Why did Ralph Klein succeed where Rachel Notley failed?

June 15, 2019 marks the 26th anniversary of the historic election win of Ralph Klein--his first election win as premier, in 1993. The following is an excerpt from Ralph vs. Rachel: A tale of two premiers, from Mark Milke. Ralph vs. Rachel is available in stores but you can order copies direct at a 25% discount for a limited time at https://markmilke.com/buy-ralph-vs-rachel. 

You’re welcome: When Alberta rescued Canada’s unemployed (from chapter 9)

In kicking off the 1997 election campaign, Ralph Klein asserted that his government’s priority was to create the “climate for growth with… balanced budgets, debt reduction, the lowest overall taxes in Canada and less bureaucratic red tape for industry.” Rather than a new direction, it was more a recitation of the existing, deliberate strategy pursued before and after Klein’s “Miracle on the Prairies” election win in June 1993: to avoid loading up the private sector with higher bills. Parallel to that were strategies to keep government services vibrant and affordable through competition in delivery, e.g., tendering where possible, or outright privatization as was the case with government liquor store and licence registries.

Then, as now, New Democrats and their ideological allies were critical of not only the Alberta Advantage but what is best described as Ralph Klein’s restoration of Alberta’s culture of opportunity. To hear the critics of the Klein era today, who range from union executives who should know better to Premier Rachel Notley, the 14 years of the Klein era from December 1992 to December 2006 were ones of unrelenting Dickensian misery with divides and battles between the rich and poor. It is a mythological, foreboding, dark fairy-tale—and voters rejected such claims when they re-elected Klein and his colleagues in 1993, 1997, 2001, and 2004—but New Democrats have always offered up endless versions of this gloomy narrative anyway.

An early example arrived in 1994 with the new Alberta NDP leader, Ross Harvey, who characterized the post-1993 reforms as an attempt “to create a tax haven for large corporations,” and claimed this “works against [the government’s] stated philosophy of developing economic advantages.” Barely one year into the Klein Revolution, as many called it, the NDP leader was sure Klein’s policies had failed. He told a Medicine Hat crowd it was a “right-wing economic experiment gone wrong” and “from the point of view of fairness and equity on one hand, and economic common sense on the other.” In 1995, Harvey was at it again, stating with certainty that “the policies of this government are not contributing to job growth.”

This was predictable rhetoric in the mid-1990s, where the NDP and its allies claimed the Klein era would end in desolation, or already had. As for alternatives, Harvey had earlier (in 1993) advocated federal spending on make-work schemes for roads, bridges, and sewers. Harvey claimed this would create “500 jobs a year for five years in Edmonton alone.” In its 1995 convention, the New Democratic Party touted job creation via shorter workweeks (32 hours instead of 40). It was a long-time, left-wing fantasy from Paris to Victoria. Without more money in the economy, or higher productivity, instructing businesses to pay full-time wages for 80 per cent of the needed work did not somehow magically create the ability to pay for new employees for the other 20 per cent. Businesses could not spend money they did not have.

In the 1990s, as Alberta’s economy began to speed ahead, the usual suspects were sure that somewhere, somehow, something must be wrong. In 1997 the Alberta Federation of Labour (AFL) released a sour report titled Crumbs from The Table: Re-evaluating the so-called ‘Alberta Advantage’. In it, the umbrella group for the province’s labour unions complained of how jobs in the early 1980s and early 1990s lasted slightly longer in central Canada than in Western Canada. It was telling that the AFL had to reach back to the 1980s—the era of Pierre Trudeau’s economically illiterate National Energy Program and which was devastating to the oil patch—or to the early 1990s, and a recession, to complain. Yet here was the AFL carping about the effect of 1980s policy from Ottawa in a document alleging that Klein’s policies were mistaken.

Ironically, in its report, the AFL unwittingly gave the real Alberta story in the president’s introduction: “1996 was a good year for Alberta. For the sixth time in seven years, our province’s economy grew more quickly than the Canadian average,” wrote AFL President Audrey Cormack. “The official unemployment rate was one of the lowest in the country. And corporate profits were up for the fourth year in a row. To top things off, the provincial government posted a $2.2-billion surplus – the third multi-million-dollar surplus in as many years.”  

Despite all the positive indicators recounted by Cormack herself, the report grasped for bad news, this to prove Ralph Klein’s policies were in the wrong. It was bizarre, but the newest NDP leader picked up labour’s talking points. In 1997, Pam Barrett, parroting the AFL report, said she would create “real jobs” and not “McJobs.” The problem for Harvey, Barrett, and the AFL alike was the economic numbers were not cooperating with their dystopian vision. The same year Barrett claimed no real jobs were being created—and where even the AFL admitted things were great—even the NDP leader had to admit that “the provincial economy is booming.” It was just that she claimed to have found fog amidst sunny skies: “Many of the jobs being created are low-wage temporary or casual positions,” said Barrett and the NDP in their March 1997 election platform. That was untrue. Alberta’s job-creation machine was already chugging along nicely, and the employment created was more full-time than part-time: between January 1993 and December 1996, Alberta’s employment numbers shot up by almost 11 per cent. That was double the job creation record in the rest of Canada. Alos, 86 per cent of the new jobs in Alberta were full-time compared with just 71 per cent nationwide.

By 1997 the Alberta economy was again described with boom-time references. “Alberta leading new boom,” announced the Calgary Herald on the front page in late July 1997. In Edmonton, where job creation was also up significantly, the Edmonton Journal headlined how “The capital rebounds despite being hard hit by government job cuts.”The Journal’s headline had it backwards, something pointed out by a source interviewed in the article, Allan Warrack. The University of Alberta economics professor pointed out that the elimination of the provincial deficit and cutting the debt helped create about half the capital region’s new jobs, care of new private-sector investment. “Governments can really get in the way of progress, so even just getting out of the way helps,” said Warrack in response to the journalist’s query on the cause of the recovery.

When it was clear that the economy and employment were soaring, Barrett traipsed out a different complaint: Klein was taking credit for jobs created by the private sector, the 157,000 new jobs since 1993. “He’s not responsible for them—population growth and private corporations created them,” remarked Barrett. Barret never explained how higher population counts necessarily created more employment. Plenty of countries with skyrocketing populations were in abject poverty when Barrett played the demographic and economic expert, but they were hardly job-creating dynamos. The NDP leader also missed Klein’s point that permanent private-sector job creation was exactly what the government aimed at since 1993, not make-work projects, as her predecessor had recommended.

Ralph vs. Rachel is available at a 25% discount for a limited time at https://markmilke.com/buy-ralph-vs-rachel.