Are you better off today?

It might be well if you would ask yourself, are you better off than you were four years ago?‘ Ronald Reagan 1980, Jason Kenney 2019

The United Conservative Party’s (UCP) campaign document of a year ago hasn’t aged well.  The document made the case that the NDP government had failed at growing the economy, dealing with Ottawa and was creating a mountain of debt.  

The ballot question they asked was after four years of NDP rule “Are you better off today?”  Once elected the UCP got off to a fast start.  It killed the Alberta carbon tax, reduced corporate taxes and created a road map for budget reductions.  

But the plan went off the rails!

  1. The federal Liberals won re-election, and worse yet for conservative Alberta, their minority government is propped up by left leaning parties.
    • No Liberals were elected to advocate for the West between Winnipeg and the BC mainland. The Liberals quickly found they could safely ignore the prairies.  
    • Although Premier Kenney laid an extensive list, Alberta’s priorities they have mostly been ignored by Ottawa.
  2. The UCP economic strategy is focused on a rebound in the energy sector.
    • The Finance Minister declared that diversification is a luxury that Alberta could not afford until the budget is balanced.
    • The corporate tax credits the UCP offered as a stimulus for investment resulted in many companies using the cash elsewhere or to buy back shares.
    • Without pipeline access and a less antagonistic federal government, investment stalled.
  3. The national focus shifted from ‘Western Alienation’ to Indigenous governance, rail blockades and a seat at the UN Security Council table. And now the pandemic has pushed all other priorities aside.
  4. The COVID-19 pandemic put to bed the UCP plan to balance the budget through cost reductions.  
    • Suddenly governments across the country had to take on huge debts to replace the private sector cash flow that was lost when the country went into lock down.
    • The Alberta government was so overwhelmed that it just approved a budget that was out of date before it was signed.
    • Employment dropped by 10% in April and gross domestic product could drop by 10% for the year.
  5. The price war started by the Russians and Saudis hit Alberta particularly hard – just when our economy was most vulnerable.  
    • As prices fell, production dropped by roughly a million barrels per day.
    • Non-renewable resource revenue might be cut in half to just $2.0 billion this year.
Budget Calculations by Trevor Tombe University of Calgary

Now What?

The Calgary Stampede Caucus meeting in early July is when Alberta governments typically focus on their plans for the last half of the fiscal year.  There is lots of heavy lifting to do.  The policy questions that must be grappled with are:

Federal relations

How can the federal government be effectively re-engaged to address the economic mayhem in Alberta?  Will angry ‘protest’ politics work?  Can the Conservative Premiers bloc be re-activated post-COVID-19 to strengthen Alberta’s hand?

Economic Strategy

The option of swinging for the fences with an ‘all-in’ energy strategy is enormously risky.  The alternative is a diversification strategy. But that idea gives many conservatives a rash because it is a “small ball” approach that needs government involvement. So, what is the alternative middle of the road strategy?  It might consider revamping its approach to technology companies, advanced education, petrochemical development, tourism and product development. A strong focus on international marketing to promote export services and market diversification for agriculture and forest products.  In Canada, it might find greater traction for internal trade now that the risks of over-globalization are clearer.

Debt, Deficits and Revenue

If desperate times, call for desperate measures, is this the correct moment to reclaim the federal carbon tax?  

Can the economic panel of experts that includes Ex-Prime Minister Harper and various industry folks conjure up a case that would support a sales tax? 

“Albertans are you better off today?”

One year into the UCP mandate almost no one can make that claim. Is this the time for severely normal Albertans to weigh in by plebiscite on our future – thinking about both a future sustainable revenue plan and our place in the federation?