Now that we’ve all had time to shake off the morning-after stupor following the upset win for the New Democratic Party (NDP) in Alberta’s recent election, let’s take a hard look at what’s ahead for the province.
Ultimately, it will be up to Rachel Notley, the new premier, to decide whether the province descends into “a socialist bog,” as Kevin O’Leary has warned us, or whether Alberta becomes one of the NDP’s provincial success stories, such as Manitoba under the premiership of Gary Doer.
Notley and her organizers know there has been a distinct pattern among provinces that have handed victories to the NDP. There are the recent success stories, such as Doer’s Manitoba, and further back, Saskatchewan under Roy Romanow and Allan Blakeney.
But there also have been NDP one-term wonders: think of the governments of Bob Rae in Ontario, Dave Barrett in British Columbia and Darrell Dexter in Nova Scotia.
The successful NDP governments have leaned left on social issues but hard right on fiscal policies. The governments of Doer, who left office after a decade of balanced budgets to become Canada’s ambassador in Washington, will always be remembered as the provincial success formula for the NDP.
If the party elders aren’t able to make this point with the new premier – and they likely have already had the discussion – Notley will be mindful of the other success story of election night: Brian Jean and the Wildrose Party.
Normally, much more attention would be devoted to the former backbench federal Tory who was able to patch together a viable party after the mass defection led by Danielle Smith and form Alberta’s Official Opposition, with 21 seats. Jean’s success is all the more remarkable considering he had just lost a son. We will be hearing more about Jean.
Notley won 53 seats with 40.6% of the popular vote, while the Progressive Conservatives (PCs) under Jim Prentice came second in the popular vote at 27.8%. Wildrose won 24.2%. The PCs only got 10 seats – less than half of Wildrose, thanks to a split vote on the right. It was really a divided right wing that put Notley in power, not a changed Alberta political culture.
Just as Alberta has a history of political dynasties, rather than one- or two-term governments, it also has a history of disappearing dynasties. The Alberta Liberals were first with a dynasty. Then came the United Farmers. Then Social Credit. And then the PCs in 1971 led by Peter Lougheed.
The Alberta Liberals have been on life support for years. The others are long gone and it is a good bet the PCs could be gone, too. Notley will have to worry about a united right and really has little political capital. Expect a cautious, conservative NDP regime.
Of her eight policy priorities, expect that Notley will start with a ban on political donations by unions and corporations almost immediately. The Wildrose leader supports this, making it an easy deliverable for the NDP’s honeymoon period.
Expect the Notley government to proceed with hiking corporate income taxes by two percentage points to 12%. Most new governments would, given the unpopularity of the personal tax increases in the Prentice budget.
Next, the NDP will begin replacing the flat tax on personal income with progressive taxation. Again, any government would, because the Alberta tax model, with its emphasis on resources royalties and artificially-low personal taxes, is busted. Albertans were living large on resources royalties for far too long, until oil prices collapsed. When Jim Prentice told Albertans to look in the mirror, he was telling the truth – politically stupid as that may have been.
The end of the Alberta tax model has federal implications. The Harper government had been trying to follow a variation of this model, even assuming an oil price of $94 a barrel, as of last October.
If the federal Tories survive the Oct. 19 federal election, they likely will have to raise the GST, back to 7%, because the government can’t continue using Employment Insurance as a slush fund.
As for other Notley priorities, she is unlikely to succeed with rolling back cuts to health and education. However, she will probably have more luck with promises to mend bridges with First Nations, boosting renewable resources and a $15 minimum wage by 2018. These are the easy deliverables for the party faithful.
That leaves the eighth election promise – reviewing the royalty regime for oil and gas. This would have to be done early in the mandate, if at all. The NDP doesn’t have the political capital, honeymoon or no honeymoon. Most governments deliver 70% of their election promises. Delivering six of the eight priorities would be very respectable.
Gord McIntosh has been covering national politics for 30 years. He is Investment Executive‘s Ottawa columnist.
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