All posts in Alberta Economy

Ironies abound in Alberta’s agitated politics as Alison Redford cranks up the postage meter

by David Climenhaga on May 8, 2013 in Alberta Economy, Alberta Politics with 1 Comment

How Albertans should see Progressive Conservative and Wildrose policies and procedures. Below: The clever Wildrose Facebook attack on PC Premier Alison Redford’s faintly unsavoury taxpayer-funded mail out, which makes it look a little worse than it really is.

Am I the only one who sees irony in the leader of Alberta’s ultra-conservative Wildrose Party working up a full head of steam because the merely very conservative government of Premier Alison Redford plans to mail a colourful budget brochure to every household in the province – at taxpayer expense, of course?

After all, the Wildrose Party of Danielle Smith is effectively the Alberta provincial branch of Prime Minister Stephen Harper’s Conservative Party of Canada – the one mailing out those federal Tory flyers attacking Liberal Leader Justin Trudeau’s substance as well as his masculinity.

The federal Tory ads are being mailed to voters across the country at taxpayer expense as well, of course, but there’s no word about how Ms. Smith feels about that – nor is there ever likely to be.

She was also silent on the provincial government’s new policy of referring to the Alberta Government as the Redford Government in news releases drafted up by civil service public relations flacks – another bad habit copied from the Harper Government.

But on the topic of the Redford Conservatives – the 61 supposedly Progressive MLAs so spooked by Ms. Smith’s 17-member caucus they’ve forgotten who got them elected and offer destructive policies nearly identical to those of the Wildrose Party – the Opposition leader was in fine fettle.

“We have a premier who is desperately afraid of losing confidence from her party in her leadership vote in the fall, and she’s pulling out all the stops, including using taxpayer money to send out political propaganda,” Ms. Smith huffed in an interview with the always reliable Canadian Press, which you can only read in out-of-town newspapers nowadays because the moribund Alberta rags don’t use the news service any more.

Ms. Smith raised an important and fairly non-partisan point – which was echoed from the other side of the political spectrum by NDP Leader Brian Mason – and that is that this mail-out likely has as much to do with internal PC Party politics as with any desire to inform the populace of the government’s plans.

“This has got a lot to do with the premier’s campaign, which is now in full swing, to win her leadership review in November,” Mr. Mason told the CP, most certainly an accurate assessment of the premier’s motivation.

If the mail-out can help her improve her polling numbers with voters, it will most certainly help her win her party’s endorsement to carry on – which, as has been stated here before, she likely will anyway.

Still, with their characteristic ineptitude, Ms. Redford’s strategic brain trust made it easy for the opposition by printing the $350,000 brochure in the same orange and turquoise colour scheme the premier used in her 2012 election campaign.

A clever commercial artist in Ms. Smith’s party’s employ worked up a witty Facebook graphic that drew attention to this fact, managing to make the leaflet look just a little sleazier than it in reality is.

The contents of the eight-page mail-out add up to the usual baloney we’d expect from any premier who found herself in Ms. Redford’s shoes – plenty of excuses for the party’s screeching turn back to instinctive austerity from its promised sustainable funding for social programs, blamed on the already evanescing “Bitumen Bubble,” plus anodyne bromides about the province’s glowing future.

Well, call me cynical, but I reckon that to the winner goes the spoils – and in a democracy that usually means the keys to the room with the postage meter.

The brochure is faintly unsavoury, but I just can’t get my knickers in a twist about a sin this small compared with things like the Tories’ determination to ship bitumen and jobs out of the province and the country as quickly as they can – a policy they share with the Wildrose Party, except that Ms. Smith’s crew is standing on the sidelines yelling, “more, more, faster, faster!”

Nor do I believe for a moment that the Wildrose Party – the would-be, erm, Smith Government – would behave any differently in office on this particular count.

That’s not cynicism designed to discourage citizens from voting, yet another Tory bad habit, merely an evidence-based assessment of the likely behaviour of so-called conservative parties of almost all stripes whenever they manage to glom onto power.

The government, meanwhile, defended sending us all the factoids contained in its cheerful “Report to Taxpayers” – “we don’t apologize for communicating to Albertans the information that Albertans want to know,” sniffed Finance Minister Doug Horner.

Well, not all the information that taxpayers want to know. The government won’t be releasing the contents of a report on pipeline safety to taxpayers any time soon, Energy Minister Ken Hughes explained yesterday.

Mr. Hughes promised: “We’ll release it in the fullness of time” – the dispensation of which will happen, as lots of people in Alberta of all places understand instinctively, whenever…

In other words, don’t hold your breath waiting for environmental pie in the sky.

This post also appears on Rabble.ca.

Most of us are happy at 29 … but maybe not Alison Redford

by David Climenhaga on April 10, 2013 in Alberta Economy, Alberta Politics, Keystone XL Pipeline, Polling with 6 Comments

Happy 29? Unlikely. Cake shot grabbed from eslpod.com. Below: Alberta Premier Alison Redford and B.C. Premier Christy Clark, 29 and 25 (per cent) respectively.

Most of us are happy at 29. The world is our oyster. The future looks bright.

Alison Redford at 29? Not so good.

But then, we’re talking percentage points here, not years.

A 29-per-cent approval rating is a problem.

The Alberta premier was in Washington, D.C., yesterday trotting out the line heard recently at the Manning Centre “Big Ideas” Conference that a pipeline full of Alberta bitumen might actually be doing Earth a big favour on the planetary warming front.

Opponents of the Keystone XL Pipeline, Ms. Redford told a crowd of curious Americans at the venerable Brookings Institution think tank, “proclaim that either you stand against the oilsands, or you write off the environment, along with any hope for a sustainable existence. That is completely wrong.”

Instead, hecklers notwithstanding, the Progressive Conservative premier said Alberta is one of the most environmentally friendly jurisdictions in the world.

Well, good luck with that one. But even if it’s true, and even if her mission to the Imperial City works out the way she hopes, it isn’t going to help with the problem that really bedevils her, the one summed up in that awful number 29.

