A Government of the Few for the Few - The Government of Alberta

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The UCP Government of Alberta is pursuing three strategic intentions. The first is to balance the Provincial budget, by which they mean only spend the “revenues” they secure through taxation, royalties and other means. The second, linked to the first, is to better align government spending by Department with the spending levels seen for those services in other Provinces, no matter that Alberta’s economy is different and that GDP per capita and taxation levels are different. The third is, as rapidly as possible, privatize significant sections of the currently public services offered to citizens.

In pursuing these strategic intentions, the government is happy not to engage in any meaningful consultations and dialogue with those who may be impacted by these strategies or with those who have policy alternatives. They are also unwilling (some may say incapable) of looking at an evidence-base which shows that these strategies are either likely to fail or based on a poor (yet deliberate) misunderstanding of the situation Alberta faces. Finally, they expect sections of the public service to engage in industrial action – work to rule or strike – in response to their actions. Indeed, they are hoping for a full-on confrontation since this will accelerate their move to privatization and, in their view, garner support for union busting.

These three strategies come directly from the neo-liberal new public service playbook and are proven failures all over the world.

Balancing the Budget

So as to balance the budget any sensible government would do two things: (a) maximize revenues; and (b) control spending. This government dramatically reduced revenues through tax breaks and the removal of the carbon tax and is not considering increasing revenues through either a sales tax or increased royalties from natural resources licenses. The government is pursuing “trickle down” economics – something even the IMF accepts does not work. When we look at revenues, Alberta has by far the lowest government revenues of any jurisdiction in Canada at just 13.6% of GDP (BC is at 18.9%, Ontario at 17.6%).

Alberta’s net debt is currently $43.7 billion – an increase of $7.09 billion over the previous year. Our net debt to GDP ratio is projected to be 11.8% - by far the lowest in Canada by any calculation. Our net debt per capita is also low at $8,379. As a comparator, Ontario’s net debt to GDP ratio is 40.1% and net debt per capita is $24,282. We do not really have a debt problem when these numbers are compared either to other jurisdictions in Canada or to competitor jurisdictions around the world. 

The idea that we have to balance budgets is a ploy and a manufactured problem. We do need to manage spending and be efficient, but we also have to respond and meet social needs. Corporate largesse and tax breaks for the rich and already wealthy will not lead to job creation as employment numbers clearly suggest. What is needed is a revenue increase through a sales tax, an increase in oil and gas royalties and higher corporate taxes.

Aligning Spending with That Seen in Other Provinces

It is true that our spending on government programs looks to be higher than other Provinces (except Newfoundland and Labrador) at $12,915 per capita (BC spends $10,947) but then our wages for all employees in Alberta are higher. The real number to look at is progam expenditure as a percentage of GDP and here we spend less than any other Province (15.7%).

Spending needs to be reduced on non-core functions (war rooms, overseas travel to “attract investors”, task forces and advisory panels, Ministry of Red Tape Reduction for a government which is significantly increasing the red tape in health and education) with more money going to services which Albertan’s value – health care, senior care, care for those with disabilities, education and infrastructure. Alberta’s population is still growing and investments in people, support for those in need and the payment of a decent wage do more to stimulate and grow an economy than tax breaks for the already wealthy.

Privatization

So as to reduce economic risk and ensure the effective management of public expenditure, Alberta needs to halt all talk of privatization in health, education and social services. Study after study shows that privatization both increases costs, reduces efficiency and increases social risk. Further, laying off public service personnel in favour of private providers who will walk away if profits fall poses a real economic threat and risk to service quality. Sweden rapidly privatized parts of its K-12 system in the name oif school choice. Not only did quality fall (as measured by PISA and Sweden’s own testing system), the private players “gamed” the system by manipulating and inflating the performance of their schools. When profits fell, the private players walked away, leaving the Government to pick up the pieces. Similar things have happened in the US and the UK. In healthcare, privatization leads to loss of cost control, increased wait times in the public system and poorer systemwide outcomes.

A Government of the Few for the Few

In short, the Alberta government is intent on pursuing strategic intentions which have been shown as failures elsewhere in the world all on the basis of a misunderstanding of the challenges Alberta faces.  To make matters worse, the Government of Alberta is systematically disengaging from public debate or real engagement with those who disagree with their steamroller approach to public policy, as all who have tried to have authentic policy conservations with Ministers and MLA’s will attest. We don’t actually have “government by the people for the people”, we have a government of selected interest steered by the few for the few.