Promises, promises: A review of the NDP’s 2015 platform
Above image: the Alberta NDP’s 2015 election platform and a page of economic promises.
BY MARK LISAC
Alberta’s minimum wage moves to $15 an hour in October. That’s almost exactly what the New Democrats said would happen in their 2015 election platform (the promise specified “by 2018” but not any particular month).
However, the new government has come nowhere close to reaching another major goal. Its main election document said: “With our plan we will balance the budget in 2018.” The plan had called for a $25-million budget surplus this year but the current budget estimates a deficit close to $9 billion.
Political parties don’t always deliver the goods, especially when a province’s key industry goes into a prolonged slump.
But contrary to public cynicism about politicians’ trustworthiness, they usually put a lot of effort into giving voters what election campaigns promise. Alberta’s New Democrats learned that lesson all too well. In 1993, leading party figures had trouble believing the Progressive Conservatives and new PC Leader Ralph Klein genuinely intended to make large spending cuts as promised, or that many Albertans would support the cuts. That year’s provincial election and its aftermath proved them wrong. It took the NDP 20 years to recover from that miscalculation.
After the party finally won an Alberta election for the first time in its history, the new government has put a lot of effort into delivering on its promises. The minimum wage increase is only one of several examples.
Nevertheless, following through on some of the 2015 election platform promises has proven a challenge as big intentions encountered unexpected obstacles and systemic inertia.
The simplest and quickest economic actions taken by the NDP involved tax changes. The government replaced the 10% flat-rate income tax with a graduated five-rate schedule. The change was probably easier than it could have been because, just before the 2015 election, the Conservatives introduced a budget that also mandated an end to the 10% flat rate; the NDP plan differed only in raising the rates for higher-income earners more than the PCs wanted. The return to progressive tax rates is yet to produce significantly more revenue for the Alberta government. Personal income-tax revenue fell throughout the NDP mandate, with just a modest increase of about $500 million expected this year. Tax cuts in the move to a flat tax in 2001 slashed revenue by about $1.2 billion a year but the government had a natural gas boom to rely on; getting tax revenues up during a period of low oil prices has proven more difficult.
Not all of the NDP government’s platform commitments were as firm as the increase to the minimum wage. The New Democrats sprinkled in a few proposals in 2015 that were contingent on having money, the standard phrase was to promise changes “as Alberta’s finances permit.” Finances have permitted less than hoped, although the government did stick to its determination not to let multi-billion-dollar budget deficits lead to multi-billion-dollar spending cuts.
Thus, the government has in fact pressed ahead with major transportation projects and other infrastructure needs that were falling behind. The most recent example is a $1-billion allocation to complete the ring road around Calgary.
Some of the biggest economic platform deliveries involved energy use and the electricity market. The province now has a green retrofitting loan program as promised. More surprisingly, the government has managed to speed up the phaseout of coal-fired electricity generation. That plan includes more than a billion dollars in compensation paid out of the carbon levy on large industrial emitters, going to energy companies closing plants and in transition aid for coal-mining communities and workers; but while there have been complaints about the cost, no one seriously suggests that burning less coal will do anything but improve both population health and the overall state of the environment.
And the promise to change regulation of the electricity retail system “to give Alberta families more stable electricity prices and to protect the public interest from financial manipulation” also led to an overdue overhaul of the Klein-era restructuring of the market. The move to a “capacity market” system in 2021 will reduce price volatility for small consumers while also instituting a much more predictable process for building new power generation. The old system had been much more geared toward supplying rapidly growing electricity supply needs in industry.
Rebates from the province’s carbon levy will deliver an estimated $525 million directly to more than one-million households this year. (The levy is also nominally the source of funding for a small business tax-rate cut, from 3% to 2%, even though the NDP platform talked about “retaining” the rate at 3%.) There could be concern the government-of-the-day could increasingly use the carbon levy for general revenue purposes in future; critics might argue that would be a shift toward a type of sales tax, although in a form that sidesteps the legislative requirement for a referendum on institution of a provincial sales tax.
Instead of spending more money on major PC-era capital projects like carbon capture and storage, focus was shifted to capital expenditures in areas like transportation, health and education.
The NDP promised to review “resource processing and fair royalties.” The government did establish a commission to review royalties and accepted its report. The recommendations for very little change in the resource royalty framework — and the government’s acceptance of the recommendations — were probably not what many NDP supporters were expecting though.
The handling of resource royalties was a major example of another clear trend for the government — a willingness to practise flexibility where it seemed advisable.
While the platform suggested somewhat higher corporate income taxes, the government has countered with huge new corporate benefits — $500 million in royalty credits for the second phase of a petrochemicals diversification program intended to spur $6 billion in new investment, and $500 million for a petrochemical feedstock infrastructure program that will use loan guarantees and grants to encourage construction of new extraction plants to recover natural gas liquids.
