The report and recommendations of the Blue Ribbon Panel on Alberta’s Finances, known widely as the MacKinnon Report, after the panel’s chairperson – former Saskatchewan cabinet minister and history professor Janice MacKinnon – was released yesterday.
The report is an endorsement of the United Conservative Party government plan to implement deep cuts to public sector funding, a wide-range of drastic changes to how Alberta’s public services are delivered (or delivered at all), and the use of legislative tools to interfere with the collective bargaining process.
When reading the panel’s report and recommendations, it is important to remember this is not a neutral or academic document. The MacKinnon Report is very much a political document written by political people who were appointed because they share the government’s vision.
Despite her past political affiliation as an NDP cabinet minister in Saskatchewan, MacKinnon’s fiscal conservative views make her more likely to feel welcome in the UCP or the Fraser Institute than in a party led by Rachel Notley or Jagmeet Singh. For decades MacKinnon has been a champion of fiscal conservatism and more recently provided an enthusiastic endorsement that was prominently displayed in the UCP’s election platform.
The MacKinnon Report calls for funding freezes or cuts to public services across the board, including increased privatization of health services, changing the funding formula for Alberta schools (and likely introducing more private and charter schools), increasing government control of post-secondary institutions and lifting the current freeze on tuition fees, and downloading more infrastructure costs on municipalities.
In yesterday’s press conference announcing the report, MacKinnon suggested that “fewer hospitals” could be a solution to cutting the health care budget, which should raise giant red flags in rural communities across Alberta. During her time as Saskatchewan’s finance minister, 52 rural hospitals were closed as a result of budget cuts.
The report’s suggestion that the government scale back capital investments could also spell trouble for the much-needed new hospital in southwest Edmonton, which was announced by the previous New Democratic Party government in 2017.
The recommended cuts and creation of legislative mechanisms to interfere with the collective bargaining processes are likely designed to create strife with public sector unions whose members would be directly impacted by these cuts – a group that the UCP is eager to pick fights with.
For anyone who grew up or lived in Alberta in the 1990s, it may feel like deja-vu.
When premier Ralph Klein and treasurer Jim Dinning imposed drastic cuts on public services, Albertans were told that balancing the budget and paying down the provincial debt was necessary to get Alberta’s fiscal house in order. At the time, a young anti-tax crusader named Jason Kenney cheered on those cuts, going so far as to tell the Western Report that “Education will be the toughest area to cut, but it will also be the most important. If the government backs down on this one, then the entire Klein revolution will fail.”
Successive governments, both Progressive Conservative and NDP, spent decades trying to fix the damage those short-sighted cuts had on Alberta’s communities, public infrastructure and public services.
The “blue ribbon” panel was created to provide an endorsement of Premier Kenney’s political program, and, if its recommendations are adopted, could be the most radically ideologically conservative agenda Albertans have seen in decades. It is a far cry from the technocratic conservative agenda meticulously implemented by former prime minister Stephen Harper, who Kenney served dutifully in Ottawa.
Unlike Harper, there is no indication that Kenney is interested in half-measures or incrementalism.
Alberta still has a big revenue problem
The narrow mandate of this panel was a missed opportunity to actually address the fiscal challenges facing Alberta, which includes issues with revenue ranging from low taxation and over-dependence on oil and gas royalty revenues.
The report briefly mentions that over-dependence on unreliable natural resource revenue is an issue, but the panel was specifically told not to provide recommendations to fix the revenue problem – only spending. Both MacKinnon and Finance Minister Travis Toews repeated the government’s well-used talking points during yesteday’s press conference – that Alberta has a spending problem and not a revenue problem.
The report frequently compares public sector spending in Alberta with British Columbia, Ontario and Quebec, but only when it comes to government spending. The big problem with comparing Alberta with our provincial counterparts on the spending side is that our revenue – generated through taxes – is significantly lower than every other province.
If Alberta had the same level of taxation as BC, which is the second lowest in Canada, then Alberta could have no deficit and could be collecting billions of dollars in additional revenue each year.
By not addressing the revenue challenges faced by the Alberta government, the MacKinnon Report shows it was created to justify the spending cuts and privatization of public services that the UCP was likely already planning to implement. Remember, this is a political document.
It’s hard to criticize the MacKinnon Report without also laying some criticism at the feet of the past PC and NDP governments who did not fix Alberta’s revenue problems when they had the chance. Had the NDP been as aggressive in fixing Alberta’s long-standing revenue problems as the UCP will be in attacking government spending, we might not be reading the MacKinnon Report today.