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Trevor Tombe: Provincial finances are in worse shape than the PBO suggests

Commentary

Wab Kinew, Premier of Manitoba, speaks during a press conference at the meeting of the Council of the Federation in Halifax, Nov. 6, 2023. Kelly Clark/The Canadian Press.

British Columbia faces a pivotal moment in its upcoming election. Despite being among the wealthiest provinces, it is grappling with a rapidly rising deficit this year and even larger long-term challenges. Amidst concerns over health care, affordability, and economic growth, the next government (whoever that ends up being) will inherit a more precarious financial landscape than many realize.

But B.C.’s challenges—and the lack of public awareness—are not unique.

Across the country, many overlook the mounting fiscal pressures facing their provinces, focusing more on federal finances instead.

Even recent analysis suggests concern may not be warranted. The Parliamentary Budget Office (PBO), for example, often assesses government sustainability, and its latest report released last month offers reassurance: Canada is in decent shape. Public pensions are secure, and the federal government has fiscal room, with Ottawa able to spend more or cut taxes while stabilizing debt over the very long run.

Their analysis concludes that, overall, provinces are sustainable. While some face more significant challenges than others (they rightly find B.C. has the biggest challenge), the PBO still suggests a stable fiscal picture.

But this is an overly optimistic view, and Canadians shouldn’t rest so easy.

My analysis suggests a far more dire picture for the fiscal future of our provincial governments, especially British Columbia but also for nearly all provinces.

Without changes in how we manage public services—particularly health care—and how we structure our taxes, provinces may find themselves on an unsustainable fiscal path.

Trevor Tombe is a professor of economics at the University of Calgary and a research fellow at The School of Public Policy.

Brad Tennant: It’s time for Alberta’s conservatives to move on from Ralph Klein’s one bad legacy

Commentary

Alberta Premier Ralph Klein speaks to the media in Calgary, in this Sept. 20, 2006 photo. Jeff McIntosh/The Canadian Press.

Conservatives in Alberta may have it easier than politicos in other provinces. The province consistently elects 90 percent conservative MPs even in challenging elections, and it has elected a provincial conservative party in every election except one in the last half-century.

However, in the last couple of decades, Alberta’s conservatives have become adept at shooting themselves in the foot. This has been evident for years, and if we want to trace the origins of these issues, we need to look no further than the ouster of “King Ralph” and the legacy this rash act left behind.

Ralph Klein’s leadership is a benchmark of conservative governance in Canada. As premier of Alberta from 1992 to 2006, Klein transformed the province with his tough, fiscally responsible policies. He inherited a province drowning in debt and, through decisive spending cuts and privatization, led Alberta to become the first debt-free province in Canada.

Ralph restored the “Alberta Advantage,” but he is remembered for his leadership style just as much as his policy successes. His no-nonsense approach to reducing government size and his commitment to the free market spurred economic growth, particularly in the oil and gas sector, making Alberta a powerhouse of the Canadian economy.

He was a man of the people, known for his plain talk and ability to connect with everyday Albertans, which solidified his popularity. Klein’s legacy is one of economic prudence, reduced government interference, and a belief in individual responsibility—values that still resonate deeply within the province.

His tenure is a reminder of what strong conservative leadership can achieve—but that tenure did not end the right way. How he was forced out of office has left a wake of dysfunction in this province for nearly two decades.

To put it bluntly, Klein was stabbed in the back by a minority of members in his own party. In his 2006 leadership review, he won the support of the majority of delegates, but the number was disappointing at 55.4 percent. This may have been a win, but it was hardly the overwhelming cascade of favour he had expected. Humbled, Klein announced he would step down.

Klein had entered his 2006 party leadership review expecting to receive a much stronger mandate of support. And for good reason. He had brought the PC Party back from the brink of defeat, turning it into one of the strongest provincial political parties in the country. He won four straight majority governments and simply wanted to see his last mandate through before leaving the party for a new leader thereafter. This mirrored the political paths of Peter Lougheed in the 1980s and Mike Harris in Ontario in 2000.

Party insiders, however, had a different idea.

The duplicity of the minority that brought Klein down was apparent throughout that consequential weekend. Take the night following the leadership review vote, when guest speaker Danny Williams, then-premier of Newfoundland, said that if he had accomplished a fraction of what Klein had, he would expect the support of his own party members. The room erupted into a standing ovation. It was clear that those in the room willing to stab Klein in the back didn’t have the fortitude to say it openly.

