No matter how badly they mismanage it, Alberta Conservatives can usually expect to get a pass on the economy.
There’s no point carping about this. It’s not just Alberta. Public opinion research suggests it’s a common delusion among the populations of all the so-called advanced economies of the West, a half-century of powerful evidence to the contrary notwithstanding.
Nor is there much point imparting truths that you know the folks who need to hear them won’t believe. Still, people keep trying.
Last week, with Alberta’s provincial election looming, Edmonton-born economist Jim Stanford released a paper that argues persuasively that from any perspective except corporate profits, the economic policies pursued by the United Conservative Party Government since 2019 have been a flop.
“In one area, Alberta has indeed led the entire country: the robust growth of corporate profits, which have expanded dramatically as a share of provincial GDP in the last four years,” the director of the Centre for Future Work, which operates out of Vancouver and Sydney, Australia, wrote in his study, The Failures of Trickle-Down Economics in Alberta.
“But on other indicators of economic and social progress – including employment, wages, capital investment, and economic growth – the province lags the rest of Canada, often ranking last among Canadian provinces,” wrote Dr. Stanford, who is the author of a regular economics column for the Toronto Star and holds academic posts at the University of Sydney and McMaster University in Hamilton.
“The business-centric policies implemented in Alberta over the last four years have failed to stimulate investment, growth, jobs, or prosperity,” he concluded in his study, which defines trickle-down economics as “the assumption … that reducing the regulatory, tax, and labour obligations of private corporations will spur them to expand their scale of operations, resulting in employment and income gains that ‘trickle down’ to the rest of society.”
Instead, Dr. Stanford’s study concludes, “they have succeeded in redistributing income to the corporate sector, which has enjoyed unprecedented profitability. But that wealth has distinctly failed to ‘trickle down.’
“The empirical evidence suggests that policies promoting a more balanced vision of economic development – including pro-active efforts to stimulate higher wages, public services, investment (public as well as private), and better, more stable jobs – would be more successful at achieving a prosperous and fairer provincial economy.”
Of course, that last bit is the part the folks who have advocated and lobbied for the UCP’s policies really don’t want us to hear – which is why it’s unlikely that Dr. Stanford’s study will get much attention from Conservative-dominated media, which in Alberta is most of it.
The study shows that under the UCP, Alberta has had:
- The slowest economic growth in Canada
- Wages that fell far behind inflation
- Below-average job creation
- A significant drop in business investment
- Among the slowest rates of economic growth in the country
This comes as no surprise, of course. “Trickle-down economics” – a term popularized during the Reagan Administration in the 1980s – have been a catastrophic failure everywhere they have been implemented, which includes to varying degrees almost all of the industrialized West.
Equally, though, they have been a spectacular political success – boosted by corporate-financed propaganda mills commonly known as “think tanks” (although they are responsible for precious little actual thinking), an elite consensus among all governing parties in most Western democracies including supposedly social democratic ones, and sophisticated digital political manipulation strategies that came of age in the past 15 or 20 years.
Cutting taxes for the wealthy has never trickled down to the rest of society. It has just made the rich richer, the rest of us poorer, and society less equal.
Many long-term studies, including this British one in 2020, showed that over half a century tax cuts for the rich and major corporations never trickled down.
So we shouldn’t be surprised that yet another study demonstrates that this idea – which was and is the core principle of the UCP economic platform under premiers Jason Kenney and Danielle Smith – hasn’t worked well.
How badly have UCP economic policies performed – in the midst of yet another oil boom, no less, for the last part of the party’s term in office?
Between 2018 and 2022, Alberta ranked last in Canada in growth in average weekly earnings, change in the minimum wage, change in share of Canadian non-residential investment, change in labour compensation share of GDP, growth in real GDP per capita at basic prices, and change in the employment-population growth.
The study says: “The only economic indicator in which Alberta has led all provinces has been the growth of corporate profits: they increased by 145 per cent between 2018 and 2022, and the growth of profits relative to GDP in Alberta has led all provinces.”
Someone is bound to raise the impact of the pandemic, which of course was very real during Mr. Kenney’s term at the helm. “To be sure, the COVID pandemic and its aftermath posed historic challenges throughout that period,” Dr. Stanford wrote. “But other provinces also suffered from the pandemic, and they outperformed Alberta on most criteria during this time.
“Meanwhile, revenues and profits received by Alberta businesses (led by the petroleum sector) have now rebounded dramatically – yet it is hard to find any evidence of that renewed wealth trickling down to the broad population of Albertans.”
Perhaps once upon a time there was a kernel of truth in the notion conservative parties by nature were more likely to be conservative about how they spent money, although the “facts” underpinning this popular belief were always shaky.
As big-C Conservative parties sank into neoliberal cant over the past half century, though, it has become increasingly apparent that this is no longer so.
Regardless of the final result in Alberta on Monday, this has undoubtedly contributed to the difficulties experienced by the United Conservative Party in this campaign.
As many people have observed: Inequality is a political choice, not an inevitability.
Albertans have an opportunity to influence that choice tomorrow.
