Keep your eyes on Alberta

The richest Province in Canada (that’s what they call them there, not States) always used to be Ontario when I was growing up in Toronto. This was the ‘have’ province; this was the industrial power-house that made Ford and GM cars; this was where the financial centre of the country, Toronto, was; Ontario was a bit like New South Wales if you want to find an Australian analogy.

The old joke was that a hatred of Ontario was what kept Canada together, and that within Ontario it was a hatred of Toronto that made things work, and within Toronto what kept the big city ticking over was the shared loathing of Bay Street (the big downtown street on which all the main banks and law firms could be found).

As it happens I haven’t lived in Canada for 23 or 24 years now, having moved from there to London then Hong Kong then New Zealand and now Brisbane. But all of my and my wife’s relatives still live in Toronto and we get back for visits fairly regularly.

And here’s the thing. Ontario is no longer a ‘have’ province. Incredibly it has become a mendicant ‘have not’ province, part of the posse of poor provinces that gets dollops of ‘equalisation’ payments each year from the ‘haves’. This remarkable decline has been hastened by a big spending Ontario provincial government run by the left-of-centre Liberal Party that basically wouldn’t know how to spell ‘surplus’ much less have any idea what the concept was. It is now running such a big deficit that it is floundering around helplessly wondering what to do. (Sound familiar?)

Meantime some 1,700 miles (that’s about 2,800 kilometres) west as the crow flies you find the province of Alberta. This is the new ‘have’. This is where you find oil and gas and those tar sands with the second most reserves on the planet after Saudi Arabia, though much harder to extract. Here is the emerging economic centre of Canada. Here is the city of Calgary with ever more head offices re-locating there.

Alberta has low taxes compared to other provinces, and especially to Ontario and Quebec. And for those of you readers who don’t really understand what I mean by the idea of a province having income taxes, that’s because in a functioning federal system (so not Australia) the States or Provinces or Cantons have income taxing powers and what you get is competition between provinces, including on tax rates, and so the level of government that does the spending on education and health also does the money raising for that spending.

And did I mention that Alberta has the best education scores and results (on international tests) of all Canadian provinces – they wouldn’t be caught dead supporting a national curriculum! Alberta is Canada’s version of small government, low taxes, and booming resource sector.

If one were so inclined he or she could possibly even draw analogies with Australia and how some of its States are faring, though the analogy is far from perfect (not least because our High Court has so consistently sided with the centre and undermined real, competitive federalism – the kind that actually works – here in Australia).

Of course there is more to the story of Alberta than that. On the political front Alberta has long been the domain of the right of centre Conservatives, and indeed current Canadian Prime Minister Stephen Harper comes from Alberta and has his core support base there. In most national elections virtually every Alberta seat goes Tory and at the Provincial level Alberta has had a Conservative government since 1971. Yep, for the last 41 years the Progressive Conservative Party (to give it its full name) has run Alberta.

But since 2006 things have gone all wonky for the Conservatives. You see they flirted with the idea of a red Tory or Malcolm Turnbull-type leader, first under Premier Ed Stelmach who was so unpopular he was forced out and then since last year under Alison Redford. Premier Redford is as far to the left as any Tory can get, I’d say, and still not be embarrassed by being called a Tory (though of course in quiet moments in her room alone she may well be embarrassed to be called that).

Anyway, a few months back the Alberta Conservative Party still had its usual big lead in the polls. And it was time for another election. And Premier Redford had settled in to her new job. And so she called an election, to take place towards the end of this month.

And you know what happened? There was this relatively newly formed political party with the bizarre name of Wildrose Alliance that quickly caught up to the Tories in the polls. In fact Wildrose is now slightly ahead. And this Wildrose party is to the right of the Conservatives on just about every issue going, most notably on size of government and government spending and don’t over-tax the mining industry type issues.

And after four decades in power the Alberta Conservatives, all of a sudden, look vulnerable. This is a party that hasn’t even had to try to win an election for eons. And now its new leader is being painted as a left of centre big government spendthrift more at home at the UN (where she once worked) than in Alberta. Worse for the Tories, the Alberta voters now actually have a real alternative right of centre party to vote for, one that might actually win. You can imagine how the Conservatives have reacted. This is the nastiest provincial election in a long time.

Anyway, keep your eyes open for what happens in Alberta in a couple of weeks. This, after all, is now the rich part of Canada. It’s the ‘have’ province that is generating far more than its share of the wealth. It’s even a trendsetter in politics these days. It may even have a lesson for Australia.