‘Real Leader’ Brad Wall’s government feeds the fluctuations of a boom-bust economy as Alberta stays the course

Posted on January 17, 2017, 9:43 pm
7 mins

PHOTOS: The Saskatchewan economy … where it sits right about now. It’s not Brad Wall’s fault!!! Below: Mr. Wall, the “Real Leader” of Western Canada (Photo: Daniel Paquet); Saskatchewan Deputy Premier Don Morgan; Saskatchewan Finance Minister Kevin Doherty; and Saskatchewan Federation of Labour President Larry Hubich.

OTTAWA

What a pleasure it is here in the nation’s capital to be the one from the only province on the Prairies where grownups are still in charge!

I speak, of course, of Alberta – but I speak of my home province in the context of the goings on in Saskatchewan earlier today, where the premier according to the best-known candidate to lead Alberta’s Progressive Conservative Party is “the real leader of Western Canada.”

The speaker of that line was Jason Kenney, former Harper Government cabinet minister who wants to save the PC Party by destroying it. The “Real Leader” is Brad Wall, the bilious Saskatchewan premier who has been coasting along quite popularly for years financing low taxes and expensive market-fundamentalist nostrums with the returns from sky-high oil prices.

And, just today, the Real Leader’s government indirectly told its government employees that they’ll have to come up with the cash to help deal with his government’s mismanagement, caused fundamentally by its failure to notice the obvious fact that the market for petroleum is a volatile one, and oil prices have accordingly turned south.

Or, to put that the way the Saskatchewan Party Deputy Premier Don Morgan explained it letters to 41 public sector employer groups, there’s no more money, so public sector trade unions representing about 64,000 workers must immediately reopen their contracts, accept big wage rollbacks or, as the Regina Leader Post warned, “potentially face big layoffs.”

As reported by local media, Saskatchewan Finance Minister Kevin Doherty denied the government is threatening its employees. However, he said, if they won’t listen up, “then you take a look at what some other options might be, and one of those options is layoffs.” (Emphasis added.)

When you do this, not only are you scapegoating all public sector employees, students and sick people to pay for the conservative government’s serial mismanagement, as Saskatchewan Federation of Labour President Larry Hubich put it in an interview with the CBC, you are making the economy worse as many households already hit hard by the problems in the oilpatch lose their only remaining wage earner.

All Saskatchewan’s Dear Leader is doing, Mr. Hubich observed, is “looking for someone to beat up on and it happens to be their own employees, so they can continue with the narrative that the real problem in Saskatchewan isn’t that they’re incompetent, it’s that it’s everybody else’s fault.”

We Albertans have seen this movie before, of course, when Ralph Klein was the premier of our province. So we know how it ends: The public employees take the rollbacks, then suffer massive layoffs anyway. The economy doesn’t get any better until cyclical changes elsewhere take their course.

Mr. Klein’s acolytes in Alberta have been screaming for a return to the same thing ever since – first at Ed Stelmach, who tried to move the provincial PCs toward the centre and was rewarded by Albertans with a majority government, and more recently at Rachel Notley, the NDP premier who campaigned successfully against Alison Redford, placeholder Dave Hancock and Jim Prentice after Mr. Stelmach quit in disgust over the abuse he was taking for being a competent manager.

It’s that same richly schizoid Western Canadian conservative tradition of alternatively screaming … “We’re the richest, best managed place on earth! No we’re not! We’re the poorest, most wretched place on earth! It’s not our fault! No we’re not …” (Repeat ad nauseam.)

We know about this because we put up with it for most of the 80 years before the NDP won a majority government in May 2015 – with short exceptions during the Peter Lougheed and Stelmach governments.

Alberta conservatives apparently want more of the same. They’ve been demanding for months that Alberta get back on the destructive old boom-bust track as quickly as possible. So Mr. Kenney’s praise for Mr. Wall, who is doing just that next door, is hardly unique.

By contrast, the NDP Government here in Alberta has met the same oil-price crisis with a commitment to protect health care services, public education and basic government services while building the social license required to get Alberta’s resource industry back on track – which clearly appears to be working. The NDP is also making a genuine if quixotic effort to diversify the economy to ensure the impact of inevitable oil and gas price fluctuations is not so devastating.

In other words, they are behaving like grownups … like actual stewards of the economy.

Not Saskatchewan. And not Manitoba either, which last year elected a Conservative government and already appears to be heading down the same garden path.

Meanwhile, it was revealed by the federal government today that Mr. Wall’s government had cut a side deal with Ottawa on health care funding, allowing further fragmentation of the national health care system and making it more difficult for provinces like Alberta to negotiate the agreement all Canadians deserve.

Despite the fact they ease the province’s burden, the additional health care funds just agreed to will have no impact on the Saskatchewan Party Government’s efforts to bully the province’s health care workers.

Because, when it comes to fiscal planning in conservative Western Canadian provinces, all we have to fall back on is the notion the lord giveth and the lord taketh away. Repeatedly.