It is true the economy is doing better now than it was under the UCP a couple of years ago, but that is like saying I felt better once I stop banging my head against the wall. Lest we forget, the first two or three years under the UCP economically were absolutely terrible. Now it is just not as bad.
Alberta’s unemployment rate? Still consistently above the national average. Calgary’s unemployment rate – still regularly shows up as one of the highest in lists of Canadian cities and of course the office vacancy rate likewise. So much for the UCP’s corporate tax cuts attracting a bunch of head offices. Edmonton does better on unemployment and office vacancy, but still not great.
Also, lest we forget (and Smith does want us to forget not just her own record of all of her kooky remarks, but her party’s record) the UCP ran some sky high deficits in the last few years, so Alberta’s net debt is higher now than under the NDP. The UCP was also the party that started the war against doctors, after supposedly guaranteeing health care funding in the previous election. So, its not just Smiths history of contradictory statements on health care we should be concerned about. Her party is not any better.
If you really believe the UCP are good economic managers, perhaps you were living on another planet between mid 2019 and mid 2022. It was a time that was economically brutal for Alberta. Smith and the UCP has unleashed a most unconservative torrent of spending over the last few months, including various rebates that will end very soon, to make it seem like economic good times are here again. Perhaps some will forget the UCP’s actual record, but at most this is a temporary distraction from an economy that is still in many ways languishing compared to the rest the country.
It has been said that when you’re flat on your back, and creeping into the grave, the slightest improvement, like a slight and slow rise, looks really good.
The UCP has without a doubt destroyed the economy by every measure. Kenny, in this relentless pursuit of favour and free meals tabs, handed enormous wage advantages over the restaurant lobby, gutting any protections for workers in Alberta’s laughable labour laws. And his tendency to play Daddy Warbucks, by handing out untold billions in public funds to any harebrained scheme that came his way, gutted public finances further. Thankfully, war in the Ukraine saved Alberta’s hide and accounts. But if peace ever comes, well, Alberta will be ruined and, likely, going cap in hand to Ottawa, because if a province goes bankrupt, Ottawa guarantees the bonds. It’s not like Alberta hasn’t gone broke before, so why not do it again? I mean when you can blame PMJT for everything, you develop a sense of entitlement. Since Albertans are the most entitled people on earth, there’s no way reality will every occur to the Albertan mind. Once, Premier Jim Prentice declared that if Albertans wanted to know the source of all their problems, they should look in a mirror. Yeah, great move there, Jimmy. You just a people with a heightened sense of entitlement and stupidity to take responsibility for their mess. That turned out well, didn’t it?
Danielle Smith has managed to spin some pretty impressive lies, all based entirely on Alberta’s sense of entitlement; or as I like to call it, Alberta Uber Alles. So, is the economy doing better? In the short term, yes. There’s still a lot of cheap credit in the economy and there’s a lot of liquidity. However, nearly a year of rising interest rates will choke off that liquidity soon enough. And there’s the problem of Canada being a favoured place for foreign money-laundering, but that’s another matter.
Alberta’s modest economic growth pales in comparison to other regions and is driven by expectations that the good times will never end. Elections are all about timing, especially the timing with the next economic collapse. Prentice called an early election in the hope the PCs could avoid having an election during a recession. It didn’t work out. For Smith, the odds are likely better and her dumping out the Horn O’Plenty on any insane venture will cause considerable pain once reality returns.
Tough luck, Alberta idiots.
If Danielle Smith wins by a narrow margin, her premiership will be as weak and precarious as Kevin McCarthy’s speakership in the U.S. House of Representatives.
Wealthy people like Jeffrey Epstein’s customers trickle down on the faces of poor peoples children’s faces. And something tells me they don’t ever want those kid’s families to have enough wealth to afford a lawyer that could make charges stick. Same goes for an extremely wealthy religious entity that doesn’t pay a whole lot of taxes on the overly abundant property they own. Ample evidence over the last half century shows this to probably be the only real trickle down that’s happening.
Unfortunately, once again we will see the same benefits as Kansas under Brownback. What brought his policies to end was his own party.
Ah the great Kansas Experiment. Nice reference! Why no one uses this failure to rebut neo-con trickle down fantasies is beyond me.
This article is spot on but too late and too many words to influence any voter to switch intentions. Where were these talking points for Ms Notley to use during the debate? And why didn’t she hammer Ms Smith on her many goofs over the past months? It truly is a “post truth” election.
NTL: This is a fair and legitimate question. I think the answer is that the notion Conservatives own the economy file is so deeply entrenched that any mention of it is dangerous for any progressive party. All the more so since, as we have seen, conservative parties will respond to such arguments with “facts” of their own that makes the discussion appear to be a he said/she said type of argument. DJC
Theft is another way of saying it. Intergenerational theft is a bit more nuanced. But when one class of people, the rentiers, are taking outsize portions of the economic profits derived from the common wealth, at the expense of the wage-earner class, that is theft.
45,500 Canadians died in World War II.
They died fighting against Fascism and Nazism.
They did not give their lives so that in the future, one man or woman or one political party could make it their mission to destroy Democracy in Canada or in any one of the provinces.
Vote for anyone except the right wing parties.
