Issues to follow in 2023- Analysis and Opinion- Part 1

Report by Todd Hirsch for NDP on windfall. 

In October former ATB Financial Todd Hirsch was given a mandate by NDP leader Rachel Notley to study what to do with windfall revenues received by the province’s treasury. Hirsch was a consummate pick of Notley.   (Full disclosure– I hired Todd as ATB’s first economist through a lengthy process which I won’t bore you with.) Hirsch was ATB’s chief economist for 15 years and knows the province’s economy inside and out. Hirsch’s persona, excellent speaking raves and travelling to ever part of the province speaking and learning about Alberta’s economy will build enormous economic credibility which the NDP hopes to “capitalize” on.  There are only so many financial alternatives to parceling out a budget surplus: 1) pay down debt, 2) spend the money, or 3) save the money.  The UCP has chosen to do all three things- 1) allocate some to the Heritage Fund, 2) strategically pay down debt and meet “spending demands.”

To differentiate the NDP Hirsch has to either pick one of the three or advance the case for a economic development strategy which builds on the report of the Premier’s Council For Economic Strategy (Emerson Report). Regrettably “openalberta.ca” has taken down the link.

The full report is found here. shapingabfuturereport.

The Premier’s council recommended that over time resource royalties be intentionally reinvested in sectors outside the oilpatch.  Radical stuff from a “blue chip” committee which included David Dodge, Robert Brawn,  and Anne McLellan. The council was chaired by David Emerson, a Queen’s Ph.D. in economics and former B.C.  Deputy Minister of Finance. Emerson moved back and forth from different sectors of B.C.’s economy – finance, forestry, and transportation the head of B.C’s public service.

After ten years he joined a private equity firm CAI Capital Management as a senior advisor. Emerson continued to work at a frantic pace taking on a wide range of boards and trade association including as Vice-Chairman of the Canadian Council of Canadian Council of Chief Executives.  Other prestigious but demanding board included- Teresen (pipeline utility), Royal & Sun Alliance Insurance Company (finance) and chair of the British Columbia Ferry Services.

Then Emerson was lured into federal politics at the request of Paul Martin. Emerson  narrowly defeating the NDP’s popular Ian Waddell. However, when Harper formed a minority government in 2006, Emerson crossed the floor and becomes a Conservative cabinet minister.  He landed his choice job  as minister of international trade, third in precedence in cabinet a measure of how credible Emerson was both politically and business-wise.

I go on at length to chronicle the training, development, and support Emerson received as he moved very quickly through B. C.’s political, financial, trade, and resource sectors. The Premier’s Council’s report should be required reading of every Alberta cabinet minister.

February- pre-election budget

This will be Travis Toews’ final budget certainly before the election and will endeavor to buttress the UCP’s poll numbers.  Various constituencies which may have been ignored during our time of COVID  will be courted with money and policy promises. Incumbency confers an advantage when it comes to spending taxes, resource rents, and other levies and fees.  I would expect more targeting of announcements which are organized now with the constituency benefitting proclaimed how good these measures are for Albertans in general.

Assuming there is no material change in oil price ($70-$80 USD/WTI/bbl) the 2023-24 fiscal year should enjoy a $10-billion surplus before allocation. UCP must also show itself to be fiscally prudent to financial watchers.  This may mean no tax reductions, a third to spending, a third into the Heritage Fund and a final third into debt repayment. One surprise might be that budget is to close down the Legislature and hold an election earlier than late May.  This of course will depend on where the polls sit prior to the budget.

May 29 election-

As the new year dawns, political strategists for both the UCP and NDP will be developing and rolling out new ads and employing different social media techniques to connect to both undecided voters and partisans.  A flurry of donation requests have come to my in-box from both the NDP and Danielle Smith herself. Financing general election campaigns have become an expensive business. Political consultants cost a lot and having the best minds usually wins elections.  But there is more than political strategizing, there are complex data mining operations that gobbles up data like Pac men, automatic online polling,  require a very stable and secure cyber environment which can be costly. Various uses of Artificial Intelligence will be experimented with. Out of province election “volunteers”  will play a factor but this can be a double-edged sword where payback is expected.

