Kicking them while they're down.

Yesterday, I wrote a short post on updated employment figures that show that it is the youth, impoverished and working class families that are most affected by growing unemployment in this recession.

Two stories that I came across recently confirm who is really being affected by the recession. First, a report from the Community Foundations of Canada is
pointing out that the youth unemployment rate has hit a 30-year high. Youth
unemployment rose to a staggering 16.3 per cent over this past summer. Even
those youth who are able to find work are getting far fewer hours.

In the meantime, Statistics Canada data is showing that "Young people,
low-paid workers and families with children have borne the biggest share of job
losses in this downturn, while those aged 55 and over had modest employment
gains." Talk to anyone in their early 20s and they can tell you stories about
themselves, or their peers who are under or unemployed.

I concluded by criticising pending government cutbacks as a kick-em-while-they're-down strategy, because programs like education, post-secondary education, affordable housing and income supports are being threatened with cutbacks.

I'm sure glad that the Alberta government is gearing up for a kick-em-while-they're-down strategy towards our youth, impoverished and families by planning to cut the social institutions that we have set up to help those people in our society who need it most.

Silly me, I wrote about this before our premier came out and delivered the biggest boot to the head of the unemployed, saying "The A and B Crews are working and the C Crew is at home until they change their attitude."

Well, Ed, it is clear who needs the attitude adjustment. You've earned your monicker of Steady Eddie, because we have a youth unemployment pandemic and you have done NOTHING to improve their situation. Which is par for the course on how you manage to handle pandemics.

The premier's flak Tom Olsen tried to clarify by saying that the premier meant to say these people got used to $80,000 a year jobs with no training and now aren't prepared to go out and get an education.

He's got a bit of a point. This government blessed oil companies with low royalties, low taxes and corporate handouts for the past decade allowing the oil industry to boom unchecked. We were desperate for workers - oil companies chased after our youth with promises of big bucks and big trucks. So, you can't really blame them for somehow getting the idea that life was easy. Many kids were poached from high school without a second thought for their longterm wellbeing and sent off to the rigs and the pits. For some, the work-hard, party-hard lifestyle and easy-come, easy-go cash flow resulted into some pretty nasty drug addictions.

Now, you're blaming them for having no job and no education. You have got to be kidding me! You tell them to go back to school, yet you're cutting finding to education, tuition is rising and student loans are becoming smaller and harder to get. Meanwhile, you're cutting oil royalties and corporate taxes to 'stimulate' the economy?!?! It seems to me the only things being stimulated are the oil executives and shareholders.

Ed, you better hope they don't learn how to vote.

Youth and low paid workers suffer the most.

Two stories that I came across recently confirm who is really being affected by the recession.

First, a report from the Community Foundations of Canada is pointing out that the youth unemployment rate has hit a 30-year high*. Youth unemployment rose to a staggering 16.3 per cent over this past summer. Even those youth who are able to find work are getting far fewer hours.

In the meantime, Statistics Canada data is showing that "Young people, low-paid workers and families with children have borne the biggest share of job losses in this downturn, while those aged 55 and over had modest employment gains." Talk to anyone in their early 20s and they can tell you stories about themselves, or their peers who are under or unemployed.

I'm sure glad that the Alberta government is gearing up for a kick-em-while-their-down strategy towards our youth, impoverished and families by planning to cut the social institutions that we have set up to help those people in our society who need it most.

*fixed from original posting. Thanks hhenshaw.

My Stop the Cuts letter.

Dear Brian Mason, Minister Hancock and Premier Stelmach:

Albertans have sacrificed and worked hard over the past fifteen years to help eradicate our provincial debt. They did so because they knew that future payments on that debt would pose a risk to the quality of services the Alberta government provided in the future.

Now that Alberta is debt free and has gone through a significant boom, we expect that Alberta will have the highest quality public services in the country. We deserve it.

Reacting to plummeting energy prices by slashing funding will only jeopardize our future prosperity.

Our long term prosperity is dependent on developing creative and critical thinkers who are committed to working together to solve the problems of society. The only way to build that citizenry, is through a world class public education system, where students have the supports and opportunities to develop to their full potential.

Education funding cuts puts that future at risk! Now is the time to make the wise investments, the ones that will pay off for years to come. The future is so uncertain - we need to do everything possible to ensure that Alberta is ready for it.

As a concerned Albertan, I urge you not to cut funding for our schools.


