If you were secretly relieved by yesterday’s NDP Alberta budget, you weren’t alone …

Posted on April 15, 2016, 2:47 am
10 mins

PHOTOS: Alberta Finance Minister Joe Ceci addresses the media during a lockup early yesterday afternoon in Edmonton before reading the 2016 Budget Speech to the Legislature. Below: CFIB Alberta spokesperson Richard Truscott, Edmonton-Centre MLA David Shepherd and author and environmentalist Naomi Klein.

Admit it, Alberta, after yesterday afternoon’s Budget Speech was read by Finance Minister Joe Ceci, you were secretly relieved.

Well, maybe your relief on learning the details of the first budget the year-old NDP government of Premier Rachel Notley had fully drafted on its own wasn’t all that secret.

There were no destructive cuts to health care and education, no open war declared on public employees like teachers and nurses, no dangerous and doomed market-fundamentalist economic experiments that keep being tried elsewhere even though they never work.

TruscottIn other words, there were none of the things the Wildrose Opposition has been demanding and might actually have been foolish enough to implement if the legislative shoe had been on the other foot.

Instead, there was a fairly realistic effort to make the best of a truly terrible situation. How bad is it? According to Mr. Ceci, the crash in the price of oil from $105 a barrel in 2014 to less than $30 in January means “we are forecasting an almost 90-per-cent drop” in resource revenues, “to $1.4 billion, the lowest in 40 years.”

In other words, no political party – including the Wildrose Party, whether they’re willing to honestly admit it or not – could have balanced this budget without doing grievous damage to the province and its people. There’s not much hope, of course, that the Wildrose Legislative Caucus will stop pretending they could.

Astonishingly, even many of the most likely opponents of the government, who were at the Budget Speech in significant numbers yesterday, were prepared to concede this. I expected representatives of teachers’ and health care unions to express the view that, given the province’s grim economic circumstances, the budget didn’t seem all that bad. And so they did.

But I was surprised when spokespeople for business groups made the same observations. “Overall, from the point of view of the business community, it was a quite positive budget,” said Scott Crockatt of the Calgary Chamber of Commerce. And he was talking about more than just the 1-per-cent cut in small business taxes, Mr. Crockatt made clear.

I will admit, though, I almost fainted with astonishment when Richard Truscott, spokesperson for the normally uncompromising Canadian Federation of Independent Business, conceded, “It’s not a bad budget.”

“When oil prices fell in the past,” Mr. Ceci had told the Legislature not a half an hour before that brief conversation, “Alberta governments responded by making reckless and extreme cuts to public services, firing thousands of teachers and nurses, cutting supports for seniors, and abandoning the most vulnerable.

Shepherd“Some say we should turn the clock back and do the same again,” he continued. “But on this side of the Legislature, we fundamentally disagree.”

So the NDP will keep the lights on in Alberta through deficit financing to operate the government and debt to rebuild our neglected infrastructure – close to a billion dollars for affordable homes, another $365 million for continuing care, plus massive upgrades to roads, public transit, post-secondary education buildings, schools and municipal infrastructure. Readers can go to the mainstream media for a thorough description of the details.

A certain number of Albertans, of course, will disagree in principle with Mr. Ceci’s approach. We can argue with them about the government’s rhetorical justification for naming this budget “the Alberta Jobs Plan” – but with unemployment creeping toward levels that have long been normal in the rest of Canada, it will certainly help hold the line on statistical job losses.

But it’s said here that many of those same people – while they will continue to make dire predictions about the future and half-heartedly assail the NDP – will nevertheless feel privately relieved we don’t have to face a homemade Wild Rose apocalypse just now.

As he brought the Budget Speech to an end, Mr. Ceci argued that years of inaction by pervious governments have left Alberta too dependent on the price of one commodity.

naomi-klein“In the past when oil prices fell, the cost of that inaction was downloaded onto hard-working families through short-sighted cuts,” he said. “Albertans paid in longer hospital wait times, overcrowded classrooms, longer commutes, higher fees and lost opportunity.”

Few Albertans who are paying attention would disagree with this, although they will certainly argue about whether the job creation programs implemented by the NDP will produce the results the government promises.

“Some say we should repeat those mistakes. We say no,” Mr. Ceci went on, however.

