Alberta Finance Minister Joe Ceci, a New Democrat, delivers a traditional Progressive Conservative budget

Posted on March 23, 2018, 2:19 am
7 mins

PHOTOS: Alberta Finance Minister Joe Ceci, Below: A slimmed-down Jason Kenney, leader of the United Conservative Party, and Stephen Mandel, Leader of the Alberta Party, at the Legislature for Mr. Ceci’s Budget Speech yesterday.

Despite the predictably apocalyptic tone of Opposition political spokespeople and the unenthusiastic analysis by mainstream media commentators, if you ask me Finance Minister Joe Ceci delivered a traditional Progressive Conservative budget in the Alberta Legislature yesterday.

If this seems odd – Mr. Ceci is a New Democrat, after all – it’s just the Alberta way. We elect new governments from time to time and, before we know it, they start to turn into PCs.

As has been said in this space before, the re-election of Premier Rachel Notley’s NDP government would be a virtual certainty if it had a different name, one with “conservative” somewhere in it.

I don’t know if NDP is a damaged brand in these parts, exactly, like that of the hapless Alberta Liberals. But the New Democratic Party does have a brand, and Alberta’s Conservative Opposition has done its level best to exploit it effectively to paint everything the Notley Government does as “risky,” “ideological” and “socialist.” This has gained some traction … at least among the commentariat.

Nevertheless, Mr. Ceci’s budget yesterday was a conservative political document in that classic Alberta way: enough of a pivot to “fiscal responsibility” to annoy the NDP’s traditional die-hard supporters, a degree of austerity compassionate enough to be deemed insufficient by the perpetually angry conservative base, and a reliance on Alberta’s traditional response to bad times in the oilpatch, a fervent hope oil prices will go up again soon.

If the NDP has added a new twist, it’s the suggestion things will get better when the Trans Mountain Pipeline is completed – which the government insists is a sure thing and the Opposition prays will never happen on the NDP’s watch.

One can argue with this proposition, but it’s clever in that it suggests that with the NDP at the helm Alberta has a degree of control over its own fate without having to do the sensible thing and implement a sales tax. The Tories just used to pray to the Oil Gods to make the Saudi Arabians pump less of their high-quality crude. And how’d that ever work out?

The NDP Government will probably be annoyed by this characterization. But then, the Usual Suspects on the right will be annoyed too by someone saying that if the finance minister’s virtual new shoes were on the other foot, they’d do much the same thing at least as far as deficit and debt go. They’d certainly be meaner, though, given their ideological bent toward privatization, which in the long term would cost us more. But then, as what’s happening south of the Medicine Line clearly illustrates, debt and deficits only matter to conservatives when they’re not in power.

Mr. Ceci’s speechwriter, meanwhile, pushed the fiscal responsibility theme hard. I counted the phrase “a path to balance” (as in, we’re on one) five times in the minister’s speech. The official slogan chosen by the drafters was “A Recovery Built to Last,” a phrase clearly designed to push the same button.

As for the pivot to something not unadjacent to fiscal austerity, the NDP’s historical supporters – progressive activists, education and public health care advocates, unions and commentators like the author of this blog – will continue to scream for taxes that recognize the fiscal realities of running a modern Canadian province.

And as Mr. Ceci observed, with this year’s provincial deficit now estimated downward at $8.8 billion, Albertans will still be paying $11.2 billion less in taxes than they would in any other province. So … the conclusion will seem obvious to many.

But they can forget about it. Ms. Notley’s government is having none of it. And in fairness to their point of view, the conventional wisdom in Alberta (true or not) is that implementing tax increases on that scale would be to commit political suicide.

Anyway, why bother when, as Mr. Ceci observed, the province despite its recent troubles not only “surpassed expectations,” but “outperformed the rest of the country on a number of key economic metrics – the highest per-capita GDP, the highest average weekly earnings, and the highest employment the in the country.”

And that’s without the promised pipeline and the fervently prayed-for oil price increase!

The Opposition is left to argue that the province’s long-term debt amounts to the NDP breaking open the Seventh Seal, plus that we should be measuring deficits in per capita terms, not as a percentage of GDP. Well, OK. We know that matters to the media and their ilk.

So will this plan work for the NDP? Well, all the Usual Suspects on the right say no, unanimously and confidently. But notwithstanding the Opposition, the Astro-Turf groups that support them, pollsters that work for them, and the universally right-wing mainstream media in this province, a week is a long time in politics. And a whole year is an eternity.