I was there that day, and I have to say it likely set the path for the next couple of decades for me. It was the first provincial AGM I had attended. I was proud to support Klein, someone I, like many Albertans, grew up admiring. But this was also an introduction to much of the nonsense that happens in politics. I was young and idealistic and I hated the duplicity and back-room shadow-dealing by people unwilling to publicly stand by their actions. I would spend much of the next decade fighting in a conservative civil war that developed in the province, trying to battle the culture I saw on display that day.

The end result of that leadership vote? Alberta’s greatest premier resigned early and called for a PC leadership race to elect a new premier.  These events have haunted Alberta’s conservatives ever since.

Both the PC Party and the Wildrose Party were engulfed in different phases of chaos in the decade that followed. Both parties became publicly defined by infighting, and by 2015, the unthinkable happened: Alberta elected an NDP government.

Thanks to the unifying work of Jason Kenney in bringing the Wildrose and PC Party together under the banner of the United Conservative Party (UCP), as well as the terrible policies of the NDP government that shot that party’s popularity down, Rachel Notley was a one-and-done premier, having been overwhelmingly defeated in 2019.

Kenney’s own ouster amidst COVID-era discontent has led to Danielle Smith’s tenure as premier, and she will also face yet another leadership review in the months ahead. This process Albertan premiers go through remains unique to political leaders in this country who win a majority government. While it has its merits and certainly keeps a leader focused on their party, the public desire to see the leader win not just a majority but a massive majority in these votes is out of touch with new realities and what is best for the conservative movement as a whole. More often than not, these are counterproductive exercises in score-settling, not genuine accountability.

This is particularly a problem given the existence of third-party groups that look to create dissent within conservative ranks, and who are not looking for a victory as much as looking to vote against the leader so that they get a less-than-ideal approval rating at the AGM and their leadership is handicapped as a result. This danger is especially fraught given the potential intervention from those on the political Left who are unlikely to ever support conservatives in a general election.

In 2011, Alberta saw so-called “two-minute Tories” help decide a leadership race. At the birth of the UCP, the Alberta Teachers Association and other NDP-friendly groups bought memberships to try to undermine the UCP and what party members would want.

To counteract this, one change would be to extend how long an individual must be a UCP member before they can vote in a leadership review. Currently, anyone can buy a membership and vote out the leader after just 21 days, even if they’ve never truly supported the UCP.

Only UCP members who joined the party prior to or during the previous election should be eligible to vote in a leadership review. This stipulation would only exist for leadership reviews, and not for nominations or party leadership races.

There are already allegations that third-party groups are trying to recruit and pay leftists to vote in the upcoming UCP leadership review in Red Deer to oust Smith. Whether this is true or not, it’s a very real possibility and goes against the spirit of the entire exercise. As the UCP moves forward as one of the country’s largest political parties, it would be wise to implement firmer rules on who can participate in these crucial decisions, rewarding dedicated members and protecting the integrity of the party.

Fundamentally, though, what Smith and future UCP leaders must do is stop letting losers win the day. If a majority of eligible, committed members call for a leadership review, there should be a leadership review. If they say it is unnecessary, then there shouldn’t be one.

Even more importantly, we should get over the idealistic sense that the leader must have an overwhelming amount of support like they did at conventions past. That idea remains too idealistic for the coalitional UCP and today’s more fractured movement.

Alberta’s conservatives must decide if we want to let the minority agitators and their unpopular agendas continue to dictate to the majority within our party.

We did not benefit from 55 percent being too low of a bar for Klein to continue on. He should have been allowed to go out on his own terms. Instead, he stepped aside. Setting the expectation as such has only hurt conservatives and their subsequent leaders since. It is the only bad legacy he left.

Unless UCP members vote to change the need for a leadership review altogether, which itself would require a 75 percent majority in order to effect such a constitutional change, provincial conservatives will continue to see incessant leadership reviews. But until that happens, as a party we should lose the expectation that a leader must receive an overwhelming majority in such a vote in order to continue on.

Fifty percent-plus-one is the only number that should really matter. A win is a win. We must stop rewarding those on the losing side of these votes. We must stop handicapping our own success, and we must allow our leaders to get on with delivering real results.

Brad Tennant

Brad Tennant is a long-time political activist in Alberta and previously served as the executive director of the United Conservative Party. He is currently a vice president with Wellington Advocacy.

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