BC Forced onto Unsustainable Path By Poor Planning
BC taxpayers are having a new budget foisted upon them this afternoon. A budget was presented last February for exactly the same spending period, but that was a phony budget. Today, now that the election is over, we are supposedly getting the real numbers.
It is hard not to feel depressed about our current state of affairs. The media and the academic experts, now having made a few obligatory comments on the duplicity of it all, will report this new budget with the same gullible bemusement that they have showed over the last few months. They like a lot of other opinion leaders will proceed with a ‘what can you do?’ shrug common to banana republics when ‘Big Daddy’ commits a new outrage.
So what are we are now being told. Well for starters, that the deficit forecast at $495 million in February, will now be $2.8 billion. And the promise that the government would balance its books in two years has now been extended to four years.
Further, major programs and services will be cut, even though we were promised they would be protected. Except Cabinet Ministers’ and MLA’s pay – they will be protected. Volunteer, cultural and social service organizations,proceeding with their business on the assumption they could believe what they were told in February, will now be hung out to dry. An endless array of people in need will have to take care of themselves. As for the nascent climate change initiatives, neatly constructed for election consumption, they are no longer needed. So they too are cut drastically or eliminated completely.
It is all very dreary and tacky. Virtually all of the bad news we are hearing today was known or could be projected by the government in February. It just didn’t serve the government’s electoral interest to tell the truth.
Sadly, too many opinion leaders will buy the argument that things couldn’t be predicted, that it is really no-one’s fault and that what must be done must be done.
But it didn’t have to be this way. The economy goes through periodic recessions. It always has and there is no reason to thing it will not continue to do so. But governments can and do plan for this. But not this government. It has spent six years spending as if there would be no end to BC’s good fortune, acting as if it was their own creation. Anyone with an ounce of sense knew that BC was experiencing one of those resources and construction booms so common to its resource based economy. Further, it was pretty clear that a credit bubble was greatly exaggerating the apparent good times. Indeed the government was reminded of this repeatedly.
It was told that the prudent fiscal response was to develop a sustainable long term plan on spending on major infrastructure and capital projects and on taxpayer supported liabilities, and to build up a reserve or rainy day savings fund that would provide resources that could sustain essential services through times such as this. This would also have reduced the amount of crowding out of private sector investment in industry by large government spending on construction and mega projects. However, the Campbell government was constitutionally incapable of such fiscal prudence. In fact, it made the situation worse by driving up its own spending across the board during the resources and credit bubbles, thus adding to a cost inflation that was already under severe pressure from these bubbles.
It is almost impossible to imagine a situation much worse than the one the government created. And time and time again it refused advice on how to do things differently
The result is a spending base of government that is unsustainable. Making things worse, materials, skilled labour and related costs have been inflated well above a level that will make it possible for BC to be competitive in the next few years. Taxpayer liabilities, including debt plus the present value of payment obligations on major projects financed through expensive private capital, now exceed $100 billion dollars. (The government conveniently avoids reporting the over $60 billion of liabilities assumed through contracts to private firms to borrow to finance and build government projects. These are debts owed by taxpayers, just like the rest of government reported debt). These debts together make about 56% of GDP, which amounts to about $50,000 per taxpayer. (It is interesting to note that the Vancouver Sun reports the lower number of $15,000 per taxpayer, the misleading number the government has put out). Economic studies have established that liabilities in these proportions have an overall dampening affect on the economy as taxpayers cut back spending given that that such liabilities growth mean that substantial tax increases are inevitably coming. And we saw the start today with further regressive increases in medicare premiums, which is just a tax by another name.
The BC economy has a great capacity to withstand the ravages of resource and credit collapses. However, it is going to be greatly handi-capped this time by an imprudent government unwilling when it could to build a sustainable base for the future. Government, caught on an unsustainable path, will be crippled for years to come. The manufacturing and high tech industries, once robust and vibrant, have been decimated during the resources boom by escalating costs, unreasonable competition for labour from big government mega projects, government neglect, and the high dollar about which the government did nothing. The trajectory of natural gas prices, by far the largest driver of the resources boom, looks like one of those down hill ski ramps built on the side of an extreme sports camp – breathtakingly steep and straight down. All in all, the prospects for an early recovery are anything but good.
