fbpx
Connect with us

Features

DOLPHIN: Inside Alberta Budget 2020

Ric Dolphin takes a dive into the UCP’s 2020 budget.

mm

Published

on

Coming less than four months after last year’s, the Kenney government’s budget for 2020-21 offers little that is new and proceeds on the slow path toward (sort-of) fiscal balance, with spending freezes, staff reductions, some tax increases, and dubiously optimistic predictions for improved oil prices, increased energy investment, and reduced unemployment.

Things could hardly be worse than for the current 2019-20 fiscal year. According to the third-quarter update – which was presented alongside the Budget 2020 – growth was essentially flat at 0.3 per cent, unemployment topped seven per cent (20 per cent for 18-25-year-olds), personal income tax revenue was $160 million lower than budgeted, and bitumen revenue – while estimated to be up slightly over budget ($4.7 billion), began a downward trajectory in the second half of the year that is predicted to result in a 33 per cent revenue drop in 2020-21, down to $3.3 billion. 

This reduction is the result of higher differentials and reduced exports caused by lack of access to markets (that is, no pipelines).  Finance Minister Travis Toews told reporters that he does not expect resource revenues to exceed their 2019-20 levels for four years. This is despite the de-indexing of income tax brackets, which Jason Kenney denounced as “bracket creep” when he was the young head of the Canadian Taxpayers Federation.

Nonetheless, the Finance ministry is predicting 2.5 per cent GDP growth for the coming year. This optimistic forecast is based partly on an expected 1.5 per cent population increase, a one per cent decrease in the unemployment rate, and gains in the energy sector. The latter include increased drilling activity, new energy projects coming on line, and growth in oil and gas investment encouraged by more cost-efficient production methods and the imminent prospect of greater market access (the US portion of Enbridge’s Line 3 is expected to open in 2021).

And according to the budget document, “With investors becoming increasingly concerned about U.S. shale oil well productivity and lack of investment returns, Canadian energy companies are in a good financial position to attract investor funds.”

Despite the predicted growth in the overall economy, the government itself is projecting a two per cent reduction in its revenue for 2020-21 – from $50.95 billion to $49.99 billion – largely as a result of those lower bitumen royalties.

On the expense side of the ledger, total operating spending is estimated at $56 billion, which is $865 million (1.7 per cent) less than that forecast for the previous year in the Q3 update. And in the absence of any other good news, Toews was quick to point out that the estimated $7.54 billion deficit for 2019-20 was $1.2 billion lower than budgeted. 

The deficit for 2020-21 is budgeted at 6.8 billion, which, as will doubtlessly be repeated ad infinitum from the opposition benches, is slightly greater than that NDP’s last deficit of $6.71 billion in 2018-19.

Asked how this could be considering the 1.7 per cent reduction in spending, Toews blamed it on the cost of the Notley-initiated oil-by-rail contracts, which the UCP recently cancelled at a cost of $1.2 billion. Another contributor is the incremental increases in servicing costs on a debt that will grow from $67.9 billion in 2019-20 to $76.9 billion in 2020-21. This means the servicing cost will rise from $2.1 billion to $2.5 billion.

Despite this fiscal millstone, Toews was adamant that the UCP government will eliminate the deficit by 2022-23, in part by reducing operational spending by three per cent. The deficit-elimination schedule is also predicated on revenue rising to $54 billion in 2021-22, and $58 billion in 2022-23 – predictions based on increases in oil revenue, which in turn are dependent on completion of the Line 3 and TMX pipelines.

Asked what will happen if these predictions are unrealized, Toews said, “If we don’t achieve additional energy egress, additional restraint will be required.”

The budget is titled “A Plan for Jobs and the Economy,” and Toews touted the increase in capital spending – from $5.8 billion in 2019-20 to $7.0 billion in 2020-21 – as a stimulator of employment in projects that will include the twinning of Highway 40 in the gas fields between Grande Prairie and Grand Cache and expansion of the Peter Lougheed Hospital in Calgary.