Well, here’s the rub: The Alberta NDP, along with all the other parties in the Legislature, continues to say No to the real revenue reform that is required to end the dependence on volatile resource revenues in this province.

It may meet a reasonable definition of insanity, but all parties accept the conventional wisdom about Alberta’s political consensus, which holds that implementing a sales tax or higher income tax like other provinces is simply impossible here.

Given everything that’s been going on, I wonder about that. Could a party brave enough to do the right thing and campaign on implementing a sales tax actually win? Well, that will have to be a story for another day.

In the mean time though, as Mr. Truscott said, this really wasn’t a bad budget, and a lot of Albertans know it, too.

Just who advocates the risky ideology around here, anyway?

Probably the most entertaining moment yesterday came just before the finance minister’s Budget Speech, when Edmonton-Centre MLA David Shepherd stood in the House to offer a short statement on the Wildrose Opposition’s bad habit of labelling anything the NDP does as a “risky ideological experiment.”

The champions of such risky ideology, Mr. Shepherd pointed out, are surely the Wildrosers themselves. At any rate, he observed, “I dare say, they’re hardly immune.”

Mr. Shepherd went on to argue forcefully that “risky ideology is believing you can instantly cut billions of dollars from public services and not affect front-line workers. Risky ideology is blindly insisting, despite clear examples like Kansas, Louisiana, and Mississippi, that slashing taxes always increases revenues and promotes growth. … Risky ideology is believing that a growing province could afford to adopt an experimental flat tax and depend on volatile royalty revenues to fund essential public services. …”

I commend this entire short passage to readers. It can be found in Hansard.

Naomi Klein defends Leap Manifesto in response to AlbertaDiary.ca

In an article published today on Rabble, journalist, author and environmentalist Naomi Klein has expressed her serious disagreement with the post published in this space on Tuesday, which asked, “With friends like the Leap Manifesto’s advocates in the federal New Democratic Party, does the Notley Government need enemies?”

While I respectfully disagree with many of her points, I appreciate the thoughtful arguments Ms. Klein has advanced in favour of the Leap Manifesto and its supporters, and I am grateful for the respectful tone of her rebuttal, which anyone interested in this issue should read. Naturally, I was not displeased to be referred to by such a well-known author, even in a critical piece, as “an important progressive analyst on Alberta politics.”

This post also appears on Rabble.ca.

27 Comments to: If you were secretly relieved by yesterday’s NDP Alberta budget, you weren’t alone …

  1. jerrymacgp

    April 15th, 2016

    Compare and contrast, if you will, the other provincial budget brought down yesterday: Newfoundland & Labrador’s. That province has also suffered a revenue hit from the drop in oil prices for its offshore oil revenues. Their response? Massive tax hikes, to the tune of $3,000/year for the average nousehold. Brutal cuts. And still no balanced budget.

    Granted, NL’s room to manoeuvre was much smaller than Alberta’s, but still, this is a tough budget for a population that, on average, lives far closer to the margins that Alberta’s.

    Reply
  2. Phil Elder

    April 15th, 2016

    I like your remarks about the failure to create a sales tax. I suspect that the government will keep virtuously saying “no, no, the people don’t want it”, while awaiting the pressure for its obvious necessity to build, via Debra Yedlin,Jack Mintz, most economists and finally the business sector, until the “people have decided they can accept it.” Whereupon, a 3% HST will appear and we peasants will be amazed to learn that the total burden of the harmonized taxes totals a mere one percent over the original GST rate.
    Machiavelli is alive and well and living under Alberta’s Dome?

    Reply
    • Chris

      April 16th, 2016

      Rachel is watching Greg Selinger self-immolate for increasing his PST by only one percentage point. Rachel wants to be Premier past 2019.

      Reply
    • Anon

      April 16th, 2016

      A sales tax may be an effective way to raise money in the fantasy world inhabited by neo-con economists (remember they were the ones who claimed finance could be deregulated giving us the global financial meltdown). http://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot

      However in the physical world we all have to live in, some of the most effective ways to raise money, like sales taxes, are immoral because they hurt or exploit the vulnerable. My moral position is that taxes must be based on the ability to pay, not on what is effectively a head tax.

      Reply
    • PIGL

      April 16th, 2016

      Well, it more that a combination of disastrous long-term trends such as decline in literacy and civility, and the systematic decay of other democratic norms, coupled with the utter corruption of the mainstream media, have made public, adult discussions about serious matters utterly impossible.