It did not have to be this way. But Big Daddy is in charge. What can you do?
Don’t blame this government for this mismanagement. Blame all those who voted for them. They knew the Campbell Liberals were a bunch of liars and crooks led by a liar, former drunk and a convicted criminal(impaired driving is a criminal offense), but they voted for them anyway. Go figure?
I am including an article from a recently released book about Ralph Klein in Alberta. B.C. voters might want to consider this, in view of the reports of Klein’s inner circle being Campbell government imported advisors following his initial election victory as premier.
The bigger question for all citizens is where is, and has, the money gone? All of those surpluses that were spent, but added nothing to the supposed core jobs of the government are lining pockets somewhere.
Klein’s squandered potential
Sep 01, 2009 04:30 AM
Comments on this story (17)
Gillian Steward
When Gary Doer, the amiable, sure-footed, NDP premier of Manitoba, was named Canadian ambassador to the U.S. last week, I couldn’t help but think of Alberta’s former premier, Ralph Klein, and what might have been.
When Doer was elected premier in 1999 Klein had been premier of Alberta for seven years. He was enormously popular at home and had even been noticed by the prestigious Wall Street Journal for his efforts to balance the budget and pay off the provincial debt.
But as Rich Vivone argues in his new book Ralph Could Have Been A Superstar: Tales of the Klein Era, Klein wasted his power and popularity. He could have done so much for Alberta and the rest of the country but he never lived up to his promise.
As publisher of a popular subscriber-based newsletter on provincial politics that he founded in 1986, Vivone had a ringside seat during Klein’s rise to power and his subsequent fall. In the early days he watched Klein work his magic in the Legislature, at Conservative constituency fund raisers, and in the bar where he liked to regale reporters with gossip and insider secrets.
Booze was so important to Klein that one of the first things he did when elected premier was lift a ban on alcohol in the Legislature building imposed by one of his predecessors, Peter Lougheed.
But booze wasn’t Klein’s only problem. According to Vivone, the former mayor of Calgary didn’t know how to govern. He knew how to campaign and was very good at it. He knew how to pull things apart, as he did when he instituted 20 per cent cuts to provincial programs.
Klein was at his best when he was running against a perceived enemy – the deficit, Ottawa, Liberals, anyone who publicly criticized him – but he didn’t know how to build. His ideology seemed to spring from a small cabal of Calgarians more interested in business than politics.
In the end, Vivone writes, it became clear that “Klein’s leadership was about himself. He attracted few interesting people into politics. He didn’t encourage citizens to participate in politics. He had little respect for his enemies or for people with different ideas. And he had no grand schemes to lead Alberta into a new era.”
All of this at a time when the price of oil and natural gas was steadily rising; when the provincial treasury was awash in billion dollar surpluses; when Klein still held the trust and good will of most Albertans. Even people who loathed his policies loved him. They couldn’t conceive of voting for anyone but “Ralph.”
He had convinced people that drastic cuts in government spending were necessary in order to balance the books. But he didn’t seem to know what to do after that. Alberta could have been a leader in health reform and environmental policy. It could have had the best public schools and universities in the country, writes Vivone, but Klein just didn’t have it in him to provide that kind of leadership. Despite his strong start and stunning electoral victories, he was eventually booted by his own party in 2006.
And now the premier who was once seen and heard almost every day via the news media making wisecracks about such serious issues as global warming or mad cow disease, has completely disappeared from public life.
Gary Doer made the most of what he was given. Ralph Klein wasted a wealth of opportunities. And after reading Vivone’s book one wonders if “Ralph” wasn’t simply Alberta’s collective delusion.