11 Comments to: Alberta Finance Minister Joe Ceci, a New Democrat, delivers a traditional Progressive Conservative budget

  1. Sam Gunsch

    March 23rd, 2018

    Listening and reading all the coverage today, all the AB media, including our public broadcaster, CBC, discuss the deficit/debt using the economically ignorant framing of the Fraser Institute and other anti-government ideologues.

    They really are lazy bunch. And fail the citizenry.

    re: The Opposition is left to argue that the province’s long-term debt amounts to the NDP breaking open the Seventh Seal, plus that we should be measuring deficits in per capita terms, not as a percentage of GDP. Well, OK. We know that matters to the media and their ilk.

    Reply
  2. J.E. Molnar

    March 23rd, 2018

    The usual suspects from the right-wing echo chamber notwithstanding, I see voter indifference on debt and deficits from the voting public. Could be they’ve become immune to the “sky is falling” rhetoric from opposition benches, or they just realize a two-year recession comes with consequences and ramifications, least of which is a temporary balance sheet inconvenience.

    The opposition parties will pile on, media pundits will claim financial virtue, bond agencies will drool over another chance to inflict bad PR, and the public will go along its merry way oblivious to the feigned Apocalypse being orchestrated on the right. Chalk it up as just another day at the office for this politically beleaguered and besieged NDP government. Life will go on in Alberta as Rachel Notley and the NDP intended it to — one safeguarded day at a time.

    Reply
  3. Michael Brayall

    March 23rd, 2018

    I read most of your blog posts and I recognize that you are a pretty strong advocate for a sales tax. My understanding is that a sales tax is a regressive tax and I was wondering why you aren’t an advocate for increased income taxes which could be implemented as a progressive tax?

    Reply
    • Athabascan

      March 25th, 2018

      A sales tax is not regressive. Think of it as a consumption tax.

      The more you buy (esp. luxury goods) the more you pay. That is progressive!

      Reply
  4. David

    March 23rd, 2018

    Perhaps in a few ways, it could be considered a traditional PC budget, but I think overall that is a real stretch. Yes, it does have assumptions about strong growth and good fortune in the energy industry leading to a declining deficit, that was a common feature of some PC budgets, particularly in the Redford years, with the bitumen bubble of low oil prices that she seemed determined to make go away some how. However, starting with the deficit itself, traditional PC’s would quickly point out they didn’t generally have deficits over $8 billion. Now, of course the $3 billion or so deficits I recall from the Getty years, seemed quite alarming at the time too and adjusting for inflation would be higher. I don’t know if that would equate to over $8 billion now or not.

    Much of the media has certainly latched on to the accumulated debt number projected more than five years in the future, of course without any comparison to other provinces to make it sound alarming. I would like to make a bet with someone predicting oil prices in five years – I don’t know what they will be, but whatever they are, I bet the prediction will be wrong. So on that basis alone, the projections are not very meaningful and will probably turn out to be wrong.

    In financially challenged times, a traditional PC budget would be laying off people, nurses and teachers seemed to be frequent favorites (the numbers depending on the size of the deficit, the outlook for oil prices and perhaps the mood of the Premier) and implementing a host of new user fees. Depending on whether the PC Premier was a smoker and or a drinker those taxes might go up and they would likely try to bring back their favorite flat tax – health care premiums. Prentice’s last budget was an example of some of this.

    I think the traditional PC budget would have been more optimistic about the deficit than this one. The PC’s were great at projecting quickly declining deficits, but they were not so good at achieving them. If anything, this budget seems more realistic about there being a prolonged deficit. Now I think honesty and realism are good ideas, but I am not sure if Alberta voters really want to hear that. I think they want to hear, the recession is over, the economy is recovering and the deficit is gone. Perhaps 2 out of 3 is good enough for some people, but I am sure Kenney will have a laser like non stop focus on any bad news he can find. However, I noticed he seemed a bit rattled in his criticism of this budget. I think he now finally realizes if he was in power, he would be as reliant on the BC pipeline being built to improve revenues and his clever subtle strategy of trying to sabotage the efforts of Premier Notley and Prime Minister Trudeau on this may not be in his own best interests. Now isn’t that ironic?

    One observation about the budget that Kenney may have also noticed, is that the carbon levy is also very integrated into balancing the budget and developing infrastructure. For all his brave talk about scrapping it, he must have figured out by now that would be like pulling a pin on a hand grenade called financial calamity. A lot of things are funded from the carbon levy, such as major LRT projects. If you think we have a deficit problem now, get rid of the carbon levy and watch it get much worse.

