Saving for a rainy day

The tragedy of recent historic flooding in Southern Alberta has had a profound impact on us. As an Edmontonian who spends a good deal of time in Calgary, my heart goes out to those who have been affected. Encouragingly, the Alberta spirit lives on and Calgarians will demonstrate resiliency as the rest of us demonstrate high levels of empathy and community through giving in the ways that are available to us.  I have to give big kudos to Mayor Naheed Nenshi, Premier Alison Redford, Prime Minister Stephen Harper and all three levels of government who have been absolutely stellar in their response. These tragedies and struggles do emphasize the important role of government in acting as the vehicle through which we take collective action and in the value of the public service and public servants.

Recently, the Redford government announced that it would pledge an initial and immediate $1 Billion in aid with more to come. They also said that in doing this, the priority of a balanced budget would be set aside. They should be applauded for doing the right thing. We count on government (ie our neighbours) to be there for us on rainy days. But, talk of a balanced budget in this context made me think of where this money will come from, could come from and should come from. Wouldn't it be nice if we had a rainy day fund for such unforeseen instances?

Oh?! We do???

That's right. We have the Alberta Heritage Savings Trust Fund which sits at $16.8 billion. This is good. It could come in handy here, but with BMO estimating the costs of recovery in the $3-$5 billion range it would make a considerable dent in the fund. Unfortunately, the fund has not grown substantially in decades. The last systematic investment into the fund was made in 1987 and while the fund has generated $33.4 billion in total income, $34.6 billion has been transferred out of it largely to fund general programs. 

The Alberta fiscal formula is fundamentally flawed. Last year the government brought in $38.6 billion in revenues. Of that, $7.6 billion came from selling off non-renewable resources and $2.5 billion came from siphoning off investment earnings. At the same time they still spent $2.8 billion more than they raised which was drained out of another smaller more temporary rainy day fund, the Sustainability Fund. 

This all becomes a critical issue when you account for the fact that Alberta is the lowest taxed jurisdiction in Canada and could raise $11 billion more in taxes and maintain the lowest tax regime in the country. 

In simple terms, we are selling off the farm and dipping into our RRSPs in order to pay the bills just so we can take more time off work. 

As much as some would say debt is stealing from future generations, what we are doing amounts to grand larceny fraud against our great grandchildren. They should have a stake in both our non-renewable resources and our savings and in the meantime we should continue to contribute by paying our fair share. 

A fiscal prudent strategy would look like this. Instead of selling off non-renewable resources to fund programs we should treat it like a transfer from fixed assets to liquid but restricted assets. In other words, put all non-renewable resource revenue into the Heritage Fund. We should quit the vacation from responsibility and increase our taxes to the point where we collect the $11 billion more in revenue while maintaining our tax advantage. We should then quit using interest to fund general programs and instead use it for an endowment fund to help diversify our economy and train our people for the day the oil is gone. 

And when catastrophic flooding or fires occur again we sensibly and responsibly use the rainy day fund to pay for recovery... without guilt or regret because that is what we planned for all along. 

Cabinet Speculation

Hey, I'm awful at predictions, but why not speculate on cabinet postings.

Premier Alison Redford has discussed the possibility of some repositioning of portfolios and the possibility of a downsize to cabinet. It is quite likely that we will see 20 ministers in the cabinet including the Premier. As far as responsibility juggling, we could see something done that would help coordinate seniors housing options which is currently spread over three ministries: human services, health and seniors. We might also see a combination of Tourism, Parks and Recreation with Culture and Community Spirit as a way to downsize cabinet by combining some smaller ministries that are justifiably related.

But people tend to be more concerned about who will be in cabinet and so let's get to that.

First off, let's look at ministers that will definitely remain in cabinet:

• Alison Redford (Calgary-Elbow) will be Premier.
• Doug Horner (Spruce Grove-St. Albert) is competent and popular. He will remain in cabinet and he is likely to remain as deputy premier.
• Dave Hancock (Edmonton-Whitemud) will surely continue in his role developing the new Human Services ministry.
• Greg Weadick (Lethbridge-West) will remain in cabinet since Redford will need representation from South of Calgary.
• Cal Dallas (Red Deer North) will likely be returned to cabinet to bring representation to central Alberta. He is also likely to be given the opportunity to continue building his new ministry of Intergovernmental, International and Aboriginal Relations.
• Diana McQueen (Drayton Valley-Devon) has proven to be competent and should be returned to cabinet. It is quite likely that she may also be promoted. Energy might be a good fit for this oil patch area representative.
• Verlyn Olson (Wetaskiwin-Camrose) is also quite competent and widely respected, so it is likely he will remain in cabinet and as justice minister.
• Frank Oberle (Peace River) will bring some northern representation, as will
• George Vanderburg (Whitecourt-Ste Anne) brings rural representation and could head up realignment of housing services for seniors.
• Manmeet Bhullar (Calgary Greenway) proved himself as a junior minister and will help represent cultural diversity in the new government. Look for him to be promoted.