      Reply
  3. John Murray

    April 15th, 2016

    Standing “Ò“ for Premier Notley at Edmonton Chamber of Commerce.

    Reply
  4. April 15th, 2016

    The real relief was within the public sector union ranks who cheered on the adoption of added debt to keep them from sharing any of the pain felt by private sector Albertans. I predicted the credit rating downgrade on April 2nd in a FB post and was amazed to hear Joe Ceci say yesterday that there was no way that Alberta’s rating would be downgraded because our Debt to GDP ratio is so much better than the ROC. He is an embarrassment to Alberta as Finance Minister. What you all fail to understand is that the collapse in revenues hasn’t hit bottom yet. So the relief will be short lived because forced slashes will be needed by this fall.

    Reply
    • Expat Albertan

      April 16th, 2016

      Yeah, I hear this all the time for the right. It sounds like fiscal conservatism, but it’s really just irrational anger aimed at people who aren’t suffering as much, but who also did not profit as much as those in the private sector during the boom times (btw, where is all the money they made during the good times – didn’t they squirrel some away for a rainy day?). Of course, folks like you never think about the fact that firing teachers and nurses would not help the situation and only make it worse – less money circulating in the economy, fewer taxes paid to support the deficit, more competition on the unemployment line. Plus the fact that the last time there was a cull of nurses (Ralph Klein) in Alberta, they paid top dollar to get them all back when times were good again.

      Reply
      • George Clark

        April 20th, 2016

        Read my Albertans First Shadow Budget. No Job Cuts, just controlled spending and very modest wage rollback on the top earners. The left always assumes that the right is a one trick pony. Read it on my Facebook page and see for yourself that better is possible without all the slash and burn that you fear.

        Reply
    • Kang

      April 16th, 2016

      George you may be right that the oil industry has yet to hit bottom. However, it was Klein who put the pedal to the metal on tar sands development making Alberta the highest cost economy on the continent to do business in. He also foolishly did not take into account the effect on oil markets of allowing the development of more production than the transportation system or the market could sustain even at high oil and gas prices – which is the basic reason why no new pipelines were ever built.

      Because of the Cons delusions about free enterprise the oil industry has been allowed to produced itself into poverty. All it took was a price bump to send the oil sector into a tail spin. Lougheed had the good sense to stop the gold rush mentality in 1973 and ration access to export pipelines on a quota basis.

      If history is any guide the high oil prices are not coming back for years, or perhaps never. Thank your lucky stars the grown-ups are in power instead of the right wing people that created this mess.

      Reply
    • jerrymacgp

      April 16th, 2016

      Mr Clark, how many oilpatch jobs will be saved by laying off public-sector workers, or cutting their wages as was tried in the early years of the Klein era? Not one, Sir. Instead, those same laid-off oilpatch workers will wait longer for support services to help them through the tough times, because there will be less capacity in the provincial public service, in health care, in post-secondary and K-12 education. And, brutal cuts will also put the brakes on infrastructure spending, so they won’t be able to apply for those construction jobs that their skills may be able to transfer to.

      We tried cutting our way out of recession in the 80s and 90s, and it didn’t work, and then after the economy rebounded we had to spend, spend, spend to get caught up, at a much higher cost to boot. Now we are going to try a different approach, that in the
      words of Gil McGowan, tosses struggling Albertans “a lifeline instead of an anvil”.

      Reply
    • Islandcynic

      April 16th, 2016

      Rating agencies are partisan. Don’t believe a word they say.

      Reply
      • Sam Gunsch

        April 17th, 2016

        You’re being too kind to just call ratings agencies ‘partisan.’ Yes they are partisan in that they always favor RW neoliberal economic policies.

        But the way the ratings agencies covered up the bull shit mortgages in the USA was worse than partisan. They covered up a bubble for the hedge funds and investment banks that cost the world’s economies trillions. Which means it costs citizens who pay the taxes.

        They should all be in jail. They perpetrated a fraud on all of us. And ordinary citizens are paying the bill thru decreased government services so gov’t’s can pay off the huge debts incurred to save banks and other industries. Sick, greedy, corrupt bastards, the lot of them.

        Reply
  5. Edward

    April 16th, 2016

    We need the second Ralph Klein back. Deep cuts to unions and public services are the only way we will ever stop debt from pouring into our children’s hands.