As noted, that is the percentage of Albertans qualified to vote in a provincial election who approve of the job Ms. Redford is doing, at least according to the Angus Reid polling company’s highly entertaining periodic horserace survey of how Canada’s premiers and their chief opponents are getting along with the people who give them their jobs.

Who knows if this online poll of 7,091 Canadian voters is perfectly accurate? It’s certainly a guide to how well the premiers and their opposition leaders are doing, and Ms. Redford is not doing very well at all.

This is especially true when you consider her white-knuckle drop of 18 points from the last time the pollster did the survey in December 2012 and the truly terrifying plunge of 26 points from a positive 55-per-cent rating her reputation with voters was enjoying the previous August.

We’re almost talking Christie Clark numbers here – according to the same survey, the B.C. premier is at an approval rating of 25 per cent. In just over a month we should know for sure what happens to Western Canadian premiers with those kind of approval ratings – unless, of course, Ms. Clark’s B.C. Liberals manage to find a way to evade their own fixed-election-date legislation and skid Ms. Clark into Victoria Harbour while they stall and find a replacement for her.

Actually, we already know what’s likely to happen with numbers like those. Both former Ontario Premier Dalton McGuinty and former Quebec Premier Jean Charest had similar approval numbers of 32 per cent in the previous Reid premiers’ popularity survey and they’re both gone now – the former into retirement and the latter to electoral defeat.

Worse, like British Columbia. where half the respondents (49 per cent) approved of New Democrat Opposition Leader Adrian Dix’s performance, fully 53 per cent of the survey’s respondents in Alberta gave Wildrose Opposition Leader Danielle Smith the thumbs up. (They liked New Democrat Leader Brian Mason and Alberta Liberal Leader Raj Sherman better too – with both at 34 per cent. And Saskatchewanians still love Brad Wall, the Mr. Congeniality of Confederation, but you can read about him and all the rest of them for yourself if you’re so inclined.)

Spin all this stuff however you like – and unlike Ms. Clark, Ms. Redford won’t have to prove anything in a provincial general election for three years – what this obviously means is that an awful lot of Albertans are no longer buying what their premier is selling.

It’s no wonder, really. First she successfully built a grand alliance with the province’s progressive voters to defeat Ms. Smith and the hard-right Wildrose Party, then she turned on them in last month’s hard-line budget, which was apparently designed to appeal to the voters she’d lost to the Wildrose. Now, as Edmonton Journal political columnist Graham Thomson observed, nobody likes her! And that was before the “Bitumen Bubble” she used as an excuse went pfffft!

With a popularity plunge like the one the Reid poll indicates, it’s probably not too strong to say Ms. Redford’s reputation has been obliterated – which means her party is going to have to decide at their mandatory leadership review next November if they want to stick with her and be obliterated too.

Obviously her recent charm offensive – chatty visits to the Press Gallery and all that – hasn’t been very charming.

Which brings us back to yesterday’s junket to Washington.

Premier Redford seems to be labouring under the impression that if she, or someone, can persuade American President Barack Obama to OK Keystone XL to export Alberta’s oilpatch jobs to Texas, all will be forgiven.

Now, why Mr. Obama would feel the need to do that is not at all clear when the pipeline not only faces powerful opposition from the president’s own supporters but passes through states that could be fairly termed Mitt Romney territory in the U.S. presidential election last November. But – who knows? – maybe he will.

But if he does, it’s said here this doesn’t translate into a political victory for Ms. Redford for two reasons.

First, regardless of what you hear from Conservative and Wildrose circles, support for the pipeline is far from universal here in Alberta – especially among the progressive voters Ms. Redford wooed away from their traditional parties a year ago and then kicked to the curb in her last budget.

Second, because the voters who want the pipeline will thank Mr. Obama, not Ms. Redford, for the approval.

Ms. Redford is 48.

This post also appears on Rabble.ca.

Dutch Disease plus unbalanced equalization: a shot across Alberta’s oily bow

by David Climenhaga on April 2, 2013 in Alberta Economy, Canadian Economy, Canadian Politics, Dutch Disease with 4 Comments

The site of a former automobile assembly plant in Oshawa, Ont. Well, you can’t blame this particular patch of weeds on the Dutch Disease, but you get the idea. Below: Economists Jim Stanford and Noah Zon.

Let’s call it Dutch Disease Redux with complications of Confederation.

Since Alberta’s petroleum economy has almost unquestionably hurt Ontario’s manufacturing base, it is axiomatic that Ontarians will soon demand a revised deal from Confederation.

This is a reality Albertans need to think about. Some may scoff and mutter that Central Canada deserves whatever it gets – “Let the Eastern Bastards Freeze in the Dark,” and all that. But the electoral reality is that Ontario probably has the votes to make a good start on fixing this problem if voters there start to perceive it has gotten out of hand.

Alberta’s crybaby notion of Confederation in the era of Stephen Harper’s prime ministership is that we pay for everything through equalization payments with our vast oil wealth, and the federation is then run to our disadvantage – even though the people doing the running are dominated by a claque of far-right Alberta politicians.

The problem with this perception is twofold:

  • First, the damage being done to the Central Canadian manufacturing economy by Canada’s petroleum-enhanced Loonie, in other words, the so-called “Dutch Disease”
  • Second, Canada’s equalization formula does not tell the whole story of whom is contributing what to Confederation

Now, Alberta politicians from all three branches of the Wildrose Party (federal government, Alberta government and Alberta Opposition) can accuse politicians who speak the obvious truth of treason if they like, but this doesn’t alter the unassailable facts about Canada’s economic predicament, and those facts are going to winkle through to Central Canadian voters.

This is not to say Mr. Harper’s federal Conservative Party can’t win back their hearts by 2015, but they won’t necessarily do so by advocating and adopting the polices that Alberta politicians say must be followed – such as, for example, us dictating social policies to them.

As economist Jim Stanford wrote early last month, our current conservative political leaders in Edmonton and Ottawa, aided and abetted by the semi-official Sun News Network and market-fundamentalist think tanks, have worked hard to portray the idea Dutch Disease might afflict Canada as dangerous, foolish and virtually treasonous.

The trouble with this McCarthyist strategy, he notes, is that “it relies on vilifying and marginalizing opposition, rather than debating facts and arguments.”