Ric Dolphin is the Alberta Political Editor of the Western Standard. He has had a long career in journalism with Maclean’s, the Globe and Mail, Edmonton Journal, Calgary Herald, Alberta Report, and the original Western Standard. He was previously Publisher and Chief Editor of Insight into Government. 
rdolphin@westernstandardonline.com

Ric Dolphin is the Alberta Political Editor of the Western Standard. He has had a long career in journalism with Maclean’s, the Globe and Mail, Edmonton Journal, Calgary Herald, Alberta Report, and the original Western Standard. He was previously Publisher and Chief Editor of Insight into Government. rdolphin@westernstandardonline.com

Features

ANALYSIS: Saskatchewan Party’s strengths & weaknesses

The Western Standard breaks down the strengths, weaknesses, opportunities, and threats facing the Saskatchewan Party.

mm

Published

on

Saskatchewan is headed to the polls October 26, 2020. In the first in a series, our Saskatchewan correspondent Lee Harding will examine the strengths, weaknesses, opportunities, and threats each party faces in this election campaign. Our first in the series looks at the Saskatchewan Party which has governed Saskatchewan for the last 13 years.

Background:

The Saskatchewan Party was formed in 1997 when four Progressive Conservative and four Liberal MLAs left their respective parties to form a new entity. Two elections by with former Reform MP Elwin Hermanson at the helm failed bring the party to government. Brad Wall won majority governments in 2007, 2011, and 2016 before handing over the reins to Scott Moe in January of 2018.

Strengths:

The Sask Party has overwhelming reasons to win. The party has enjoyed over 50 per cent support in opinion polls since July of 2018. The high rate of population growth since 2007 continued until the pandemic hit. The province of 1.18 million people has had just 1900 cases and 24 deaths from COVID-19, despite restrictions that were less onerous than most provinces. The provincial deficit of $2.1 billion is perhaps forgivable, given the circumstances, which include a government in Ottawa that remains largely hostile to the oil and gas sector. 

Scott Moe is no slouch. Although this will be his first election as Sask Party leader, the 46-year-old has more experience and savvy than his counterparts in other parties. He won his riding of Rosthern-Shelbrook quite handily in 2011 and 2016 and has held various cabinet posts. In 2018, he beat out five other competitors in a fiercely-contested party leadership battle. And, for the past year, he has chaired the Council of the Federation meeting with his fellow premiers. Polling by Angus Reid showed that 59 per cent of Saskatchewan residents approved of his performance, placing him fifth nationally.

The Sask Party team remains intact even though seven incumbent MLAs are not seeking re-election. Columnist Murray Mandryk noted the party’s “solid cabinet base” of veterans with governing experience.

Weaknesses:

“I’m not Brad,” Moe told the Leader-Post in a recent interview, to which the NDP said, “we strongly agree.” An NDP press release also noted Moe’s comment that “Boring might be just not too bad,” and that his vision for the future was “managing events that we’ve been presented with.” 

An urban female university graduate is the only demographic coin flip in the province. An August 31 EKOS Politics pollshowed the Sask Party had its smallest margins of preference over the NDP with university-aged voters (9 percent) and those in Regina (12 percent) and Saskatoon (13 percent). The margin was also smaller for women (23 points) than men (42). 

Cracks in the Sask Party armour began to appear before Wall left, and some have emerged since.

In 2017, longtime MLA Bill Boyd was flagged by the Conflict of Interest Commissioner over land dealings related to the Global Transportation Hub, Regina’s inland train terminal. The NDP actually led in two public opinion polls over the matter.

In 2019, Moe reached an agreement with the federal government to shut down most coal-fired power plants by 2030, an unpopular move in Sask Party ridings where jobs will be lost.

In May, the Moe government closed 12 rural emergency wards as a contingency measure for COVID-19 and even built field hospitals in June in what seemed a misguided effort to many.

Moe had a mini-WE scandal of his own. The premier has known the Kielbergers for years and took his wife to visit the Kenya compound last winter, all at his own expense. The province cancelled a $260,000 contract that would have put a WE Charity initiative in schools.

Opportunities

This is Moe’s chance to fully emerge from Brad Wall’s shadow and put his fingerprints on the direction of the party. His main opponent is Saskatoon MLA Ryan Meili, a doctor who was elected for the first time in a 2018 by-election. None of the remaining parties have a leader who has ever been elected or led their party into an election. Four NDP incumbents are retiring; three of them in Saskatoon and Warren McCall in Regina, making it a little easier for a Sask Party contender to steal a seat.

