Thursday, February 11, 2010

What Are the Politics Behind the Stelmach Budget

The fiscal narrative around the Alberta budget has been written and yes the results were very different than what was projected in the trial balloons the Stelmach floated in the lead up. The potential return to the massive versus brutal cuts of the early 90s was floated as a possible fiscal reaction by the Stelmach government to cover an extrapolated $2B revenue shortfall. This political messaging was done as part of its continuing quest of the Stelmach government to out flank the Wildrose Alliance Party on the right. But it never materialized in the Budget, much to the astonishment of almost every Albertan. In fact what happened is Premier Stelmach reasserted his own progressive personality.  He applied some sound Keynesian fiscal principles in response to the recession and the expressed priorities of Albertans over health and education concerns.

I will deal with the politics behind this Budget in this blog post. The Budget numbers are important but what motivates the government politically when it builds a Budget is just as important. It all adds to the volatile political culture in Alberta these days. The new Budget represents a positive shift in the attitude and approach of the Stelmach government. Stelmach has shown with this Budget that he is no longer trying to emulate the Wildrose Alliance Party. Stelmach is actually isolating the WAP, putting it out there all by itself on the extreme right of the political spectrum.

The WAP has been controlling the political and media agenda in the province for months now. Stelmach has been chasing them from behind thinking he had to be more right wing and reactionary than the WAP to win the confidence of Albertans. The Stelmach government signaled with this Budget that they are not going to let that happen anymore. Stelmach has given a strong indication that he is prepared to pursue a balance between fiscal prudence in response to the reality of the recession and at the same time ensuring that social services are sustained while bolstering health and preserving education supports. The use of the Stability Fund monies to do this is the exact right move at the right time and for the right reasons. That is why the fund was set up in the first place and it is time to use the money.

There is still a blind spot in the Stelmach government over responsible revenue policy. The most obvious shortcoming is the lack of serious attention to charging reasonable royalty rates with a long term view instead of pandering to the unfounded threats of conventional oil and gas sectors. The return of commodity prices and the return of oilsands projects show that energy development is shifting away from the conventional business as it should.

Here is my take on what happened politically over the last few months as the Stelmach government found its way to the recent Budget.


The political strategy for Stelmach for months now has been to try and outflank the Wildrose on the right. The by-election loss, with their candidate coming in third in the former Deputy Premier’s riding, spooked the Stelmach brain trust. , The acceptance of the myth that the royalty review somehow caused the decline of drilling activity, while ignoring the collapse of commodity prices and new easier energy plays in Saskatchewan and northeastern BC, added to the anxiety. All this saw the Stelmach government move beyond appeasement of the conventional energy business into capitulation to their threats and demands. They walked away from rational decision-making about reasonable royalties five times since they accepted the Royalty review recommendations. With the so called “competitiveness review” to be released “in draft” in March they are apparently poised to capitulate again.

The rise of the “smart, intelligent and media savvy” Danielle Smith and her convincing win of the leadership of the WAP (she won 75% of the votes) made life even worse for “Unsteady-Eddie.” That was only one of the mocking taunts that the good old-boys in the conventional energy sector have been spouting in Calgary about the Stelmach government. Then add the reality of the potential for a serious revenue shortfall from commodity price meltdown and the Stelmach government was on the hunt for $2B in program cuts going into the 2010-11 Budget deliberations.


Transitioning out of the fear factor of the WAP touting the need for smaller, meaner and leaner government, even in a recession, the Stelmach government took a run at the health care, education social services sector. The announcement of hospital bed closures in Edmonton and Calgary plus the ham-handed handling of proposed Alberta Hospital transfers and closures of psychiatric beds added to the distaste and distrust of the public policy and governing philosophy of the Stelmach government.

The approach in the education sector was at least more collaborative and inclusive where school boards were asked to use accumulated surpluses to help make up for anticipated funding shortfalls. The use of the arbitration process in the ATA pension settlement agreement to determine the amount owing by the province to the pension fund was also seen as a more enlightened policy approach than the dictatorial demands the province tired to apply in other sectors.