Secondly, which newcomers are likely to be added into the mix:

• Bridget Pastoor (Lethbridge East) will be added to cabinet to bring as much southern representation as is possible.
• Ken Hughes (Calgary-West) was handpicked by Redford to run and as former Alberta Health Services chair will surely be added to the inner circle.
• Donna Kennedy-Glans (Calgary-Varsity) is also a friend of Redford's going back to the Joe Clark days. She represents the new brand of Progressive Conservatism that the party is trying to brand itself as. Her work around integrity will be valued by this partially stained PC government.
• Don Scott (Fort McMurray-Conklin) will likely be included as one of the Fort McMurray MLAs will need to be added to cabinet and he seems to be the more experienced of the two.
• Other newcomers that could get cabinet postings include Christine Cusanelli (Calgary-Currie), Ron Casey (Banff-Cochrane), David Dorward (Edmonton-Gold Bar) and Sandra Jansen (Calgary-North West).
• Alana DeLong (Calgary-Bow), Naresh Bhardwaj (Edmonton-Ellerslie) and Janice Sarich (Edmonton-Decore) are sophomore MLAs that could get a bump to cabinet.

Finally, experience is likely to come from these ministers who are likely to get reappointed, but bumps in their last files may provide uncertainty around their placement:

• Doug Griffiths (Battle River-Wainright) proved popular on the leadership trail especially amongst progressives, but his spat with AUMA chair Linda Sloan could cost him.
• Thomas Lukaszuk (Edmonton-Castledowns) is a very strong messenger and has proven himself as loyal to the premier, but problems with passing the Education Act could jeopardize his reappointment.
• Fred Horne (Edmonton-Rutherford) tried hard but wasn't fully able to bring confidence to one of the most important portfolios in cabinet. He will likely be reinstated to cabinet at a lower posting.
• Jonathan Denis (Calgary-Acadia), Jeff Johnson (Athabasca-Sturgeon-Redwater) and Heather Klimchuk (Edmonton-Glenora) have no points against them, but haven't made a big splash either. They could go if Redford has other people in mind for cabinet.

And finally, since I am not afraid of being proven wrong, here is a firm estimate of people and positions from my point of view. I am certain there will be some restructuring, but I will place people into the old set of portfolios anyway.

Alison Redford	Premier
Doug Horner	Deputy Premier, Treasury Board
Dave Hancock	Human Services, House Leader
Donna Kennedy-Glans	Energy
Verlyn Olson	Justice
Ken Hughes	Health
Thomas Lukaszuk	Finance
Fred Horne	Education
Greg Weadick	Advanced Education
Bridget Pastoor	Agriculture
Cal Dallas	Intergovernmental Affairs
Doug Griffiths	Municipal Affairs
Diana McQueen	Environment
Don Scott	Transportation
Jonathan Denis	Public Security / Solicitor General
Frank Oberle	Sustainable Resources Development
George Vanderburg	Seniors
Jeff Johnson	Infrastructure
Manmeet Bhullar	Service Alberta
Sandra Jansen	Culture
Naresh Bhardwaj	Tourism

Election Predictions and Ridings to Watch

Today is election day in Alberta and quite a day it will be. I am guaranteed to be glued to my television screen and interweb module well into the wee hours of the morning. I suspect that it will be late before we know who the premier will be and whether they will have a majority or minority government. I pity the people who will have to make projections for the media outlets. They will juggle the balance between trying to be first to call the election, while ensuring that their call is not a wrong call.

Nonetheless, for funsies, I am prepared to make a prediction:

• Wildrose - 45 seats
• PC          - 36 seats
• NDP       - 4 seats
• Liberal    - 2 seats

While I have ended up at nearly the same result as Eric at threehundredeight.com, I feel it is important to note that I have done so by crunching my own numbers using 2008 results and current poll projections. The totals are nearly the same, but the ridings that make up the totals are different.

