Alberta’s finances a wreck but Alison Redford says “promises will be kept”
By Bruce A Stewart
Alberta Premier Alison Redford last night took over the province’s airwaves and — like many before her in politics — issued a political press release.
$55,000 borrowed taxpayer dollars later, what did Albertans learn from their premier?
Well, the message was cut from the mould of Margaret Thatcher: “The lady’s not for turning”.
It doesn’t matter that Alberta’s finances are so out of whack that if you scaled the province up to the size of Ontario, she’d be running a $40 billion deficit right now.
The Alison Redford infested the province’s television sets to make it clear that she’s going to keep her promises. Aside, of course, for the ones about respect for taxpayers, or balancing the books, or avoiding debt for operating purposes, and so on.
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Keeping a political promise when the bucks have stopped usually means breaking another one, but don’t worry: mum’s the word.
Part of the speech was designed to educate the province’s citizens. There’s a glut of bitumen from the oil sands parked in holding tanks in Cushing, Oklahoma. That’s why the province isn’t seeing even the West Texas Intermediate (WTI) price for its oil bounty these days (much less the world (Brent) price).
Since royalties — the engine of Alberta’s income side in government — are tied to what stuff sells for, getting paid less means getting less to spend.
This explains the tanker train loads of red ink arriving daily in Edmonton.
Now, if dear aAlison Redford actually wanted to be a politician that made a difference, she might have said some things no one wanted to hear.
Things like “the services and infrastructure needed for our province can’t be held hostage to conditions in oil pricing we can’t control — so we’re going to have to have a tax profile that looks more like our neighbours”.
Frankly, it doesn’t matter how much Albertans hate the idea. The province needs something like a consumption tax to bring in stable amounts of revenue.
It’d be smart to do it as a Harmonized Sales Tax, pick up a cheque from Ottawa for the transition (rumour has it they’re available if you sign on), and let the Feds carry the weight of administering the system. Their snivel serpents (well, what else do you call a tax collector?) are already on the national payroll and being paid for by Albertans’ income taxes. Might as well get something for that money, eh?
That way, matching British Columbia’s income tax rates for lower and middle income Albertans could be part of the transition (because right now the Alberta flat income tax penalizes them compared to their next door neighbours).
Stabilizing the revenue in this way would allow royalties to be used for capital expenditures (which are much needed), help pay off the debts the lady’s already rung up, and help reload funding for the future (Heritage, Sustainability, etc.).
After all, for any barrel of oil or oil-like product, you get to collect a royalty once. Future generations of Albertans can never collect on that barrel again. Putting some aside for them just makes sense, instead of spending it all faster than it comes in.
Now, whether she was sticking with her spending plans or not, this would be good (but unpopular) public policy. Still, she doesn’t face the voters again until 2016, more than long enough for the benefits of infrastructure to be showing up.
Meanwhile, the boom and bust nature of Alberta service provision would be ironed out.
She might also have made it clear that even if Alberta had approvals in place for the Northern Gateway (exports to the west), a trans-Canada pipeline (exports to the east), a rail line up through the territories to Valdez, Alaska (exports to the north) and Keystone XL (more exports to the south) in place, they’re all years away from actually carrying a drop of anything.
In other words, stop dreaming about pipeline approvals fixing everything and buck up to the real situation today.
Of course, to face the real world that forthrightly as a province, Alison Redford herself would have to do so.
The weight of evidence from the speech last night is that far from facing the real world, she’s firmly fixed on cloud cuckoo-land.
Even Dalton McGuinty ripped up his promises a year after taking office.
Mind you, he could blame the opposition for their time in government. Perhaps that’s why Alison Redford finds it so difficult to face the facts now.
In any event, Albertans were told last night to watch their province head down the drain just like all the other high spending, low collecting jurisdictions, because changing course or fixing the underlying problem is beyond the Premier’s capabilities.
Taken a look at population outflows lately? You’ve got people moving from Calgary to Saskatchewan for the stability.
Citizens aren’t stupid. They know that overspending and falling oil royalties will end up the same way it has in the past, with services being slashed, infrastructure decaying, and life getting harder because the clown at the front of the parade screwed up again.
(That Albertans show a stubborn refusal to throw the bums out when they muck it up means Redford’s unwillingness to take on the tough issues is many times worse than anywhere else: re-election is closer to a sure thing regardless for her than anywhere else in Canada.)
Hope you enjoyed having her face in your living room with her infomercial. Just don’t expect her to do more than nibble around the edges going forward.
She’s no Iron Lady.