On the eve of Alberta’s closest election and arguably since 1935, it’s most crucial, I am reminded of an analogy I heard first around 2013. The term was used in a public forum on the recent Alberta budget. Grant Robertson, a career Alberta public servant and recently retired former deputy minister in Treasury Board compared Alberta’s non-renewable resource revenue dependence with the use of crack cocaine. His comment produced a titter in the audience. When I heard this phrase come up again recently in my conversation with Todd Hirsch on 8 May, one week into the provincial election, I took notice. Mr. Hirsch, the well known ATB Financial former economist was likewise using this phrase in the same way used by Mr. Robertson about a decade ago.
The ups and downs of Alberta’s roller coaster are well known to economists, the media, political scientists and understood by virtually everyone in Alberta’s tightly knit policy community.
This addiction is lamentably not well understood by the political class. The general lack of a discussion of the boom and bust nature of Alberta’s economy- produced by price fluctuations of Alberta’s largest export- have persisted throughout the election. The tendency when shopping for votes is to promise new programs and infrastructure spending and to guarantee taxes will not rise for individuals- perhaps corporations as well.
This received wisdom has played out to its conclusion as both Notley and Smith spoke about retaining Alberta’s hallowed tax “advantage.”
Yet on May 30th, assuming there are no recounts, one of these party leaders will inherit a province deeply divided ideologically. The fissures in the Alberta politic came out during the campaign: sovereignty vs. federalism; stability versus disruption; freedom versus collective responsibilities; public health care and education vs. private health care and charter schools; law and order vs. compassionate caring.
A new premier will also lead a province where up to thirty per cent of Alberta’s public services are paid for by the “oil industry.” This number move in zigs and zags over the years and has varied in terms of its source- conventional oil, natural gas and now bitumen. Contributing to the perniciousness of this addiction is the fact that resource revenue is increasingly derived from bitumen where only four producers control over 80 per cent of production.
A new premier will also need to address the contradiction between reducing emissions and weaning the province off it’s resource royalty dependence. This issue has been kicked down the road for far too long as our forests burn down at an alarming rate.
Whoever wins, I wish them the best of luck! They will need both luck and sound, empirically based, science-based, public policies to achieve a better future than our current trajectory.
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