Big, big changes in Alberta - what will they mean for the rest of the country? That is up to the voters to decide.

Rivers 100x100By Ray Rivers

May 8, 2015

BURLINGTON, ON

They used to say that Ontario would only vote Liberal provincially if the government in Ottawa was Conservative. What does that portend for the upcoming federal election, reviewing the results of this week’s provincial elections in PEI and especially Alberta where the voters turned everything upside down.

PEI wasn’t really much of a surprise and the Liberals barely worked up a sweat, sweeping in to a third majority government in Canada’s tiny province. But Alberta, with over four decades of continuous Conservative government was a ground shaker. It seemed like only yesterday that newly anointed (former) Premier Redford held onto her majority in an election the pollsters said she would surely lose to the Wild Rose Party.

Rachel Notley

The voters decide – and in Alberta they did so dramatically. Now to figure out what the Alberta change is going to mean to the rest of the country.

So when these same pollsters started talking about the NDP winning this time, nobody believed them. But chickens do come home to roost, and partisan loyalty only lasts so long before the people have had enough. Expense scandals, failed economic policies, a deteriorating environment, cuts to health and social services, new taxes, rising unemployment, an arrogant leader (Prentice) and a miserable election campaign brought down this once unassailable dynasty. And in so doing restored our faith in the polls, the pollsters and voters of Albertans.

Nobody likes being lied to. And there was this big lie, that you can have it all. Perpetual wealth with no consequences. Albertans were told to trust their government and it would build a sustainable petroleum-based economy that was going to fuel the greatest boom in Canadian history. An impossible dream, Albertans now realize.

The rewards from all the oil extracted from the ground had been squandered. The big oil corporations and the wealthiest Albertans got theirs, alright. And the rest? Well the premier told Albertans, complaining about its dismal fiscal state, to look in the mirror if they wanted someone to blame.

There may be federal repercussions from this provincial NDP zinger. For one thing, the federal NDP can no longer be discounted as a one-hit-wonder- a flash-in-the-pan – as they show off their official opposition hat. The party with roots in Saskatchewan has held government in several provinces now. And Tom Mulcair has proven a tireless and credible political leader.

It hasn't reached a fever pitch yet - it might not but he does know how to pull all the heart strings and both his hair and his children get many mentions.  The bold new ideas? - haven't heard those yet.  what he did assure his audience was that he had very solid values - but didn't make much mention of what they were.

Justin Trudeau on a tour through Burlington – will the charisma hold during the next federal election?

And that could mean troubles for Mr. Trudeau’s Liberals, hoping to win a majority government this time around. Two respected parties competing for the same votes in the middle-left may be one party too many to keep Mr. Harper from coming up the middle for another Tory victory, albeit one that is unlikely to be a majority.

Trudeau has dismissed talk of a coalition with the NDP. Despite many common values between the parties there are fundamental philosophical differences, including Jack Layton’s Sherbrooke Declaration, which would allow Quebec to leave on a 51% vote. So it is not a slam-dunk should the votes come in that way. And the last time there was an agreement on a working coalition, some Canadians felt uneasy about any such marriage of convenience.

The Canadian economy is facing tough times ahead. While the federal finance minister was able to scramble together a balanced budget by fire-selling government assets and raiding the unemployment and contingency funds. He’d have trouble the next time around. The reality is that the cash-cow from Alberta has stopped milking and any future Tory budget would have to go back into the ‘red’ unless somebody reforms our tax system.

To that point Mr. Trudeau has just proposed the first significant reform of our income tax system since Brian Mulroney gutted it back in the 1980’s. The one percent (1%) of Canadians, those earning over $200,000, will see their federal rates rise by four percentage points to 33% – a significant rise, though still lower than in the immediate post war period.

This would free up an estimated $3 million of new federal revenue to be re-distributed through tax breaks for the middle class – those with incomes between $40, 000 and $90,000 a year. Re-distribution isn’t a bad word, even though it is multisyllabic and sometimes hyphenated.

TFSA_amountsRe-distributing the way Trudeau would do it, rather than the way Harper has been doing it will mean new economic growth, driven by the middle class as opposed to being left in the Tax Free Savings Accounts of the one-per-cent crowd. And that makes us all better off. Recall US President Harry Truman’s notable saying that if you want to live like a Republican you’d better vote for a Democrat.

The upcoming federal election is still a crap shoot, but becoming more interesting every day as October draws near. Few people are expecting the NDP to pull another rabbit out the hat and actually form the national government, let alone with a majority.

But look at Alberta.

