PHOTOS: NDP Health Minister Sarah Hoffman. Is she the best person to hold Alberta’s finance portfolio as Alberta’s 2019 election edges nearer? Below: Finance Minister Joe Ceci and Jason Kenney, the conservative politician most likely to lead the United Conservative Party into the next provincial election.
The pecuniary difficulties faced by the new United Conservative Party Caucus in the Alberta Legislature are genuinely hilarious and highly ironic.
The irony is particularly pronounced given the pro forma screeches of anguish from the caucus after the province’s first-quarter financial results were released Wednesday by NDP Finance Minister Joe Ceci.
This hardly conforms to the carefully cultivated image of pro-austerity conservative parties like the UCP as fiscally prudent, businesslike and highly responsible with the taxpayer’s hard-earned dollars.
Of course, anyone who has actually observed conservative politicians in action anywhere, especially their propensity for burning through public funds while slashing taxes for their wealthy benefactors, knows this image is entirely spin.
The fact the 28-member Opposition UCP Caucus has 38 publicly paid political staffers, compared to 25 for all 55 NDP MLAs, is a striking illustration of this phenomenon in action. Most of the UCP Caucus’s financial troubles, the Edmonton Journal’s capable legislative reporter wrote on Thursday, originated in the Wildrose Caucus before the two parties’ members voted to merge. Again, not surprising.
Readers, however, need to remember that as far as the usual suspects in the conservative media cheerleading squad are concerned, conservative deficits don’t matter. Only Liberal and NDP deficits are cause for frantic concern.
Still, anyone amused by this juxtaposing also needs to keep in mind that the obvious inability of conservatives to manage their own publicly supported budgets in no way reduces the ability of their patrons in the wealthiest segments of Alberta society to raise formidable amounts of cash for their political party, as well as for the so-called PACs set up to help the UCP skirt Alberta’s election financing laws.
In a few weeks, the financial troubles of the UCP Caucus will have been conveniently forgotten and the financial predicament faced by the province will continue to loom large in the minds of a great many Albertans, and especially in the vast and well-financed UCP propaganda apparatus.
In the medium term, in other words, the irony of UCP fecklessness will not save Premier Rachel Notley’s NDP Government from the very real political danger presented by the continuing state of the province’s finances.
In the first-quarter fiscal update – required by a law dating back to the heyday of high petroleum revenues and officially sanctioned conservative ideology in Alberta – Mr. Ceci was forced to revise his officials’ estimate of the price of oil downward, with the inevitable impact on the province’s forecast bottom line.
So while the NDP made progress on reining in costs while maintaining public services – what nowadays is known as bending the cost curve – the predicted budget deficit for the end of the year remains stubbornly stuck at $10.5 billion, and surely the NDP would have liked to see that number edge into the single digits.
To many Alberta voters, including a lot who support the NDP on most issues, this doesn’t make it sound as if the Notley Government has much of a plan to deal with the problem. Mr. Ceci’s homespun delivery may add to this impression.
Nor is the NDP prepared to deny that budget deficits and debt of the magnitudes faced by Alberta even are a problem – an argument for which a sound case could be made by any competent economist, but which has been deemed politically unsalable in Alberta.
For all intents and purposes, then, the NDP appears to accept the argument of the conservative establishment that any deficit is a terrible thing, all budgets need to be hurriedly balanced and all debt must be eliminated – most of which is plainly nonsense.
It could be argued the only significant difference between the NDP and the UCP on this point is the speed at which this feat should be accomplished – understandable enough since the NDP actually has the responsibility of running the place without demolishing it.
It’s troubling, of course, to contemplate the possibility the UCP seriously proposes to cut spending by $10 billion or even more while slashing taxes across the board. It’s unlikely our health care system alone could survive that onslaught, UCP fantasies (or outright lies) about not touching “front line” health care workers notwithstanding.