Enough is enough.
No offence, but given the emergence of the US National Security State after 1947, and the role of the Canadian military within that complex, and the fact that the Second World War was basically Round 2 of the War to End All Wars, I really have to question your assertions. 20% of the population of North Korea dead as a result of aerial bombing within eight years of the end of this purported crusade seems to really weaken your characterization of the role of the US and vassal militaries in the last century. But maybe it’s just me.
https://www.theguardian.com/world/2023/may/28/albertas-party-leaders-are-ignoring-the-climate-crisis-while-the-region-burns
Wage suppression is a feature of UCP policies. It is a critically important goal of their policies, as implemented by Jason Kenney’s government. And it’s worked.
By freezing the minimum wage for four years, Kenney and his anti-labour party succeeded in suppressing wage demands, even during 2022 when inflation was around eight per cent. By repealing the NDP’s pro-labour policies, Kenney shifted the balance of power between workers and business owners far in favour of the owners. Kenney’s War on Doctors signaled that high education is no guarantee of high wages anymore; you can bet the attitude carried over into corporate board rooms—albeit with less success. A university degree imparts some protection against arbitrary salary cuts, at least in private business.
Kenney’s promise of more jobs after slashing corporate taxes was either wishful thinking (if Kenney didn’t know how CEOs behave) or an outright lie (if he DID know how CEOs behave). In fact, Kenney’s 2020 tax cut worked so well that one CEO (was that a pipeline company? I forget) moved his corporate headquarters to the United States. Seems he knew more bankers there, and could get loans more easily from American banks. But jobs in Oilberduh? Hear that hollow echo!
But just try to convince a brainwashed labourer that The Boss is deliberately screwing him over! The poor schmuck is more likely grateful to have ANY job, even lousy work for lousy wages. Sometimes I think Albertans are conditioned into a Pavlovian loyalty to “the company” or “the oilpatch.” (They’re also loyal to “the government,” if it’s labeled Conservative—and for even less reason.)
Less than a day now to voting day. I fear we’ll find that too many Albertans are scared to force a change of government. David Parker’s anger-generating machine is very effective, so fear plus anger are keeping Danielle Smith competitive despite her obvious incompetence. The outcome will depend on undecided voters in Calgary—and fear of change always trumps dissatisfaction with the status quo.
Pray if you’re inclined to, friends, but save your money, too. If Danielle Smith squeaks out a win, she’ll turn Oilberduh into a have-not province. The only winners will be the handful who own an oil well.
Mike: Kenney was quite open about his intention to suppress wages. It was clearly a policy goal of the UCP. I would take issue with your characterization of NDP labour relations policies as “pro-labour.” A more accurate, if awkward, description would be “less anti-labour.” The NDP brought Alberta labour relations law into the mid 20th Century. As you will recall, we were well into the 21st by the time this happened. DJC
Yet another well written piece David, but I think the deceased horse has had enough flogging. Most (if not all) polls and media outlets, including the CBC, have already called it for the UCP. Unless you are a beneficiary of the UCP’s extremely generous corporate welfare program we are all f**cked come Monday.
As I’ve said before, I’ll very gladly eat crow if I’m wrong. But from what I’m seeing let’s just say I won’t even bother starting the oven.
So why didn’t Rachel Notley have this guy on tv explaining it to the people? The ones who are smart enough to understand it likely would have. I was pleased to see yesterday , while voting , the vast majority were young people who are likely a lot smarter than the seniors who have been believing every lie these Reformers feed them. When Notley was elected in 2015 it was mainly young people we saw voting and my wife and I were really surprised. It wasn’t that way in 2019. I see it as a good sign. Let’s hope they are as fed up with what they have been seeing as we are.
Alan K. Spiller: I hope you are correct. I’ve seen footage of UCP gatherings and there are a lot of seniors there. I don’t know how the people at these UCP events can believe the lies that these phony conservatives and Reformers are feeding them?
Speaking at the Alberta Federation of Labour, wonder is Rachel’s husband invited him?
Who do you think he is? Hint: not the AFL president. Conspiracy theories are so tedious.
Any chance of putting that question in comprehensible English?
However, I’m sure you’d have no problem voting UCP despite your linguistic limitations.
It’s one thing when you suspect something, it’s another entirely to see it elucidated so clearly with data points. Is everyone else as mad as I am ?
The PC, the Conservatives, the Wildrose, the Alliance and now the UPC politicians and supporters were always like businessmen in dirty, cheap, ill fitting, torn, off color suits telling each other how well dressed they were while all other parties tried to introduce them to mirrors and got accused of trying to steal their soul and Alberta freedom spirit.
Primitive knuckle dragging tribalism is an acceptable government for our baby blues with no fact too exaggerated or distorted; no inference too obscene to not be used for the ideological agenda and continuance of the fundamentalist voodoo trance.
Well, we have one small consolation to look forward to tomorrow – we won’t have to look at Jason Kenney’s fat smug face grinning with joy at having hoodwinked us again.
It is a small consolation. Unfortunately Smith’s smug smarm was too much for my stomach at the end of the “debate;” I’m not looking forward to seeing it again.