On Wednesday of this week two prominent Albertans gave important speeches.
The first speaker focused on the need to rethink the Alberta competitive advantage, especially as it relates to attracting new investment, restoring fiscal responsibility and developing strong communities. Based on a detailed and thorough analysis, the speaker recommended that Alberta needs to reduce public spending, cut the Alberta income tax and taxes on capital and impose a sales tax of eight per cent. Pointing to the fact that many other jurisdictions within Canada, never mind the US, are now more attractive destinations than Alberta for firms wishing to create new enterprises or expand existing ones, the speaker argued that urgent action was needed.
The second speaker, in a more folksy style, recognized that Alberta was facing a challenge but encouraged us not to panic. Because Alberta had stacked money under the mattress and could pay down the deficit the Government was incurring and could raise money through issuing bonds. He also suggested that wage freezes would also be needed for two years to stave off real trouble, but we shouldn’t panic – things would soon be back to normal and we could get back to growth.
The second speaker has been widely derided for his comments. They lack depth, they show an ignorance of the real structural challenges Alberta’s economy faces – a long-term change in the nature of natural gas pricing, shifts in investment patterns in oil and gas and a jobless economic recovery, over-spending and lax taxation – and project an ignorance of the political and social dynamics underlying Alberta’s current situation. The speaker was Ed Stelmach, sometime Premier of Alberta.
The first speaker, though recognized as having understood the economic problems Alberta faces, is widely thought to have solutions which many think Albertan’s would find tough to accept, even though they understand the need for both austerity and real change. While he caught the mood of the realist Albertan, his solutions are radical for a low tax regime. The speaker was Jack Mintz, formerly of the University of Calgary.
These two views of Alberta – “we’d better act differently to stave off real economic challenges” and “don’t panic, trust us, just don’t expect wage increases for a while” – suggest an emerging challenge for Alberta’s government. No one things that staying the course, with minor adjustments, will position Alberta well for the future. Most people think that significant change in strategy – major cuts in spending, increased taxation, reinventing the role of Government and finding solutions to long-standing problems like health care cost growth and environmental issues – will be necessary, but the Government does not appear to be listening.
The Wild Rose Alliance, which elects its new leader tomorrow, is voicing the concerns of thinking Albertan’s and their rise in popularity should also be triggering a significant rethink of strategy in the governing party. The fact that it isn’t speaks to the enmeshment of the cabinet in the hands of its caucus. Its time for the senior members of the party to break out of their capture by their own caucus and show real leadership for Alberta. It’s also time to recognize that the Premier, nice as he is, is no longer the right person to lead Alberta in the next stage of its development.
Alberta is a great place to live and work, kind of. But we don’t do great anymore and we are making it less and less likely that we ever will. What we are seeing in the Premiers address this week is an absence of bold, imaginative leadership. It is this that Alberta now needs.