How To Increase The West’s Clout

-- (historic), Commentary, Public Sector, Uncategorized

 

When Stephen Harper and other Albertans created the Alberta Agenda letter to Ralph Klein nine years ago, the authors called on Albertans to “take greater charge of our own future.” As I detailed previously, as a general recommendation—Alberta and Ottawa should have complete and independent responsibility for constitutionally-assigned areas of jurisdiction—the call made sense.
 
But many of the means proposed by the firewall folk were never the proper way to reach the end goal. If ever adopted, most Alberta Agenda ideas would be inconsequential at best, or costly policy failures at worst. 
 
After all, suppose Alberta did have its own pension plan. How would this (or provincial cops and income tax collection) make Ottawa and the other provinces change on matters of substance? Canadians didn’t protest over a doubling of Canada Pension Plan premiums between 1997 and 2003. If Alberta withdrew from the federal plan, I doubt substantive federal change on an Alberta wish-list would result from slightly higher CPP premiums for other Canadians.
 
In informal conversations with some firewall folk over the years, the responses to my critiques have been varied. Some admitted this or that firewall idea was flawed but the last defence has always been that Alberta needs more power vis-à-vis Ottawa.
 
A more powerful Alberta and West is a desirable end. There is a general lack of corruption in the West (compared, say, with Quebec politics), an entrepreneurial spirit both as it applies to business and environmental solutions, and a constant openness to new ideas and policies. All of this benefits the entire country. It’s an influence that should be heightened.
 
But for strengthened Western clout, another vision and another set of proposals are required and it starts with understanding what constitutes real power.
 
In a democracy, influence is wielded via population, voters and wealth. In the United States over the last half-century, the south and the west counted for much in national politics and not because Texas, California and Florida possessed their own pension plans or flirted with other, useless symbols of imagined but not real power. Those states mattered because of their population and wealth.
 
In Western Canada, a larger population and more seats in Parliament is a long-term project. But there are measures Alberta can take that would lead to a richer and more populated province, and also serve as examples to be copied. Insofar as other Western provinces enact such measures, they too would only boost the region’s influence within Confederation.
 
Consider some examples. First, Alberta could help restore a clear division between Ottawa and the provinces by picking one transfer (as a start), and press Ottawa to give up federal tax room to all provinces in exchange for an end to that federal subsidy. Health or social transfers are obvious first candidates.
 
Given that two original firewall authors are now in a position to do something here—Stephen Harper occupies 24 Sussex and Ted Morton runs the Alberta Finance file—the only problem might be that some provinces prefer continued cash rather than extra tax room. It’s easier for premiers to blame Ottawa for not giving out enough money than to be directly accountable to voters for their own provincial taxing and spending. But if Alberta and a few other provinces press for this reform, it has potential. 
 
Second, on health care, Alberta should introduce health care savings accounts as suggested to the Alberta government years ago by Don Mazankowski in his provincial report. The demographics of an aging population need to be dealt with; also, such accounts have the potential to transform health care finance and delivery in positive ways.
 
Third, Alberta should streamline government by ending long-term obligations for any new public sector employees. The province should imitate the private sector where most companies provide pensions for employees through matching defined contributions, not defined benefits. The latter approach unwisely promises future unsustainable GM-type, legacy benefits at the expense of taxpayers; it also promotes an earlier retirement age than is possible in the private sector.
 
Fourth, Alberta will collect $3.8 billion in corporate income tax this year. Once the province returns to a surplus position, the province should slash the business tax take in half. That will lead to more investment and then more people in Alberta.
 
There is more that can be done. But the political ramifications of these wealth-and-population boosting policies for Alberta and other Western provinces are more voters and federal ridings over time. Moreover, on policy innovation, Alberta’s “magnet-status” would mean other provinces must imitate us or decline in relative terms. Either way, Alberta wins.
 
In short, a useful and updated Alberta Agenda is one that increases Alberta and Western power in real ways, both by policy example and that also lead to real increases in Western wealth, population, voters and eventually more seats in Parliament.