Thus endeth the lesson.

This post also appears on Rabble.ca.

15 Comments to: ‘Real Leader’ Brad Wall’s government feeds the fluctuations of a boom-bust economy as Alberta stays the course

  1. January 18th, 2017

    The root of Morgan’s ‘explanation’ comes from the the recent Supreme Court decision stating that employers must bargain in good faith and cannot arbitrarily dictate terms of settlement. It will be interesting to watch Wall & Co. try to skate around that mandate.

    https://thetyee.ca/News/2016/11/10/BC-Teachers-Win-SCC-Battle/

    Reply
  2. David

    January 18th, 2017

    Mr. Wall is now discovering what PC leaders in Alberta learned the hard way – voters don’t mind a bit of mismanagement when times are going well, but when the economy turns sour things get scrutinized much more closely.

    Perhaps the pay freeze will deflect attention from the questionable land expropriation deals for bit, but the feeling that Mr. Wall’s government blew money on questionable things in good times will not go away.

    It is easy to be popular if you are a premier that has governed mostly in good times, but the good times seem to have ended so Mr. Wall’s past spending will be under much greater scrutiny now. Also, he has already exceeded the deficit promised in the last provincial election.

    Perhaps if he is lucky, he can get out just in time to take over the leadership of the federal Conservatives, if they do not win the next federal election – provided they still want him. Two helpful suggestions for him – don’t cut spending on bilingual education and perhaps its time to start those french lessons now, Mr. Wall.

    Reply
  3. Jack

    January 18th, 2017

    Not knowing the exact distribution, I would assume most public sector employees live in the urban Saskatchewan ridings that never seem to vote in favor of Wall. To Wall’s rural base this appears to be a fantastic way to cut costs.

    Reply
  4. Sassy

    January 18th, 2017

    I feel sorry for my relatives and friends in Saskatchewan, some of whom are progressive and others who are big Wall fans. Maybe, just maybe, over the next few years, the latter group will get a wake-up call by comparing how the two provinces are dealing with the oil price downturn. It feels good (and still a little strange) to feel proud of my government’s governance and decisions in difficult times.

    Reply
  5. Farmer B

    January 18th, 2017

    I think the difference between Saskatchewan and Alberta is financial responsibility to the taxpayer. In attacking Saskatchewan’s fiscal management you are ignoring the size of Alberta’s deficit. It is projected to be 10.9 billion for 2016-2017, it will actually exceed 14 billion with capital costs included but I will use Joe Ceci’s latest projection. This amounts to 2553 dollars per capita. Saskatchewan’s deficit is projected to be 1 billion or 875 dollars per capita, so who is doing a better job?

    As for diversification, the NDP promotes green energy as diversification. We are already producing electricity, how does shutting down one source of electrical generation and replacing with another amount to diversification. You are producing the same commodity for the same consumer at over twice the cost, how is that diversification? To add insult to injury Alberta taxpayers must pay hundreds of millions of dollars of early retirement costs of these generation facilities for many years to come. I do not see this diversifying the economy! And the NDP still admits that the size of the deficit depends on the price of oil.

    I will agree with you on one point, Saskatchewan’s side deal agreement on health certainly reduces the remaining provinces bargaining power, bad move!

    Reply
    • Mike

      January 19th, 2017

      Well said Farmer B. This electricity situation is going to be a real shocker for many.

      Reply
    • Bob Raynard

      January 19th, 2017

      Hi Farmer B,

      I really do enjoy reading your posts, and embrace the mental challenge your numbers present. I also respect the effort you put into your well researched comments.

      Like you, I am also fiscally conservative, in the sense that I too am concerned about our current deficit. Where we seem to diverge, however, is considering the revenue side of the equation. Ralph Klein used to love talking about Henry and Martha; Henry needs to start working the same number of hours as his neighbours.

      So, using your numbers, 2553 minus 875 is $1678, so Alberta’s per capita deficit is $1678 more than Saskatchewan’s. Since one of the ways the Real Leader of Western Canada leads is by imposing a 5% sales tax, that gap would be closed entirely if everyone in Alberta spent $33,560 per year, or roughly $2800/month on sales tax eligible items, and we imposed the same sales tax Jason Kenney’s idol imposes. I acknowledge that these sales numbers are high enough that it would not entirely close the gap, but I think you can see how it would make it considerably smaller. I don’t know how the 2 provinces’ income tax rates differ, but since for years Alberta bragged we had the lowest income tax, it is possible that could close the rest of the gap.

      For years our conservative thinking governments patted themselves on their backs that their superior management style allowed Alberta to be the only province in Canada that didn’t have a sales tax. The reality is, however, that it was oil revenue that made that possible. Now that oil revenue has dried up, the fiscally responsible thing to do would be to tax the same as the rest of the country does. Sadly, while fiscally responsible, politically it would be suicide. Thus we have deficits.

