It’s Alberta Budget Day tomorrow.
Finance Minister Travis Toews will table a budget at an afternoon pop-up meeting of the Legislature. Then United Conservative Party MLAs will run like hell for their ridings and hunker down until the Legislature’s business resumes on March 8.
Whatever Mr. Toews has to say, there’s not much danger he or Premier Jason Kenney will pay any heed to what those crazy Marxists at the Business Council of Alberta were telling us a week ago.
The high-profile group of 90 some well-heeled CEOs, presidents and corporate directors called on Alberta to implement a harmonized sales tax as well as its own carbon tax, plus some other rather progressive sounding ideas.
This was something of a surprise, since advocating higher taxes is not the sort of thing we’ve come to associate with influential business groups in recent years.
Still, the views expressed in the report, Towards a Fiscally Sustainable Alberta, shouldn’t really come as a shocker unless, say, you’ve been toiling for a national business newspaper for a decade and a half. It’s been pretty obvious for a while to almost anyone who’s been paying attention that there’s nothing fiscally sustainable about the fiscal trajectory Alberta’s been on.
You can argue, as many do, that Alberta’s problem is mainly on the revenue side. Or you can argue as many others do that it’s on the spending side. You can try for a saw off, as the Business Council did. But one way or another, it’s obvious that something’s gotta give.
What’s changed recently is that thanks to global climate change, the pandemic and new technology, we seem to have gone from a boom-and-bust economy to one without many prospects for any more booms.
This presents a serious political challenge for Premier Kenney and his finance minister. They seem never to have had any idea but to make fossil fuels great again. They have no Plan B now that we’ve been blown off course by the pandemic, renewable energy, and the change of government in the United States.
The UCP desperately wants to present a hard-line austerity budget. That’s because these are guys who in their hearts believe there’s no role for government beyond keeping order and cutting “red tape.” As their hero Grover Norquist famously put it, they just want to shrink it down to a size they can drown it in a bathtub.
The UCP also desperately needs a good news budget to keep the wheels from falling off its campaign bus, thanks to its glaring recent record of incompetence and nincompoopery reminding voters an election will soon be in sight over the horizon.
What will they do? My guess is they’ll present an austerity budget tomorrow and call it a good news budget. Plus, of course, they’ll try to blame the NDP and the Liberals in Ottawa for the province’s current fiscal predicament, which is not an argument likely to persuade anyone but a blinkered UCP partisan.
Anyway, Mr. Kenney has made it clear there will be no new taxes.
“Kenney says no new taxes as Alberta preps for another tough times pandemic budget,” read the headline on recent editions of Postmedia’s local newspapers.
The CBC, apparently striving to be different, put it this way: “Premier says no new taxes as Alberta prepares for another tough times pandemic budget.”
Sure, they were both using the same Canadian Press story, but still.
Meanwhile, thanks to half a century of mostly Conservative mismanagement and the new factors noted above, Alberta is caught between an economic rock (a single-product export economy) and a hard place (not much of a market for the single product we export). Well, OK, there’s cattle too, but face it, beef on the hoof is never going to bring back the glory days of black gold, oil that is.
Which brings us back to the Business Council’s thoughts on how to create a fiscally sustainable Alberta. The report isn’t perfect, but it contains a certain amount of good sense stripped of the ideological claptrap we’ve come to associate with the sorts of business types who advise Conservative governments in Alberta.
Remember who these guys are – and aren’t. They aren’t a bunch of college Marxists from the Seventies, previous sarcasm aside. They also apparently aren’t nuts like the ones at the Canadian Federation of Independent Business, the Canadian Association of Oilwell Drilling Operators, or Restaurants Canada, who must keep a well-thumbed copy of Atlas Shrugged on their bedside tables.
The Business Council report’s serious tone somewhat belies the serious criticism of the UCP Government’s approach it contains. But the fact it doesn’t exactly excoriate the UCP like the party’s loony separatist fringe is doing these days doesn’t mean its criticism lacks punch. On the contrary, it packs a bigger wallop because of whom it’s coming from.
The Business Council report’s core thesis is that “Alberta under-taxes and overspends.” (Emphasis added by me.)
“We cannot … sustainably run a high-spend, low-tax government in the province,” the report says. “This option was available for a period of time when resource revenues were high, but it would be inadvisable – to say nothing of fiscally imprudent – to count on such an approach succeeding in the future.”
The thing is, the report also acknowledges, the times, they are a’changin’, and you can’t count on energy revenues to sustain Alberta into the future, no matter what Mr. Kenney promised. (It’s also pretty blunt about how much Alberta is coming to depend on transfer payments from the federal government, something the UCP doesn’t like to acknowledge.)
“The simplest benchmark for returning Alberta to fiscal sustainability is to bring provincial revenues and expenditures more into line with other provinces,” it says, hence the recommendation for a harmonized sales tax and a return to the province collecting its own carbon tax, an option the UCP tossed over the side in foolish haste to undo everything done by the NDP.
And while the report calls for keeping taxes competitively low, it also suggests investing in education, diversifying the economy, developing a robust climate action plan, and “maximizing labour force efficiency by expanding access to affordable child care.”
Sound familiar? Well, considering the obvious, these Big Business guys never quite come out and advise the UCP to run Alberta like Rachel Notley’s NDP did. But that’s what they’re doing.