And the facts to be debated point strongly by to a case of Dutch Disease being experienced by Central Canada that is more severe than that experienced by the Dutch. The decline of Canadian manufacturing, writes Mr. Stanford, “is mostly a problem of consumers (both at home and abroad) not wishing to buy Canadian-made manufactures, and in that context the issue of the Loonie’s decade-long appreciation (beginning in 2002) is clearly relevant.”

He concludes: “Far from being ‘discredited’ by empirical research, the resource-driven deindustrialization hypothesis is almost universally supported by it.”

As for the outflow of money from Ontario, consider the new study by economist Noah Zon of the Mowat Centre for Policy Innovation at the University of Toronto, which concluded “there is roughly an $11-billion structural gap between what Ontarians pay to the federal government and what they receive back from the federal government.”

“One might assume that, given Ontario’s below average fiscal capacity, it would now be a net recipient of redistribution in the federation, but that turns out not to be the case,” the report explains. “Canada’s fiscal arrangements have not evolved to reflect changing circumstances.

“As a result, Ontarians continue to see their federal taxes redistributed away from Ontario on a net basis at a time when the province can ill afford it, at a rate estimated at approximately $11 billion in the 2009-10 fiscal year, the most recent year for which numbers are published.

“The gap is almost entirely a result of federal spending and program decisions that leave Ontarians receiving less than their per capita share of spending and transfers, rather than regional inequities in revenue collection,” the report says.

In its conclusion, the report notes: “Federal spending decisions are significantly skewed against the people of Ontario. The good news is that this is fixable. The federal government can, and should, reform those programs that discriminate against Ontario and Ontarians.”

The obvious conclusion from Ontario’s perspective: If currency distortions fuelled by Alberta’s oil industry continue to disrupt Central Canada’s economic wellbeing, more equalization not less is going to be required from Alberta.

It may not be obvious to our Alberta politicians, who are mostly occupied shouting down their opposition and branding it as treason, but the release of the Mowat Centre’s report is more than just a way to fill a few column inches in the Toronto Star.

Whether we like it or not, combined with the fact the Dutch Disease narrative is not just going to go away because we want it to, it’s a shot across Alberta’s oily bow.

This post also appears on Rabble.ca.

Alberta Health Services trimmers toss out a couple of market-fundy myths to save cash

by David Climenhaga on March 15, 2013 in Alberta Economy, Alberta Health Services, Alberta Politics, Alberta Teachers Association, Budget Deficits, Health Care, Public Education, Public Services with 2 Comments

Alberta Health Services Board Chair Stephen Lockwood demonstrates how to trim a provincial health care budget. Actual AHS board members may not be exactly as illustrated. Below: The real Mr. Lockwood in his official AHS portrait.

Two pernicious and slightly dissonant myths that cloud discussion of public health care are the idea that to get the best public-sector managers we must pay excessive private-sector style salaries and perks and the plainly preposterous notion the private sector always does everything better.

So it was interesting how Stephen Lockwood, the apparently cold-eyed and pragmatic trucking company executive from Okotoks picked by the Progressive Conservative government of Premier Alison Redford to lead the Alberta Health Services Board, tossed both ideas over the side the instant he was told to get serious about appearing to save money.

In other words, whatever Board Chair Lockwood’s other flaws may be, he can apparently add and subtract.

The AHS news release yesterday outlining Mr. Lockwood’s cost-cutting plans in the face of a smaller-than-anticipated provincial increase to the AHS budget – 3 per cent, versus the expected 4.5 per cent – was one of a phenomenal six press releases issued by the massive province-wide health agency today. (Hint to AHS cost cutters: if your PR department is trying to get in the Guinness Book of Records for the most news releases in a single day, perhaps some of them should be reassigned to front-line health-care duties!)

Actually, the release implied the plans were jointly cooked up by Mr. Lockwood and CEO Dr. Chris Eagle, but one has the unshakeable feeling that on this one that it was Mr. Lockwood calling the shots. It’s also a bit of a stretch to call the contents of this release news, since the key points were all released once before in a meeting with the Calgary Herald editorial board at the end of February.Regardless, the statement lists eight “initial administrative cost savings,” and the stuff that made the lead of the newscasts were promises to freeze management pay for three years, reduce administrative expenses by 10 per cent over all, and deeply chill the hiring of new administrative employees not deemed to be “mission critical,” whatever that means.

Of course, mission criticality may turn out to be a pretty elastic concept, although not likely in the first year – which when you think about the budgeting process is really the only year of this packet of promises that has any meaning.

Still, here’s a little wager, despite the constant repetition of the mantra that we have to pay top dollar to get top managers, not many of these top managers will immediately decamp for other top jobs.

If I am right, perhaps we should bear this in mind when we set the management salaries of a whole range of senior public jobs in future, including university presidents, health system vice-presidents and government deputy ministers.

Oddly enough, from the market fundamentalist perspective not usually advocated in this space, the iron law of supply and demand would suggest demand is high worldwide for physicians, nurses, practical nurses and other front-line medical professionals and that therefore their pay is probably too low.

The same cannot be said of managers, who are a dime a dozen even if we pay them more than that.

Meanwhile, buried in Point 8 of the release was a notation that, to immediately save money, AHS would now be “cutting expenses incurred for the use of consultants and external facilitators.”

One could argue it’s about time.

It’s well established that with its massive purchasing power and many economies of scale – and without the need to pad corporate bottom lines with profit – single-payer public health care is far less expensive and much more efficient than for-profit health. Health care marketizers and highly ideological right-wing governments just hate this well-established fact, and are endlessly creative but not terribly successful in their efforts to wiggle past it.

Public health care agencies like AHS that instead of using their own skilled public sector workforce go outside to the private sector to “save money” rarely achieve that goal, and often end up costing themselves and taxpayers far more.

That Mr. Lockwood immediately spotted that bad habit as exactly what it is was should be a useful yardstick of the truth behind the risible claim private operators do key jobs better than public employees.

After all, he’ll have the before and after cost and quality comparisons right in front of him for future reference when the cash starts flowing again.