The Alberta investor tax credit now provides a 30% tax credit on equity investments in eligible Alberta businesses related to new technology, products or processes. Similar measures came out of the blue. A tax credit now covers 10% of certain capital expenditures by firms involved in manufacturing, processing and tourism infrastructure. Both tax credit programs have been extended beyond initial target dates to 2021-22. A $20-million “interactive digital media” tax credit program is also to last until 2020-21.
The overall effect has been to shift the New Democrats toward industrial strategies remarkably similar to some of those used for decades by the Progressive Conservatives, though perhaps with an extra revenue boost through the carbon levy. What all these and similar programs have in common is measurement obstacles. It’s difficult to know exactly how much extra economic activity such measures generate.
An increase in the province’s family employment tax credit, totalling $153 million for about 180,000 lower and middle-income working families this year, was also a quick win, supplemented by the creation of a new Alberta Child Benefit providing another $200 million for families. As with the income-tax adjustments, changes in this direction had already been set out in the Conservatives’ 2015 budget.
Smaller budget measures were also relatively easy and quickly applied: rollbacks in taxes and user fees for services such as vehicle registration, mortgage registration tax and death and birth certificates all of which had been increased during Prentice’s short-lived time as premier. The NDP also reversed the Prentice government’s cuts to the charitable donation tax credit, even though federal statistics show this may provide only a bigger tax break for high-income donors and not more donations from more people.
Moving toward “$25-a-day care in quality child care centres” was one of the revenue-contingent promises. Despite big ongoing budget deficits, it began to be implemented last year.
Reversing cuts the Conservatives made to services for children in care was another immediate budget decision, though implementing quick reforms has proven to be difficult regardless of the party forming government. A new review has lead to a four-year strategy to revamp the child intervention system, with nearly half of the changes proposed to take place before the next election. Similarly, creating more spaces in women’s shelters was a seemingly uncontentious budget decision for the NDP but ending violence in families remains a societal challenge.
Eliminating backlogs in hospital and school construction was a tempting goal. There has been steady progress on Alberta’s infrastructure backlog, despite the need to borrow money to fund it. Yet the needs seem so endless that “eliminating” backlogs is a goal constantly receding into the future.
Employment standards were not only reviewed as promised, but were changed to improve compassionate care leaves and time off for family responsibilities. The government’s follow-through on such measures has updated and modernized many workplace safety regulations and rules, but some employers found themselves struggling to keep up with the changes and to figure out how their businesses would be affected.
The platform didn’t say anything specific about bringing farm workers under the umbrella of worker safety legislation and workers’ compensation as part of the more general commitment to employment standards reviews. A fairly clumsy initial attempt in that direction provoked rural anger and took three years to sort out before arriving at a compromise that involved many exemptions and workarounds for family farms.
A general promise of more rural access to health care, education and infrastructure also seems to be a work in progress. The pledge to work on better rural bus transportation produced an initial two-year, $1.6 million pilot project to help develop new service between larger towns and surrounding communities. Greyhound’s announcement of an October 31 shutdown of all its service west of northern Ontario emphasizes the difficulty of providing services to sparsely populated areas and appears to now be spurring more government-funded transportation options.
The New Democrats also promised to improve landowners’ position in surface rights issues, and to review federal rail and transportation policies. The federal government ended up acting on the latter. CN and CP Rail also decided, this year, to invest $600 million in new grain cars. This may help avoid a repetition of earlier government investments in grain cars for use by railways.
The province now has a Ministry of Status of Women, although the minister of the new initiative is also responsible for the much larger Ministry of Children’s Services – arguably diminishing the importance of both. The Ministry of Status of Women works with the rest of government to apply gender-based analysis (GBA+) to policies, programs, legislation and budgets. It is also responsible for prevention of family violence and community grant programs, although some efforts in the former existed previous to creating the new department.
The 2015 election platform had a fair bit to say on Indigenous communities, and areas such as working with Ottawa to improve access to safe drinking water, improving representation of aboriginal history and culture in the school curriculum, building “a relationship of trust,” resolving land claims, and more. Some incremental progress has been made. Nothing in the platform aimed directly at improving perennial systemic failures which result in high levels of Indigenous peoples being incarcerated and children in government care.
General optimism about movement toward city charters and expansion of municipal powers finally led to new legislation last fall and new regulations this spring that provide city charters for Edmonton and Calgary. The effects remain to be seen, particularly around how infrastructure funding will continue to be provided.
Reversing the Conservatives’ planned cuts to front-line services and privatization of some services was relatively straightforward. The new government also scrapped former premier Jim Prentice’s plan to return to a “health care levy.”
The return to a flat-rate health payment had been a strange proposal all along; the Conservatives had scrapped the old “health premiums” several years earlier because they amounted to a highly unfair tax (a flat tax falling most heavily on lower middle-income earners) and a highly inefficient one (tens of millions of dollars a year lost in uncollected payments and spent on attempts to collect payments owed).
