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Ralph Klein

Grant Devine 2.0?

It’s really odd to hear Alison Redford use the same rhetoric in Alberta that Grant Devine did in Saskatchewan during the late 80s.

In a series of interviews following her televised address to the province Thursday night, Redford said that she wanted Albertans to understand that the province should no longer rely on its resource wealth to balance its books, pointing to a $6-billion “bitumen bubble” that will cut the province’s anticipated resource revenue almost by half in 2013-14 fiscal year.

“We can no longer continue to rely on oil and gas for 30 per cent of our revenue,” Redford said Friday. “It’s a fundamental change. It’s the sort of thing a province has to deal with, I think, once in a generation, and this is our opportunity to do it this year.”

The provincial government has received plenty of advice in recent years urging it to wean itself off a practice of using resource royalties to balance its books.

The Premier’s Council for Economic Strategy, a panel of experts established by Premier Ed Stelmach, tabled a report in May 2011 that asked Alberta to divert non-renewable resource revenue instead into a new “shaping the future” fund dedicated to helping diversify the province’s economy.

The council’s chairman, former federal cabinet minister David Emerson, said Friday it sounds like Redford is looking to make that kind of shift.

“She’s looking at establishing a new fiscal regime and that’s essentially what the premier’s economic strategy council was calling for: To stop treating non-renewable resource revenues as a form of operating revenue to be spent on, in effect, buying the groceries and to become more strategic separating natural resource assets,” Emerson said.

“If that’s the case, my congratulations,” he said.

But while Redford said Friday that a “different” budget will be forthcoming, she also said will not be a disruptive document. The government has already sent some signals about what some of those changes might look like, she said, pointing to the government’s plans to borrow to fully twin a 240-kilometre stretch of Highway 63.

“The Highway 63 announcement signalled to people that we’re going to think differently about long-term infrastructure plans,” Redford told The Canadian Press. “We’re going to finance that differently. We’re prepared to go out to capital markets and to really put out stellar fiscal reputation out there and ask people to invest in our province in some of our public infrastructure.”

As of right now, however, Redford said tax reform is not part of that financial restructuring.

Right now it looks like a lot of talk without the deep cuts and probably tax increases needed to bring the budget back in line.  

Mount Royal University political scientist Keith Brownsey said Redford needed to make a case for a fiscal crisis in her televised speech. She did that in a reasoned, effective manner, he said.

Such a statement was needed, he said, because Albertans thought financial problems were something that were a thing of the past because of its resource wealth.

“I think she prepped us for both cuts and tax increases,” Brownsey said. “Now, she may not have said that today, she may have said, ‘No taxes,’ but the current revenue structure in the province is unsustainable. We cannot exist as a modern industrial state living off of revenues from non-renewable natural resources. It’s simply too volatile.”

The truth is that Alberta spends money like no other province in the confederation.  Even during the Klein crisis, they spent more money than everyone else.  People talk of the deep cuts he made but ignore the fact that in Saskatchewan, the NDP made even deeper cuts (and had to raise taxes).  Whatever the solution is that it should be a combination of taxes and spending cuts and it is going to take a bit of time.  

I have no doubt that Redford is serious about making cuts (and who knows, she may even raise taxes) but when the oil prices go up, will they stay the course and remake the economy, especially when the opposition will be calling for restored spending and tax cuts (it’s always going to be like that).  I really hope she sticks with it because the oil and natural gas won’t be there forever.  I know the oil sands are a massive reserve but not all of that is recoverable and there is a point where it gets more too expensive to go after it.

If her hero Peter Lougheed brought in Alberta 2.0, then Alison Redford will need to be the one to bring in Alberta 3.0.  I hope it’s more than Devine era rhetoric.

Calgary/Banff 2012

It’s been so busy the last week and I have been so incredibly sick that I never posted this last week.  Since a bunch of you have asked how our mini-vacation went, here is the summary… just really late.

On Thursday morning we got up early, checked out the highway conditions and headed out to Calgary for the weekend.

It was Oliver’s first long road trip and we packed pretty well.  In his backpack he had his VTech tablet and some kid’s volume controlled headphones as well as a cheap set of binoculars.  Mark had his PSP and a National Geographic History magazine.  The end result is that we stopped in Kindersley (for a 5 Hour Energy Drink for me), Hanna (for windshield washer fluid), Drumheller (to take Oliver for a walk up the giant dinosaur) and the boys were remarkably good.