+ + +

After much puffing and blowing, teachers and government reach deal

After all their wary circling and a tentative jabs, it appears Alberta’s schoolteachers’ union and the Redford Government reached a tentative collective agreement yesterday that everyone can live with – well, maybe everyone except some school boards, whose association was predictably screeching about the costs of the deal last night.

Details must await our commentary until the 35,000 eligible Alberta Teachers Association members have voted on the pact, which the union’s provincial executive has endorsed.

Expect the relative amity that have long characterized the relationship between the government and the ATA to quickly return once the agreement is signed.

This post also appears on Rabble.ca.

Alberta still needs a “city party” – a role the New Democratic Party could fill

by David Climenhaga on March 14, 2013 in Alberta Economy, Alberta New Democrats, Alberta Politics with 8 Comments

Typical Alberta Progressive Conservative Party members. Or, wait, are those Wildrose members? Alberta’s rural elite may not appear exactly as illustrated. Below: Alberta Municipal Affairs Minister Doug Griffiths, Calgary Mayor Naheed Nenshi, Edmonton Mayor Stephen Mandel. Where’s the NDP when we need them?

Here it is 2013, the Earth is about to become an urban planet, and the Progressive Conservative Government of Alberta and the Opposition Wildrose Party are locked in a titanic battle to win the hearts and minds of conservative rural voters.

What’s wrong with this picture?

City folks? As far as both parties are concerned, we’re just effete, latte-swilling, soft-handed condo dwellers who get along by mooching off the hard work of our horny-handed rural betters.

Worse, we’re dangerously inclined to go out and vote for politicians like Calgary Mayor Naheed Nenshi, who – quelle horreur! – has squishy liberal values. The same could be said of Edmonton Mayor Stephen Mandel, although I’ll bet he thinks of himself as a small-c conservative.

A week ago, Municipal Affairs Minister Doug Griffiths – who would be as comfortably at home in one of our two rural right-wing parties as the other – spoke for both parties when he accused the millions of Alberta city dwellers of spending all their time thinking up ways to purloin the wealth of the rural Albertans who toiled so hard to store all that currently undervalued oil and gas beneath their North 40.

“You could be asked by rural Albertans why 17 per cent of the population that lives in rural Alberta that has all the oil and gas revenue, does all the work, all the farms, all the agriculture and everything associated with it goes to support urban Albertans, who sit in high-rise condos and don’t necessarily contribute to the grassroots of this economy,” Mr. Griffiths told the Legislature.

Later, he said that wasn’t what he thought, it was just the opinion of a couple of friends of his. But you get his general drift. Even having a big-city premier never seems to make much difference.

Alberta today is dominated by low-population rural ridings whose residents are going to vote for their beloved tax-and-spend conservatives, in one guise or another, as long as sufficient loot from city taxpayers and hydrocarbons keeps flowing their direction.And it’s pretty clear that out there amid the barley fields and pump-jacks of rural Alberta, Mr. Griffiths’ remarkable slander of Alberta’s beleaguered city folks isn’t going to cost him many votes.

Meanwhile, here in the cities, we are undergoing yet another brutal course of the austerity treatment regularly prescribed by these two hayseed parties while we try to navigate our way through the potholed streets of the former Richest Places on Earth.

And what are our two supposedly progressive political parties, the NDP and the Alberta Liberals, doing about this? Oh, they’ll take a gentle poke or two at Mr. Griffiths for his mean-spirited ignorance, but neither of them seem to be able to get out of the rut of imagining they can somehow, someday win a majority in this rural-dominated, rural-favouring province.

Fat chance! 

I’ve said for years that this is a lost opportunity for the Alberta NDP in particular, which could recast itself as the party of Alberta’s cities and thereby play a genuinely influential role in shaping policy in this province in a way that can benefit all its citizens.

It’s a continuing tragedy that our four Alberta New Democrats – every one in an Edmonton area city seat – sacrifice the ability to build the party and have meaningful influence in order to play homage to the pipedream that some day, when the planets are all magically in alignment, enough old CCF voters are going to crawl out of the rural woodpile to finally swing things the way that God and Tommy Douglas intended.

So let’s say it one more time, with vigour, that the Alberta NDP should recast itself as the City Party of Alberta and speak up plainly and forcefully Alberta’s urban voters and demand that we and our tax contributions be treated with a little respect.

What kind of issues would work for the NDP in this context? Here are five, dragged back from the crypt one more hopeless time:

Public Transit and public works. Everyone knows how Alberta tax dollars flow to rural areas for irrigation projects, first-class highways, health facilities, Cadillac schools and a host of other costly benefits. Meanwhile, we need decent, efficient, safe, fast public transit in our cities, and roads we can drive on in a family car. But while transit helps the environment and saves a bundle down the line, it costs a fortune up front. The NDP should fight for it, not just half-heartedly pay it lip service. And while we’re at it, how about a little help filling those potholes?

Social Services. When Tories cut social services, as they’re doing once again, who pays? Urban taxpayers, that’s who! We pay more for policing, health care, basic services required just to keep our fellow humans from freezing to death. We pay in crime, run-down neighbourhoods, foregone business opportunities and illness, physical and mental. Plus ever-higher municipal taxes, of course. Rural-based, rural-focused parties don’t really give a hoot.

Child Care. Can we afford childcare at a time like this? We can’t afford not to have it at a time like this! This is an urban issue if ever there was one. It’s also a prosperity issue – as a method of stimulating the economy, childcare dollars are worth about five times infrastructure spending. All the other parties will say, “stimulating the economy? What’s that?”  But they’re the parties that stand for rock-bottom hydrocarbon royalties, carbon storage boondoggles, endless contributions to the upkeep of rural electoral districts, and a flat tax that favours the rich.

Public Health Care. Decent hospitals and enough health professionals are an urban issue. Mental health facilities that work, where they’re needed. Public health and emergency treatment facilities belong in every part of our urban communities. So do publicly run seniors’ residences. So what are our rural parties doing again? One of them is kicking the crap out of health care and the other is demanding that it kick harder. All in the name of winning rural votes.

