I have a question for you, dear reader. What factor was the biggest factor that drove your voting decision in the 2012 Alberta election? Did you base your vote on a platform, a leader, a party, a local candidate or was it a combination of two or more factors?
The 2011 Canadian Election Study asked a similar question of 2500 voters after they voted in the 2011 federal election. Responding to the question, “Which of the following was most important in your decision to vote for this party,” most voters said they liked the policies of the party they voted for and the next largest group said they didn’t like the other parties.
Much of the conversation after the 2012 Alberta election focused on how many progressives voted for the PC party because they liked Redford, liked the policy positions advanced by the Tories, or moreover, voted to stem the surge of the Wildrose party.
I would suspect that, like in the 2011 study, few people would say that they voted for the local candidate. This is interesting because what we’ve learned since 2012 is that the only part of the vote that really counts at the end of the day is the local candidate.
Allow me to elaborate.
Perhaps you voted for one or more of the planks of the progressive platform promoted by the PC party. You were likely dismayed by their lack of action on things like a poverty reduction strategy or full-day kindergarten. But despite the almost wholesale abandonment of their election platform, you’re vote still stood. So, voting for the platform does not count.
Perhaps you are a PC voter who voted for the leadership of Alison Redford. You were likely upset by all of her controversies and, by the time of her eventual resignation, grew quite disillusioned by her leadership. But despite the party appointing a new leader, you were not given a new vote. So, voting for the leader does not count.
Let’s say you voted for the Wildrose party because of the party; because you were rejecting 40-plus years of one-party power in Alberta. You were likely upset by the mass defection of 12 MLAs from your party of choice – perhaps you watched your own MLA walk over to the party you were rejecting. It doesn’t matter; your vote still stood. So, voting for the party doesn’t count.
However, if you were one of the people who voted for Len Webber, Dave Hancock, Ken Hughes or Alison Redford as your local MLA, then you were one of the few people in Alberta, since 2012, who were asked to make a new choice. You got to vote again because your local candidate changed.
Policies change, leaders change and party affiliations change, but so long as your MLA is still prepared and able to sit in the house then your vote remains cast. To put it simply, in our parliamentary system, despite how you decide to cast your ballot, the only thing that legally matters at the end of the day is the local candidate who received the most votes.
This is important to keep in mind as we prepare to screen a new set of candidates, leaders, platforms and parties in another provincial election.
P.S. – For what it’s worth, by the way, I’m predicting that the writ will be dropped on March 16 for an April 13 election date.
Sometime toward the end of November, the Alberta government will release their 2nd quarter fiscal update. Finance Minister Robin Campbell will likely tell us that the second quarter was another good quarter but that the good news is coming to an end and the 1st quarter projection of a $3 Billion bonus will be revised. The reason of course is that oil prices are down again. The budget projected $95 oil (WTI) and today’s spot price is under $79. For every drop of one dollar in the price of oil (WTI) the government treasury loses $215 million.
As much as Premier Jim Prentice wants to paint the government as being under new management, I’m not willing to buy until I see changes to how the government manages our oil and revenue situation. He has already stated that he does not plan on raising taxes, which means we will continue to rely heavily on volatile revenue sources.
“Alberta relies heavily on revenue sources that can be volatile and unpredictable, including non-renewable resources, corporate income tax and investment income. Since 2000-01, these revenue sources have accounted for anywhere between 38% and 55% of total revenue.”
– Alberta’s Fiscal Plan 2014-17
An Alberta government truly under new management, would propose a comprehensive new plan for managing our oil resources, rather than approaching it the same mediocre way we have been doing it for the past 10-15 years. Here are 9 key features that should be part of that plan:
1. Restrict resource revenue to capital expenses, savings, debt repayment or economic diversification
Some like to say that taking on debt amounts to stealing from our kids and grandkids. I would argue that the rapid development of our oil resources is a similar form of inter-generational theft. That oil belongs not just to us, but also to our kids, grandkids and all future generations of Albertans. As we sell of that long term asset we are obligated to spend it on things that have long term benefits, Here are four things that would qualify.
First, we can spend it on long term investments like roads, schools, hospitals and other capital infrastructure. Second, we can save it like Norway has done (more on this later) so that down the road the interest on the savings can be used by future generations. Third, we can reduce our debt, but this only makes sense if the interest on debt is lower than the interest that can be earned by saving the money. Finally, we owe it to future generations to invest some of the earnings on economic diversification; our oil reserves are finite and we must make sure that the economy remains vibrant after the oil is gone and we must start work on that now.
2. Remove resource revenue from operational spending
With over 20% of our operational revenue coming from non-renewable resources we are stealing from future generations to pay for programs now. This must stop. Peter Lougheed said that we need to behave like owners. It is irresponsible to sell off part of the farm just to pay for more fertilizer.
3. Raise corporate and personal income taxes on the wealthy
We will need to replace that revenue, but fortunately we have a great deal of room on the taxation side to accomplish that. The Alberta government proudly acknowledges that we could collect an additional $11 Billion in taxes and still be the lowest taxed province in the country. We need to collect just $9 Billion more to stop the intergenerational theft of using resource revenue to fund current programs. A mix of new taxes on personal income over six figures, on corporate income and a small consumption tax can balance the books without losing our competitive advantage.