Sincerely,

Jonathan Teghtmeyer
Edmonton

If you care about the future of education in Alberta, and the future of Alberta in general. Take 5 minutes and send your own message at www.stopthecuts.ca

Just for Scott Hennig

Canadian Taxpayers Federation does a good job looking out for Alberta's elite. The Alberta Director Scott Hennig, told me on Twitter that Alberta has progressive taxation:

scotthennig @atypicalalbertn But we already have progressive taxation, thanks to the Basic Personal Exemption

Let's be honest Scott, it looks pretty flat to me:

Save the economy - get rid of the flat tax

In my post yesterday, I examined provincial personal income taxes for a variety of income earners. I realise now that I wasn't clear on my main thesis.

The primary point I wanted to make is that flat tax systems extraordinarily benefit high income earners - and do so at the expense of middle class workers.

My analysis showed that an Albertan earning $40,000 pays 40% more in income tax than her counterpart in British Columbia. At the same time, the Albertan making $200,000 pays 18% less than a similar west-coaster.

But let's also keep in mind two important considerations.

Dollar for dollar, that high income earner is saving $4,000 out of his $200,000 while the low income earner is paying an extra $700 out of $40,000. Who do you think notices that difference more?

Secondly, my calculations do not include deductions. How much tax do you think that $40,000 earner is deducting because of RRSPs, political contributions or investment dividends? Now, how much do you think that $200,000 earner is deducting?

But, more importantly let's think about the impact on the economy. Plain and simple, economic activity is generated by spending. The healthiest thing for us, economically speaking, is to have people spend money and to have them spend it locally. By injecting cash into the local economy, local people have jobs - local people with jobs means more people spending money locally.

Cash in the hands of working people gets cycled around the economy and spent over and over and over again - generating economic activity.

Cash in the hands of the wealthy doesn't get spent as much. A greater percentage of their money is saved or invested - removed from the local economy.

It makes much more sense to shift the tax burden from the working class and move it towards the wealthy. First off, they can afford it more and secondly they will benefit indirectly from the economic activity generated by the spending of the working class - whether its because of bonusses, businesses or returns on investments.

It's time that Alberta got rid of the flat tax, for the benefit of all of us.

Debunking the low taxes myth.

Albertan premiers have for a long time convinced Albertans that Alberta is the tax haven of North America. The last guy we had loved to talk about the Alberta advantage. The new guy wants us to think we have the freedom to achieve and tells us things like, "we have very low tax rates for people working in the province."

Either one of two things are happening for Premier Stelmach: he is trying to mislead us or he has no sense of what "working" people make.

He must not be talking about people who make between 30 and 80 thousand dollars a year. Because they could move to BC or Ontario and pay less in taxes.

This graph shows the amount of provincial personal income tax paid in 2008 by someone making $30,000, $50,000 and $70,000 of taxable income. If you're making $40,000 in Alberta you would pay $2,383.90 or 6% of your income to the province. Meanwhile, in BC you would be paying 4.2% and in Ontario you're paying 5%. (All data is calculated from Revenue Canada tax returns with only the personal deduction claimed)

In fact, as income levels rise, Albertans pay more tax than Ontarians until they start making $80,000. British Colombians save on taxes until they start making over $120,000.

The main reason for this, of course, is that Alberta has a flat income tax rate, while BC and Ontario have progressive tax rates. In fact, Alberta is the only province (and one of only a few jurisdictions) to have a flat tax.

We have it because we were duped.

In 2001 King Ralph moved Alberta to a flat tax and combined it with a tax cut. We bought the idea of a flat tax, because we liked the tax cut that happened to come with it. In actuality, the ones who really save with flat taxes are the wealthy.

To further support my claim that Alberta has revenue issues, this chart shows the 2008 personal income tax paid in 6 provinces, depending upon a person's taxable income.

In all of the other provinces as an individual's income level rises, the proportion taken for provincial taxes also rises. Except for Alberta, represented by the blue line, where the more you make the more you save.

There is an Alberta advantage alright - it's just felt most by those people who make the most money. Here are the tax levels for people earning $150,000 and $200,000 in the various provinces:

So while the Albertan making $40,000 is paying $693 a year more in taxes than his counterpart in BC, the Albertan who makes $200,000 is saving $3,874.

This provides for me two interesting alternatives. We could cut taxes for 6 Albertans by raising taxes on one siginificantly wealthier Albertan with no affect on the treasury. Or we could tax him at a level that all of the other provinces deem to be fair and save our public services.

Inspiring Education and religious fanatics: not what you might expect.