Threats

The Sask Party will face more opposition from the right than it has in any election since 1999. The Progressive Conservatives have tried to rejuvenate under new leader in Ken Grey. The Buffalo Party has also emerged to capture the post-Trudeau Wexit sentiment. These parties could play spoiler in a few ridings, or keep Moe on his toes from an angle not represented in years.

Conclusion

A majority government of at least 46 seats seems certain for Moe. Anything less than a majority government would be enough to trigger a leadership review. However, unless the premier makes a major mistake, that is unlikely to happen.

Lee Harding is the Saskatchewan Correspondent for the Western Standard

Continue Reading

Features

Unconditional: The Japanese Surrender in World War II

Clayton Trutor reviews “Unconditional”, dealing with the American/Allied politics in how to deal with Japan after the war.

mm

Published

on

Book Review:
Oxford University Press. 288 pages. $27.95.
Marc Gallachio

As the Allied Powers approached victory in World War II, the foremost questions on their leaders’ minds centered on the particulars of the postwar settlement. These questions included the nature of surrender by the Axis powers, how would governments in these countries be constructed, and who would oversee their creation. This litany of concerns persisted well after the conclusion of hostilities. It was a source of intrigue both on the international front as well as inside the beltway in Washington. In Unconditional, Marc Gallachio describes in detail the intense debates within Washington’s corridors of power on how the United States ought to end its war with Japan. 

Unconditional is a particularly timely account, published to coincide with the 75th anniversary of the end of World War II—the response to this milestone anniversary has been decidedly muted in both the United States and Canada. It is also timely considering the shifting winds of foreign policy in Washington. The traditions of liberal internationalism (as embodied in this book by Truman and his allies) and conservative anti-interventionism (as embodied by his political opponents) have once again become the standard positions of the Democratic and Republican Parties, respectively. Gallachio, quite clearly, aligns himself with the interventionist tradition of Woodrow Wilson, which, at least until Election Day, will be the consensus view of foreign affairs among American progressives.  

Gallachio focuses on the final two years of the war in the Pacific, tracing a path from Franklin Delano Roosevelt’s promise at the January 1943 Casablanca Conference to bring about the unconditional surrender of the Axis Powers to Japan’s final surrender on the decks of the USS Missouri on September 2, 1945.  In this briskly-paced narrative, the author delves both into the debates within the White House as well as those on the editorial pages of the nation’s newspapers.  

Conservatives within Truman’s administration, in Congress, and in the American press corps discouraged the new president from occupying Japan, removing the Emperor from power, or dismantling his Empire. In Truman’s cabinet, Secretary of State Henry L. Stimson, a veteran of several Republican administrations, argued that the preservation of the emperor and a semblance of empire would serve as a stabilizing force in Japanese society. Moreover, he argued that the acceptance of a conditional surrender would enable the remains of the Japanese Empire to serve America’s interests as a counter to the Soviet Union’s suddenly aggressive pursuit of territory in the far-east.       

New Dealers within the administration helped shape Truman’s approach to winning the peace with Japan. Then-assistant Secretary of State Dean Acheson and U.S. Army Chief of Staff George Marshall persuaded Truman to push for an unconditional Japanese surrender, which would serve as the starting point for full-on nation-building in the former empire. The author is clearly sympathetic to Truman’s decision. While empathizing with the gravity of the new president’s decisions to drop the atomic bombs, Gallachio endorses Truman’s choice to seek unconditional surrender, which kickstarted a process that remade Japan into a democratic county and durable American ally. Gallachio has little time for historians of the anti-interventionist left which arose in response to the Vietnam War, particularly those who have in retrospect called into question the wisdom of Truman’s approach to finishing off Japan. He even calls out Oliver Stone for having the gall in The Untold History of the United States (2012) to invoke Herbert Hoover’s assertion in May 1945 that Japan was ready to negotiate a settlement to the war, dismissing the former president as a mere “Roosevelt hater.” 

