An Alternative Vision for Alberta

“@WorkingCollar @52ideas @suehuff It takes dollars, volunteers & commitment. #abparty is the place to invest the time and dollars for change”

  •  Phil Hyde ‏@philmhyde (Twitter – Mar 1, 2015)

About a month ago, I was involved in a conversation on Twitter with Sue Huff and a number of Alberta Party Members. It got me thinking about my own political history and my own political truths. For since my move to Alberta, I have yet to join a Provincial Political Party. This might not seem shocking to some but to me it is. I joined the Ontario Liberal Party just after I became a member of the Federal Party. To the best of my memory that was in 1994 before my 20th birthday. But my political involvement doesn’t end there. Up until I moved to Calgary, I was associated in some way or another with a provincial MPP, federal MP or a local riding association. I have helped Liberals, Conservatives and NDP during a local, provincial or federal election and sometimes helping out as an election official.

Consequently, my non-alignment in Alberta Politics is surprising to me. But it is not as befuddling as Opposition Parties in Alberta. For as my Progressive Conservative leaning friends – some members, some not – have pointed out, it is rare for any party to provide a cohesive alternative vision.

On the right, the Wildrose Party has emerged as the dominant opposition force but it has no vision for the province. It is true that they advocate for less government regulation and less taxes, and it is true that they feel that Government in Alberta is full of highly paid people. Consequently, they feel that they can find the expected $6 to $8 Billion dollar short fall by cutting government waste. Or as the Edmonton Journal reported “Wildrose finance critic Drew Barnes said his party would cut ‘with a rifle, not a shotgun,’ focusing on ‘corporate welfare’ and ‘layers of government bureaucracy’.” (Alberta government criticized for ‘scorched earth’ plan to cut spending across the board, By Mariam Ibrahim and Karen Kleiss, Edmonton Journal February 12, 2015). But what do they want the province to look like? Do they want the province to have rural medical facilities or rural infrastructure? Do they want the province to have a strong environmental stewardship programme alongside a strong oil recovery programme? Do they want to twin the Highway that runs from Edmonton to Fort McMurray to assist companies trying to develop the Alberta Oil Sands? To all of these questions we have one simple answer: we don’t know. For, they cannot tell us what their “future province” looks like.

What we do know is their hope to cut government runs counter to reality. Just think about it. The Alberta Budget is just over $44 Billion Dollars in 2014. In the past, the Wildrose Party has argued against the closing of rural medical facilities (Alberta hospitals crumbling, rural facilities underused and system manipulated by politics (with video), By Keith Gerein, Edmonton Journal, Dec 2, 2014). Yet, in the past couple of months they have argued that the short fall of between $6 to $8 billion dollars can come from cutting ‘layers of government bureaucracy’. The only problem is that the budget for the province is disproportionally allocated to health care and education. So, if one does not cut rural medical facilities, one must cut urban medical facilities, school board or post-secondary educational facilities. Given that all of those facilities have already received cuts in the good times, does the Wildrose Party feel that they can even take more cuts in the bad? If you want to be even more perplexed, think about Alberta’s future. If its Universities, Colleges and Schools produce kids with substandard educational outcomes, what will Alberta do? After the Klein cuts, it meant importing qualified people. Without high wages, what will Alberta do?  Accordingly, it is easy to see that the Wildrose Party can criticize but they don’t have a plan, idea or vision for the future.

The sad part is that the same is true in the other parties. The Alberta Party will complain that the Government is not listening or accountable. Meanwhile, the NDP will point out that there is a lack of labour rights or lack of environmental protection and the Alberta Liberals will complain about the viability of the economy or funding for hospitals and universities. While I have been attracted to individual MLAs or candidates like Rachel Notley, Susan Wright, Kent Hehr, David Swann, Laurie Blakeman or Sue Huff, I cannot say that I have been attracted to any party and the reason is simple: no provincial party in Alberta has presented an overall plan.