So, I come to my computer this evening to make a post, after a fair hiatus, about Inspiring Education. Rusty to the process, I mistype the address into the explorer bar and end up at http://www.blogpsot.com/. It didn't take me long to determine that I would have to include my stumble onto this site as part of my post. But I'll get there later...

Now, anyone who was at The Inspiring Education Fall Forum knows that Bridget Ryan has the uncanny ability to use every conjugation of Inspire known to man. And, they also know where education should go over the next 20 years.

The big question is, how will we reconcile the fact that everyone leaving Northlands today had a slightly different image of that future?

First off, the team and everyone involved needs huge commendations for putting together an incredible environment where Albertans could get hopeful about our future and the potential we have as a society. It was about building the society of our dreams by ensuring that our children grow to their greatest potential. It was inspiring and there were some fabulous things said.

But we need to be clear, there was no synthesis of ideas from table to table and there were no ratifications of ideas or suggestions. There was no collective voice of Inspiring Education developed.

This is not a criticism of the process, it is merely an observation of the outputs. An important observation.

Over the next few months we are going to be in the process of rewriting the legislation that oversees education in Alberta. There is going to be a great deal of talk about what the system should look like and who should be doing what and how they should do it.

Beware the advocate who says that "Inspiring Education told us ___________."

Even (or perhaps especially) if that person is from the Government of Alberta or, for that matter, the Alberta Teachers' Association.

As valuable, authentic and informative as the process was, it was not a decision making body and it wasn't a referendum on policies - and that is exactly how it was intended. Government is not about to allow itself to be fenced in by what Inspiring Education said, and therefore nobody should be able to use it as a mantle to hang their own biases or agendas.

In the end, the process did exactly what it should. It gave people an opportunity to dust off their binoculars and peer into that perfect world down the road and to feel confident talking about what their vision for education in Alberta is, which is what these next few months are all about.

We need this dialogue and the government still needs to hear your thoughts, because some one needs to counter the more radical points of view out there.

The Untold Angle on Education Cutbacks.

Full disclosure. I work in communications for the Alberta Teachers' Association. I have been very deliberate about maintaining a distinct line between what I write here and the work I do for my employer. Having said that, I really enjoy working for the ATA because the organization generally reflects my values and aspires to create the same Alberta I envision.

With that out of the way, the topic of today's post is the state of public education in Alberta.

I have expressed concerned in the past about how the Alberta government lacks planning for our future, those concerns are growing rapidly. My concern is that government is going to proceed next year with massive cuts to our education system.

While Hancock is hesitant to quote a number, credible estimates range between $215 million and $400 million. A common number referred to takes the $2 Billion reduction needed government-wide, multiplies it by the 17% of spending that the province devotes to education and arrives at $340 million in cuts to K-12 classrooms in 2010/11. This level of cuts could see the system losing 2000 to 3000 teachers, resulting in significant increases in class size.

While many stories have been written in regards to these cuts, one story flew under the radar because it wasn't labelled as an education funding issue, although it most undoubtedly is.

A love of children draws hundreds of new people to the teaching profession each year in Alberta, but there has been growing concern in both professional and government circles about the number of new teachers who, for one reason or another, stop feeling that love and leave the classroom after a few years.

More than 20 per cent of Alberta teachers leave the job within their first five years, workforce statistics compiled by the provincial government indicate. The problem is particularly evident in northern and rural areas.

Please, take a moment, read the story and come back for further analysis.

Here is my reason for dire concern. Of the up to 3000 teachers being laid off next year, most of those will be teachers with temporary and probationary contracts. These teachers tend to be younger and newer to the profession. These teachers are passionate about their work and their students, but they also worry about their own wellbeing and are considerate of the demands of the job and limitations on being able to meet the needs of all of their students.

If you take a group that is already leaving the profession in considerable numbers and lay a large portion of them off, it is quite likely that many of them will leave the profession or province completely.

Now, let's consider the long term implications. Sophisticated demographic models developed by government are already predicting a dire shortage of teaching staff in the next five to ten years. This will be mainly caused by very high fertility and immigration rates, combined with an outflux of retiring teachers.

So not only will the cutbacks affect classsizes, but they will also ensure astronomical levels of attrition in the teaching profession. And, as Alberta education director of workforce planning Randy Clarke is quoted, "There is evidence that with high levels of teacher attrition, students struggle academically."

So, what value do Albertans get out of slashing public education and laying off scores of teachers who will be desperately needed in five years? Teachers needed to meet the demands of the system that will educate the next generation of leaders in our province? How is this planning for the future?