And yet the NDP and Mr. Ceci also seem unprepared to confront the obvious reality that if Alberta proposes to function with a level of public services plainly expected by citizens – regardless of how they vote – it has to do something to raise suitable revenues.
In other words, our revenue problem is both more serious and more tractable than our spending problem. And the obvious solution – again, deemed to be politically impossible apparently by everyone – is the implementation of a sales tax like every other province in Canada.
It would seem to me better for the NDP to go down defending the right policy, which the province really needs, than defending the precursor to harmful conservative austerity, which is the wrong policy the province most definitely does not need.
But rolled out skillfully, because most Albertans are not fools, a sales tax might be more saleable than either major party imagines – especially in light of the alternatives.
Regardless, in terms of the political optics as we move toward a provincial election in 2019, it is said here the NDP needs to show some resolve, even if it is unwilling to actually demonstrate it where it’s really needed and would really help – that is, on the revenue side of the budget.
One way to do that would be a visible change in the finance portfolio, in which the soft-spoken Mr. Ceci has done a good job but, arguably, sent a weak message.
Sarah Hoffman, the minister of health, has been the most effective member of Premier Rachel Notley’s cabinet.
Historically, the health ministry has been a career killer for many politicians, whose political carcasses litter the neighbourhoods of more than one Canadian legislature.
But the capable Ms. Hoffman has not only survived, she has prospered.
Jason Kenney, the former Harper Government cabinet minister, Progressive Conservative leader and the front-running candidate to lead the UCP is a hardworking and calculating politician, who, though he is not a particularly likeable or empathetic man, is capable of doing the electoral math.
Accordingly, the NDP can count on it, as 2019 nears, Mr. Kenney will play to his strengths, and not the NDP’s. And one of his strengths right now – notwithstanding the embarrassment of the bottom line of the UCP Caucus, of which Mr. Kenney is conveniently not yet a member, is the public’s perception of the province’s financial bottom line.
Which is why it is time for a change of course on finances, and why Ms. Hoffman seems like the woman to lead it.
David, You rightly state that the province has a revenue problem, but your solution of a sales tax is, well, regressive. Sales taxes cause more disruption to the economically disadvantaged than any other form of tax measures and should be avoided at all costs.
To a person, or family that is struggling to get by (never mind having even a fighting chance to become middle income), a sales tax is a nightmare. There are significant numbers of Albertans who struggle from paycheque to paycheque and to add the burden of a sales tax to any portion of their budget is cruel as it means even less money to spend on necessities as economically disadvantaged people and families don’t have the ability to invest money for themselves or for their children.
Yes there could be rebates, but these rebates require spending first, rebate later, which to an economically disadvantaged person or family results in working at yet another job, eating even poorer quality food and potentially visiting one of those payday loan outfits. As well, a rebate program is expensive to administer and police which adds even more costs for the increased tax to take care of.
Of course the wealthy (and those hoping to join that group) love sales taxes as they know that a sales tax will only affect a portion of their income, that which they choose to spend on necessities and luxury items, but that leaves a fairly large (or large as it would appear to economically disadvantaged person) left to invest and take advantage of the built in taxation benefits of investing. Or a more advantaged person can afford to take their un-sales taxed dollars and vacation somewhere else with the result that the income stream is removed from the provincial stream in its entirety.If their income were taxed at a higher rate and the investment stream tax loopholes were at least reduced then that would be a fairer system.
If our government is to do something to increase revenue, then lets actually try something new and not borrow socially bankrupt ideas from other jurisdictions, lets choose a really new and unique ‘right policy’ rather than retreading old regressive ideas where the problems are well known. Perhaps the solution lies in making sure that there are no economically disadvantaged people and families, that instead of a $15.00 minimum wage we institute a living wage which will increase the money flow through the economy and reduce taxation loopholes and increase the taxation base though higher wages..
The NDP not only has caved into the Con mantra on financial management but is busy implementing and supporting the Harper agenda on agriculture.