      These deficits are financial, whereas the deficits Ralph Klein et al left us were in infrastructure. I would love to know if any of the capital costs you mentioned became necessary because there was not enough money for routine maintenance during Klein’s austerity years. (no money to change the oil in the government’s vehicles? Tell the trucks to do more with less) As well, how many of those capital costs are for projects whose need was identified when we were enjoying Ralph Klein’s good management, when there was no plan?

      Reply
      • Farmer B

        January 19th, 2017

        Bob I as well enjoy your responses. Just for the record the B in Farmer B is Brian. As for your thoughts on a sales tax, I have in previous posts on this blog advocated for a sales tax so you and I are in agreement on that front. I believe it has been speculated that for every 1% of sales tax the Alberta government would recieve roughly 1 billion dollars. Now with a 30 dollar a tonne carbon tax I believe it has a projected return to government of 3 billion dollars a year or the same as a 3% sales tax. The problem with the carbon tax is that it does nothing to reduce the deficit. Rebates to Albertan’s use up about 1/3 of the carbon tax, a rebate I view as a bribe to those in Alberta most likely to vote NDP. I believe a good portion will be used to subsidize green energy to make it competitive. This does nothing to solve our revenue problem. In fact I believe it will make the problem worse due to our dependence on energy royalties, an industry made less competitive in Alberta by the carbon tax and cap on emissions.

        As for your thoughts on capital costs and infrastructure, I would agree that the conservatives postponed infrastructure investments without analyzing what was needed. I do think the large influx of people looking for jobs during the boom times exacerbated the problem. As an example I can remember many times Mayor Nenshi of Calgary complaining that there wasn’t enough money coming fron Calgaian’s taxes to fund needed infrastructure and this is municipal, a complaint he still has today. Governments seem to have an insatiable appetite for money and seem to never have enough. Progressives are always looking for new places for government to spend money some are justified, many are not. Leadership is knowing when to say no.

        Reply
      • Val

        January 20th, 2017

        quite manipulated arithmetic you use, which doesn’t make our payment any less. saskatchewaners wouldn’t pay $875 each off $2553 albertans debt but albertans alone.
        as i mentioned somewhere before, at same time, $6.3 billion off $9.6 billion carbon tax revenue was allocated to some quite blurry and not clearly specified investment to “help diversify our energy industry”.
        seems NDP likes the money no less than PC but similarly to PC (except Lougheed’s era) can’t handle cash rainfall by appropriate and efficient way.

        Reply
        • Farmer B

          January 21st, 2017

          Val how is taking the projected deficit for one year for each province and dividing that number by the population of that province manipulative? It simply shows that Alberta’s debt on a per capita basis is 3 times as large. Here is more math, the interest for one year at 3% on 10.8 billion dollars is 324 million dollars. That is tax dollars spent that will benefit no one.

          Reply
          • Val

            January 22nd, 2017

            sorry, my bad. i skipped “more than Saskatchewan’s” part.

            as for ” tax dollars spent that will benefit no one”, well they will benefit borrowers, who’s already have $10.8 billion to lend. thus our “left of center” government, proclaiming on one hand “social equity”, on another does already rich even richer on behalf of taxpayers.

    • K. Larsen

      January 19th, 2017

      Another crucial difference is Saskatchewan has social responsibility to its citizens. Sk. has a government owned telephone, electrical company, liquor stores, and auto insurance all of which keep money in the province and provide income to the government.

      A bigger portion of the Sk economy is based on field crop agriculture which, dollar for dollar, spins more money into the province than oil and gas which mostly leaks out (pun intended – sorry) to foreign shareholders. Overall the Alberta grain sector is much smaller and the profits from beef also go to foreign shareholders with no thanks to cow calf producers who produce the wealth.

      But you are right. The Alberta NDP has bungled the part of the electricity file on compensation to the coal generators. They ought to do what the Harper Government did with the farmer-owned assets of the Canadian Wheat Board: seize them without compensation – after all that is what the electrical transmission, and petroleum sectors has been doing for years to both farm land surface rights owners and Provincial oil and gas resources.

      You are however wrong on the cost of electrical generation. In spite of the green rhetoric, the shift is from coal to natural gas so the cost is not double. Natural gas does not require the heavy transmission lines coal does and the NDP should let the owners of those overbuilt lines go hang so we can have cheaper electricity.

      Reply
  6. Expat Albertan

    January 18th, 2017

    So one must ask the obvious question… if Kenney becomes Premier (god forbid) and Wall is still Premier (again, god forbid) will the former still consider the latter to be the ‘real leader’ of the west?

    Reply
  7. Eric Cameron

    January 19th, 2017

    OK, we got an NDP government in Alberta. What has to happen in Saskatchewan and Manitoba to elect grownups?

    Reply
  8. pogo

    January 19th, 2017

    Well well, on the advent of the inauguration (that word is right up there with enema at this point) of Donald Trump I can only offer this and faux fur set of socks and underwear for Jason Kenney… https://youtu.be/SJUhlRoBL8M

    Reply

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