So far, Klein's record on jobs superior to Notley's performance
When Statistics Canada reported earlier this month that Alberta gained 26,000 jobs in December 2017, the Alberta government was delirious with post-Christmas joy. This, Finance Minister Joe Ceci asserted, was evidence that his government's policies are working.
After the dramatic drop in oil prices in 2014 and 2015, it would be surprising if some employment gains had not occurred by now. The relevant question is how does the NDP job creation record stack up against the past, and specifically, to the early Ralph Klein years after a similar amount of time in office? This is useful to ponder given the two governments offered diametrically opposed economic policies.
Klein became premier in December 1992 after winning his party's leadership race, but his first provincial election as leader came in June 1993, which he won. After that, economic reform began in earnest: Reductions in provincial spending, privatization of government liquor stores and licence registries, a hold-theline approach to taxes and an end to most corporate welfare.
Rachel Notley and her colleagues came to power in May 2015. Their policies are best described as spend, tax, borrow and intervene more - a lot more. This month marks 32 months since their ascension to power.
Assuming June 1993 as the start of the voter-endorsed Klein era, his 32-month mark arrived in February 1996. Here's the comparison of their job creation records using seasonally unadjusted figures from Statistics Canada.
By February 1996, Alberta's unemployment rate stood at 7.9 per cent, down from 9.1 per cent in June 1993. As of December 2017, the Alberta unemployment rate under Notley was 6.5 per cent, higher than the May 2015 rate of 6.2 per cent.
After Klein's 1993 win, unemployment decreased faster than the Canadian average (down 1.2 per cent, versus one per cent). For the Notley period (May 2015 to December 2017), Alberta's jobless rate is up by 0.3 per cent, while the Canadian rate is dramatically down, by 1.8 per cent.
Under Klein, Alberta's unemployment rate was lower than the national average; under Notley, it is higher.
By February 1996, Klein's Alberta gained 10,400 full-time jobs and 33,000 part-time jobs (43,300 new jobs in total). As of December 2017, Notley's Alberta's saw 72,800 full-time jobs evaporate, with 57,700 part-time jobs created (a net loss of 15,100 jobs).
In other words, if the NDP premier had replicated Klein’s 32-month record on jobs, there would be 58,400 more people now working in Alberta. And the record of Klein and his colleagues is even more impressive if one understands that Alberta’s labour market in Klein’s first three years contained nearly one million fewer people than it does now.
The Klein advantage cannot be attributed to high resource prices. They were mostly lower.
Adjusted for inflation to 2017 dollars, the average annual price of natural gas in Alberta was $2.40, $2.62 and $1.85 (in 1993, 1994 and 1995), compared with $2.50, $1.87 and $2.04 (in 2015, 2016 and 2017). Thus, Klein faced lower gas prices in two of three years, with one year lower under Notley.
On oil, the Klein government saw oil prices at $28.04, $26.20 and $27.50 (in 1993, 1994 and 1995, West Texas Intermediate, in U.S. dollars, and again, adjusted for inflation). Despite the 2014 crash, average annual per barrel prices have been $50.27, $44.20 and $50.88 (2015, 2016 and 2017) during the Notley era. That's between 69 and 85 per cent higher than the first three Klein years.
I grant that Alberta producers take a discount relative to WTI. Still, with the exception of the deepest trough in early 2016, the Notley government has seen higher energy prices in most months relative to the first three Klein years.
Despite that, Klein and his colleagues presided over net employment creation, including new full-time jobs.
In contrast, in its reign thus far, only part-time job creation is in net positive territory for the NDP government. That's the record, even though energy prices have been higher relative to the first three Klein years. During the Notley era, unemployment has risen overall and full-time employment has plunged.
~ Mark Milke, Calgary Herald, January 20, 2018, A16
Mark Milke is the author of dozens of policy studies on Alberta over two decades and a regular Herald contributor.