Background:

Alberta Election Issues      How Albertans Felt       Trudeau Tax Plan       PEI Results       Federal Raids

Election Background       NDP Sweep      Alberta Premiers       A Timely Change

Rivers-direct-into-camera1-173x300Ray Rivers writes weekly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking. Rivers was a candidate for provincial office in Burlington where he ran as a Liberal against Cam Jackson in 1995, the year Mike Harris and the Common Sense Revolution swept the province.

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7 comments to Big, big changes in Alberta – what will they mean for the rest of the country? That is up to the voters to decide.

  • Tony Pullin

    With respect to tfsa’s – not just the 1% club benefits. Mr. Trudeau had better get a grip on that because the general population already does;

    https://business.financialpost.com/personal-finance/tfsa/exclusive-canadians-maxing-out-their-tfsas-from-all-walks-of-life?__lsa=3f1b-ac7d

    Gary is correct, you mean to say $3b, not $3m. Anyway, that’s only one little gas plant boo-boo and 2 months interest payments on an Ontario debt so – “no biggie”. We didn’t give a proper damn about such chump-change here in Ontario at election time.
    Is Mr. Trudeau going to embetter the country by running $3b through some bureaurocratic gristmill? No – it’s political posturing so let’s pack away the “economics” rhetoric and lay the social adgenda on the line.

  • Peter Rusin

    Any kind of tax increase is a move towards slow death for the financial health of this country. An opinion from a career civil servant on fiscal management in the form of tax increases is typical. Let’s hear from the one percent who actually make the money and pay the taxes on their opinions as to how federal revenue should be distributed. Trudeau wants to raise taxes and legalize pot; that’s the kind of leader people want representing this country on the international stage? seriously? A pothead?

  • Your words: “The one percent (1%) of Canadians, those earning over $200,000, will see their federal rates rise by four percentage points to 33% – a significant rise, though still lower than in the immediate post war period.”

    I think it important to note that this increase pushes the marginal tax rate (with sales tax, provincial and federal income tax) for these individuals further over 50%, the point where governments get more of their income than they get to keep. A great way to sap initiative and incentive to work in Canada.

  • Through his remarkable insight into fundamental societal principles Mr Rivers again evokes those feelings of “this sounds familiar” in those of us living south of the border. The lesson he presents from Alberta challenges residents of the U.S. to question, and reject the incessant messages from the fossil fuel industry trumpeting world dominance, well paying jobs for everyone, and a future of comfortable superiority over the rest of the world.

    For many in the U.S. Canada has long seemed a special case of mature, reasoned tranquility. We would do well to attend to its actual internals.

  • BCarlton

    Alberta’s first protest vote to clean house. Ah memories of Ontario’s Ray days. Interesting to see at least Albertan’s have a long memory and could never put an X beside a Liberal candidate. So much for no Provincial tax in Alberta….I give it 1 year. A costly protest but a protest non the less.

  • Gary

    In Ontario a Tim Hudak promises to reign in runaway government spending and to eliminate 100,000 civil service jobs to achieve that goal. His main opponent, Wynne, says if you liked McGuinty’s free spending ways, wait ’til you get a load of me. Who did Ontarions pick? In Alberta a Prentice told Albertans they were living in la-la land and it was time to face some financial pain. His opponent ran the standard sunshine, roses and no pain for main street, the decades old standard NDP refrain. Who did the voters pick? What a surprise. Who could possibly have seen that coming? Perhaps the.late Bob Stanfield?

    The windfall in Mr. Trudeau’s tax plan is only three million dollars? Are you sure you didn’t miss out some zeroes? That is lunch money for caucus meetings inOttawa.

  • John Birch

    The fascinating electoral history of Alberta.

    The NDP will form it’s first Govt in Alberta, and a majority too.

    There have been 4 Party’s prior that have Governed Alberta.
    Liberal 1905-21; United Farmers of Alberta; 1921-35; Social Credit 1935-71; Progressive Conservatives 1971-2015; NDP 2015

    * Every Alberta Govt has been a majority government.

    * No Governing Party has ever formed a one term government.

    * No Governing Party, once defeated has ever been returned to power.

    The question now at hand: a dynastic change?; a paradigm change?; or a one off? Time will tell, but Alberta history is on the side of dynasty.

    However, as shown again so clearly Tuesday night, Governments defeat themselves.

    Of the 53 NDP MLA’s elected, only 3 have parliamentary experience.

    Footnote
    Voter Turnout: PEI 85% ; Alberta 58%.

    Interesting that the NY Times made no mention in its electronic edition of this momentous change of government in a leading energy producer.