving Albertans the answer they wanted, Alberta governments (and the Harper government) engaged in yet more salesmanship, telling others to get with the Alberta program.
Even when it became obvious that in the United States and British Columbia such salesmanship was a flop, the urge to keep selling and telling would not go away. But then, neither would the opposition noting that although Alberta had brought down its emissions from a business-as-usual case, emissions from expanded bitumen production would wipe out all the greenhouse gas reductions elsewhere in Canada, preventing Canada from meeting its national greenhouse gas reduction goals.
Now the rearview mirror is cracked. What was done and not done is past, but the tasks remain – first among which is to acknowledge hard truths.
It might be, although it is too soon to tell, that in voting impressively for the NDP, Albertans implicitly testified that they have looked in the mirror are now ready to grapple with crucial things left unattended to by previous PC governments.
. It is a valid line of questioning though. Alberta has been undergoing a massive cultural change with so many new residents who bring different experiences. How much did that influence the vote or really was it down to the PC screwing things up.
