Fake news and dodgy claims from the Alberta government
Calgary Herald, A12, February 3, 2018
Ever since the Vietnam War and government disinformation from the Lyndon B. Johnson administration, it's a cliché that citizens trust government much less, if at all.
But the Johnson approach was not new, nor limited to the United States. Governments everywhere regrettably and routinely try and spin away bad news.
Example: Two weeks ago, in response to my column that showed higher job creation numbers in the first 32 months under Ralph Klein, when compared with the same length of time under Rachel Notley, government MLA Graham Sucha took to Twitter in an attempt to criticize my analysis.
Sucha, the NDP MLA for Calgary-Shaw, who serves as the legislature's chair of the standing committee on Alberta's economic future, asserted my column had "quite a few holes in it, including a failure to consider inflation."
His reference was to energy prices between 1993 and 1996 and my comparison with the last three years.
Sucha's claim was mistaken.
Oddly, the MLA skipped over two column references: I noted gas prices were "adjusted for inflation to 2017 dollars" and that oil was "again, adjusted for inflation."
Also, Sucha couldn't attack the Klein advantage on employment numbers, given the hard data from Statistics Canada. Maybe that explains why he then tried to defend his government's record by alluding to the "context prior to both leaders taking on the role of premier."
I assume the MLA meant things were worse for Notley and her colleagues in 2015, versus what the Klein government faced in 1993.
Klein became premier in December 1992. Let's compare what he and his colleagues faced with what Notley and her government encountered in May 2015.
When Klein ascended to the premier's chair, Alberta was in its eighth deficit year. The red ink years resulted from lower revenues after the 1985-86 oil crash and also high per person program spending. That problem was set in motion by the Peter Lougheed government and was only tinkered with by his successor, Don Getty.
Just before Notley became premier, Alberta recorded six straight deficits. The Progressive Conservative government then claimed a surplus (in the fiscal year ending March 31, 2015). But the province was on track for a deficit when the NDP entered office in May 2015.
The chronic red ink resulted from the 2008-09 financial crash which tanked oil prices and the 2014-15 oil drop.
The problem was exacerbated by per person program spending running ahead of inflation and population growth in the latter Klein years and also under premiers Ed Stelmach and Alison Redford.
For the record, the then Progressive Conservative government's claim of a surplus just before the NDP came to power is nonsense.
In 2013, the Redford government changed the previous, straightforward budget definitions in place since 1993.
As of 2013, the PCs'newly creative approach allowed for a surplus claim even when the province was/is awash in red ink. A more straightforward approach (less revenue than money spent, equals a deficit) means the NDP actually faced Alberta's eighth straight deficit year as of May 2015: Same as Klein.
So how did each government respond? In 1993, the Klein government cut spending, refused to hike taxes and did nothing to injure Alberta's primary wealth creation machine, oil and gas. A surplus fiscal year began as of April 1994.
In contrast, after May 2015, the Notley government increased spending, hiked taxes and imposed a new carbon tax. That latter tax makes it difficult to compete with a long-ago recovered American energy sector.
The carbon tax also increases costs and makes it more expensive for every entity, from grocery stores to food banks, to operate. As for red ink, using the honest pre-2013 method, Alberta is now in its 10 deficit year, with year 11 starting on April Fool's Day.
The summary: When combating disinformation, context indeed matters.
~Mark Milke, a regular Herald contributor, has authored multiple reports on Alberta government finances since 1997. Photo credit: I-Stock. Used under license.