Similar to last week’s third quarter fiscal update delivered by finance minister Joe Ceci, this week’s Speech from the Throne will mostly focus on political messaging and managing public expectations. Along with the pomp and circumstance that will drape the Legislature as Lieutenant Governor Lois Mitchell reads the throne speech on March 2, 2017, the government will present its narrative for the upcoming session of the Assembly.
To give you an idea of what recent throne speeches have included, here is what the NDP government’s throne speech from March 8, 2016 promised to:
- diversify energy markets.
- pursue a coherent and effective economic development strategy.
- invest in a greener, more sustainable economy.
- pursue a responsible approach to public finance.
- pursue ongoing democratic reform to ensure public accountability in all of this work.
The spring session will start just as Premier Rachel Notley returns from Washington D.C. and will mark the half-way mark in the New Democratic Party government’s first term in office.
We can expect NDP cabinet ministers to boast about achieving the approval of the Kinder Morgan Trans-Mountain Pipeline expansion and Environment & Parks Minister Shannon Phillips to release further details of the plan to address Climate Change, including government support for communities impacted by the phase out of dirty coal-fired power plants. We can also expect to hear some hint about what type of reforms the government could make to Alberta’s outdated labour laws in this session of the Assembly.
We can also expect the NDP to begin shifting away from its more activist legislative agenda into re-election mode later this year.
Predictions that the Alberta economy is beginning to recover bodes well for the NDP as they prepare to present their next provincial budget. If the economy does recover and the unemployment rate decreases, they should be praised for not making the massive cuts to critical public services advocated for by, Jason Kenney, the Wildrose Party and the Progressive Conservative Party.
(One of the big stories of the upcoming session will be the one-upmanship we can expect to see between Wildrose leader Brian Jean and soon to be anointed PC leader Kenney, but I will save that for a future blog post).
The NDP inherited a financial mess in 2015 from an old PC government that relied too heavily on revenue from resource royalties to fund the daily operations of public services. As we saw starting in 2014, when the international price of oil dropped, the much-lauded Alberta Advantage of using unreliable resource revenues to subsidize short-sighted tax cuts quickly became the Alberta Disadvantage.
I support the NDP government’s decision continue investing in public services and much-needed public infrastructure projects rather than slashing-and-burning, as the opposition conservative would do.
Alberta fell behind on critical infrastructure investment during the years when Ralph Klein was premier, when his government’s singular focus was on deficit and debt reduction. I was pleased to see the PCs move away from that short-sighted approach during their final years in government and that the NDP has continued to invest in building the type of public infrastructure – schools, hospitals, roads and public transit – that Alberta’s growing population will need.
The conservative opposition parties continue to irrationally lambast the NDP for taking on debt to fund capital infrastructure projects, but on this issue I agree with the approach presented by John Kenneth Galbraith in The Good Society:
“There remain those government expenditures which are intended to improve future well-being and economic growth or which so serve. Here, borrowing is not only legitimate but socially and economically desirable. Similar borrowing in the private sector of the economy is both accepted and wholly approved even by the most eloquent, frequently vehement, opponents of the public deficit.”
The last throne speech recognized the key economic and financial challenges facing our province. “We have seen oil price drops before. We will get past this one. And we will draw the right lessons from it, and act on them,” the Throne Speech stated.
But overall, it is still not clear to me what the NDP’s longer-term fiscal plans are, or how they plan to significantly diversify the government’s revenue sources without further increasing taxes (which they should do). Maybe they are praying for another oil boom? That was the old PC government’s plan too.
Maybe we will learn more in this week’s Speech from the Throne?
4 replies on “Looking ahead to the Throne Speech and Spring Session”
Problem with your radical socialist theory is that Prentice, love him or hate him, had a plan to get us out of debt and off of the oil track. The Prentice deficit would have been $3b this year, not almost $11b from the NDP. What a terrible “gift” to our children and grandchildren, a legacy of debt with tax dollars going to interest that could have gone to services or to reduce taxes further. For shame on socialism.
What “radical socialist theory”? Building schools, hospitals, roads and public transit that the next generation will need is just smart long-term planning.
The “plan” that Prentice wrote was when oil was still over $60/barrel. The reality was it dropped to under $30 and stayed lower much longer than he expected. The voters gave him the boot before it was clear it was going to be worse than expected. Of course he would have had also to close schools and hospitals and lay off teachers and nurses to get to the $3b even if oil prices did not fall further than he expected. That was part of his “gift” too and Albertans saw it for the lump of coal that is really was and said no thank you.
The bottom line is, you can’t eat a balanced budget. Slashing government spending during a recession is like fighting a fire by spraying it with gasoline: it can only make things worse. A modest, fragile recovery is not the time to look at the revenue stream, though; we can’t afford anything that will put the brakes on a nascent turnaround, not yet.
If the economy really starts to take off, like it did after the last slowdown, there is room to take on those tough questions, like whether we need to increase government revenues to pay for the pressures of growth. Remember, the province’s commentariat is vehemently opposed to increasing taxes, whether by a sales tax or any other tax measure, regardless of the objective merit of the idea, so only the most courageous politician is likely to take that on.