The province extrapolated annual revenue shortfall of some $2B based on the presumption of low energy commodity prices continuing into the next budget cycle. The then tried to use that presumed shortfall to pressure and intimidate community based social service providers dealing with vulnerable Albertans into returning funds for services already paid for, provided and pursuant to contracts not grants. That dictatorial and intimidating approach was based largely on inaccurate and misleading information provided to politicians who were all too eager to assert their political power over groups while at the same time forgetting about their legal duty to provide these necessary services to vulnerable citizens. They tried and succeeded to get some not-for-profit volunteer based agencies to capitulate but in doing so the government has actually threatened the safety and security of people like children at risk, and persons with developmental disabilities. They also showed a chintzy and mean-spirited side by withdrawing of personal items and toiletries from institutionalized mental patients all done for a saving of only $70k annually.

This lack of caring and compassion by the government caused some in the not-for-profit and voluntary sectors to stand up and push back by refusing to accept claw-back demands. The Regional PDD Boards in many cases made career-limiting innuendoes and other fiscal threats to the leadership and management of these agencies trying to force compliance with the government’s demands. The agencies hung together and organized meetings with MLAs to tell them the facts of the matter, including that there were legally binding contracts with the government for these services that were negotiated last year at the insistence of the province. That the information the MLAs had in briefing notes about agency costs and where funds were going to serve vulnerable citizens was inaccurate and misleading. It got to the point that it was suggested that the province would be better advised to investigate its own administrative and service spending if they wanted to see where there was real waste.


The provinces pressure on agencies mounted but so did public support. The PDD agencies in Calgary held a mock bake sale “selling” muffins for thousands of dollars and the proceeds to be “donated” to assist the Stelmach government meet its statutory obligations to the people in the province with developmental disabilities. A bottle drive rally was held in Edmonton that brought out 1300 citizens to demonstrate and protest. They brought recyclable bottles and cans with messages to the Premier to drive home the mean-spirited attitude the province was showing towards the most vulnerable citizens in our society. The bottle drive raised $1000 and organizers collected thousands of letters to the Premier to be hand delivered to him at the legislature. The citizens trying to deliver them were denied access to the building. The Speaker upon hearing about that in Question Period recently asked opposition MLAs for a letter detailing why peacefully protesting citizens were denied access to their Legislature to carry out their protests. One can almost smell democracy returning to the air in Alberta again as citizens re-engage in the politics of our time.

The Whitemud Citizens Forum on Health Care rally in early January drew over 550 citizens to protest the health care situation for seniors too. The rally was organized by a few citizens who became frustrated with the lack of attention the government was paying to the issues. This rally was undoubtedly a key to the turnaround in attitude of the Stelmach government to health care funding and policy approaches shown in the recent Budget. So many upper-middle class Albertans showing up to protest in the riding where the Stelmach government had enjoyed its widest margin of victory in the election less than a year ago sent a clear message that people were fed up and not going to stand for any indifference or deceit from its government any more.

It is clear that one of the best ways to get the attention of the Stelmach government is to stand up, stand out and protest against bad politically motivated public policy pronouncements. Regular readers of this blog have heard me say many times that the world is run by those who show up. In Alberta you have to show up and stand up for what you believe in and that can make all the difference in how our government responds these days. Merciless and mean-spirited politicians are elected by good citizens who do not show up to vote.


The 77% support for the Stelmach leadership at the November 2009 AGM was seen as a reprieve for the Premier but it put him on a short leash too. He said in his speech at the PC Party gathering that he “got the message” and he promised changes would come. Then everything just stayed the same with the Premier’s office now taking on even more of centralized top-down command and control stance in using the political and policy levers of power. MLAs were getting restless and quietly grumbling about the centralized political control by unelected staffers in the Premier’s office. With a Cabinet shuffle in the offing they choose to keep their discontent below the surface.

But in early January there was the loss of two PC MLAs floor crossing to the WAP both of whom decried the centralized power in the Premier’s office controlled by unelected staffers. There were anonymous media sources spreading rumours about the possibility of many more PC floor crossings to the WAP. This rumour became more plausible as it got repeated and amplified. It all tended to gives the WAP even more credibility and media attention. The Premier fast tracked his Cabinet Shuffle to stem the tide of a possible erosion of Caucus confidence. The gambit worked, at least for now, as the arch-conservative Ted Morton, got the job he wanted as Minister of Finance. This Cabinet appointment added fuel to the suspicion that the Stelmach government was going to return to the massive and brutal cuts of early Klein days and Morton would lead the slashing and burning with the Premier’s blessing.