Progress on the promise of 2,000 public long-term care beds to shorten emergency room waiting times has been subject to much debate. Some have argued that publicly funded long-term care beds in private or not-for-profit facilities do not meet the definition of “public”, while others argue that new funding in AHS-run facilities still cannot keep pace with demand. The government still insists the last of the extra 2,000 beds will appear by next year. But it may achieve more with changes made this spring to the funding formula for long-term care. And the effects on emergency care remain uncertain.
The home-care budget has been strengthened and is scheduled to keep climbing by about 8% a year. But changes in program delivery are still leaving some users dissatisfied or even dismayed.
Helping families “get better access to primary care networks” by negotiating stronger mandates and longer hours sounded simpler than it was; the PCNs remain somewhat resistant to any sort of rapid change. They are still held firmly in the control of physicians who successfully resisted former premier Alison Redford’s bold plans for creation of 140 much more flexible “family care clinics.” Two years of back and forth, plus an unflattering review of how PCNs had been working, led to an agreement with physicians a year ago on overhauling the concept; that remains a work in progress more than a decade after PCNs first appeared.
Mental health strategies continue to be written and expanded, particularly in schools and post-secondary. As with many preventative strategies, Albertans will have to wait and see what kinds of qualitative change result from better funding of mental health care.
The government did restore the Summer Temporary Employment Program (STEP) and instituted a tuition freeze for post-secondary students. The advantages of a tuition freeze were incremental and temporary, and although the freeze has been extended through to next spring; barring a truly radical and budget-busting change such as a move to free post-secondary education, the bills for students will start mounting again.
K-12 school fees for essential services were reduced by legislation last year, but the phase-in of all-day kindergarten was another plan subject to being brought forward “as Alberta’s finances permit”. Kindergarten services remain mixed: part-time in some school board regions, all-day in some (with costs covered by school boards or foundations), all-day with parent fees as high as $320 a month in others. Tinkering with things like school fees has not addressed questions about slipping test scores or the growing population of children with specialized needs. The government is also in the midst of a massive update to the entire K-12 curriculum.
The party did not say anything in its formal election platform about issues like gay-straight alliances in schools but those absorbed a significant amount of time and energy on the education file, as the opposition and some private and religious schools pushed back on legislation that pre-dated the 2015 election.
The government arrived in office floating on a sea of decades-old rhetoric, common to every party, about diversifying the economy and supporting everyday Albertans. It has delivered on many of the measures it had set out, and went even further in some ways.
Changes to conflict of interest law have made it tougher for MLAs to benefit their own or their friends’ financial interests. But tighter control of donations to political parties initially failed to eliminate vast loopholes that saw millions funnelled through organizations ideologically allied with, but not formally connected to, political parties. New rules were brought forward to rein in this so-called “dark money”, though it remains to be seen if new loopholes could be exploited.
Measures to improve democratic institutions have not kept the Alberta government from falling into some of the same traps and temptations as afflicted previous governments — particularly interference in freedom of information rules and allegations of holding back reviews or reports for political reasons.
And then, of course, the government has both faced and been implicated in the usual interprovincial or federal-provincial quagmires. The debacle created by British Columbia’s opposition to the Trans Mountain pipeline dragged Alberta into unexpected initiatives and political wrangling. All the provinces’ insistence on maintaining interprovincial trade barriers (despite rhetoric and agreements to the contrary) remain an urgent issue, and one in which the Alberta government still bears a fair share of responsibility.
The province’s Climate Leadership Plan remains subject to questions because of Opposition promises to scrap the carbon levy and because of other provinces’ potential challenge of federal plans for carbon pricing.
And Finance Minister Joe Ceci could not resist taking shots at the federal equalization program this year, even though federal transfer payments now make up the second-biggest source of Alberta provincial revenue after income taxes.
Meanwhile, the government has also quietly cleaned up a number of areas that were left to drift under the Conservatives and were too small to highlight in the election campaign. Executive salaries in Crown corporations and in various entities funded by the province have been reined in (although the process hasn’t always gone smoothly). The number of provincial agencies, boards and commissions — useful places for former governments to make appointments that rewarded supporters over the years — has been reduced by dozens.
The realities of being in office, and a recession driven by plunging oil prices, perhaps created unexpected pragmatism and flexibility, producing surprising decisions that were not contemplated before the 2015 election. Among those that can be chalked up are huge support for the Trans Mountain pipeline, various new financial supports for business, and wage and salary freezes for much of the public sector.
Has the government been effective in its first term? In some ways, that’s up to individual judgment and measurement of how specific groups and communities have experienced the last three years. Has the Alberta NDP delivered much of what its 2015 election platform would have led Albertans to expect if it formed government? Even with the usual challenges to measure results, the direct answer is demonstrably yes.