Here is the gist of messages send out from the parties on in the last 72 hours.

United Conservative Party

The road to victory starts now.

 

Over the next five months, we will pour ourselves into ensuring that we defeat the NDP to protect the Alberta we love.

 

In doing so, we’re going to need every single Conservative to be there with us to help us win.

 

We must knock on doors, talk to our friends, volunteer, donate, and give our time and talent for this cause, because this is Alberta. 

 

We love this province and all it stands for.

We won’t sit by and allow socialist NDP policies to destroy what Albertans have worked so tirelessly to build. 

 

This province is worth fighting for, no matter what the media or the woke Twitter mob throw at us. 

 

If we stay united, if we stay true to our values, we will inevitably prevail.(emphasis added)

 

Alberta’s New Democrats

Doesn’t it feel like we’ve been going a mile a minute? It’s good to take a breath and remind ourselves of what we’re fighting for.

Danielle Smith and the UCP have brought in legislation that has made life harder for Albertans. Tomorrow is the last day of our end-of-year fundraising to make sure we start the new year on track to stop all the chaos. Elections are a BIG job and we can’t afford to fall behind the UCP’s big donors.

(emphasis added)

The NDP’s pitch is to highlight governing party weaknesses including building on the perception that the UCP represents big money and corporate interests and  UCP indifference (until just recently) towards ordinary Albertans struggling with rising costs of housing and gasoline prices. Of course we should not forget the pandemic which put all of us into a bit of a shelter with friends of our choosing.

This election is a pivotal one both for Alberta and Canada.

Analysis

For Alberta, a majority government of either stripe will give the winning party four years to shape the future of the province. A UCP victory will produce more disruption for Alberta’s public sector and more support for the “ailing” oil sector. An NDP government will reverse many of the changes advanced by the UCP- the Sovereignty Within a United Canada Act, repatriate the carbon tax, bring back the provincial laboratory, raise taxes, implement tax incentives to attract investment. and potentially reshape the Alberta state’s over- dependence on the oilpatch relations. Many unknowns will come into play from the weather, over-stretched health system,  another pandemic, and the stumbles of political leaders.

For Canada, this race is unique because it pits two evenly equipped teams (fundraising and technical sophistication).  New techniques to attract voters will be tested with implications for races in other provinces and federally.

If the UCP is returned it will signal elevated tension between Alberta and the Trudeau government and the emergence of a government directed largely by separatists. The addition of “Within a United Canada”  designed to assuage concerns of right of centre conservatives worried about talk of separation – may bring some votes in May.

The NDP will attack the UCP as a de facto separatist party.  They will need to be careful about advertising out-of-province support for the NDP because it may backfire on the party in a climate of nationalism-stoking.

Notable in the language  from the UCP fundraising letter…”defeat the NDP to protect the Alberta we love. To the UCP the Alberta we love is about the values of hard work, free enterprise, individual freedom, less government, and low taxes. This in contrast with the NDP whose values are based on values like solidarity, fairness, compassion, respect for the environment, and a role of government. Viewed very broadly one might say this is a referendum for the supremacy of American or Canadian values.

Those at the UCP centre of power are actively studying the necessary phases to accomplish a rapid separation with swift U.S. recognition. Moment of Truth is the guidebook for the UCP strategists.

The intellectual driving force for both the Sovereignty Act and the Free Alberta Strategy is Barry Cooper professor of political science at the University of Calgary. According to Wikipedia Cooper is a advocate of climate denialism, Quebec separatism, Western Canadian separatism, with Alberta as an independent, sovereign jurisdiction within Canada. Cooper is Fellow of the Royal Society of Canada and a key member of the so-called Calgary school.

A Notley victory will definitely turn down the temperature inter-governmentally and would mean the Alberta separatist-sovereigntist vote was weaker than expected. But this does not mean that Notley will agree with everything Trudeau and Guilbeault propose.  There is a lot at stake.

Next week I will look at the following issues

• Impact Assessment Act comes before Supreme Court
• Sovereignty Act applications- before the election?
• More climate disasters
• Environment replaces economy as decision driver