2013 Alberta Economic Summit

Blog, Taxation, Marco Navarro-Genie

Last week’s Alberta Economic Summit was an interesting exercise.  The panels of experts presented some sound economic ideas and generated some lively discussion. The interventions from state clients were less interesting because they had not much to say about how to resolve the current problems and because they were unabashedly self-serving. The public sector union reps and heads of public-funded charities predictably wanted more spending and more hiring.  One of them, a woman representing the Boys and Girls Club, was shamefully unprepared, quoting wrong facts and making pronouncements without much of an idea of the historical record. Case in point, she claimed that the non-profit sector didn’t exist a century ago.  You would think that someone high up in the non-profit sector would know a little of the history of voluntary organizations such as the Salvation Army or the Boys Scouts.

Alberta's Premier Alison Redford addresses the audience at the First Annual Alberta Economic Summit on 9 February 2013 at Mount Royal University in Calgary. Alberta’s Premier Alison Redford addresses the audience at the First Annual Alberta Economic Summit on 9 February 2013 at Mount Royal University in Calgary.

As an exercise, in and of itself, the Summit was a good thing.  As a political tool, it may have bought the premier the room that she needs to convey to Albertans the impression that she is doing something about the economy. Whether the Summit will have any practical benefit remains to be seen.  Touted as the First Annual Alberta Economic Summit, it opens the probability that there may be more of them.  And if so, their institutionalization can result in creating a specific place for discussing policy ideas that might result in tangible impact.

But the idea was culled in a hurry from political necessity, more than economic need or historical tradition.  I say historical tradition because we should not forget that Social Credit wanted and tried to institute government by experts. The experts would create the policy and the politicians would put it into place.  Parts of what took place last Saturday exhibited shades of that colourful Alberta past, the premier would be horrified to admit.

I must give credit to the premier for having sat through the proceedings all day, sometimes listening to ideas critical of her doings and undoings, and lack of doing in some instances.  I thought that subjecting herself and her MLAs (perhaps most ministers) to the process showed an uncharacteristic amount of humility, for which the premier is not known.  It was either humility or meeting a strategic demand in practical politics.  Either way, Redford is deserving of credit for it.  But it is difficult for me to imagine that the premier will agree to subject herself to the same thing each and every year.

As such, if and when there is another Summit it will necessarily be different.

Now for the structure.  The structure was stacked to frame the process and discussions in search of alternatives to the so-called “bitumen bubble.” In short, the process was geared toward “resolving” an economic problem that is at best a small portion of the fiscal difficulties Alberta is experiencing. Although it was said a few times by the token fiscal conservatives in attendance, the problem is spending, not diminished revenue, or at the very least the relationship between the two.

Frontier's VP Research, Marco Navarro-Genie, is captured here at the Economic Summit with Alberta's Leader of the Official Opposition, Danielle Smith. Frontier’s VP Research, Marco Navarro-Genie, is captured here at the Economic Summit with Alberta’s Leader of the Official Opposition, Danielle Smith.

Instead, the process focused on diminished revenue as though the government could not have done anything about how much it was spending, and as though there was no link between spending and collecting revenue. The problem framed thus, attention is averted toward looking for ways to raise taxes in order to increase revenue.  How you frame the question does point toward a particular answer.

In short, the Summit was framed in terms of the wrong problem or, being charitable, it focused too narrowly on the nature of the problem. As such, the response and solutions that the Alberta government will present will necessary miss the mark for they have failed to account for the fullness of the economic reality in which the province finds itself.

Openly admitting that a significant portion of the problem that got us here has been undisciplined spending in the last decade is not a requirement to solving it. But unless that reality is recognised, the problem will likely persist.