Alberta: Tories kicked out after 44 years

The people of Alberta have delivered a stunning result in legislative assembly elections, upsetting the landscape of Canada. There were headlines in the US about ‘Canada’s Texas electing a socialist government’. The Progressive Conservatives were kicked out of office after 44 years – falling from 61 seats in 2012 to just ten – and the New Democratic Party (NDP) won a majority. The NDP won 41% of the vote and 54 out of 87 seats, sweeping every city with over 50,000 people. It also won eleven rural and semi-rural seats.

Almost all the seats for the second place Wildrose party (with 21, up four) are in rural areas, while the Conservatives are mainly on the edges of the province’s largest city, Calgary. Alberta, the centre of Canada’s oil and gas industry, and home to the tar sands, is reeling from the collapse in oil and gas prices. Most of past job growth was based on the oil industry – often dirty and dangerous jobs in the tar sands. The province’s finances face an $8 billion deficit. The economy is falling into recession and unemployment is climbing.

The Conservatives announced a crisis austerity budget in March and then called a snap election for 5 May hoping to win before the cuts hit home. Their proposed budget had 59 increases in taxes and fees for working people, a modest increase in taxes for those with an income of over $100,000 a year, cuts to health, education and other services, and no tax increase on corporations. At 10%, corporation taxes in Alberta are the lowest in Canada and in a pre-budget government survey, the most popular response (70%) was for increasing tax on corporations.

Conservative governments have always been close to the oil and gas industry. Revenue from the energy sector ($9-12bn a year) provided around 25% of the provincial government’s income. This allowed it to have one of the lowest tax levels for both people and companies, and no sales tax. Spending on public services per person was around the Canadian average. The Tories, led by Alison Redford, had won the 2012 election by campaigning to the ‘left’ against the right-wing populist Wildrose party, gaining votes from the NDP and Liberals. However, hostility within her own party and a series of scandals forced her resignation in 2014.

Jim Prentice, an ideological Conservative, who had been in prime minister Stephen Harper’s federal cabinet for eight years, became leader in 2014. After resigning as a federal MP in 2010 he became a senior executive with CIBC, one of the big five Canadian banks, and worked with Enbridge, the company seeking to build a widely opposed tar-sands pipeline to the west coast. Compared to Redford, Prentice’s leadership moved the Alberta Tories more in line with Harper’s neoliberal, pro-big oil agenda. He convinced eleven of the 16 Wildrose MLAs (Members of the Legislative Assembly), including the party’s leader, to join the Tories. While this increased their majority, to most Albertans it was seen as opportunist and politically dishonest.

Prentice’s favouring of big business and the oil and gas industry, in response to the fall in energy prices, was out of touch with the mood in the province. Albertans were hurting from the drop in oil prices and angry at the government. The overwhelming majority, 86%, thought the province’s economy was too dependent on oil and gas, and 71% thought the oil and gas companies do not pay enough in royalties to the province. The provincial Tories had squandered much of the past oil and gas revenue with only $17 billion set aside in the Heritage Fund. Prentice was seen as arrogant, a view reinforced by him telling Albertans to "look in the mirror" to see the cause of the province’s problems.

The right-wing vote was split between two parties: Wildrose in disarray after defections, and the Conservatives, led by the arrogant Prentice. This helped the NDP but the key to its victory was its election platform. This generated enthusiasm, with many young people working in the election campaign and the highest voter turnout in 20 years. The NDP, Canada’s left-leaning party with roots in social democracy, put forward a radical platform which put the needs of Alberta’s working people above the energy corporations. It promised to raise the minimum wage to $15 an hour by 2018, increase taxes on the rich and corporations, reverse the cuts to public services and not implement many taxes and fees, including the planned introduction of monthly health premiums.

During the campaign, the Tories and Wildrose attacked the NDP’s commitment to raise corporation taxes to 12% claiming it would destroy jobs. At 12%, they would still be lower than in most of Canada. Most companies are in Alberta for the resources – which cannot be moved. Furthermore, US investment, which is a significant factor in Alberta, would not feel any impact. This is due to the ‘treasury transfer effect’, whereby the US government taxes all US foreign profits at 35% (minus taxes paid in the host country). The proposed 2% increase in Alberta’s tax rate, therefore, means a slightly smaller tax income for the US government – more of the revenue staying in Canada is the only change.

The NDP claims it will tackle the dependency on fossil fuels with promises to diversify the economy and refine the tar-sands bitumen in Alberta. It has proposed an increase in the production of renewable energy and a boost to energy efficiency. It also stated it would review the royalties the oil and gas companies pay, which has wide public support as they are currently some of the lowest in the world. The Alberta NDP has never formed the government. This means that people are more hopeful than in the provinces which have seen past NDP failures.

This result adds to the problems for Harper, who faces a general election later this year. Alberta is his home province, and the original power base of his right-wing ideology. Already Harper’s economic strategy, based on fossil fuel exports, is in disarray (See: Canada’s ‘Carbo-state’, Socialism Today No.188, May 2015). His attempt to whip up paranoia over terrorism has failed to gain mass support. The court case of Harper-appointed senator, Mike Duffy, on charges of fraud, bribery and expenses fiddling, may produce embarrassing evidence. Even Harper’s hometown of Calgary has turned against his party.

The Alberta election result has also boosted the federal NDP in the run-up to the autumn election. It demonstrates the possibility of rapid changes, although Albertans have never been as right-wing as has been claimed. While by no means socialist, the Alberta NDP’s platform contrasts sharply with the very weak policies of the British Columbia and Ontario NDP in recent provincial elections, both of which ended in defeats.

Alberta shows that a radical programme need not be a barrier to winning elections. The NDP won on promising improvements for working people. However, promising reforms in an election and delivering them are two very different things. Alberta’s economy is weaker due to the collapse in oil prices, and global demand for oil is slowing as the Chinese economy slows.

The oil barons are used to running the province and will seek to continue to do so, regardless of who is the elected government. The Alberta NDP will face enormous pressures from big business, especially the oil and gas companies, to abandon its election promises. The labour movement and others must build a mass movement to counter the corporations. The battle to deliver a $15 minimum wage and the other reforms has only just begun. To really deliver secure safe jobs and a healthy environment will require more than electing a moderately reforming NDP government. It would involve taking control of the wealth of resources in Alberta and democratically using them for the benefit of society.

Socialist Alternative Canada