Actually, the Alberta budget and election has been the most interesting thing going on in the country for a while now, but it keeps getting more interesting! Of course, as we know from the last election, polls in Alberta are worth practically nothing. Still, even contemplating the possibility of an NDP government in Alberta is mind-expanding. (For Stephen Harper, this would be like Rob Stark losing Winterfell…)
First, about the Alberta budget. It seems to me obvious that Jim Prentice took the only sensible course of action available to him, which was to go with a mix of budget cuts and tax increases. Let’s be clear: public sector spending in Alberta is bloated. Alberta’s health care spending, for instance, at $6,781 per capita, is the highest of the 10 provinces (Quebec, at $5,616, is the lowest). Alberta’s education spending, at $11,086 per student, is the highest of the 10 provinces (Prince Edward Island at $9,260 is the lowest). Average salaries for teachers were highest in Alberta, at $80,393 (and lowest in Prince Edward Island, $53,928). And so on. Albertans love government services… they just don’t love paying for government services.
So it’s not crazy to think that there is some fat there to be trimmed. What is crazy is thinking that you can trim that fat in a year or two. The people who were calling for a 9% reduction in provincial spending (5% in real cuts, 4% in cancelled increases) must not have stopped to think very clearly about what the province spends its money on. First of all, imposing real cuts on the health care system is simply not possible, and since health makes up 40% of spending, the 5% real cut to spending would have to be more like 9% in real reductions to the rest of the budget. Second, much of the bloat takes the form of higher salaries — the product of poor fiscal discipline for well over two decades. You can’t fix that overnight. It’s one thing to tell Alberta teachers “you’re overpaid,” but saying to them “I’m going to cut your salary by 9%” is something else entirely. Again, it’s something that I’m inclined to classify as “not possible.”
Furthermore, it just doesn’t make any sense to think that government spending should fluctuate wildly from year to year. Provincial governments deliver very important services, which the population depends upon. Spending on food and housing in Alberta is likely to be pretty much the same next year as it was this year, despite the drop in the price of oil. So why should spending on health and education be different?
So Prentice did the only reasonable thing — he raised some taxes. The fact that some commentators criticized him for it (Tom Flanagan, Andrew Coyne), and of course the Wildrose rump went crazy, is a useful reminder that taxes still bring out the wild-eyed ideological extremist in some people. But on the whole it was hard to fault his thinking. It was the ideological flourish, of not raising corporate taxes, that seems to have gotten Prentice into trouble. One gets the sense that, with the people he surrounds himself with, it probably didn’t even occur to anyone that this could become an issue.
Anyhow, for all you Eastern bastards who don’t follow these things, it’s time to brush up. I would recommend Paul Wells’s recent article (“Could Jim Prentice actually lose?“) for starters. One of the early signs of reasonableness that Prentice exhibited was in recognizing that a government actually needs a capable civil service in order to function well. And so despite the cheap political points that can be scored by attacking “bureaucrats,” it is self-defeating in the long run. (This may seem obvious, but it is something that Tony Clement has yet to figure out.) Wells is good on this:
In 1967 the U.S. behavioural psychologist Martin Seligman discovered that if you put a dog in a harness and gave it an electric shock no matter what it did, it would eventually cower in a ball on the floor and stop trying to do anything at all. Seligman called this pathetic state “learned helplessness.” After four decades under the Alberta Conservatives, capped by three years of Alison Redford, the province’s public service was putting on a pretty good imitation of Seligman’s dogs.
“I want to be clear,” Prentice told me. “There are really fine people in the Alberta civil service. But there were real signs of difficulty. The churn was way beyond what it should have been. Evidence of a great deal of inexperience among people in senior positions. Very few really sage people who had been in their position for a long time. It didn’t have an esprit de corps around it.”
This was a non-trivial problem for the new premier. “I couldn’t get any advice. I’d ask for a briefing and I’d get, like, 30-page memos or 60-page memos, 500 pages on a weekend, but nobody would ever say, ‘I recommend that you do this or that.’ It became clear that people had just—turtled.”
Also, I should mention that the trick Prentice pulled on Danielle Smith was legendary, positively Shakespearean, one of the most astonishing double-crosses in the history of Canadian politics. Anyone not following this stuff must be crazy… I can’t wait to see how it all ends.