Public Education. Investment in public education obviously benefits the province. It pays dividends in terms of quality of life in our communities – even the ones in the sticks. It eases the impact of unemployment, especially for young people. It helps urban working families. What a concept – create vast long-term advantages for society by helping young people now! Caps on tuition, adequate funding for institutions, and schools where we need them add up to a terrific urban issue. If we can pay billions for carbon capture and drilling “incentives,” surely we can afford to fund our schools and universities. What have we got? Bigger cuts in education than anywhere else!

The NDP could speak to these issues, and it could speak to them in a way that said specifically it supported urban areas and their citizens. The NDP could paint itself as what it is anyway, whether it likes it or not: the only political party in Alberta that looks out for, or cares about, issues and values that matter to city people, rich and poor alike.

The party wouldn’t actually need to have to badmouth rural areas. But seeing as the folks out there aren’t going to vote NDP anyway, they would hardly need to put a heck of a lot of effort into developing a platform for them either!

Alberta’s city taxpayers get screwed. Street crime, sky-high municipal taxes, potholes, poor health facilities, doctor shortages, unplowed winter streets and pathetic public transit are all glaring examples. No Alberta party likely to form a government soon – least of all the two rural parties that run this place – will sacrifice rural votes to serve the people who really provide the energy, enterprise and creativity that make this province worth living in.

The NDP can speak for those of us who live in Alberta’s cities, and improve its electoral chances too. Or it can wait for someone else to do it. Because – trust me on this – one of these days, someone will figure this out!

This post also appears on Rabble.ca.

Close enough for government work: Alberta Tories manage to hold their centre-right turf

by David Climenhaga on March 7, 2013 in Alberta Economy, Alberta Legislature, Alberta Politics with 2 Comments

Finance Minister Doug Horner preps Albertans for yesterday’s budget. Actual Alberta finance ministers may not appear exactly as illustrated – but that’s the trick, isn’t it? Below: The real Doug Horner.

All in all, I guess, you could make a good case this was a pretty lousy budget.

It’s deeply confusing, as without any doubt the Alberta government intended, and there are a couple of real disasters lurking in its pages – got kids in post-secondary education, anyone?

But in the aftermath of the Alberta Budget Speech read this afternoon by Progressive Conservative Finance Minister Doug Horner, who was wearing his new flip-flops at the time, you have to admit it was a pretty slick example of expectation management.

The usual suspects on the left and the right quickly attacked Mr. Horner’s budget with the usual feigned ardour, as they are expected to do, and from either perspective they probably got it right. But so what? You’ve got to know plenty of their supporters were breathing a sigh of relief and reckoning they’d just dodged another bullet.

NDP Leader Brian Mason, sounding a bit like a broken record, called it a “broken promise budget.” Undoubtedly he’s correct – the question is, will Alberta voters buy Mr. Horner’s and Premier Alison Redford’s explanation that things have really changed? The answer: Probably.

Alberta Liberal Leader Raj Sherman called it a “bankrupt budget” – he meant, morally, presumably, because you can’t call any entity with the kind of cash flow Alberta has bankrupt, exactly, even when you’re feeling the uncomfortable pressure of a bitumen bubble passing through.

So are they morally bankrupt for running a cynical but effective campaign, then changing everything? Almost certainly! But will Alberta voters care in three years’ time? Unless something big changes, almost certainly not.

Opposition Wildrose Party Leader Danielle Smith called it the “back-in-debt budget,” trotting out the standard hard-right line that we’re spending beyond our means, a position that may not get a lot of support here, but that admittedly has a certain constituency in this province.

So are we back in debt? Sure. Will anybody care? Well, the Wildrose brain trust can try to make Albertans care and, who knows, maybe some of them eventually will. Or not.

Many more of the usual suspects, from a couple of well-known unions to right-wing Astroturf groups like the Canadian Taxpayers Federation, rolled out some fairly predictable cris de coeur. The Edmonton Journal even sounded a bit like the official arm of the Wildrose Party, trotting out portentous phrases like “opaque, obscure and cynical.” Well, yeah!

But there’s no escaping the sense the Redford Tories cynically but deftly stage-managed the whole thing by rolling out a number of terrifyingly dire hints and rumours in advance – tough decisions, sharp break with the past, significant restraint, yadda-yadda – then announcing actual budget details that seem on their face considerably less drastic.

Of course, we don’t really know yet. Maybe ever.

But faced with a hard-right obsessive about debt and spending, a centre-left ready to view any cuts in health care or social programming as a major betrayal, and influential groups walk away from any exercises in coalition building, Mr. Horner managed to leave both sides’ supporters feeling as if they might have just been had, but disinclined to start rushing to the barricades.

There’s still some potential for mischief there – the government’s fight with Alberta’s physicians could still cause them some grief, but they’re sure acting like it works for them. It might not be smart to bet against them on that one!

No one’s conducted an opinion poll just yet – Janet Brown! Tony Coulson! C’mon down! – but it’s said here that in their opaque, obscure and cynical way, the strategic brains behind Alberta’s Progressive Conservative Party managed to hold their centre-right ground a little longer.

And the centre right, if you haven’t happened to notice, is territory quite a lot of Albertans will vote for.

This post also appears on Rabble.ca.

Alberta budget primer: when they say ‘tough decisions,’ they really mean … ‘decisions that will be tough on you’

by David Climenhaga on March 7, 2013 in Alberta Economy, Alberta Legislature, Alberta Politics, Alison Redford with 4 Comments

Typical Albertans await tomorrow’s budget aboard the Good Ship Richest Place on Earth. Alberta may not actually be as damp as illustrated. Below: Premier Alison Redford. Why is this woman smirking?

Oh, we’ll squeeze you till the pips squeak, Premier Alison Redford seemed to be promising Albertans yesterday, as we nervously awaited the provincial budget that is to be brought down, possibly in flames, this afternoon.

Well, we’re all really looking forward to that out here in the pothole-riddled Richest Place on Earth, I can assure you!

This is different, of course, from the promises Ms. Redford was promising back when it looked like the Wildrose Party under Danielle Smith might actually win the provincial election in April 2012 – and then squeeze us till the pips squeaked.

Well, we the voters of Alberta clearly rejected the Wildrose pipsqueak … and apparently got a Wildrose pipsqueak instead. What’s wrong with this picture?