    Reply
    • Expat Albertan

      April 16th, 2016

      You lot really were fooled by Ralph, weren’t you?

      Reply
    • PIGL

      April 16th, 2016

      Indeed. In fact, I would go much, much further. The children of the mooching public sector, and of the useless poor should be fattened for the tables of Conservative voters….well, for rich Conservative voters. The not-rich ones will be given the processed waste of industrial pig-farms. As long as they are told it’s soylent green, they’ll eat it up and ask for seconds.

      Where, or where, is the source for this unreasoning hatred for unions and public sector workers? Koch-funded stink-tanks? Or is it just nascent in the souls of some people, like having green eyes, or a fear of heights?

      Reply
    • Athabascan

      April 17th, 2016

      “Debt pouring into our children’s hands.” I’m trying to visualize such a nonsensical talking point.

      You sounds more like a one-percenter trying to avoid paying his fair share while sucking up all the public riches for yourself.

      If you cared about your so-called children ( I doubt you have any) you would care about the future of the planet you are leaving them. Do you also imagine that your “children” and their children’s children will all work in the tar sands, or coal industry endlessly polluting the planet and never paying taxes to sustain our society?

      Wake up! Reality has arrived. Alberta is in a difficult transition period that was made unnecessarily difficult because of the short- sightedness of Klein and the Conservative (Oil) Party for the last 40 years.

      Your solution is to add to the ranks of the unemployed? You say you have kids. Do they go to school? have they ever been seen by a doctor or a nurse? Do you like your roads plowed in the winter so they can go to school? Yeah, and your solution is to cut jobs of those people who help your imaginary children?

      Real smart.

      Reply
  6. Farmer B

    April 16th, 2016

    When the budget was released was I relieved, no, was I surprised, no, was I impressed, no. Let’s be honest the only hard decision made in this budget was what shoes Joe Ceci wore. Government is supposed to lead and by basically saying yes to all spending requests they have shown no leadership. I am curious how royalty revenue is the lowest in 40 years when we have experienced periods with lower oil prices. As for helping on the jobs front out of a 50 billion dollar budget only 250 million was ear marked for job creation. As for your relief on lack of job cuts, I agree that we need our teachers and nurses but somehow their wages need to be more aligned with what is payed in other provinces.

    Now on the carbon tax front, this is truly a farce. As a government it always helps your re-election chances if your electorate receives money from you. In Alberta 60% of those who pay the tax will get a rebate of roughly what the government expects you to pay in carbon tax based on your income. How does this change your consumption habits and is this really just income redistribution. It is the governments way of creating a fund so they can subsidize the industries they want on our money.

    When the NDP ran for election they ran on diversification of our tax base so that we were not dependent on oil royalties. They have plainly stated that the budget will not be balanced until the price of oil comes back up. They are showing that government really can do very little but in this case create a big deficit. They also missed a golden opertunity to bring in a sales tax. In Alberta we continue to run our government on champagne tastes and beer wages!! Have a good day:-)

    Reply
    • Eric

      April 16th, 2016

      I think that the NDP government crafted a smart budget for the following reasons. First, they kept the public sectors unaffected to keep their support base. Second, they used the climate change levy as a way to appeal to the other parts of Canada for the pipelines, and the money collected can be allocated for other uses as I believe any ruling government can easily find a reason to change the use of taxes or levies collected. Third, the budget actually imposed an increasing pressure for the Albertan public to concede to the eventual adoption of PST and also left PST as a lever against the PC and the Wild Rose in 2019. Here is probably the reasoning by NDP: if the plans works (i.e., oil price goes up, pipelines are approved, and deficits are going down), NDP will earn credits. Otherwise, the NDP will probably keeps using the money from the climate change levies to make up. And in the next couple of years, there must be something positive happening, and the NDP are ready to take credits for those things. If the fiscal situations do not improve as expected, then in the 2019 election even the PC and Wild Rose will have to resort to PST because the familiar tools (spending cut) that have been talked about by the two right wing parties will fail to be effective. PST will be most likely becoming an election issue in 2019 if the tools used by NDP do not work. NDP are truly smart: stick to what they believe and create potential problems for their oppositions.

      Reply
    • Expat Albertan

      April 17th, 2016

      But isn’t the point of the carbon tax to reduce GHG release from big polluters (oil sands producers) rather than individuals?