Drumheller's Dinosaur

The trip took up around 6 1/2 hours which is pretty good but like I said, our stops were quick.  The stop at Drumheller took the longest and Oliver wasn’t that thilled with the idea of running up the “butt of a dinosaur” and I carried him most of the 100 steps to it’s mouth.  

In the mouth of the dinosaur

After heading back down, we were off to Calgary and checked into our hotel at around 2:30 p.m. Calgary time. 

The hotel was the Best Western Plus Calgary Centre Inn and was quite nice.  Our room was massive and the photos on their site don’t do justice to how nice the pool area is.  They have a normal pool, a hot tub but also a small pool that is only 2 feet deep for kids.  Oliver loved, “his pool” and spent all of his time in it.  They also have a free continental breakfast that was varied enough that we didn’t get sick of it.  Of course it’s central location meant that it was out of the way of everywhere we wanted to go but not so far out of the way we didn’t go.

All day on Twitter, Mayor Nenshi was warning of the snowfall which we didn’t really notice until we hit Chestermere and the highway was closed because of a rollover.  I am not sure what happened as we didn’t find the highways that slippery.  There was some black ice but nothing that bad; then again I am used to driving in it.

We were two long blocks away from the 39th Street LRT station and took it downtown where we went for a long walk.  We had plans to head up the Calgary Tower but visibility was really poor so we just took in downtown Calgary.  The snow was really coming down but all over downtown were snow removal crews sweeping sidewalks and streets even as the snow fell which is quite a bit different than Saskatoon which puts the onus on store owners who may or may not shovel out downtown.  It’s almost as Calgary’s downtown is a place of commerce.

Stephen Avenue in Calgary

Snow clearing in Calgary

That night we headed back, checked out the pool and ordered in from Mother’s Pizza, something that I have done since I was old enough to know what pizza was.

Friday morning the roads in Calgary were reported to be in bad shape but in reality were quite good.  Thanks to Saskatoon for lowering my expectations for snow removal.  Mark spent the summer and fall saving up for a new iPod Nano and despite being $4 short that I kicked in for him, we went to the Apple Store in Chinook Centre where a clerk named Jazz managed to help him pick out the one he wanted.

Wendy and Oliver in the Apple Store

While Mark and Jazz finished the deal, Wendy pulled out her Samsung Galaxy and started to text something.  She was lucky she wasn’t tossed out.  As we were leaving, Wendy had a minor fit as she saw a Lego store and insisted that we had to purchase some Lego for Oliver for Christmas.  Long story short, Wendy always wanted Lego as a kid and never had any.  She had more fun than any of us in there.

As soon as we hit Highway #1, roads were perfect until we hit the Banff National Park gates and they never got the snow the rest of us got so it was a fun trip up with lots of stories and sight seeing along the way.  We went straight to Sulphur Mountain and took the gondola to the top of it.  Excited does not describe the reaction of Oliver and Mark who loved every second of the nine minute trip to the summit.  Once at the summit I was tempted to hike to the science station but it was blowing and cold up there so we ordered a bite to eat and chilled out at the top.

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Panorama from Sulphur Mountain

Once back down we did some shopping and Banff didn’t disappoint.  Every single shop had the exact same touristy junk.  As I told Wendy, I spent most of my life trying to buy something nice in Banff and failed.   Wendy found some earrings and found some Christmas gifts.  Mark managed to get some more money out of me and bought some magnetic rocks and a Gondola souvenir.  The highlight of the shopping was a large male elk meandering through main street and within inches of the car.

An Elk

I personally love Banff in the off season and hate it during the peak season.  The lack of tourists and crowds are nice, even if the weather is not.  What I loved about Banff is that there was absolutely no trace of snow along their main street.  Every flake was removed… again, it’s a place of commerce.

Finally we took the boys to Bow Falls where a combination of the cold, wind and humidity almost froze Wendy, Mark and I to death while taking some photos.  Oliver just said, “I want to wait in the car”

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Panorama of Bow Falls

As we were leaving, we went to Walsh’s Candy Store where I bought Mark and Oliver two massive jawbreakers and challenged them to finish them by the time we got to Calgary.  It’s an impossible task (knowing first hand) but neither one of them talked all the way back to Calgary.  I love it when a plan comes together.

For supper that night, we went to Five Guys Hamburgers for the first time.  We need one of those in Saskatoon in the worst possible way.  We ordered burgers and fries and couldn’t even start the fries as the burgers were so filling.