Gallachio, who won the prestigious Bancroft History Prize in 2018 for co-authoring Implacable Foes: War in the Pacific, 1944-1945, is the perfect author for this account of the defeat of the Japanese Empire and its aftermath. He navigates the web of military and diplomatic maneuvering in this densely-packed historical moment with great know-how. Gallachio has a genuine knack for turning the secrets of the archives into a story.  

Unconditional also offers a window into the making of Canada’s postwar foreign policy.  Canada’s own nation-building, peacekeeping, and internationalist impulses are in large part a product of the historical moment described in Gallachio’s book. The decisions by the Liberal governments of Mackenzie King and Louis St. Laurent to ally strongly with the United States and play an active role in global affairs reflects their shared vision with Truman and his allies. Through active participation in pro-democracy international institutions, both America and Canada’s leadership class sought to bring to stability to the emerging Cold War world. It also makes more striking in retrospect the nerve shown by the subsequent Diefenbaker government in asserting Canadian sovereignty and independence from the United States in its foreign relations.

Clayton Trutor holds a PhD in US History from Boston College and teaches at Norwich University in Northfield, Vermont. He’d love to hear from you on Twitter: @ClaytonTrutor

Continue Reading

Features

Cabinet Sizes: Which provinces & parties have the biggest?

Germany has a cabinet the size of Manitoba’s, and the United States’ is smaller than those in Ontario, Quebec, B.C., and Alberta.

mm

Published

on

When it comes to cabinet size, biggest doesn’t always equal better. Truth be told, it appears to have little to do with public policy outcomes, and mostly to do with pure politics.

The Western Standard has compiled the cabinet sizes of all 10 Canadian provinces, the current Trudeau federal government, the previous Harper and Martin governments, and several other comparable countries.

The smallest cabinet in Canada – by several orders of magnitude – is Prince Edward Island. With Just 157,000 residents, it shouldn’t come as a shock that Islanders have fewer cabinet members than the City of Calgary has councillors: just 10. Because PEI’s population makes it such an outlier, we have excluded it from the provincial averages when comparing across Canada. This isn’t a dig at our green-gabled friends, but a compliment.

Small government ≠ small cabinets

First off, lets disabuse ourselves of any notation that “Conservative” governments – ostensibly believing in small government – practice small cabinets. Quite the opposite in fact.

The average provincial cabinet in Canada (less PEI) has 21 members sitting in it, driven by the two largest provinces, Ontario (28) and Quebec (27). This puts “conservative” governments exactly on the average, at 21, or 22 if we include the ill-defined Coalition Avenir Québec (CAQ).

Liberals by contrast, have markedly smaller cabinets at 16 member. However this is due in large part to the only two nominally “Liberal” governments in Canada residing in relatively small Nova Scotia and Newfoundland (and Labrador).

Technically, the NDP score the largest average cabinet size at 24. But with just one provincial government, and located in populous BC, this is a difficult indicator to use as any kind of broad trend.

And again, technically the Conservatives have both the largest cabinet in Ontario (28), and the smallest in Prince Edward Island (10).

A more useful comparison than among parties is among regions and comparable populations.

Among the four largest provinces, cabinets average 26 members, putting Alberta and B.C. slightly below Ontario and Quebec. By that comparison, the “conservative” large provinces (including Quebec’s CAQ), score at the top, while the B.C.’s NDP comes in below at 24.

Among the mid-sized provinces (everything smaller than Alberta and larger than PEI), the cabinets average 17 members. In this club, Saskatchewan, New Brunswick, and Nova Scotia all come in above, while Newfoundland is the outlier at just 14.

Federal cabinets

Conservatives also tend to score large cabinet numbers at the federal level as well, compared across administrations.

Justin Trudeau’s federal cabinet has a massive 36 members. What they all do, is anybody’s guess. But while Conservatives regularly define the Trudeau government as bloated, the last Harper cabinet totalled an eye-watering 39 members. While it was short-lived, Paul Martin’s final cabinet was – by Canadian standards – a trim 26 bodies.

But this is less about party, and more about a strange Canadian tradition. Canada’s cabinets – regardless of party – are traditionally out of all proportion compared internationally.

Cabinet size across countries (source: Western Standard, Derek Fildebrandt)

U.S. President Donald Trump manages his country – with 10 times Canada’s population – with just 21 cabinet members. Put another way, The United States of America functions with a smaller cabinet than Ontario, Quebec, British Columbia, and Alberta.