Having said that, there are a few things that I will be watching closely on election night.

1. Bellwether Ridings - ridings where early results will help determine the scope of the election. Wildrose wins in these close Calgary ridings will help to indicate the mood of Calgarians for change. Similarly, if PC can hold these two close central Alberta ridings, it should indicate that rural Albertans might be less ready to risk it with the Wildrose.

• Calgary Cross
• Calgary Currie
• Calgary East
• Calgary Foothills
• Lacombe Ponoka
• Wetaskiwin Camrose

2. Other interesting ridings

• Edmonton Centre - Everyone is talking about Glenora, but I think it is safer for the incumbent than this seat which is as likely to go PC or NDP as opposed to staying with Liberal Laurie Blakeman. I say Blakeman stays.
• West Yellowhead - Should be a safe PC riding, but has had a strong showing for the NDP in the past. If Alberta party leader Glenn Taylor can convince labour supports to vote for him, he could steal the riding. My prediction is for Robin Campbell.
• Calgary Elbow - Having been the home of former Premier Ralph Klein, Elbow must be getting accustomed to hosting the premier. Will their member be Premier, leader of the opposition or a giant killer in a new Wildrose government? I say Redford holds.
• Edmonton Glenora - Of course, this one is being dubbed as the five way race so everyone will be keeping an eye on it. I believe that Klimchuk will be able to hold it and it won't be as close as everyone is anticipating.
• Edmonton Meadowlark - It is hard to say how many voters who voted for Raj Sherman as a PC will stick with him as a Liberal, but floor crossers are rarely punished in Alberta and he will have the advantage of being a party leader. I say Sherman holds.
• Edmonton Riverview and Edmonton GoldBar - Both ridings were previous Liberal strongholds, but popular MLAs Taft and MacDonald are not running. The NDP is making big pushes in both ridings, but progressive voters might coalesce around the PCs to stave off the Wildrose. I'm picking PC in both ridings.
• Fort Saskatchewan-Vegreville - People here loved Ed Stelmach, some will backlash against the Tories for turfing him and reward the Wildrose who have fielded a strong candidate in Shannon Stubbs (seeking to beat the Premier at home), but others will see the Wildrose as the enemy that got rid of their guy and stay true blue. I think Fenske will keep the riding PC.

We shall check back on Tuesday to see how these predictions hold up.

Election 2012 Begins - A real race is expected.

As expected Premier Alison Redford visited the Lieutenant-Governor's office today and started Alberta's 2012 general election. She waited until the Alberta legislature passed the budget to get the campaign started in an effort to reinforce the party image as stable competent managers. The strategy seemed sound: pass a fair and prudent budget, move forward on key legislation and keep Danielle Smith on the sidelines. The risk, of course, is that you provide a forum for the opposition parties to air their grievances on a daily basis. If a narrative emerges and gains traction, then you are stuck in the house responding to an agenda advanced by the opposition parties. Unfortunately a narrative emerged: the Tories are bullies and have abused the reins of power for too long. This narrative was largely advanced by the Liberals and will serve the Wildrose party well.

Recent polls bear witness to this critical mistake on election timing. Prior to the spring session the PCs had a comfortable 10-15 point lead, but two polls released on the day the election started show the race is much closer.

A CTV-Forum research poll puts the PCs ahead only three points over the Wildrose province wide (36-33) amongst decided voters. Even worse, a Global-Ipsos poll puts the parties in a complete tie (38-38). With a strong Tory lead in Edmonton, both polls demonstrate that Wildrose is ahead in Calgary and rural Alberta.

Now I am watching the polls closely and have developed a little seat projection tool that I hope will serve me well throughout the campaign. According to my projections, a vote held today would yield 51 seats for the PCs, 27 for the Wildrose, 6 seats for the NDP and 3 seats for the Liberals. (My pre-session projections were 65-12-5-5, and a few commentators said I was giving too much credit to the opposition).

Polls aside, 28 days can be an eternity in politics and a vigorous campaign will undoubtedly emerge. Redford strategist Stephen Carter is known to use the full length of the campaign period quite effectively, so the story on April 22nd will be quite different from the story today. I hope to write to you dear reader on a daily basis until then. I hope you will enjoy it and share your thoughts.