The Cabinet shuffle was otherwise pretty inconsequential and did nothing to change the image and fortunes of the Stelmach government as tired and out of touch. The punditry and media saw them as still trying to show they were more neo-con than the conservative fundamentalism of the WAP. While this was going on, the grumbling old boy conventional oil and gas sector in Calgary started to work on developing an energy policy for the WAP. Suspicions rose that the WAP energy policy would see the rights of Albertans as resource owners ignored and relegated to being policy takers of decisions that would be made in boardrooms behind closed doors. The coziness of the conventional energy sector to controlling political power would then be complete and run by the tenants and not by the legislators by the duly elected representatives of the people of Alberta.


Progressives and moderates in the province saw that the only political choices Albertans were being offered were variations on neo-con policy agendas that would gut government and reduce citizens to servants of the old-school energy sector economic forces that were supporting the WAP and abandoning the PCs. Reboot Alberta was born in reaction to this rapidly rising right wing trend in the Alberta political culture. Again it was set up by a small group of independent and individual citizens as a way to revitalize and restore a progressive voice in Alberta politics.

The Reboot Alberta social movement met for the first time at the end of November. In less than 90 days has become a gathering place for most of those Albertans who are concerned about the direction and destination of the province. The Reboot Alberta website ( has generated lots of traffic and lots of postings from individuals who are keen to share thoughts and ideas about how Alberta can start to live up to its potential once again.

There is a study being done by Reboot Alberta about what values moderates and progressives in Alberta want to see applied by Alberta’s provincial politicians as they make various political and policy decisions that impact the lives of ordinary citizens. The survey results will be released at Reboot2.0, the next gathering of Reboot supporters in Kananaskis Feb 26-28. Early indications from the study show that the people joining the Reboot Alberta movement are very active Influentials and Cultural Creatives. This will be a potent citizens based social movement and will have an impact on public policy approaches now and in the future for sure.

The Reboot Alberta movement is evolving around four Theme Streams that are all moving forward concurrently. They are supported by individuals who want to change the existing parties and institutions to be more progressive from the inside. There are some who believe we need fundamental democratic reform in voting, electoral policy and political culture in the province. Others believe there needs to be more influence on politics and public policy from the not-for-profit and voluntary sector to balance off the power of big business in political and policy decision making. Still others believe there is a need for a new progressive-centrist political party to balance off the trends to the reactionary right shift that WAP is fostering.

The idea of a new political party is alive and moving forward through another citizens based group who call themselves Renew Alberta. They are in the process of organizing and gathering signatures needed to petition Elections Alberta for new party status.


The Stelmach government reaffirmed itself as still having a potential to be both progressive and conservative with this Budget. There is a lot to applaud and to criticize in the document but overall it shows a shift away from running scared of the WAP and a return to the starting line of being a socially progressive and fiscally prudent government. The effect of this shift in attitude of the PC government will be to marginalize the WAP on the extreme fundamentalist conservative right and to show that they are far from being ready for primetime political power. The rise in WAP “support” has been more of a revolt against the PCs and a rejection of the other conventional parties as a viable option but as a way to send a message that citizens are upset with the status quo.

There is no doubt that political change is in the air. What form it will take is yet to be determined. There is a restlessness and restiveness in the land known as Alberta these days. It is touching many people in many aspects and goes to the core of our sense of being Albertan. Volatility is the new normal in the Alberta political culture. It will be interesting to see if progressives and moderates return to participation in the political culture of our times and add to the volatility. Will politics become relevant and cool for them again? I think many aspects of the new Budget will set the stage for an even more emboldened and engaged progressive citizen’s movement. They have seen what it takes to exert influence on their government, stand up, stand out and take action. I expect they will start to use their new found self-assurance to make even more meaningful differences in setting the agenda and policy direction for the province.

The rise of the WAP all of a sudden made politics interesting in Alberta. They offer no new insight or policy options, merely variations on tired and old political power themes. The rise of Reboot Alberta as a group of Influential and Culturally Creative progressives who are becoming engaged in a concerted social movement aimed at making Alberta live up to its potential as a civil society will make our politics actually fascinating. Progressives’ working respectfully and collaboratively is where the real revolutionary and transformative forces for political and public policy change will come from. The new political reality of Albertans is that they are rejecting the tedious and pointless posturing between left and right politics. They are ready to move forward as a more progressive society that lives up to its potential and where Albertans can be proud to be Albertan once again.

If you are interested in the Reboot Alberta movement you can participate at
You can register for Reboot2.0 there too. If you come to Reboot2.0 you will find like-minded progressive citizens who are intent on making a difference in how Alberta is governed.