UCP leadership

Brian Jean’s economic policy points in all the wrong directions

Contender for leadership of Alberta's 'united right' campaigns for austerity
Photo: Sergei ~ 5of7

Now that Alberta’s opposition parties have officially merged into the United Conservative Party, the time has come for the party to elect a leader.

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The first declared candidate was Brian Jean, the leader of the now-defunct Wildrose Party, and he didn’t waste any time before making policy proposals. They include cuts to public services, introduction of a child tax credit, weakening workers’ rights, reversing policies aimed at addressing climate change, cutting as many taxes as possible, and balancing the provincial budget in three years.

Let’s examine how these proposed policies would affect the lives of Albertans.

Cutting public services

Jean’s plan to cut $2.6 billion in government spending comes from the Wildrose Party’s 2017 budget recommendations. They include a recommendation to eliminate all programs and projects funded by carbon tax revenues, such as the Green Line transit project in Calgary, various energy efficiency initiatives, the development of large-scale renewable energy, and support for Indigenous communities transitioning to a cleaner economy.

The spending cut would also include eliminating jobs in the public service by not filling positions as workers retire. The plan is a familiar one to those who have been around the public service for a while: “do more with less.” It is laid out in all of three sentences in the Wildrose plan and in a single bullet point in Jean’s policy document, so no one knows which positions are viewed as unnecessary or how public services would be affected. Beyond vague rhetoric that there are “too many managers,” there is little rationale for such cuts, and as Alberta blogger David Climenhaga points out, many of these managers are actually front-line workers.

Jean also proposes to reduce spending by privatizing laundry services in the healthcare system. Privatization plans like this rely on paying workers lower wages and providing fewer benefits, while allowing a private corporation to own the facility and equipment (which means they are no longer assets of the province, thereby increasing the province’s net debt) while keeping a significant amount of public money to pay out to their shareholders.

Introducing a child tax credit

The details of Jean’s proposed child tax credit are unclear but likely resemble a Wildrose proposal from 2012 that would reduce the amount of tax paid by parents irrespective of their incomes. The timing is interesting, given that the NDP government introduced the Alberta Child Benefit, which gives ongoing financial assistance to low-income families with children, in 2015. The idea also hearkens back to the Harper government’s Universal Child Care Benefit, which was used as an excuse not to implement a national child care system. If Jean’s proposal serves a similar purpose, then it is the wrong policy for a province that desperately needs a universal child care system.

Weakening workers’ rights

Current rules on unionization require a vote by secret ballot when less than 65% of workers have signed cards expressing their desire to unionize, but Jean proposes to make this a requirement in all cases. Not only would such a vote be redundant (some might even characterize it as “red tape,” something which Jean allegedly wants to reduce) the secret vote only happens after what is often called the “employer’s intimidation period,” during which the employer gets a chance to discourage or scare workers away from unionizing.

Jean also aims to capitalize on the NDP government’s poor communication and consultation efforts when it brought Alberta up to the national standard in workplace protection for farm workers. He proposes to repeal the new measures and to do “proper consultations” with employers on how to best improve “workers’ safety”. Jean doesn’t mention any specific problem with the current policy and bizarrely makes no pledge to consult with farm workers themselves on what protections they need.

Reversing policies aimed at addressing climate change

Jean’s plan also includes eliminating the province’s carbon tax and removing the cap on oilsands emissions. Both policies are supported by large oil corporations, but that support is cursory at best, as they certainly won’t complain about having free reign to pollute at will. The emissions cap is largely symbolic at this point anyway, with the cap not expected to be reached until at least 2026.

If Jean were to eliminate these policies, it’s unclear what, if anything, he would do to combat climate change.His former party was consistentlyridiculed for not believing in the science of climate change. They’ve now merged with the Progressive Conservative party, which didn’t have a reputation for climate change denial, but they were notorious for not doing anything about it. Jean appears to be taking the latter party’s approach (i.e. climate change is real but not important enough to act on).

Cutting as many taxes as possible

While it’s hardly surprising that a conservative wants to cut taxes, the timing of Jean’s proposal is odd. Alberta currently has a $10.3 billion deficit, and while Jean’s proposed $2.6 billion in cuts to public services would help alleviate that, now seems like the worst possible time to further reduce the province’s overall revenue.

Jean proposes cuts to personal income tax, corporate tax, and small business tax. He also promises not to implement a sales tax. In a nutshell, this is a promise to not raise new revenue from any major tax source but instead to reduce revenue from each of them.

Jean’s plan includes no costing, but government budget documents show how much these tax cuts would cost. The cuts to personal and corporate income taxes would each cost approximately $500 million per year, and the small business tax cut would cost $200 million per year, totalling $1.2 billion annually in reduced tax revenues.

Balancing the budget in three years

In sum, Jean plans to make $2.6 billion in cuts to public services but will reduce government revenues by $1.2 billion, for a net reduction of $1.4 billion to a $10.3 billion deficit. Given his policy’s implication that no new tax revenue will be raised, how does he plan to achieve the other $8.9 billion in savings needed to balance the budget in three years?

The only other proposal to cut costs in Jean’s policy document is to implement a hiring and salary freeze in the public service. Like his proposal for immediate spending cuts, he does not mention what effect the freezes would have on public services (not to mention how he would avoid labour strife). As Alberta’s population continues to grow, a staffing freeze necessarily entails a reduction in per-capita public services.

Jean’s plan to achieve a balanced budget in three years relies on appointing a fiscal reform commission with a mandate to recommend further cuts. This commission would need to find more than $8 billion in additional savings, which is the approximate cost of Alberta’s entire K-12 education system. This isn’t a promise to tweak a few things around the edges. It would involve things like demolishing hospitals and having high school students learn at their home computers instead of in classrooms. If he really wants to propose this direction to Albertans, he needs to be honest about what this new reality would look like.

The real problem

What Jean will not tell you is that Alberta’s tax system is actually already bad at raising revenue. Applying any other province’s tax system to Alberta would raise between $8.7 billion and $22.4 billion in additional revenue each year. Any credible fiscal plan needs to include how that gap should be closed.

Anyone who says they will balance the budget without raising significantly more tax revenue, let alone proposing we raise less revenue, either has a plan to dismantle public health care and education or simply isn’t being honest with Albertans.

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