The True West, Strong and Free

If the British North America Act were being written today...natural resource ownership would most likely remain with the federal government.
Todd Hirsch, Policy Options,
October 2005

t should have been a lovefest. Leading up to the Alberta Progressive Conservative Annual General Meeting on March 31, 2006, polls declared Premier Ralph Klein the most popular man in the province, and for good reason. Other provincial governments, an expert panel appointed by the federal Liberals, and even the Governor General recommended that Alberta share its bountiful riches with the rest of Canada. In response, the tough-talking premier said, essentially, “over my dead body.” It was classic Klein.

For years the premier had been Alberta’s chief defender, and his record was impressive. He led the PC Party to four consecutive majority governments, enjoyed better than 90-percent approval ratings in previous leadership reviews, and could boast of an enviable series of accomplishments. In 1993, Klein inherited a government bleeding $3.4 billion a year and with an accumulated debt of $23 billion. Thirteen years on, Alberta is Canada’s only debt-free province, its budget surplus hovers around $11 billion, and the populist premier can justifiably lay claim to having created the “Alberta Advantage.”

In the last quarter of 2005, the population of seven provinces or territories shrank, while teeming thousands migrated to Alberta. They were drawn by the lowest unemployment rate in Canada and a combined municipal and provincial tax rate that is 45 percent below the national average. In Alberta, with no sales tax and plummeting provincial taxes, a typical two-income family earning $60,000 pays roughly $4,000 for health-insurance premiums and one-third less in provincial income, gas, and tobacco taxes than the mean across Canada. Less tax means more take-home pay, and in the event that this typical couple has children, they can be confident their kids will receive top-quality education: grade ten students in Alberta routinely record the nation’s highest reading, math, and science scores.

Alberta’s advantages are destined to become even more dramatic. While other regions struggle to meet the escalating health-care costs of aging populations, 57 percent of Albertans are under forty—the highest percentage of young people in Canada. Albertans already generate Canada’s most robust per-capita gdp, and per-capita investment in Alberta is more than double that of the next-highest province. Relative to population, Calgary has twice as many corporate head offices as Toronto, and with business growth almost four times the national average, the Edmonton-Calgary corridor has become the most productive region in North America. While snobs in Ontario might cling to the view that Alberta is still home to uncultured rednecks beholden to the boom-and-bust energy sector, the truth is just the opposite. Increasingly, the province’s rapid growth is fuelled by a highly sophisticated workforce. Over 60 percent of Albertans have university or college educations, Internet use is the highest in Canada, and service industries—everything from restaurants to communications—now account for roughly 60 percent of the provincial economy.

Against this backdrop, at the Tory Annual General Meeting, Klein requested that he control the timing of his departure from politics. Instead, in an expression of non-confidence, nearly half of the delegates voted him down. How did this happen

Klein may have been “shocked... and a little hurt,” but signs that he might be so humiliated had been appearing across the province for some time. Ten days before the vote, leadership front-runner and former provincial treasurer Jim Dinning spoke to the Meadowlark PC Association and warned that “as much as geology and geography have provided us a rich gift, it is just that, a gift. It is meaningless unless we do something with it.” Dinning was referring to Alberta’s unprecedented natural-resource wealth from oil-sands developments, and he insisted that prosperous times were no occasion for complacency. Alberta had to dream big, he said, and show a talent “not only for taking the resources out of the ground, but going the next step.”

Days later, former Conservative premier Peter Lougheed entered the fray with an op-ed in the Globe and Mail. If Dinning reserved his comments mostly for provincial imperatives, Lougheed went after bigger game. With Klein and others defending Alberta’s right to keep energy royalties at home—and conjuring up the last time Ottawa made a power and money grab for Alberta’s natural resources, the infamous National Energy Program (nep) of the early 1980s, to bolster their case—Lougheed suggested a more magnanimous approach. Alberta, he said, should remain in charge of its riches, to be sure, but in the name of national unity and the province assuming a lead role in the federation, it should also invest in Canada.

Lougheed might credit Klein, to date at least