The problem may simply be that when our Progressive Conservative government and its leaders say one thing, they actually mean another. If we only had the glossary, we could have figured out what they really had in mind.

As a public service, then, here is Alberta Diary’s plain-language guide to Alberta political terminology. We hope profoundly it assists you in understanding the budget today.

So, for example, when they say “tough decisions,” they really mean … “decisions that will be tough on you.”

Each of the points below should be preceded by a shout of “when they say,” and followed by a response of, “they really mean…” And so in a few moments, it is hoped, all will become clear … or at least we’ll all have a nice time chanting and singing while the ship goes down.

Glossary of Alberta political terminology:

  • Avoiding deep cuts … making deep cuts where we figure no one will scream, you know, like to poor people and education…
  • Balanced budgets … infrastructure reduced to rubble through neglect …
  • Baths twice a week … who said anything about hot water?
  • Building this province through infrastructure spending … construction companies make bigger donations than sick people
  • Canada’s economic engine … say goodbye to your manufacturing jobs, Ontario!
  • Continue the work we started last year … we have one objective, to get re-elected in 2016 … for that we need a Throne Speech?
  • Continue to drive this province forward … do whatever the petroleum industry wants
  • Hold the line on health care costs … we’re more afraid of the Wildrose Party than the people who voted for us …
  • New fiscal realities … we figure teachers and civil servants will vote for us anyway because they’re so scared of the Wildrose Party
  • New fiscal realities II … I’m breaking all my promises …
  • Prudent fiscal management … we’ve pissed all the money away again …
  • Results-based budgeting … we want to make it impossible to compare anything with last year
  • Sustainability … sustaining resource extraction until all the resources are extracted …
  • Technical deficit … technically, we have a deficit

Well, you get the picture. Readers are invited to submit their own suggestions for what they say, and what they really mean.

In the mean time, the real question is how the Redford Conservatives expect this budget to help them get re-elected in 2016.

Because, count on it, however crazy this may seem to you, that’s the objective of everything they’re going to do today. That is, creating the conditions that will persuade Alberta voters to make the “safe choice” in 2016, and vote for the Conservatives one more time.

This post also appears on Rabble.ca.

Are Alberta’s cannily incompetent Conservatives quietly awaiting a ‘Bitumen Gusher’?

by David Climenhaga on March 4, 2013 in Alberta Economy, Alberta Politics with 5 Comments

Everybody should be as happy about Alberta’s “Bitumen Gusher” as these two guys, your blogger and former Finance Minister Ron Liepert. Below: AUPE’s chart of the price differential between Alberta bitumen and West Texas Intermediate crude. Below that: The Alberta government’s chart showing its natural resource revenue projections to 2022, prepared for last month’s Economic Summit. Obviously there’s no cause for panic.

Have things really changed all that much for Alberta since then-energy minister Ron Liepert predicted in early 2012 that the province was on the verge of a “Bitumen Gusher” of unprecedented magnitude?

One just hates to endorse the financial predictions of any Alberta Tory cabinet minister, but it is said here they likely haven’t.

If Mr. Liepert got it basically right in February 2012, understanding that fact helpfully illuminates the re-election strategy of Premier Alison Redford and her Progressive Conservative government for 2016.

At the very least, Mr. Liepert’s one-year-old forecast is extremely helpful in analyzing the real meaning of Ms. Redford’s “Bitumen Bubble” claims that are being used to justify a range of cutbacks in government services as befits her government’s true privatization agenda, which appears to differ only in insignificant detail from the Wildrose Party’s platform.

In a speech to the Calgary Chamber of Commerce the day after he released his spring 2012 budget, Mr. Liepert predicted bitumen royalties were about to soar and as a result Albertans could expect annual surpluses of $10 billion or more.

“I don’t think any of us realize what kind of – I’ll call it a gusher – is coming out of the oil sands,” Mr. Liepert said in his pre-retirement swan song to the Calgary Chamber.

The day before, Mr. Liepert boasted to the Edmonton Journal that one of the reasons for his optimism was that each year more oilsands projects were approaching “payout” – the point at which they have recovered their costs and are subject to a higher royalty rate.

“Nothing is factored into this plan that isn’t already producing or about to produce, because many of these have a 10-year lead time,” Mr. Liepert assured the Journal.

In the same story, a spokesperson for the Canadian Association of Petroleum Producers agreed with Mr. Liepert’s analysis, observing, “this seems pretty consistent with our own figures.”

Readers will note the Redford Government has been very quiet lately about when it expects projects now paying royalties based on gross revenues to achieve payout and switch to the more generous rate based on net revenues. But judging from Mr. Liepert’s prediction just a year ago, his government analysts were of the view that happy day is not far away.

For a government with a neoconservative agenda of cutbacks and privatization, or which simply has some competency issues regarding budgeting, the so-called “Bitumen Bubble” was conveniently timed. It provides justification for holding the line on the salaries of public employees. It also offers and excuse for privatizing more services that belong in the public sector and finding new ways to minimize the public reaction to cuts in essential and popular public services.

As the Alberta Union of Provincial Employees – which as the representative of direct government employees, many health care workers and other public-sector employees, obviously has a dog in this fight – noted in a paper released this morning, the differential in the price fetched by Western Canada Select and West Texas Intermediate, the so called Bitumen Bubble, is almost certainly a temporary phenomenon.

Leastways, it is if past behaviour is a good way to predict future behavior – as it generally has been throughout of human history.

Back in October 2007, for example, the difference was about $30 – not seen to be a particular cause for concern at the time. Through most of 2011 it shrank to about $17. By December 2012, it was back to $30. Now it’s a crisis.

Look at the chart provided by AUPE: the price of bitumen as a percentage of WTI has been going up and down like an elevator in an office building since the start of 2005, but the trend has been steadily and happily upward.

Dubious estimates of the value of shale gas and horizontal drilling in Oklahoma have changed all that? Don’t you believe it!

In fact, energy analysts predict the price of the differential will tighten up again soon, just as it always has. Baytex Energy Corp.’s fourth quarter 2012 Heavy Oil Pricing Update and the PIRA Energy Group’s North American Midcontinent Oil Forecast, both in January 2013, for example, predicted the differential will tighten to about $22 by June and $13 by the end of the year.