4. Raise Royalties
Simply put, royalties are what Albertans are paid when we sell our oil or gas in the ground to the company that digs it out and sells it or processes it. In 2009, a comprehensive report comparing jurisdictions found that other places, including Norway, collected much more in royalties despite having higher production costs and a similar business climate to Alberta. Despite having lower production levels and less time to accumulate, Norway’s oil trust fund is nearing $1 Trillion while the Alberta Heritage trust fund is at about $17 Billion and hasn’t grown in decades. We are similarly selling out our kids when we sell off their oil at a big discount.
5. Start a crown corporation to extract and develop oil here and abroad.
I mentioned earlier that some of our resource revenue should be used to invest in economic diversification. The best way for us to diversify our economy is to invest in alternate and green energy. Oil is finite, but the world will always need energy even after oil is gone. We are an energy super power now, we can be an energy super power in the future but we have to take some risks and use our current wealth to invest in research and development to become leaders in alternative energy sources.
7. Demonstrate a real commitment to the highest environmental standards
The death of 1600 ducks on an Alberta tailings pond in 2008 was a tipping point for how the world viewed Alberta’s environmental record when it came to oil. Rightfully or wrongfully Alberta gained an international reputation for bad environmental practice. We need to regain the social license for oilsands development and we must be leaders at environmental enforcement. To accomplish this we need an environmental regulator that is not just effective and stringent but is also seen to be effective and stringent. This means staying away from appointing energy lobbyists as chair of our environmental watchdog corporation.
8. Upgrade more bitumen in Alberta
The biggest benefit for general Albertans of having such a large store of oil here is the jobs that are created. But the bulk of job creation around the oilsands relates to the building and expansion of extraction projects. As the projects move from the construction phase into the production phase there are fewer jobs. It is in our interests to extract more value before the product is shipped out of the province. Also, processed product demands a higher price (albeit from more limited markets) than raw bitumen. We should get more value from our oil by upgrading more bitumen here than we currently do.
9. Get the products to the best markets in the safest way possible
Oilsands production levels are increasing faster than our capacity to get the product away from Alberta. This results in a glut of oil that stays here and, by the law of supply and demand, fetches a lower price. We should be supporting infrastructure investments that safely move the product to markets that generate higher revenue. If the safer method is pipeline then we should support pipeline development but we should also support research into technologies that will continue to make pipelines safer.
I think that as much as controversy over expenses, skypalaces and aircrafts sunk Alison Redford, so did the unnecessary cuts of Budget 2013. A common problem with the Klein, Stelmach and Redford administrations was a lack of a comprehensive long term financial plan – especially as it related to managing our oil resources. The 9 keys presented here are not just individual tips but are integrated with one another to create a coherent strategy. This plan may not be the one Premier Prentice wants to use, but an integrated and well articulated strategy is needed.
So, you’re a former capital region mayor, who was popular as mayor, has good progressive credentials and now finds themselves on the inside of provincial government. You might be looking in the mirror today, thinking about the health portfolio and wondering how the world unfolded to put you where you are today. If this is you, then you’re not alone.
Sure, you might be Stephen Mandel, but you might also be Cathy Oleson, Ken Lemke or George Rogers, for that matter.
There is an important distinction however between Sherwood Park MLA Cathy Oleson and Health Minister Stephen Mandel. Oleson was elected to office by discussing her views on provincial healthcare (amongst other issues) with constituents as part of an election. In fact, Oleson had to discuss healthcare extensively with Sherwood Park constituents who were unhappy with not getting the hospital that they felt they had been promised – and still got elected.
The fact that Stephen Mandel was chosen by Premier Jim Prentice to be health minister over, say, Cathy Oleson, or any of 57 other PC MLAs raises an important question: what is the status of the mandate given to the Progressive Conservatives in the 2012 election?
That mandate was a progressive mandate. It is common knowledge that the PCs won the election because progressives all across the province, in ridings like Sherwood Park, coalesced around the PCs in an effort to defeat the lake-of-fire and anti-climate-change views that became emblematic of the Wildrose Party. Oleson, Lemke, Rogers, and most of the other PC MLAs were elected with that progressive mandate.
It is important to note that while the Alberta public has since come to reject Alison Redford, they haven’t necessarily rejected that mandate. Redford was tossed aside not because of her policy but because of her personal ethics (Indeed, it could be well argued that she would have been safer if she had stayed true to her original policy directions). In fact, a group of PC MLAs who were largely progressives and were instrumental in her downfall are all now on the outside of cabinet looking in.
In the days leading up to Redford’s resignation as premier, a group of10 rebel MLAs started clandestine meetings to discuss the growing spending controversies of the premier. They included Oleson and Lemke, but also included Janice Sarich, Matt Jeneroux, Moe Amery, Neil Brown, Jacquie Fenske, Mary Anne Jablonski, and David Xiao. Arguably, these people did more to bring down Redford than anyone else at that time. Most of them were very much elected on that progressive mandate.
I suspect that these MLAs were motivated by uneasiness amongst their constituents and growing disappointment with the Redford government. Not just disappointment over the spending controversies but also disappointment over the abandonment of the mandate that voters gave to the PCs in 2012.
So, does the appointment of outsiders like Mandel and Education Minister Gordon Dirks over these 10 MLAs speak to a rejection of the 2012 PC mandate or will the new Prentice government embrace that mandate that its caucus was elected on? Time will tell.
However, if Prentice wants to pursue a new direction then he needs to obtain it from the electorate. A set of by-elections may provide him with a limited new mandate, but then he has to fight those by-elections with a clear policy agenda and not just vague messages of change or accountability. Only then will he have the authority to change the policy directions given to government. If he doesn’t get that permission from voters, then he has an obligation to follow up on the commitments that got his MLAs elected.