NDP promises to be ‘vigilant’ against Klein-style slashing
Even before Premier Ed Stelmach floated the possibility of resurrecting his predecessor’s fiscal policies to cope with the economic downturn Alberta NDP leader Brian Mason knew what to expect.
“We want to be vigilant against another round of cuts that affect the lower income and middle-class Albertans the most” Mason said in an interview with Fast Forward January 15. “We want to protect the services that people depend on. We want to invest in people. We think that’s the best way to come out of a recession.” He listed the investments he’d like to see: renewable energy projects; city infrastructure; child care. “Things that ordinary folks need in this economic time.”
Sure enough the following day Stelmach told the Calgary Herald : “I don’t want to underestimate the difficulties we’re going to face as Albertans. We may go back to the same strategies we used in the early 1990s.” In the ’90s then premier Ralph Klein made his now-infamous cuts to the provincial budget deeply slashing jobs and social services to pay off the deficit. “It was broad job destruction mostly affecting young workers” recalls Heather Douglas Heather Smith president of the United Nurses of Alberta (UNA). “The effect has been the loss of a whole generation of workers here.”
The same week Stelmach made his comments Conservative cabinet minister and Treasury Board president Lloyd Snelgrove told The Canadian Press: “You cannot just blindly go on spending if your revenue streams continue to drop. Our only other realistic opportunity is to cut spending.”
The possibility of spending and job cuts triggered alarm for many in the province but at an Edmonton press conference January 20 Stelmach presented a very different message and evaded repeated questions about his earlier comments. “We’ll use our savings to cushion any dramatic decline in provincial revenues” Stelmach said. “Most importantly we’ll protect our most vulnerable. We’re going to do that by focusing on the programs and the services that Albertans need.” The premier says about $14 billion is available for this purpose from the province’s capital account and Sustainability Fund.
When a reporter asked Stelmach if he plans on cutting public sector jobs or spending Stelmach answered: “I don’t want to lose momentum as the province of Alberta.” The reporter asked the question a second time. “We’re positioned as the province of Alberta better than anyone else” Stelmach said. The reporter tried a third time — “Are you going to cut spending? Are you going to cut jobs?” — and Stelmach replied: “As I said before we’ll be very pragmatic in setting our budget.”
Yet another reporter tried the same question. “I never used the word ‘cuts’” said Stelmach adding that he plans to protect Alberta’s health and education programs. Another reporter requested clarity. “I said we’ll look at… any place we can reduce some of our spending” replied Stelmach. “Are there programs or things that we’re doing today as government [where] we can save a few million dollars?”
Klein passed a law forbidding deficits and Stelmach says that “unlike other governments we don’t have to finance economic stimulus by deficit spending.” But with oil hovering around $40 a barrel (down from $147 last summer) Liberal leader David Swann says the province needs to look at the possibility of running a deficit to invest in Alberta’s future. “We take out a loan and we go into a debt to pay for a house” Swann says. “That’s an asset for the future. This is a time where we need to be thinking about whatever it takes to keep confidence and to keep people as employed as possible…. We cannot afford to be cutting at this time.”
In November the Conference Board of Canada warned governments against cutting spending to keep their budgets balanced. That strategy would only “make a difficult situation worse” says a Board paper about fending off a Canadian recession. “Therefore we fully support our governments running short-term fiscal deficits that are caused by slower economic growth and a resulting shortfall in revenues.” Talk of belt-tightening the paper continues “sends the wrong signal at a time when economic stimulus is needed if we are to avoid recession.”
Despite his comments earlier this month about the difficulties facing Alberta Stelmach now paints a rosy picture of the province’s economic future. “If as governments we continue to speak negatively about the economy we’re going to see further retraction of investment” he says. According to Stelmach Alberta is in the “best financial or fiscal position of any province and indeed perhaps better than any jurisdiction in North America."
CORRECTION January 23 2009: Originally this story incorrectly identified the president of the United Nurses of Alberta as Heather Douglas. The correct name is Heather Smith.