    So yes, the budget had a deficit and a bit of the traditional conservative optimism about the economy and the energy sector, but that’s about where the similarity ends.

    Reply
  5. pogo

    March 23rd, 2018

    There’s an number of questions I think Jason Kenney should answer. 1. Why are you such opportunistic professional politician when MacDonalds needs nice guys like you to help them navigate changing tastes? 2. Why Alberta, after Canada wanted you so badly? 3. Will you defend all your foreign workers to the last drop of their blood? 4. Err, their still here. Do you believe that being good enough to work here means you’re good enough to live here? 5. What in any lord’s name do you believe?

    Reply
  6. Farmer Brian

    March 23rd, 2018

    Is this a progressive conservative budget as David feels it is? Well it is certainly similar to Stelmach’s and Redford’s budgets as far as the balancing of the budget is dependent on royalty revenue from oil and gas. It differs to the extent that the PC’s would make more realistic efforts to control spending. The NDP ran on a platform of getting Alberta off of the oil and gas roller coaster, this budget shows that they have absolutely failed on this campaign promise.

    One of the most revealing aspects of this budget is that in 2021 and 2022 the NDP is going to put the federally mandated increases to the carbon tax over the $30 dollar per tonne in their climate leadership plan into general revenues. If this tax was really about the climate this wouldn’t be done, so this confirms what I have believed all along that the carbon tax is all about increasing government revenue and nothing to do with the climate. It was also revealing to see that they are putting a 10% sales tax on the sale of marijuana. Done they claim to keep the price of marijuana consistent across Canada. Alberta’s would have been cheaper due to our lack of a sales tax. I have never heard this concern raised in relation to alcohol or tabacco sales as the price of these vary across Canada.

    Now a little bit about the projected deficit of $96 billion by the time the budget is theoretically balanced in the 2023-2024 fiscal year. To give a little perspective I will compare the per capita debt with Ontario(the most indebted non-sovereign government in the world) using population data from Statscan’s 2016 census. At present Ontario’s debt is roughly $312 billion. This gives a per capita debt of $23200. At $96 billion Alberta’s per capita debt will be $23603. In 9 short years the Alberta NDP government will have surpassed the financially challenged province of Ontario, quite an accomplishment. Now Joe Ceci would argue our net debt is lower than that, true enough but we will still be paying the interest on the $96 billion. That projected interest is to be $3.7 billion(if interest rates haven’t gone up). What really pisses me off about this, is if a sales tax was implemented in 2024 of say 5% and it brought in say $5 billion of revenue, 74% of that revenue would go to pay interest on the debt, what a waste.

    Now the NDP has said if the Kinder Morgan expansion isn’t under construction by 2021 they won’t raise the carbon tax. That is one possible wrench in their plan. Also if the pipeline isn’t built they won’t receive the over $10 billion in royalty revenue they are projecting for the 2023-2024 fiscal year which they are counting on to balance the budget. So one thing is abundantly clear, regardless of who wins the election in 2019 they are facing a fiscal situation that has been severely undermined and in my opinion the NDP is “dreaming in technicolor” if they think they will balance the budget in 5 years.

    Reply
  7. Farmer Brian

    March 24th, 2018

    The best article I have found is on the CBC website titled: ‘They blew it.’ Economist Trevor Tombe on the provincial budget. In the past Trevor Tombe has been more positive towards NDP policies than other economists, not so much this time.

    Reply
  8. Jim

    March 24th, 2018

    Why don’t we just use the carbon tax as a sales tax like revenue source. It’s based on consumption and adds to everything purchased, we would have to get rid of the silly rebates however. More concerning is 60% of Albertans are low income and receive a rebate, but that’s another discussion. It keeps the feds off our back, panders to some of the environmental crowd, and potentially raises the required revenue. Problem solved and we can feel good that we are doing our part for the earth while still ripping it up and burning stuff.

    Reply
  9. Alex C. Polkovsky

    March 24th, 2018

    I would just add that they built a deficit and bunch of schools. Like governments do. Sales taxes can be less regressive if they apply to fewer necessities and to more luxuries. As one well to do person once said, when you reduce my taxes you just raise the price of a Lexus.

    The more I hear promises from the opposition to revoke the no good, rotten, job-killing, sad-making, all caps CARBON TAX, the more I want to see the UCP answer to, “So, our businesses will pay another tax to Ottawa?”

    Reply

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