The progressive financial solution is not a US style sales tax. It is to implement the independent Stelmach Royalty review – after all it is an emergency, the UCP says so.
The NDP might also point out that the market is saying that the days of wrecking farmers’ and ranchers’ land to drill 15,000 or so oil and gas wells a year are over. Less production just might mean higher oil and gas prices – the market sez that too!
you’re seriously believe in what you have wrote?
what exactly positive accomplishment can be found behind her as minister?
pretty much seems she’s like Calgary’s mayor Nenshi – big mouth, plenty of populistic blah-blah and absence of any practical achievments in portfolio.
I support your idea of moving Hoffman to finance; however Brian Mason would clearly be my first choice. Getting Mason in a more vocal role would also aid the party at this juncture. He seems completely lost in this government, despite his strong oratorical skills and political acumen.
It may also be prudent to shake up a few other cabinet portfolios and add some new faces at this juncture in the NDP’s tenure. St. Albert MLA Marie Renaud has constantly impressed me, as has David Shepherd and Jessica Littlewood.
The NDP will have to become more vocal to fend off attacks from the right-wing parties who are intent on continually lambasting them over the province’s economic record and other socially relevant issues that emerge over the next 18 months. This will likely require the resolve of everyone in the caucus to channel their inner Brian Mason — the youthful pit-bull-take-no-prisoners Brian Mason we witnessed as an opposition MLA. My gut feeling is…it can’t hurt.
“…NDP made progress on reigning in cost…” Unusual for you, Sir, to misuse a word like this, so I’ll blame spellcheck. It should be “reining in”, like what you do with harness horses to slow them down. “Reigning” is something the Family Windsor has been doing in London for a little while …
More substantially, I also disagree with a sales tax, consumption taxes being inherently regressive. Means-based income taxes (both personal and corporate), wealth taxes, and inheritance taxes can be implemented to ensure those who have benefited most from our economy contribute most to its protection.
Thanks, Jerry. Yes, I do know the difference between a reign and a rein, and I can only explain this by the fact this piece was written close to midnight, after dropping my daughter off at the airport for her return to her studies in Germany. Distraction? Perhaps. Regardless, it is fixed, and, as always, it is worth noting that I depend on my readers as my editors and I am always grateful for their observations and suggestions. On the issue of a sales tax, while I agree that it is an imperfect solution for the reasons you and others inevitably point out, it is a solution, and it is doable. The impact, while real, is not as severe as Northern Loon suggests, nor as insignificant for the wealthy as some argue. We are too inclined on the left and centre-left to demand perfection and reject outright anything less, as the Democratic Party in the United States did when Richard Nixon proposed a national health care scheme superior in some ways to Obamacare. The result was a worse disaster, which continues. We should not fall into the same trap in Alberta in search of the same unattainable perfection. DJC
Alberta is constantly called a failure in comparison to Norway. Norway has a 24% corporate tax rate and a 25% sales tax. I am not sure why a sales tax is regressive, in my opinion having high tax rates on the wealthy or higher levels of income is a disinsentive to work harder. People with a higher disposable income will purchase more goods and therefore pay more tax, makes sense to me. As for a new finance minister, not sure how having a better salesmen will make selling a failing debt management plan any more palatable.
sure, UCP, Alberta party and even Liberals will be very grateful to someone, who’ll implement PST in Alberta 🙂
NDP as they are at the moment, have pretty slim chance to compete for re-electedion with even troubled and messy UPC. PST from them would be death sentence for NDP in Alberta into eternity.
and yes, consumption tax is regressive. at least here.
if you like to compare Norway to Canada, you should include social security in wide meaning of term, norwegians receives in exchange for tax. our system of tax redistribution do not come even close.
You are right, Farmer B. When the Norwegian government discovered it had oil revenue, it decided that it would tuck all of it away, and maintain tax levels high enough to pay for the services the government provides. The country is sitting very pretty right now, but it got there with the high taxes you mentioned. My wife and I visited Norway in 2009. One night we had supper at a Burger King; my wife had one of those burger/fries/drink meal deals, and I had a supersized one. The meal cost $40, and that was 8 years ago.
