Is anyone seriously surprised Alberta’s books might be in worse shape than we were told?

Posted on May 28, 2015, 12:48 pm
7 mins

PHOTOS: Uh-oh! Newly appointed NDP chiefs of staff start to check the books left by the now-departed Prentice Government, and they don’t like what they’re finding. Actual government political staffers may not appear exactly as illustrated. Below: Finance Minister Joe Ceci and Provincial Gadfly Joe Anglin.

Can anyone honestly say they were surprised to hear yesterday from Premier Rachel Notley that the story told in Alberta’s financial books may be turn out to be a bit scarier than the one former premier Jim Prentice and his Progressive Conservative government were telling us before the May 5 election?

I don’t know about you, but my reaction was, “Oh, here we go again!”

It’s almost a right of passage in Canada on those rare occasions when a conservative government of any of a number of right-wing stripes is toppled that it turns out what we’ve been advised about the state of the commonwealth’s finances was mainly fiction, designed to make the outgoing government look more competent than reality.

Joe_Ceci_headAfter 44 years, it was probably inevitable that the state of Alberta’s books would be somewhat direr than we’d been informed. The question, of course, is how much more dire?

“There’s no question that as we get briefed we’re starting to find the challenges are bigger than may have been featured in the Prentice campaign,” said Ms. Notley yesterday in Calgary after Day 1 of her first cabinet meeting.

“Our plan is built off of their plan,” she told reporters. “Now we’re looking at the fact their plan was not as fulsome as Albertans may have expected.” By “fulsome” – technically, “complimentary,” or “flattering” – she presumably actually meant “completely honest.”

Supporters of the former government – if there are any left – will try to spin the opposite story, that the Dippers are just trying to manage expectations down now that they’ve actually got to run the place. That was certainly the suggestion made by the Wildrose Party’s finance critic, whose main credential for the job seems to be that he’s a former agitator for the Canadian Taxpayers Federation, which specializes in press releases and membership sales.

Well, dire though the books may or may not be, our New Democratic Government definitely has the tools it needs to deal with the situation.

Specifically, the Notley Government unquestionably won a mandate to start fixing the problems left by generations of PCs. Indeed, it’s just achieved that rarest of accomplishments, won an election while calling for changes to taxes and royalties that may include increases here and there.

The Government’s challenge now is not to tarry, but to get on with it. The sense they might just do that surely accounts for the mood of optimism bordering jubilation that could be felt in this province over the past few days.

Mr. Ceci made it clear yesterday that a return to a fairer, more progressive tax system remains on the government’s agenda – although you can count on it there will be a full-blown campaign by all the usual well-heeled special interest groups to bully the government into reneging on its promise.

Let’s remember one thing as we prepare for what’s bound to come next. We’re certain to hear lots of whining about how business confidence is undermined by uncertainty, and therefore we must continue to do things exactly the way the Getty-Klein-Stelmach-Redford-Hancock-Prentice Tories did them.

Well, businesses may hate uncertainty, but there’s no evidence their hatred guides their behaviour.

The “Zombie Confidence Fairy,” as Nobel Prize winning economist Paul Krugman famously described the notion is so oft repeated nowadays it’s taken on the air of unassailable truth. We will hear it many times again in the next few days,

But as Dr. Krugman explains, “it’s actually a highly dubious, mathematically implausible argument that receives no support at all from the data.”

So don’t panic! Steady as she goes. Let’s actually fix this place.

He’s baaaaaaack! Joe Anglin reemerges

Former Green Party leader and Wildrose MLA Joe Anglin reemerged yesterday with a letter to all of Alberta’s editors designed to reestablish his credentials as Alberta’s No. 1 political gadfly, as willing to shove a stick into the spokes of the NDP’s bicycle as those of the former government or his former party.

joe-anglinMr. Anglin, who was the MLA for Rimbey-Rocky Mountain House-Sundre until he was skidded as the Wildrose nominee in a log-cabin coup that was apparently organized by his own constituency association’s president, reminded Albertans it’s now been 20 years since Ralph Klein’s disastrous energy “deregulation” scheme was cooked up by the Tory brain trust.

“If there has been one constant in Alberta’s experiment to deregulate electricity, it is that it hasn’t worked very well,” Mr. Anglin observed, recounting one estimate that the Klein scheme has cost Albertans as much as $32 billion.

“The NDP have a monumental task in front of them if they want to be successful at governing this province,” he wrote. “Of all the priorities they need to confront … none will have more of an impact on the province’s immediate economic well-being than addressing the massive electricity deregulation debacle. A stable reliable source of efficient low-cost electricity is paramount to both economic diversity and stability – not to mention consumers would be pleased too.”

For starters, Mr. Anglin suggests preventing the sale of all rural electric association utilities until the government has cobbled together a permanent solution to this aspect of Alberta’s lingering Kleintastrophe.

This post also appears on Rabble.ca.

11 Comments to: Is anyone seriously surprised Alberta’s books might be in worse shape than we were told?

  1. May 28th, 2015

    The Conservatives were using the pension funds held by AIMCo as a petty cash fund. Some were paid back by arrangement with the unions but others?

    I’m pretty sure it is going to take the NDP more than a couple weeks to get to the bottom of things as they will also have to be looking at recovery possibilities.

    I do hope they publicly share their findings. Would be a great test of an open Government.

    Reply
  2. Chris

    May 28th, 2015

    Every new government, of every ideology, uses this line. It’s almost the first thing that comes out of their mouths. So which NDP promise gets broken first?

    I’m also sure many of those new NDP cabinet ministers were shocked to find that they are now part of the 1% (or within $10,000 of salary to that mark, which was about $175,000 in 2013, according to Stats Can). Are they in Calgary this week to get their top hats fitted and monacles prescribed? My guess is that corporate taxes are going to 20% and the health care “levy” is soon to become a reality.