A year ago this month, a report of the Canadian Energy Research Institute forecast “royalties collected from the oil sands industry are expected to exceed the $10 billion mark by 2016 and the $30 billion mark by 2024.”

In 2024, the number of projects in the post-payout phase, paying the higher rate, will exceed the number not yet paid out. And by 2040, CERI concluded, “oil sands royalties are estimated at around $52 billion. Between 2011 and 2045 a total of over $1.2 trillion are estimated to be collected by the Alberta Government from oil sands operators, a figure just below the equivalent of the current value of Canada’s economy or GDP.” (Emphasis added.)

Oh, and one more thing, with the government’s third-quarter fiscal update still predicting oil sands production 130,000 barrels a day higher than last year, the Bank of Canada is holding the line of interest rates – accounting for the recent decline in the value of the Loonie.

And remember, as the government pointed out in its 2012 budget, every one-cent decrease in the Loonie against the Greenback puts another $247 billion in Alberta’s back pocket – so if the dollar stays at about 95 cents, there’s another billion in the treasury!

This is a financial crisis?

Don’t expect to hear much about this just yet, however, because for ideological and policy reasons, the “Bitumen Bubble” narrative is equally convenient to the Redford Government, the Opposition Wildrose Party and the federal Conservative government of Prime Minister Stephen Harper – all of which advocate the same policies on pipelines, privatization and public-sector penury.

It is particularly helpful to the PCs, of course. For now, they can blame their current substantial deficits on unexpected factors outside their control – the Bitumen Bubble – never mind that it’s been understood and predicted for ages.

Going into the next election, they can claim it was good management and a tough line with public employees like teachers and government workers that are behind Alberta’s good fortune.

Corporate donors will be happy, the beneficiaries of continued rightward policies that feather their corporate nests. Suddenly the place will be awash in cash again, enough at least to lull the rest of us back to sleep.

Count on it that the government is confident it can again get progressive voters  worried enough about the Wildrose agenda to once again abandon the Alberta NDP and Alberta Liberals and vote “strategically” for the government.

Obviously, Alberta shouldn’t be making long-term policy changes based on a ginned up panic over revenues that, as Ron Liepert rightly predicted, are only going to go up, way up!

But it sure sounds like that’s exactly what we’re doing.

This post also appears on Rabble.ca.

Looking back in perplexity: where did all of Alberta’s money go again?

by David Climenhaga on February 28, 2013 in Alberta Economy, Alberta Politics with 6 Comments

First World money and Third World roads. If we’re so rich in Alberta, why do we seem so poor? A motorist negotiates one of Edmonton’s famed potholes. Actual Edmonton drivers may not have snappy uniforms like this fellow. Below: Author, professor and former Alberta Liberal politician Kevin Taft, the cover of Follow the Money.

There aren’t many surprises in Alberta – at least if you’ve been paying attention.

However, apparently paying attention is something you can’t expect either the government or the media to do.

Consider the news in the Edmonton Journal earlier this week that “Experts have warned of ‘Bitumen Bubble’ for years.”

Well, yeah…

This just in, reported the Journal: “…oil industry players have been warning about the phenomenon for more than a decade.” (Oil industry players, by the way, means big shots and their trusted flunkies, not the guy playing the piano in a house of ill repute. Just in case you wondered.)

Indeed, the Journal’s reporter noted, “a review of historical markets shows the gap between what Alberta oil sells for and the benchmark price for West Texas Intermediate has repeatedly hit $35 in the past two years.”

Well, it shouldn’t surprise us, I suppose, that Premier Alison Redford was surprised by the fact petroleum prices, known for their volatility, are volatile. There’s a long tradition of governments being surprised by the obvious – and this is not just true of Progressive Conservative governments, and it’s not just true in Alberta. But apparently that helps.

Which brings us to another related surprise. Don Braid, the Calgary Herald’s political columnist, who can usually be counted on to write a pretty good column, could be found shaking his head in astonishment recently about Ms. Redford’s astonishing claim that there’s almost no money any more because of the Bitumen Bubble.

“You have to wonder about a government that can pull off the remarkable stunt of going broke while the province it runs keeps getting richer,” Mr. Braid observed.

Well, actually, you don’t. You just have to listen to what former Alberta Liberal leader Kevin Taft, the best premier Alberta never had, had to say about this long, long ago.

As we said in this space back in January 2012, “Sooner or later, all conversations about the Alberta economy in the modern era come down to one key question: Where the hell did all the money go?” Indeed, where does it continue to go?

Or to put that another way, if Alberta’s so rich – almost double the GDP of the rest of Canada in recent years – how come it feels so poor? (And you only need to drive the potholed Third World roads of Edmonton to know how poor it feels!)

Dr. Taft, a former University of Alberta professor and director of the U of A’s Parkland Institute, answered this question, actually. It’s just that no one in the government or the mainstream media seems to have been paying attention.

So if we’re so rich, Dr. Taft, how come we’re so poor? Illuminate our fuzzification!

Last year working with researchers Mel McMillan and Junaid Jahangir, Dr. Taft wrote a book called Follow the Money, Where is Alberta’s Wealth Going?

Relying heavily on Statistics Canada’s CANSIM (Canadian Socioeconomic) and Financial Management System databases, Dr. Taft made a case that has not been effectively challenged by the government’s spokespeople, its apologists among the legions of far-right “think tanks” that serve as the Greek chorus for Alberta’s perpetual state of scarcity and crisis amid fantastic wealth, or far-right entities like the Wildrose Party that demand ever more vigorous attacks on public services.