Right wing commentators love to go on about burdening our grandchildren with a huge debt, but they sure get quiet when the idea of a tax to solve the problem is mentioned.
This embarrassment by UCP might lose a few members, but it will be fixed and they will probably try to twist it in their favour.
I think the NDP should avoid a sales tax, but look at any other possible revenue sources.
“The government plans to look for another $200 million in savings, in addition to $200 million in already planned cuts.” – Ceci was quoted from the CBC news item. Maybe, finally, the NDP is going to eliminate a top-heavy bureaucracy created by the 44-year PC reign. If there are approximately 6,000 managerial-level positions in the civil service, including AHS and other agency, boards, and commissions, a 10 percent cut would mean layoffs of 600 positions. If an estimated average salary is 150K, the government budget would gain 90 million dollars annually. That’s not much, but it would emphasize that cuts alone will not get us out of this financial predicament. A move like this could shut up the opposition parties and prove the NDP government can make some hard decisions. I guess we’ll wait and see.
I just read that the Wildrose cannot even manage their own caucus accounts. How on earth can we expect them to manage the economy?
If we let the likes of Fildebrandt loose he will be renting every empty Gov’t office and unused piece of equipment on his own account! That won’t help the deficit will it? Maybe it will help Fildebrandts deficit thought…or pay for some of his legal fees if he decides to hire a lawyer instead of foolishly defending himself on the hit and run charge.
As for the Tory contingent….will Kenney want a new pad constructed in secret at Government expense like Alison Redford? And will his Cabinet colleagues turn a blind eye to it just as McIvor et al did and deny all knowledge of it when they get ratted out?
Jean is very quiet on this. He does not want to admit that they cannot even manage their own caucus finances. Apparently some MLA’s have been asking the Party for an accounting for over a year but one is yet to come.
If the NDP hopes to be re-elected, several difficult and pehaps unlikely, but not impossible things need to happen of the next few years.
One, is that the NDP needs to show some plan and progress in dealing with the large deficit. I realize this may not be a big concern to traditional NDP voters, but it is to non traditional NDP voters who need to be persuaded to support the NDP again.
Another thing is some progress in the energy sector, from probably both economic improvements (from higher oil prices) and a more positive feeling about the likelihood of pipelines proceeding. Again, not a big issue for traditional NDP supporters, but it is for those others who they also need support from.
A third thing needed is for the UCP to stumble some. The Fildebrandt scandal was a gift from heaven for the other political parties. Now in less than a few weeks we have a second such gift, the Wildrose caucus deficit. Any other party that has any political intelligence will make every effort to ensure such hypocritical lapses are not forgotten by next week, but will constantly remind Albertans of them over the next several years at every opportunity.
You do not win a political battle by not taking full advantage of such opportunities when they are presented and if the other political parties can not do so, well perhaps they are not clever enough and really don’t want or deserve to beat the UCP.
I have believed for years that the only reason Alberta did not have a sales tax was because we had oil revenue. Now that the oil revenue is drying up, a sales tax really is a no-brainer. Northern Loon’s concerns above would have a lot more validity if a sales tax wasn’t already in place in every other province.
The details get interesting. First, is a government morally obligated to put a sales tax on their campaign platform? That would be the high ground, but chances of any new tax getting electoral favour are slight, as Stephen Dion had the misfortune to find out, and tax plebiscites in California have shown. Greg Clark of the Alberta Party has come out in favour of a sales tax, but I haven’t heard him say much about it since the progressive wing of the PCs migrated to his party. I do wonder how that stand will be affected by the new party members, especially if the AP becomes enough of a threat to the UPC that they turn their attack dogs in that direction.
Rachel Notley has categorically stated that she will not bring in a sales tax without it being an election issue. I really wish she hadn’t boxed herself in like that, but I suppose anything less than that forceful statement would have gotten all the commentators saying she will bring one in.