Alberta's Revenue Problem

Alberta's first quarter fiscal update was released this week and the news wasn't good. Alberta's deep reliance on resource revenues has forced the government into a harsh $6.9B deficit. With Ed Stelmach's backtracking on royalty rates and refusal to look at different tax structures, Alberta is left staring down the barrel at service cuts.

Given the economic boom that Alberta has experienced recently, there is no need for cuts to health care and education. First off, if we had a sustainable progressive taxation system, then we wouldn't have to worry about dropping energy prices effecting our public services. Secondly, if we had more lucrative royalty rates, we would have a much larger sustainability fund to draw from. Sure the boom wouldn't have been as dramatic, but then the bust wouldn't have hurt so much, either.

All in all, I consider this to be a revenue problem. The problem being, we rely on volatile revenue to deliver essential services - and that's no way to run a government.

Scott Hennig, leader of the most misrepresentatively named lobby group in Alberta (The Canadian Taxpayers Federation), argued with me recently on Twitter about my assertion that we have a revenue problem. He says we have a spending problem and pointed to dramatic increases in government spending since 2005 (near 11% per year, on average).

I decided to crunch some numbers to get a handle on the information. This graph shows the Alberta government's expenses and revenues on a per capita basis, adjusted for inflation (2002 dollars).

Government spending was slashed significantly in the mid 1990s under Premier Ralph Klein. It has only risen recently and it is still not at the level of service Albertans were experiencing before 1993. It is also noticable that the spending is reactive to fluctuations in revenue (driven by resource prices). The cuts in 2002 are only because revenues dipped in 2001.

Sure, spending increased since 2005, but much of that spending was on infrastructure that was neglected throughout the 90s and the early part of this century. The levels of delivered service is still well below what it was in the 80s - wait lists in health care are long and class sizes are large!

Here's another interesting look at government spending. This graph shows Alberta government and expenditures as a percentage of Gross Domestic Product.

In the early 90s government spending was in the 22% range, then under Ralph's reign it plummeted to near 13-14%. It stayed around there until 2002, where it took another hit and dropped to the 11.5% range. It has remained between 11 and 11.5% since 2004. What I find particularly interesting, is that government will reduce expenses whenever the economic climate justifies it, but does little to improve service when we are in a position to do so.

By comparing spending to GDP, we have a real sense of how much we are living up to our potential. As Alberta becomes more prosperous, should we not be allocating more resources to social services?

Ultimately, it comes down to this: We have great potential in Alberta to be one of the best places in the world to live - to ensure that everyone is looked after and prosperous. Instead, we don't plan and we squander our resources.

Why don't we get to see the debate?

I've said it here before. I really enjoy a good debate. And frankly, I've been wrong (many times) and a good healthy debate has convinced me to change the way I see many issues. I also think that open, honest debate is healthy for democracy and healthy for our society.

I wish the Alberta PC caucus saw it that way.

In recent memory there were two occasions where the PC caucus has pointed to the rigorous debate that has gone on behind their closed doors to justify their stance. First, it was Bill 44, where apparently the PC caucus debated the issue for months. Now, it is used to justify the ousting of Guy Boutilier. Ed Stelmach is being very clear with his MLAs and Albertans - the public arena is no place for debate on issues that matter to Albertans.

If politicians could just swallow their pride a little bit and accept the risk of being wrong once in a while - and if voters and media could accept that being on the losing end of a public debate does not make a bad politician - then we would have some really healthy public debate about what's in the best interest of Albertans. It seems to me that that is what democracy should be about.

At this point, I suspect you may be calling me naive or idealistic. And you may be right. Sure, I understand that the party leader needs to ensure that the members of his party are behind him, especially in our parliamentary system. It is incredibly important in minority parliaments and thus we have this long established traditions of party whips and caucus solidarity. My thesis however, is that this practice does not allow for the best policy to emerge and it shouldn't governance be about developing the best policy possible.

Think of it this way. If the honest debate over which building projects had to be delayed was held in a public place (a house or an assembly, if you will) intended for debates over the issues of the day, then Boutilier would be able to go back to his constituents and say "I tried, but some tough decisions had to be made." They would be witness to his attempts and he wouldn't have to call out the premier in the media. Perhaps the Fort McMurray seniors complex wouldn't be built, but at least we could point to the discussion as evidence that the issue was appropriately considered.

Of course, people would also feel less cynical or alienated about politics and maybe they would feel more empowered to vote and become involved in the process.

But then, if people saw the real reasons why our legislature makes the decisions it does they might actually turn out to vote. And if people actually turned out to vote, the Conservatives might not win the next election.

I guess Stelmach has it figured out after all.