Gillian Steward is a Calgary writer and journalist, and former managing editor of the Calgary Herald. Her column appears every other week.
gsteward@telus.net
http://www.thestar.com/comment/article/689016 Sept 2/09
Government by intimidation
Ralph Klein’s Tories didn’t take criticism well–a fact that groups depending on provincial grants learned to their chagrin
By Rich Vivone, Freelance
Organizations in Alberta that depend on the provincial government for policy and money feared what the Klein government would do to them. That is a statement of fact. These organizations, from trustees of the public education system to some of the unions, learned quickly that criticism did not endear them to the Klein government. They learned to mute their criticism for fear that the Conservatives would come down hard on them.
Midway through Ralph Klein’s first term, as Conservative popularity began to rise and the Liberals started to self-destruct again, it became clear that there would be no other immediate alternative to the Klein government. The more popular a government becomes, the more it believes that it is doing everything right. The more it believes it is right, the less tolerant it becomes to criticism. The Conservatives saw enemies everywhere, including the media.
‘WITH US OR AGAINST US’
When organizations subjected to government decisions recognized that the province lacked a political alternative, when there was little indication of political change, they started to knuckle under to a government that might last many more years. You were either “with us” or “against us.”
I saw the fear and intimidation factors first-hand in 1998. Intimidation began with MLAs such as Mary O’Neill, a Conservative from St. Albert in the first and second terms, and a former teacher and public school trustee. I was chair of a political affairs panel sponsored by the Alberta Teachers’ Association.
In front of MLAs representing the other political parties and a room full of teachers, O’Neill warned that people who criticize the Conservative government shouldn’t expect to get a sympathetic hearing from Conservative MLAs. “Whom do you think I will listen to?” she asked sternly. “People who complain all the time or people who are positive and show respect?” She wasn’t smiling. Her message was clear.
In 2000, I started to hear about intimidation from others. A municipal commissioner in a small city told me that Conservative MLAs from the region warned municipal administrators about criticizing the government in public, especially in the newspapers. “We were told very clearly that Conservative MLAs don’t appreciate critics,” he said. “If we persisted, our grants will take longer, and we might not get as much as we need. Our MLA wasn’t joking.”
In 2002, a trustee representing a public school district in northern Alberta told me that everything she said for publication in Insight into Government had to be anonymous. Her request was not unusual, but I usually ask the reason. “The province controls everything we do–how much money we get, the programs we teach, whether and where we build schools, who we hire as superintendent. If we complain in public, everything we ask from government is harder to get and takes longer. A few months ago, our MLA warned us that if we complained about money at a meeting, he would walk out. It wasn’t a public meeting. Money was our main concern and because government controls all the money we get, why else would we want to talk to him? So we insisted on talking about money. He got up and walked out. We haven’t seen him since.”
I didn’t only hear about fear and intimidation, I saw it in the eyes of people who had legitimate reason to criticize the government but were afraid to do it.
In the spring of 2000, a group of parents of disabled children in the Hinton-Grande Cache area asked me to come to their community to talk to them about the manners and operation of the Klein government. The group–about 25 parents, teachers and school trustees — said that money from the provincial government for schools was not sufficient to provide adequate programs for disabled children.
To help them understand who they had to deal with, I described the mechanics of how the provincial government functioned and its current attitude toward the public education system.
I said that the Klein government was convinced that the public education system had enough money to do its job. This group just as adamantly believed they did not receive sufficient money. After several hours of complaining about the government, I told them that they had a choice: do something or do nothing. Since doing nothing wasn’t working, they had to do something, such as talk more vigorously to their MLA and to the minister. I proposed traditional lobbying techniques including letter-writing, phone campaigns and interviews with local reporters. “Turn up the heat,” I suggested. “Let them know you are serious. Let them know that people really care.”
LOATH TO ‘TURN UP HEAT’
The silence was deafening. People were looking at each other, wondering what to say. Finally one spoke. “We can’t do what you are suggesting,” one parent said. “Ivan (Conservative MLA Ivan Strang) won’t like that.” Another parent stood and said that Ivan was a friend of everyone in the room and they couldn’t say anything negative in public about him. A school trustee got to the real story: “If we go public with our case against government funding, they will ignore us for a long time. We won’t get meetings, we won’t get money, we won’t get help. That’s how these people do things.”