Another question is whether to harmonize with the GST, or make our own tax. Harmonizing would be much simpler, for both retailers and consumers, but making our own tax would allow the government to include more exemptions, which would alleviate some of Northern Loon’s concerns. GST is applied to a lot of things that I personally think should be exempt. Dental care products and over the counter medications are two things that come to mind.
Finally, there is the ‘I don’t mind taxes, its paying them that I hate’ syndrome. I don’t know if this falls under the provincial government’s authority, but I would really like to see retailers directed to use ‘all-in’ pricing, where the number I see on the price tag is the total of what I have to pay. If a business wants to show the consumer the before tax price, fine, but the final price should be the most prominent number, on both the price tag and on advertisements. Gas stations do this already, and the federal government has forced airlines to do it. It is doable, and it would remove a real irritant involved with a sales tax.
I don’t want to pay a sales tax. I don’t want to go to the dentist or cut the lawn either. Its time.
The statement by Rachel Notley that she will not bring in a sales tax without it being an election issue means nothing to me. Both Premier Notley and Prime Minister Trudeau brought in carbon taxes without running on them. This showed me that niether politician is worthy of my trust.
As far as the all in price. This is an interesting conundrum I agree. From an ideological standpoint I like the transparency of the GST. It is not hidden. Having said that an all in price has its advantages as well. Having both shown is a good idea. Overall good comments. Enjoy your day:-)
The idea of a sales tax is an extremely poorly thought out solution to a problem that can be solved in others way using tools which do not penalize those who are low income. Increasing royalty rates, decreasing drill incentives, putting in a better progressive income tax structure, increasing corporate taxes all of these are better solutions and won’t hurt low income earners.
Gail it is true that a sales tax would be payed by low income earners where the other forms of taxation you mention would not and I certainly am concerned with a sales tax being applied to heating fuel, electricity and housing be it rent or the purchase of. The GST does not apply to most items in a grocery store and I assume a sales tax would be the same. As far as being a poorly thought out solution, Alberta is the only province in Canada not to have one, not sure if that means a Alberta is an innovator or an out outlier. Realistically our resource revenue has in the past brought in revenue equivelent to or greater than a sales tax. This is no longer the case. At present royalty revenue for conventional and oilsands production is 3.75 billion for present year based on $55 oil. This has been reduced by roughly $500 million in the recent financial update. You suggest raising royalties. The NDP has already done a royalty review and concluded that royalties were fair. What is interesting is that in the last 2 years most foreign oil companies have divested themselves of oilsands assets due to the higher cost of production, poor future market access, and better opportunities elsewhere.
You also feel we should raise personal income tax rates. At present the highest rate in Alberta is 15% when combined with the highest federal rate of 33% gives a final rate of 48%. Taking almost half of a persons earnings is not enough? Personal income tax is projected to bring in just over $11.1 billion in the present tax year. As for corporate tax. Alberta’s rate is 12%, federal rate15% for a combined rate of 27%. In countries like Norway, Denmark, Sweden their corporate tax rates range around 24-25%. These countries have high sales taxes and high personal taxes but have realized to attract and maintain business you have to be competitive. Corporate tax revenue for the present year is projected to be $3.9 billion. It would take a large increase to plug our over $10 billion revenue shortfall.
My final thought is that a sales tax is projected to bring in $1 billion in revenue for every 1% of sales tax. So a 5% sales tax would return $5 billion in theory. Is it enough to balance the budget? No it is not but it is a start. There are no easy answers and no answers that don’t come without a cost. Unfortunately in Alberta I doubt there will be a realistic debate. Enjoy your day:-)
once more – how many provinces do you know with PST and absence of debt?
after Alberta clean it’s present debt by implementing PST, what is your solution for next debt? breath tax, fart tax, walk tax, tax on live in Alberta…?