    Reply
    • David Climenhaga

      May 28th, 2015

      “…to get their top hats fitted and monocles prescribed…” I want you to know, Chris, I’ll be taking this line as if it were my own.

      Reply
  3. anonymous

    May 28th, 2015

    “A stable reliable source of efficient low-cost electricity is paramount to both economic diversity and stability – not to mention consumers would be pleased too.”

    Mr. Anglin does make a point. I drove down to the Outaouis during the 2003 black out. I looked across the river and Ontario was dark, and Quebec was bright. There’s a lesson there somewhere.

    Reply
  4. Francisco

    May 28th, 2015

    David,

    NOPE.

    Sincerely,

    Frank

    Reply
  5. Sam Gunsch

    May 29th, 2015

    Re: For starters, Mr. Anglin suggests preventing the sale of all rural electric association utilities until the government has cobbled together a permanent solution to this aspect of Alberta’s lingering Kleintastrophe.
    ====================

    Anglin raises an important issue.

    The sooner the REA’s get active on renewables, the sooner the AB coal industry is phased out.

    This is a big deal in the context of the dramatic reduction in solar power costs.
    In the USA, much of the growth of solar power installations has come the equivalent organizations to REA’s.

    Alberta’s big power generators know that distributed generation of solar and wind power is their biggest competitor. Will likely destroy the coal-fired electricity generator/utility model, if they don’t slow it down.

    Reply
  6. Sam Gunsch

    May 29th, 2015

    I’m guessing that Anglin is arguing to protect the REA’s because he is aware that AB’s BigCoal utilities that are increasingly transitioning to GAS, know that they are still threatened by distributed solar and wind.

    And TransAlta/CapitalPower/ATCO/Fortis know the REA’s are the only organized bodies that could rapidly mount a threat to their business model by promoting wind and solar to rural communities.

    Links below explain the USA situation directly relevant to AB.

    http://grist.org/climate-energy/solar-panels-could-destroy-u-s-utilities-according-to-u-s-utilities/

    http://www.communitypowernetwork.com/node/9348

    http://www.boulderweekly.com/article-11227-renewable-energy-threatens-big-utilities.html

    http://www.ilsr.org/why-utilities-are-hating-on-their-solar-producing-customers/

    http://www.thedailybeast.com/articles/2014/04/24/solar-power-burns-old-utilities-business-models.html

    http://www.scientificamerican.com/article/fight-over-rooftop-solar-forecasts-a-bright-future-for-cleaner-energy/

    http://www.sierraclub.org/sierra/2014-3-may-june/feature/throwing-shade-how-nations-investor-owned-utilities-are-moving-blot

    http://www.computerworld.com/article/2857672/us-utilities-face-up-to-48b-revenue-loss-from-solar-efficiency.html

    Reply
    • Francis

      May 29th, 2015

      As usual, Joe taking up the convo. But this time worth it. Thanks Sam for all of those links.

      Reply
  7. Raj

    May 31st, 2015

    It seems a bit absurd that Prentice was criticized as being an overly “Grim Jim,” but now he is being accused by “hope and sunshine” of not being grim enough when it comes to budget issues. In any case, the NDP promises seem to be mathematically ipaired even based on the PC budget that they say they based their numbers on:

    http://www.macleans.ca/economy/economicanalysis/there-are-two-big-problems-with-the-alberta-ndp-tax-plan/

    Taxpayers making 180K or less end up paying less tax under the NDP plan, while spending control is no where to be seen. It certaibly was time for the top 1% to pay more, but should not the same be true of the top 5% or the top 10%? The NDP’s plan results in bigger deficits than the PC plan no matter what fiscal skeletons are hiding in the closet. The NDs won’t be able to manage the defecit, let alone start to develop a sovereign wealth fund anything like that of much fabled Norway Of course, to actually be like Norway requires a consumption tax of 25%, lower public sector wages than Alberta, and diversifying the economy though lower corporate taxes of all things:

    http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-table.aspx

    Norway plan to reduce corporate tax rate to 20%, currently at 27%. Canada at 26.5%.

    Norway Tax Commission December 2014 Report: “It was therefore recommended that there should be a reduction in the country’s corporate tax rate to 20 percent from the current rate of 27 percent (in conjunction with a similar cut in its lowest rate of personal income tax), to dissuade companies from shifting profits out of Norway to more tax-friendly countries and to attract international business and investment, particularly having regard to future years when there will be an oil-sector slowdown.

    The Commission provided one package of measures estimated to be approximately revenue-neutral, and another proposal involving tax reductions of NOK15bn (USD2.1bn). Overall, to balance the reduction in corporate tax, it decided that there should be a broadening of the tax base.

    However, to generate additional revenue and put a greater emphasis on consumption taxes, it also suggested that a withholding tax on margin-based financial income should be introduced and that value added tax (VAT) be placed on financial services on which fees are payable. It also recommended a dual-rate VAT, in which the general rate of 25 percent would be retained but the current zero rate and lowest rate increased to 15 percent, corresponding to the current rate on food.

    – See more at: http://www.tax-news.com/news/Norways_Commission_Recommends_Corporate_Tax_Rate_Cut____66639.html#sthash.uu02BDNX.dpuf

    ]

    Reply
  8. Mark

    June 1st, 2015

    Why bash the ctf? They have helped push through some unpopular (with politicians) legislation regarding transparency and have helped to highlight corruption and abuse. But I digress with regard to the amount of waste and mismanagement over the last 40 years, even rank amateurs would be hard pressed to make a worse show of it.

    Reply

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