U.S. Presidents – unlike Canadian prime ministers and premiers- cannot simply conjure up new ministerial portfolios on a whim. New cabinet departments in the U.S. require the express consent of both houses of Congress, and so are much more stable in their number. Additionally, U.S. cabinet members are not drawn from the House of Representatives, and so there is less of a need to pay debts, placate factions, or satisfy troublemakers.

But even when compared with other similar parliamentary systems, Canada’s cabinets are bloated. The U.K. – with a population twice Canada’s – has a cabinet of 22 (or 26 depending on how it is counted). Germany – with two and a half times Canada’s population – has just 16 members of the cabinet. In Germany’s case, their government is made up of a grand coalition of three parties (centrists, moderate socialists, and Bavarian conservatives), which would create the political conditions for a larger cabinet to keep all sides happy. Even with such a larger population, a coalition government, and a parliamentary system, it’s cabinet is less than half that of Canada’s. Put another way, the most powerful nation in Europe makes do with a cabinet the size of Manitoba’s.

Bringing it back

The most remarkable conclusion to be gleaned from comparing Canada’s federal and provincial cabinets is their incredible size when compared with others outside of Canada. This goes back to the very foundations of confederation as Sir John A. MacDonald built his first cabinet.

When criticized for the weak composition of his front bench, he famously quipped, “Give me better wood, and I will make you a better cabinet.”

But MacDonald likely didn’t mean this. His cabinet – and all since – have had political necessity – not competence – as their primary determinant. In the political patchwork that was the early Dominion, MacDonald built his cabinet almost entirely based on ethnic, religious, and geographic considerations. A few spots for Upper Canada loyalist WASPs. A few spots for French Catholics. A little English-Catholic here, and little Irish-Catholic there. And don’t forget the regional kingpins.

Cabinet’s in Canada may look different today, but they are built the same way. Despite having a clear male-majority Liberal Caucus after being elected in 2015, Justin Trudeau appointed half of his cabinet to be women. When asked why, he did not say it was because the women in his caucus were proportionately more competent than his men. He said only, “Because it’s 2015.”

Liberals might read this as meaning that because it’s 2015, women should have equal representation as men. Conservatives mostly read into it that it was because the prime minister is an avowed feminist. More historically attuned critics would see it as the natural evolution of Canada’s hyper-demography focused cabinets.

Progressives regularly argue that Canada’s parliament should be a near-perfect demographic representation of Canada at-larger. That is, 50 per cent women, X per cent of Religion A, Y per cent of Race B. Ect.

While parties of all stripes manipulate nominations to achieve some level of artificial diversity, ultimately voters decide who goes to parliament, at least outside of safe seats. This leaves it to party leaders to fashion the demographically representative focus groups that we call cabinets.

The growing diversity of Canada has required prime ministers and premiers to concoct an ever greater list of ministerial portfolios to meet the demand of demographic mirroring. This often happens by splitting large ministries with clear mandates into much smaller ministries, often with little real power.

The political necessity of demographic mirroring also exists in the U.S., U.K., Germany, and most of the democratic world, but Canadian leaders make it an obsession.

In Alberta’s case, the social policy ministries could easily be folded into a single role. Instead, we have ministers for: Community and Social Services, Seniors and Housing, Children’s Services, Indigenous Relations, Culture, Multiculturalism & Status of Women, Mental Health & Addictions.

Less extreme, but still relevant, is the Minister of Natural Gas, despite already having a Minister of Energy, or the positions of Red Tape Reduction, Jobs, Economy and Innovation, when there is already a Minister of Finance.

The list is even longer at the federal level, but you probably get the point.

In short, cabinets in Ottawa and in the provinces have little to do with party, a bit to do with population, nothing to do with parliamentary system, and everything to do with the political necessity of demographic mirroring.

Derek Fildebrandt is Publisher of the Western Standard and President of Wildrose Media Corp. dfildebrandt@westernstandardonline.com

Continue Reading

Sign up for the Western Standard Newsletter

Free news and updates
* = required field

Trending

Copyright © Western Standard owned by Wildrose Media Corp.