I believe British Columbia has been running a balanced operational budget but has been adding debt through capital spending. It is the only province to my knowledge running close to a balanced budget so you are certainly correct that a sales tax does not in itself create a path to balance. Governments in Canada certainly appear unable to live within their means. Val my belief is you would have to cut the Alberta government’s spending by 20% to balance the budget and this in my opinion would be difficult if not impossible to do, therefore rather unpalatable alternatives like a sales tax must be considered. Enjoy your day:-)
here is few options, provincial government has, to solve deficit, without wasting time and resources to inventing new or rise existent taxes
about 1/4 of Alberta budget goes to overpay public servants in comparison what they are earning in other provinces. it’s not only negatively impact budget, but have impact on the rest of albertans as without similar salaries they must pay higher retail prices for everything, than in another provinces.
if someone don’t like it, they always have option to move for work into private sector and particularly O&G, if they very much believe they there can earn more.
implement an efficiency rating scale for public servants performance. especially for managers level and tight theirs monetary reward and employment per se!, to their performance.
invest every available extra dollar into creation local value-added and competitive to private sector, enterprises.
only thing need for this is less political ideology and more practical managerial aproach.
i (and i believe many others) will prefer regional level goverment elected on such base rather than as present ideologicly based.
Val, first off going from memory the Alberta Government pays roughly 20 billion in wages out of a roughly 50 billion dollar provincial budget(numbers rounded). So even if through efficiencies and by bringing our public servant wages more in line with other provinces we could save 2 billion dollars or 10% we still have well over a 8 billion dollar shortfall. You propose”invest every available extra dollar into creation local value-added and competitive to private sector, enterprises”. I have to admit I am at a loss of words on this one. Government should exist to provide services that benefit the health, welfare, security and education of its citizens not to compete in the business arena for consumer dollars! There are many examples in Alberta’s history of poorly invested government dollars in private business which cost the tax payers tens of millions of dollars. This is a non starter for me. Enjoy your day:-)
i assume you haven’t ever seen situation in which from ten public employees in fact only three doing actual work and 7 near by sipping coffee and discuss latest rumors?
those 7 can be fired and you, as albertan, won’t feel any impact.
as for value-added public enterprises, obviously we have differnt opinion.
Norway, which you like from time to time use as positive example, has StatOil, which generates billions of $ every year and you may don’t believe me, but Statoil is a public own corporation.
you may enjoy to pay outraged bills from telcos, banks, insurances only because they are monopolists and can charge you on their will because they can but i’m not. and if i must to pay, i will prefer this money in some way will get in local budget rather than in offshore accounts of some anonymous stockholders.
I also believe sales tax idea should be pursued more diligently. Is it possible, as part of a sales tax compromise, to tax what may be defined as luxury items? How about vehicles over a certain value? I’d love to see provincial sales tax on ATVs and other vehicles that damage our environment.
My challenge is my belief that Alberta desperately needs another Peter Lougheed. Vision, passion, honesty, common sense, and many other attributes.
Alas, Brian Jean is certainly no Peter Lougheed. Jason Kenney, in my opinion, if the absolute furthest away from being a Peter Lougheed. Not even in the same book, let alone on the same page. He is a poser.
So is there a Peter Lougheed out there who can bring some sense, some honesty, some good management, and some vision to the UCP?
It is time for a change Joe seems like a competent minister but is really not so good at getting the message across. Unfortunately the NDP lacks depth perhaps a result of no one thinking they could win. It will be interesting to see what candidates are attracted to the party in 2019.
I have often wondered why they don’t present the deficit in separate parts, long term infrastructure numbers and the operating deficit. The average Albertan should be able to relate to this you have your mortgage and your other day to day costs. If you are adding to debt from day to day costs, something we unfortunately are doing, there is a problem.
As to the sales tax I believe the carbon tax was the compromise on this front, now they need to eliminate these silly rebates. If you truly want to lower CO2 emissions the tax needs to be applied to all, we don’t rebate back tobacco taxes to low income individuals.
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