Saturday morning we met our good friend Dave King at Nellie’s where we had a good talk about politics, urban planning, cycling and photography all over a fantastic breakfast.  It was cold out that day so instead of going to the Calgary Zoo, we went back downtown and checked out Mountain Equipment Co-op (twice), the Calgary Tower, Glenbow Museum, and snagged some milkshakes at Peter’s Drive-Thru.

While at Mountain Equipment Co-Op, we did some Christmas shopping and Wendy agonized over which bag to purchase (which she always does).  She finally got one of these and seems at peace with the world.  Meanwhile I got a sleeve for the MacBook, a left handed sling pack, some gloves, bike lock (as well as one for Mark) and a lantern. Mark also bought a sling pack which means that we kind of match which is awkward.  At least his is right handed.

The Calgary Tower is always amazing and we spent a lot of time up there.  The glass floor was fun as people were absolutely terrified to walk out on it while kids seemed to not even notice.  Both Wendy and I took a bunch of photos with other people’s cameras while they stood out on the glass.  We went back downstairs and across the street to the Glenbow Museum where Mark really had a good time.  Wendy enjoyed the section on the National Energy Program and on Peter Lougheed.  It was weird to see a display honouring Preston Manning and not Joe Clark or Ralph Klein.  I know Manning has significance but so does Clark and Klein.

Oliver at the top of the Calgary Tower

The Bow as seen from the Calgary Tower

Saturday night against my better wishes, we went to Swiss Chalet.  Wendy and the boys had never gone but the meal was what you expect of Swiss Chalet.  Personally I am still bitter that St. Hubert is not in Calgary.  Sadly everyone in the family like the meal which means that I am going to have to fight not to go back.

Sunday we drove back home after some more running around.  The trip was quick as I had two boys chilling out to their iPods and sucking on jawbreakers.  The only excitement was when we were back in Saskatoon city limits when we found out again that snow removal baffles our fair city.

All of the photos from the trip can be found on either Wendy’s or my photo set.

Cutting our own wrists

Back in 2005 I saw a link to a review of Jared Diamond’s book Collapse on the New Yorker website. Malcolm Gladwell was telling the story of Norse settlers coming to Greenland a millennium ago and I found the story fascinating. Even to the Norse, Greenland was not a place that one would want to inhabit but on the southwest corner there are some Fjords that looked a lot like southern Norway and was a perfect place to settle so they got off the boats and set out to tame the land. For four hundred and fifty years they built two settlements, churches, traded with Europe and possibly even had a section of prime downtown real estate they couldn’t develop. They hunted seal, caribou and raised livestock and pets. Life was good and then one day it was all over. What happened?

Diamond’s book is full of stories of societal collapse. Easter Island, Mayans, and even the genocide in Rwanda but the Norse on is the one that I keep re-reading. Partly because I am part Norwegian but partly because I keep seeing those settlement’s demise being played out again and again today.

What happened in Greenland is what happened in most of the societies that Diamond looks at. The ecosystem was too fragile to support the population. The trees were chopped down for fuel, the soil erodes, the crops fail and society has to leave or ends up dying. He tells essentially the same story over and over again. Greenland wasn’t as green as the Norse thought it was and the same thing happened to them.

What is so odd about this chapter is that within feet of their shore is some of the best fishing grounds in the world. Diamond describes running into a tourist who had caught two Arctic Char with her bare hands so why did they not fish. For years archeologists have looked for the fish bones and no one has ever found them. They found tons of trash fully of garbage and livestock bones. When the pastures couldn’t support the cattle, the Norse ate the cattle, then their young (right down to the hoofs), and even their pets while ignoring a massive food supply right that was within feet of them. You could argue that maybe the Norse didn’t know any better but there was Inuit there but the Norse looked down at the Inuit and their hunting practices that probably would have saved their lives.

What does this have to do with today? Until last week I wasn’t that preoccupied with the U.S. debt ceiling. To be honest I was much more preoccupied with the NFL lockout. It never occurred to me that American politicians would allow the U.S. government to default on its debt. As the rhetoric flew in Washington, I realized it all sounded familiar. This isn’t about economics; this is about the survival of ideologies and political parties. In the same way the Norse wouldn’t fish, intermarry with the Inuit or even copy their ways of life because they were ranchers and because of cultural status, Republicans can’t make a deal because they can’t be seen raising taxes or Democrats can’t been seen cutting Social Security or Medicare. Michele Bachmann can’t compromise because that would alienate the Tea Party. John Boehner can’t compromise because then he looks weak. Obama can’t compromise or he’ll upset his base. They may push the United States into another recession but they won’t have compromised on their values.  It’s a pile of crap and the rest of the world in this case pays for it.

