Alberta prepares for Klein-era cuts
Conservatives still like the idea of austerity budgets no matter how often such measures have failed. It seems to warm their cold hearts. And so it is with Alberta Premier Jason Kenney, who empowered a panel of like-minded right-wing experts to suggest how the Alberta government can balance the books and return to what it considers fiscal rectitude.
That such fiscal rectitude might in fact put more people out of work when the unemployment rate here has been higher than the national average for three years doesn’t seem to enter into any of the calculations.
But that is indeed the medicine that former Saskatchewan cabinet minister Janice MacKinnon and her colleagues prescribed last week: A formula that, if swallowed by the Kenney government, will see substantial numbers of health care workers, teachers, post-secondary instructors and staff out of work.
Unionized public servants who keep their jobs could be legislated back to work if they object to reduced pay or broken contracts. Some publicly owned assets will be privatized.
Tuition at post-secondary institutions will rise, some colleges might even be closed. So much for going back to school for retraining if you lost your job in the oilpatch.
And of course, fewer people working in hospitals and schools means longer wait times and crowded classrooms.
The bitter medicine is supposed to make Albertans feel better some time in the future because, according to the MacKinnon Report, it will miraculously spur investment in the private sector and eventually there will be jobs aplenty for everyone.
And of course, the cursed deficit, an average of about $8 billion for the past four years, will be vapourized.
Where have we heard all this before? It might sound familiar to Ontario residents dealing with Doug Ford’s style of austerity.
But in Alberta, it sounds like the ghost of Ralph Klein, who, in the early 1990s, imposed 20 per cent budget cuts so quickly most people didn’t know what had hit them. Everyone was so stunned and yet so besotted with Klein that they silently watched as a large Calgary hospital was blown to smithereens.
But Klein got lucky. Within two years of his austerity plan, the government’s oil and gas revenue shot up and, by 1994/1995, his government posted a $900-million surplus. The surpluses continued, spurred on by rising oil prices and an extremely low royalty regime that enticed oilsands investment. The Klein government kept running budget surpluses ($4 billion in 2003/2004) and by 2004, had paid off its entire $23-billion debt.
This is not likely to be the case for the Kenney government. The price of oil has been down since 2015 and is not likely to rise much, if at all. Even if more pipelines are completed, demand for oil is expected to slow over the next decade and further. Investors and shareholders are nervous about putting money into big oil when there is so much uncertainty about its future.
Whether Kenney likes it or not, carbon reduction policies brought on by the climate crisis are a reality around the world.
And that’s one of the big problems with the MacKinnon report: It’s written as though nothing has changed in Alberta or the rest of the world since the 1990s. There is no mention of climate change as a factor when it comes to demand for oil. Environmentalists are slammed for holding up pipelines, but there is no mention of Indigenous rights now being routinely upheld by the courts.
It’s all about creating a “climate” for investors and if that means laying off nurses and teachers, so be it.
What exactly Kenney has in mind for those investors to invest in isn’t mentioned.
Even the International Monetary Fund has pointed out that quick-fix austerity budgets imposed during economic downturns create more inequality, spur unemployment and thereby slow economic growth.
In other words, they make the situation worse.
Albertans won’t know exactly what the Kenney government has in mind until it releases its first budget in October. That would be after the federal election in case it might scare would-be Conservative voters.