Thursday, May 16, 2019

Jason Kenny and the Test of Time

The early signs from Jason Kenny are clear. He has an agenda. The agenda is a list of classical neo-liberal moves which have yet to produce the outcomes promised anywhere in the world. These agenda items include, but are not limited to:

  • Tax cuts for corporations and high wealth individuals. The claim: this will stimulate job growth and economic investments. The facts: this leads to higher pay for executives, share-buybacks, cash hoarding and the movement of money offshore.
  • The laying off of teachers, nurses and others in health, education and social service professionals. The claim: this will have no impact on front-line services and is necessary to bring government spending into line with revenues so as to balance the budget. The facts: this has a major impact on health, education and social wellbeing outcomes, creates unemployment and damages the long-term future of the Province.
  • The ending of certain taxes, like the Carbon tax. The claim: this is necessary to stimulate the economy and, in any case, there is no evidence that a carbon tax is good for the environment. The facts: (a) this reduces government revenues and increases deficits; (b) it has a direct negative impact on emerging sectors of the economy (so-called green jobs), and (c) the evidence is clear that a CO2 tax is good for the environment. Further, in our case in Alberta, this will lead to the imposition of a worse tax from the Federal Government which, though Jason will challenge, the courts will support. 
  • The increased use of public-private partnerships for public works -  building schools, roads, hospitals, etc. The claim: the public sector is “better” and “more efficient” at managing such projects and this will save money. The facts: There is no foundation to the claim that the private sector is better at managing risk than the public sector. Virtually all P3s in Canada have been justified on the basis that they transfer large amounts of risk to the private sector. But a growing list shows that P3s are both riskier and more costly for the public, as the auditors general of Ontario and Quebec has shown. In general, P3’s are more expensive both directly and in the long term for the public than if the public sector built them.

What we will see, as we saw with Harper as PM, is increased debt, higher levels of unemployment and the growth of Government “managerialism” and intervention (we are already seeing this in Ontario) and a lot of nonsense talk ("bringing back the Alberta advantage" and "being open for business" as if we were ever not open for business and as if the advantage was about taxation rather than the abilities of our people and world-class education and health systems).

Deficits are no bad thing if they are within reason and Alberta's debt-deficit is within reason - indeed, many jurisdictions are envious of our strong position. The "blue-ribbon" panel appointed to find opportunities for spending reduction (never a good thing when we go "outside" for this kind of advice - they have little local context) will suggest significant savings so as to bring down the per capita costs of Alberta's public service nearer to that in BC (e,g a cut of app. $1.2 billion in K-12 school spending) without seeing the nuanced differences between BC and Alberta (look at taxation, for example). 

So, after just a few days in office, Kenny is off to the races - largesse everywhere (you can now drink beer and wine in public parks), but favours for a few and misery for the masses. 

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