      Reply
      • Farmer B

        April 17th, 2016

        I believe the way the carbon tax is structured oil sands producers can expense the carbon tax, thus reducing it’s cost to the company. Private citizens cannot expense it and their eligibility for rebates is based purely on income. So no Expat the carbon tax is not targeted at big polluters just high income earners.

        Reply
        • Farmer B

          April 19th, 2016

          One more interesting statistic Expat. In 2015 38.2 million barrels a day of oil was consumed by on road transportation. I believe total consumption of oil per day is roughly 90 million barrels. Looks to me like every day driving and transportation of goods are responsible for over 1/3 of our daily oil consumption.

          Reply
  7. David Niven

    April 16th, 2016

    We need a sales tax and we need to close coal plants. The money raised from the carbon tax should be spent on a broad range of environmental concerns.

    Reply
  8. David

    April 16th, 2016

    Every time our economy gets into trouble by a fall in cyclical oil prices, some people start to raise the possibility of a PST. Politically, I don’t think it is likely it will happen.

    If oil prices are still in the doldrums after the next election and the deficit is still huge, which ever party is in power then will have to seriously consider a PST, but if oil prices recover it will be forgotten like a bad dream.

    It is interesting to compare the current Saskatchewan and Alberta deficits. Saskatchewan is running a moderate deficit as opposed the the large one in Alberta. Of course, Saskatchewan is less dependent on oil revenues than Alberta, but it also has a PST which provides more stable revenue.

    However, given the choice between (temporary?) large deficits and a PST – I think Albertans will choose the former.

    Reply
  9. Economist Bauer

    April 18th, 2016

    Why is the fiscal debate always framed by the NDP as avoiding “disastrous cuts and layoffs” rather than a realistic and fair appraisal around a serious examination of expenditure including public sector wages and benefits that are now, simply, unaffordable? Review the Alberta Sunshine List and explain to me why mid-range civil servants earning $150k++ benefits cannot take a significant reduction in their take home pay (say $12,000/year, roughly the amount of spending per person in our budget)? Long-term higher income earners are stashing that money away in savings and assets, etc., not generally spending it in ways that drive the local economy. I’m not against saving, but borrowing public money to give to people to save privately is not my idea of sensible fiscal policy, and shouldn’t be the NDP’s.

    While there could be some layoffs within the civil service and AHS without service cuts, we’re just asking for sanity and fairness. This ridiculous position that we have a revenue problem and not a spending problem is so non-sensical and undercuts any sense the NDP and its supporters can be trusted in matters of fiscal management and job creation. We have the highest paid everything in our public services, and not the best outcomes. The provincial government now spends over $12,000 per every woman, man, and child in this province. That’s $50k for a family of four. But when a civil servant gets $200k of that for some non-essential, mid-mgmt position, that means four families are effectively “paying” their share of the provincial revenue/debt to that civil servant, someone who has more benefits and job security than they do (on average). When many people have lost their jobs, taken work that pays less, have less hours, have had to invest in school to upgrade their skills, etc., wouldn’t it just be FAIR for the public servants (yes, including teachers, doctors, admins, professors) to recognize that the pain should be shared? If not, the pendulum swing under a WR government will make the Ralph Klein era seem like the good old days for those in the public service.

    So, no, I was not secretly relieved by this budget…I was hoping for some leadership, some joint recognition of the expenditure problem by the NDP, the unions, and the professional associations, but, alas, money grows on trees at 2% interest, so let’s just grow more. It would be nice if there was someone in the NDP caucus who didn’t learn all they know about economics from Naomi Klein, just like it would be nice to see someone in the WR who doesn’t just look to the Ralph Klein era as the model of fiscal management. The extremes are killing the future of this province.

    Reply
    • Athabascan

      April 18th, 2016

      Economist Phsst!

      Didn’t we just suffer 10 years at the hands of a so-called economist? Nine deficit budgets latter and the national debt of Canada grew by $160 billion.

      Economics is NOT a science, unless of course you believe phrenilogy, palm-reading or astrology are also sciences.

      We can’t afford any more lessons from economists.

      Reply
  10. Reynold Reimer

    April 23rd, 2016

    Higher income tax, yes, especially for higher incomes. But a sales tax is regressive and we don’t need it. What about charging real royalties like countries such as Norway?

    Reply

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