This is what bothers me about ideological arguments, they ignore the cost to people along the way.  Real leaders are not ideologues.  They are pragmatists who are capable of making hard decisions that go against their base.  In Saskatchewan how popular do you think it was for the NDP when they closed rural hospitals or cut the public sector in their efforts to reign in the Saskatchewan deficit?  In Alberta during the same time Ralph Klein instituted user fees on healthcare.  How popular were the Chretien budget cuts and austerity of the 1990s with Liberals.  So much for the short term vision of a just society.  While the Saskatchewan Party says it is a party of free market principles, they dug in (with the support of the NDP) to help save PotashCorp (an American company that for some reason we could not handle being taken over by an Australian company because that would be wrong for some reason).  Leaders decide to go fishing from time to time.  They also know they need to raise taxes to pay for a war in Afghanistan and Iraq, no matter what it does to their presidential aspirations or how much it hurts their base.

So why didn’t the Norse settlements eat Arctic Char (apparently it’s quite tasty, similar to rainbow trout)?  Because they were so concerned with the survival of their northern European culture, a culture of churches, cattle, and trade that they never could see there was an alternative way to act.  Why is the United States about to walk into financial Armageddon because Republican’s don’t raise taxes and Democrats don’t cut entitlements and they are both too stupid to realize that this polarization can’t continue.

As Gladwell points out,

The lesson of "Collapse" is that societies, as often as not, aren’t murdered. They commit suicide: they slit their wrists and then, in the course of many decades, stand by passively and watch themselves bleed to death.

I think I see blood on the floor.

We need to cut back

Back during the Devine era, I listened to Grant Devine give an impassioned speech about the deficit.  The point was “yes we have a deficit but where do we cut back.  You can’t close hospitals, you can’t have crumbling highways, you can’t cut essential services”.  At the time the speech stuck with me (obviously as I remember it today) but history shows that he was wrong.

Roy Romanow came into power and closed hospitals, cut healthcare services, stopped fixing and cut back on plowing the highways and he cut services we used to think was essential in order to balance the budget.  People talk about the draconian cuts made by Ralph Klein but Romanow’s were deeper.  The unions were angry, the NDP caucus was angry, the rural municipalities were angry, the urban municipalities were angry.  No one liked the cuts.

Today Brad Wall broke a promise to the urban municipalities on revenue sharing agreements and they are understandably upset.  No one likes having money taken away from them.  My response to them is “oh well”, this is only the start.

  1. Whoever is going to fight the federal deficit will have to cut services (and probably raise taxes).  We call the transfer payments and I expect Brad Wall and other provincial premiers to be on the other end of the cutbacks.  Even for those of us who are “have” provinces, federal funding cutbacks will have to be picked up by provincial departments or the programs will end.  Money that used to be earmarked for services and tax reductions will have to be used to pay off the debt and fight the deficit.  In case you don’t know how this works, watch Till Debt Do Us Part.  It’s not going to be fun being the next finance minister, no matter which jurisdiction you are in as you will be facing cutbacks of your own and passing them down to the next level of government.  Let’s hope they don’t have a need for friends as they won’t have many.
  2. In case you haven’t noticed, the $1.56 trillion deficit proposed by Obama isn’t sustainable, look for higher interest rates to convince China to purchase American debt.  Higher interest rates will push many highly leveraged North American’s over the brink into personal bankruptcy.  That’s going to hurt earning on many consumer companies which will in turn cut back on spending and mean less tax dollars flowing around.
  3. If many economists are correct, oil prices will rise (and are rising) as we crawl out of this recession.  As we do that, higher oil prices will push us back down again.  This morning I was listening to an economist call this the “new normal”.  In Saskatchewan we are a commodity based economy which means that we will forever be riding the wave of potash, wheat, natural gas, and oil revenues.

I would hope for a better level of political discourse then what we saw when Romanow’s government made his cuts.  There really is no concept of we are in all of this together, which of course we are.  I know lobbying the government is an important part of the job but in the end let’s accept that this is going to get worse before it gets better.  Of course that isn’t going to happen so brace yourself for political stunts designed at short term gain over long term stability.  Grant Devine’s legacy will probably live again.

Update: Sean Shaw has a look at what this cutback will mean for the city.