“I understand that this government likes to spread fear,” I said. “Other groups like this around the province say exactly the same things about dealing with this government. I also understand that you aren’t getting anywhere doing things the way you do now. The situation is very odd: if you don’t fight, your community thinks everything is fine. If you fight, the province puts you on its hit list.
“It seems to me that you should think of your children first and then decide how to proceed. This is about children, not about Ivan Strang’s hurt feelings or the Conservative Government’s resentment of criticism.”
At the end of the evening, the group decided against a public statement and chose to write a private letter to the minister responsible for education, with a copy to the local MLA.
In another example, a group of rural doctors was frustrated because all the Conservative MLAs in central Alberta — Stockwell Day of Red Deer, Victor Doerksen of Red Deer, Ty Lund of Rocky Mountain House, Gary Severtson of Innisfail–were ignoring them. They said that no matter how much they complained to the MLAs about the difficulty in getting more doctors into the area and asked for the province’s help, the MLAs didn’t respond. “How,” they asked in obvious frustration, “do we get these guys to listen?”
At the end of the meeting in which various strategies were discussed, the doctors promised to be more persistent with Conservative MLAs. But one, clearly frustrated, wouldn’t let it go at that.
“They think we’re afraid of them,” he hissed. “I know some who are not. If these guys won’t listen, I’ll find someone to challenge one or two of them for the nominations. If that’s what it takes to get attention, that’s what we’ll do.”
Nothing happened.
UN-ALBERTAN BEHAVIOUR
I participated in many such meetings and the outcome was always the same. Although frustrated to the point of anger, groups looking for action from their own government were afraid to react when Conservatives MLAs either didn’t respond or ignored them. Always, the fear was palpable and the silence pervasive. This reaction is puzzling. Is criticizing provincial policy “un-Albertan?”
When the question was raised with school trustees, the answer was downcast eyes and a shrug. When the question was raised with municipal councillors, the answer was more expressive– fear that the provincial government will “get even” with organizations that dare criticize it in public. How will they get even?Meetings with MLAs are tougher to get, letters get lost, requests aren’t heard, grant money takes longer to arrive, grant money is gone and information channels break down.
Conservative MLAs weren’t shy about it; groups that complain in public won’t get a sympathetic ear. MLAs will lecture organizations that speak their minds. Over time, the message sinks in: Suck up or else.
This is the same provincial government that does exactly the opposite when it deals with the federal government.
Klein wouldn’t be silenced
While demanding that organizations in the province be silent and co-operative, premier Klein ran to the nearest newspaper reporter with another of his many complaints about the federal government. If talking tough and loud to the feds through the media is the preferred approach of the Klein government, why aren’t Albertans entitled to the same practice when dealing with their provincial government?
With a big majority and no political alternative in sight, the Klein government could do just about anything it wanted. Groups were conditioned to beg quietly–in private. Conventional wisdom says that by begging quietly in private, government will be grateful and generous.
If only it were true.
Silence rarely worked. School districts still got minimal increases in funding. Without local taxation, they were completely controlled by the province. To meet expenses, municipal governments raised their own taxes and suffered the wrath of local taxpayers. The province decided all by itself who got lottery money –and who didn’t. As elections approached, the payoffs began.
This was a frightening way to run a province. Only the foolish think that politicians have a monopoly on wisdom. Only the irresponsible give up their voice on public affairs between elections. But, in Alberta, that’s exactly what happened.
It was tough to stand up when everyone else was lying down. Some might call it classic bullying behaviour.
Ironically, the provincial government that practised bullying saw fit in 2004 to set up a roundtable on Family Violence and Bullying. Two months later, an individual in the department of children’s services was appointed as “executive director for the prevention of family violence and bullying.”
Oddly, the bullies were against bullying.
Rich Vivone published Insight into Government, a newsletter covering Alberta politics, from 1986 to 2005. The foregoing is an excerpt from his new book, Ralph Could Have Been a Superstar:Tales of the Klein Era, published by Patricia Publishing.
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http://www.edmontonjournal.com/news/Government+intimidation/1953657/story.html Sepy 2/09