- Students & Youth
- Creative Service Centre
Alberta NDP making a bad situation worse
Monday, 27 June 2016 - 8:30am
What’s going on right now in Alberta is truly sad. A once proud economic gem of a province is being ravaged by incompetent provincial government policy decisions.
While it’s true Alberta’s NDP government inherited a tough economic situation, they’ve made the situation worse … much worse. All of Canada should be watching Alberta and taking note of “what not to do.”
The first lesson is simple – when a province’s key industry is suffering, kicking it while it’s down won’t help. But that’s exactly what Alberta’s government did.
When Premier Notley and fifty rookie NDP MLAs were elected in 2015, it was clear that Alberta’s oil and gas sector was hurting. Oil prices had plummeted sharply and significant job losses were forecast for the province.
Her government responded by announcing a “royalty review”, a committee that would consider raising the charges oil and gas companies had to pay the government. While the Notley government didn’t proceed with any significant increases, nine months passed before the decision was announced, creating uncertainty and damaging investor confidence in the mean time – especially when juxtaposed with other concerning decisions.
Once Premier Notley settled into office, her government hired a plethora of political staff who had been quite vocal against the oil sector and pipelines. Further, one NDP Minister, Lori Sigurdson, even went to B.C. during the federal election to campaign for a candidate who had organized anti-pipeline rallies. If you were a global CEO would you want to invest $300 million in a project located in a jurisdiction run by anti-oil politicians and senior staff?
Early on, the NDP government also raised business taxes by 20% – another significant blow to the oil and gas sector and other businesses. The tax increase starved businesses of millions of dollars they could have used to reinvest in their companies and create jobs. That’s lesson two: raiding businesses for money – especially during a recession – makes no sense. Doing so only reduces the amount of money those businesses have to employ people.
Notley and team have also introduced large personal income tax increases and have planned to increase gas and carbon taxes by $10 billion over the next five years. Her government has also introduced radical reforms to the province’s electricity sector – changes which some experts have suggested could lead to a tripling of rates. Instead of learning from Ontario’s electricity reform debacle, Alberta is importing the same failed plan.
Finally, the NDP government has also started to fulfill its reckless commitment to raise the minimum wage from $10.20 to $15.00 by 2018. How can businesses afford a 47% increase to labour costs in just four years in the middle of a recession? Many can’t.
Recent news stories have noted the steep minimum wage hikes as a contributing factor to business closures and layoffs.
The NDP government’s defiance of economic common sense has definitely taken a bad situation and made it worse. Many fear the province’s surging 7.8% unemployment rate could get even worse.
That brings us to lesson three – if you elect politicians who run on a reckless economic platform, don’t be surprised if your economy suffers as a result.
Colin Craig works for the Manning Centre in Calgary.
This column was published by Sun newspapers (Toronto Sun, Ottawa Sun, Winnipeg Sun, Edmonton Sun and Calgary Sun) on June 26, 2016