This argument could even be used against the PC’s. For when Premier Prentice was presented with this present crisis, he chose old solutions. Rather than explaining to the people of Alberta that previous PC governments made the mistake of spending their fortune, he talked about bringing back the Health Care Premium and discounted the idea of a provincial sales tax. Instead of acknowledging that 20% of the Government of Alberta’s budget was based on oil royalties and that is why we are up the creek, Premier Prentice tried to argue that the problem was the cost of government labour.

However, I know that Premier Prentice’s argument is a fantasy and there are two simple explanations for this belief. Firstly, Alberta’s Government is constantly fighting Alberta’s Private Sector to get the best talent. Given that I know a number of municipal and provincial employees in Alberta, I hear a familiar story: “some department is understaffed because oil firms keep poaching personnel”. For ever since Ralph Klein was Premier, the Government of Alberta has acted like a private sector employer. The Government chooses to hire contractors and rarely hires new employees. This presents a serious problem because oil and gas companies have better employment packages, pension schemes and group benefit packages. Consequently, the Government of Alberta doesn’t get the pick of the crop. What makes things worse is the simple truth that Alberta then has to hire professionals at a premium from outside of the province.

But this is only the start of the problem because Alberta’s Government had only started to recover from the Klein inflicted cuts in the 1990s. The Klein Government had cut so much that many professionals moved out of the province. Therefore, in order to encourage many Government employees back, subsequent administrations had to pay exorbitant amounts of salaries to attract suitable employees. Accordingly, the cost of Government Labour in Alberta is simple result of the market. With that being said, one can see that the Prentice Government lacks vision and creativity as well.

So where do we go from here? I would suggest a vision requires an acknowledgement of the truth. Accordingly, let us look at the verifiable ideas, evidence and objective. To do so, let us be honest: Alberta does not collect enough revenue. Since the 1990’s, Alberta’s financial health has depended upon royalties from natural gas and oil production. Accordingly, the drop in oil prices has just pointed out a truth we, as citizens, either wish to forget or don’t acknowledge in the first place. And as Don Braid pointed out introducing a provincial sales tax would solve our problem without changing our competitiveness.

“Jack Mintz, director of the University of Calgary’s School of Public Policy, says for every one percentage point in a new provincial sales tax, Alberta’s coffers would grow by $1 billion in revenue. A five percentage point sales tax — $5 billion — would virtually solve the revenue problem even at low oil prices, and still leave Alberta tied with Saskatchewan for the lowest HST, 10 per cent.” (Don Braid: Welcome to Alberta, Canada’s tax haven, by Don Braid, National Post, December 2, 2014 11:40 AM ET)

And to those who think that such a tax increase would make us uncompetitive, I would suggest that we look towards Norway. In the mid-1980s, the Norwegian Political Class started to think about Norway’s Government Pension Fund Global, known as the Oil Fund. In many ways, it was a reaction to Alberta’s Heritage Fund – started in 1976. What is more interesting, is that it received its first capital injection in 1996 and in 2014, it exceeded 5.11 trillion crowns or $905 Billion USD (Norway: It’s Alberta only with Vikings and common sense, By Ricky Leong, Calgary Sun, Updated: Monday, January 05, 2015 11:56 PM MST; Norway’s Oil Fund Heads For $1 Trillion; So Where Is Alberta’s Pot Of Gold?, Posted: 01/11/2014 1:02 pm EST Updated: 01/06/2015 2:59 pm EST by Daniel Tencer, Published by Huffington Post) Or as Mr. Tencer put it, “That’s right. Norway, the ‘socialist paradise,’ is effectively running a surplus of nearly a trillion dollars, thanks to oil revenue.”

Norway created a Trillion Dollar nest egg because they weren’t afraid of government involvement in the oil patch. Nor were Norwegians scared of having high income taxes, high sales taxes or have having high royalties on their natural gas or oil deposits. This was all possible because Norway had an adult conversation about the needs of their government and what fiscal resources would be required to accomplish those goals. This has not happened in Alberta and any vision must start with that conversation. A conversation the Alberta Party, the Alberta Liberal Party, the Alberta Greens and NDP don’t want to have.  For, none of them wants to admit to the general populace that they have been “undertaxed” for almost 30 years. None of them wants to say that the problem is that the “Alberta Advantage” has wasted away their heritage and maybe their future.