So let’s review the places Dr. Taft was able to establish pretty convincingly are not getting our money:

  • It’s not going to government spending. For while government spending in Alberta seems to be perpetually managed incompetently by generations of Tories, who gyrate between throwing money at problems to massive and disruptive cutbacks, over the long term our government spends close to the Canadian average.
  • It’s not going to public services. “As a society, Alberta spends a steadily shrinking portion of its increasing prosperity on public services,” Dr. Taft showed in his book.
  • It’s not going to education. Comparing five-year averages to smooth out individual years’ ups and downs, spending on K-12 education went up 2 per cent, total, over 20 years.
  • It’s not going to health care. When you adjust for the size of the provincial economy, spending on health care puts Alberta last in the country. No matter how you measure it, “health care spending in Alberta and Canada is on a gradual long-term upward trend that is well within reason.” Over the long-term, smoothed out with five-year averages, health care spending in Alberta has been rising at about 1.2 per cent a year.
  • It’s not going to housing and social services.
  • It’s not going into savings. You can tell from a glance at one of Dr. Taft’s many useful charts that, as he puts it, “Alberta’s natural resource treasure wasn’t going into the Heritage Fund,” or any other savings pool.
  • And most of it is not going to personal incomes. Over the past 21 years, average personal incomes in Alberta rose about 35 per cent, accounting for inflation.

So where is it going? It’s going to corporate profits, that’s where.

And the greatest corporate profits are in the oilpatch, naturally.

In fact, so much of our money is going into corporate profit, Dr. Taft shows, that we’re actually selling our collective property at a loss to pad the corporate bottom line!

“Profits in Alberta have grown at rates simply unknown in other jurisdictions, often well beyond double the rates in other provinces and the United States,” he wrote. “There is no such largesse for public services, and the government is drawing down public savings rather than building them, doing nothing to prepare for the future.

“The transfer of public wealth to private shareholders is blistering, and our own government, rather than fighting like an owner, or even thinking like an owner, is just happy to find investors who want to cash in.” (Those investors, Dr. Taft noted as an aside – well before this became a national scandal – are frequently state-owned companies from such places as China, Abu Dhabi and Korea.)

How blistering? Well, corporate profits were up 317 per cent in the same period health care spending rose 28 per cent, incomes went up 35 per cent and education spending increased 2 per cent!

One question Taft said he couldn’t answer from the data he worked with is where all the money goes once it flows into these bloated corporate profits. But you and I don’t need a book to tell us the answer to that one: Most of it leaves the country for places where it does nothing for Canadians.

No wonder, when you think about it, that corporate special interests and their paid representatives in Canada are so aggressive in defending their “right” to rapidly export even more of our resources via pipeline to wherever – the environment, the rights of Canadians, and due process be damned!

Of course, Dr. Taft’s conclusions were not reported very enthusiastically in the media, either here in Alberta or anywhere else in this country.

I guess that’s why the facts have taken the Calgary Herald and the government of Alberta by surprise.

Follow the Money was published by Detselig Enterprises of Calgary and costs $12.95, and it’s also available as an e-book.

This post also appears on Rabble.ca.

‘Freddy Lee’ Morton, the journalistic sequel: We’ve already seen this horror movie, thanks!

by David Climenhaga on February 21, 2013 in Alberta Economy, Alberta Politics, Media with 3 Comments

Freddy Lee Morton, in happier times, with your blogger. Below: Firewaller Tom Flanagan; the entire separatist 2001 Firewall team (grabbed from the National Post).

Freddy Lee “Ted” Morton, the worst premier Alberta never had, was back in the pages of the Calgary Herald the other day, bloviating at length about the need for brutal attack on public service salaries because this province’s frequently fluctuating principal revenue source has gone and fluctuated again.

Alert readers will recall Dr. Morton describing himself as “every liberal’s nightmare, a right-winger with a PhD.” He was also the owner of the mysterious “Frederick Lee” semi-official government email account.

Later, Dr. Morton’s defiance as finance minister effectively brought down premier Ed Stelmach – setting himself up to succeed “Honest Ed” as the leader of the Progressive Conservatives and the premier of Alberta, or so he thought.

Dr. Morton first came to public attention back in the early Zeroes as the neoconservative University of Calgary professor and American-born Alberta independentiste who signed the Firewall Manifesto along with such other well-known Western separatists as Stephen “The Big Kahuna” Harper, Tom “I’m Feeling Manly” Flanagan and Ken “No Notes” Boessenkool.

Well, it’s nice to know that nowadays when Dr. Morton, PhD, is in semi-retirement, he can still pick up a little extra cash cobbling together completely predictable opinion pieces for the Calgary Herald, the newspaper lately known to its non-union employees as The Nightmare on 16th Street SE.

“Do we need another Klein-era five-per-cent wage rollback for the entire public sector?” asked Dr. Morton, rhetorically. “Probably. It would get the job done in a hurry, and it is less hurtful to families than massive layoffs.”

This would be especially true if the families in question were those of well-off, largely superannuated, public service double dippers (the Legislature and the University of Calgary) such as Dr. Morton, who is mostly out of danger of his own economic remedies. Mind you, Dr. Morton is still, according to the Herald, an “executive fellow” at the U of C’s School of Public Policy, where he is listed as teaching a single course, so there’s a small but worthwhile cut that could be made to save a few petro-shekels.

Well, Dr. Morton’s five-per-cent pay cut idea would get the job done in a hurry all right.

It’s a fight Alberta’s public service unions would almost certainly lose, but at least they’d have a chance of taking the double-talking government of Premier Alison Redford down with them, which would get Dr. Flanagan’s Wildrose government off to as easier start in 2016.

As for the health care professionals – specifically mentioned on the list of targets for wage cutting in Dr. Morton’s op/ed piece – they could move by the thousands to British Columbia and the United States, just as they did back when premier Ralph Klein last tried that stunt in the mid-1990s, leaving the Alberta health care system in a shambles from which it is yet to recover.

As a good friend of mine recently remarked, this is a person whose own government wouldn’t pass his anti-gay “religious freedom” Bill 208 in 2006, and whose Firewall Manifesto was chucked into the garbage can by Premier Klein in 2001.

His recent electoral record is similarly (un)impressive:

  • The Progressive Conservatives rejected him as their leader in 2006
  • They rejected him again as leader in 2011
  • The voters of his Foothills-Rocky View riding rejected him as their MLA in 2012

So why would anyone, even the Calgary Herald, be interested in Dr. Morton’s opinion now?

We’ve already seen this horror movie, thanks very much. It wasn’t very good the first time.

This post also appears on Rabble.ca.
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