This hard truth equally paralyses the Alberta Progressive Conservative and the Wildrose Party. For no measuring of cutting Government will provide Albertans with the Government they want. For the Wildrose Party, this means an end to their platform because their entire platform is based on the idea of an inefficient Government. This probably explains why Ms. Smith and her eight colleagues crossed the floor. However, one can see that the Alberta Progressive Conservative Party is also in trouble because the central plan to their last twenty years of governing has been the idea of the Alberta Advantage: low income taxes, no provincial sales tax and low royalty rates on oil and natural gas.

After fixing the fiscal gap, what then? Follow the example of Peter Lougheed and Norway: create a provincial champion to develop local talent. Alberta, Calgary to be specific, is Canada’s engineering capital. Graduate Engineers come to Calgary in droves because there are very few other places in the country that train new engineers. Engineers from all disciplines including chemical, geothermal and civil – come to Alberta from around the world because developing the oil sands requires engineers to develop computer systems, to move rocks and mud, to brace and build structures and roads as well as environmental engineers to fix what the others have broken.

Given that “Climate Change” will require us to adapt private building and public infrastructure, having so many engineers means that we have a commodity we can exploit: Human Capital. As a resource, we could develop our “human resources” by creating a large engineer firm. Such an action would be no different than what Peter Lougheed, Pierre Trudeau and Bill Davies did when they invested in Syncrude – the first company to develop the Athabascan Oil Sands. Peter Lougheed, Pierre Trudeau and Bill Davies invested in the private consortium known Syncrude because the owners were going bankrupt trying to be the first company able to develop Oil Sands deposits. That act of Government investing as a private individual allowed for the development of the technology to exploit the Oil Sands to be made possible. What would be different if the Government of Alberta developed a plan, a company, which the market could buy into? Would that be any different from ATB Financial or Syncrude? I think not.

ATB’s economist Todd Hirsch has proposed similar ideas. He once proposed, on CBC Radio, that we could do the same in the field of medicine, health and/or education. Nor is it far from the economic successes in Canadian History. Canadian National and Canadian Pacific both became successful because of Government Money and their relatively oligopolistic position in the Canadian Economy. The same is true for our Banking, Investment and Life Insurance Sectors. In fact, what is most interesting is Canada’s only dominant player in Property Insurance was created by the actions of a Dutch Financial Firm.

However, the development of an engineering giant is not the only option. For Alberta could work to exploit our abundance of renewal energy resources. For years now, the Danish have been working on trying to attain a difficult goal: complete independence from fossil fuels by 2050. As their Government Website notes, from 1980 to 2010 the share of Danish renewable energy has grown from just 3% to 19%. By 2030, they estimate that 33% of their energy will be produced by wind and biomass. What is most interesting is that this pledge to get off of oil, coal and gas will not use Nuclear Power Plants. Given Alberta’s reliance on the Oil Sands, one could see that the Danish Experiment could have consequence for us. Consequently, why don’t we change now? Since Western Canada and the Northern Plains States generate electrical energy with coal, Alberta could take advantage of its wind and solar bounty to lead a dramatic change and power the economies and populations of the North American Prairies with cleaner energy.

Such a political economic vision for Alberta will allow citizens to do the rest. To quote Alberta Party literature, it will allow us to have a vision for a sustainable Alberta with shared prosperity. A place where kids get the best possible education “without having to entire into a lottery just to go to their local school”. One that includes access “to primary health care when we need it”, one which allows seniors to “have access to quality home care and, when the time comes, high quality, safe and accessible long-term care”. All of this starts with a strong economy that produces more than enough for all, so that we can save for the unknowns that the future brings. Therefore, we can produce the greatest benefit for the greatest number, while taking into account the specific needs that a fair society wants to provide to its minorities and less fortunate. By working on a vision that goes beyond Lougheed, we all win. As a result, I hope the opposition parties do that simple bit: come up with a vision and not just criticize the present Progressive Conservative Government.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

About 52ideas

Here are my 52 Ideas. What are yours?