Jason Kenney’s new budget is making Albertans everywhere pay more so that large, profitable corporations can get billions of dollars in tax cuts. Team Advantage assembles to survey the damage. What’s with the attacks on organized labour? What’s the point of austerity, if it’s proven not to create jobs or growth?
Joel: Okay, uh …
Kate: I’m not even – I’m not even mad about the budget at all. I like it, actually.
Rory: I’m laughing.
Kate: I’m – I’m laughing, and I’m not mad, and I feel … normal.
Kate: Hello, and welcome to the Alberta Advantage. My name is Kate Jacobson, and we live in hell. Hell is real, and we live in it.
Joining me today on Team Advantage are Patrick-
Kate: – Rory-
Kate: – and Joel.
Joel: Hello, hello.
Kate: So before we start off, I would like to say that if you listen to this podcast on a regular basis and you enjoy it, I would invite you to support the work we do on patreon.com/albertaadvantage. You can also get all sorts of fun, weird stickers, tote bags – what other things have we given people?
Kate: Patches. Uh-
Patrick: The zine.
Kate: I don’t think we should joke about blessings.
Joel: Fine. There were no blessings.
Kate: No blessings. Once we made a zine. So, pretty good.
Today’s episode is going to be about the budget. The budget is really bad. Every morning I wake up and I feel like I could turn on the news and I could see just a news story that was, like, the government has sold all the public schools to Enbridge, and I would be like, oh, yeah, I mean, yeah, I see it. Like, they would do that. And it’s been like that for, I want to say months, but I think the budget came out, like, a week ago. Yeah. So, yeah. The budget came out quite recently, but it feels like we’ve been living in this world, uh, for years.
So on Thursday, October 24th, three days after the federal election, the government put out its 2019-2023 fiscal plan, but we actually ended up having to wait for Monday, October 28th for a lot of the details, and the government introduced these two omnibus bills to implement the budget, so that was Bill 20, the Fiscal Measures and Taxation Act, and Bill 21, the Ensuring Fiscal Sustainability Act.
So what we’d like to start out with is looking at how the Kenney government has framed this budget in its press releases, in its talking points, in the way that they are articulating and framing the austerity that is contained within.
So what is some of the ideology that is going on at work in the Kenney government’s budget?
Rory: I’d love to hear about households and belt-tightening, because I’ve heard that phrase so many times in the last week, but that’s kind of a very good way to understand how they’ve framed this: that the government is like a household, and we’re overspending, and this is unsustainable and it has to stop, and it has to stop like a household would do, which is, like, cut spending.
Joel: So one of the big myths that is going on here is that the total cut in operating expenses over four years is a mere 2.8% in budget in 2019, compared to the 18% cut that happened in Budget 1993 with Ralph Klein. So they’re really trying to say we’re being sober and responsible and not doing reckless cuts, but doing very smart cuts.
Kate: I believe the rhetoric they used was “surgical” cuts, so … You know, they’re very precise. You won’t even notice them. Et cetera.
Patrick: Although they actually meant they were just cutting surgeries.
Kate: So when combined with inflation and with population growth, this amounts to a functional cut of over 20% over four years. And the reason it’s really important to incorporate inflation and population growth when we talk about government spending and cuts is that the population grows in Alberta every year. There’s about 70,000 new people in Alberta every year. So we are literally adding a city about the size of Medicine Hat to the province every year, and if the public spending on things like healthcare and education don’t go up, you’re essentially expecting those people to live without resources and to share the resources in the province, which are already stretched quite thin.
And the reason it’s important to talk about inflation is that, simply, things get more expensive year to year. That’s why, theoretically, people’s wages should go up year to year, because your rent goes up and food is more expensive and childcare is more expensive. So it’s really important to incorporate those things when we truly understand what a budget cut will look like, especially over a period of time like four years.
Rory: Yeah, so a great example to talk about when we’re talking about population growth here is, so the government has promised to free spending on K-12 education. They say that they’re maintaining spending; they’re not cutting it. But every year, about 15,000 students enter the system. For the next four years, there was no funding set aside for this growth, so that means 60,000 more students, but with the same number of teachers, the same number of classrooms and other resources.
Joel: Which is, like, hilarious. Just … [laughs] I mean, hilariously sad and bad, but, like, just the – that makes no sense just mathematically. Like, how are you going to shove that many students into that many classrooms?
Kate: And in fact, school boards may have to cut hundreds of teachers on top of accommodating more students.
Joel: Pretty bad. Uh …
Kate: You do not like to see it.
Joel: Yeah, quite rather bad. So, okay, myth number one: This 2.8% cut is nice and friendly and fuzzy. It is not. It’s functionally a 20% cut, and we should call it that.
Kate: Yes, absolutely.
Joel: Myth number two: Alberta spends almost $2500 more per person on public services than other big provinces, but without better results.
Kate: Okay, this really grinds my gears. Like, this really, really just gets under my skin, because at the root of this is this idea that people who work in the public sector in Alberta are overpaid, that they are lazy, that they are just not working as hard as people in other provinces. And it is absolutely true that wages in Alberta are higher than wages in other places in the country, but that is because wages in the private sector in Alberta are higher, and that means that the cost of living in Alberta is higher, so we have a higher consumer price index than other provinces, which just simply means goods and services cost more. It is more expensive to live here than it is to live in most other provinces in this country. So when I say that Alberta has higher wages, most of that is in the private sector, so private sector wages are 18% higher here than the national average, and public sector wages are 9% here than the national average.
And for what it’s worth, public sector workers are workers and they are people and they still have to live here; they still have to be somewhat competitive with private sector wages; they still have to feed and clothe their kids and pay mortgages on their homes and buy food and all the things that we have to do because we live in a capitalist society.
Patrick: Yeah, this line about our public sector workers being more highly paid than in other parts of the country is such an enraging line, because it’s such an easy way to distort the data that exists out there. You can just point to the payment charts and say, “Yeah, look, wages are higher,” and it completely omits everything you just said about how everything is more expensive in Alberta because the magic oil money has pushed up the costs of everything in this province.
Rory: And that fact that gets bandied around that we spend more per capita than any other province also disguises this other thing where Alberta’s public sector as part of its GDP is smaller than other provinces. Like, basically, we’re a much richer province, so we can also afford to spend more on these things, and yet when you actually compare what percentage of the GDP that goes towards the public sector, Alberta is one of the lowest.
Kate: And for what it’s worth, I do not think that this disdain for public sector workers that is incredibly common throughout this budget, throughout the way the Kenney government approaches politics, is unrelated to the fact that the vast majority of workers in the public sector are women. I think absolutely that the work they do is incredibly undervalued and underpaid and that they are incredibly, incredibly shortstaffed, and I think it is all about building these narratives about the types of people who do public sector work.
Joel: It also sucks and is bad and you hate to hear it.
Kate: You do not like to hear it, Joel. You just – you really don’t.
Here’s some other things that you do not like to hear – or, as the Kenney government will have you believe, that Assured Income for the Severely Handicapped (commonly known as AISH); the Alberta Seniors Benefit, Income Support, and Special Needs Assistance will remain at current levels, and this is what the Kenney government wants you to believe.
Rory: It’s interesting that they’re being kept at the current levels but somehow this will save the government hundreds of millions of dollars over the next four years. How could this – how is this possible?
Joel: So for folks that don’t know, maybe it’s worthwhile just explaining what AISH is – like, Assured Income for the Severely Handicapped. These are basically people that are unable to join the workforce, right? Like, they can’t work, so this is their only income and the only thing that keeps them alive.
Patrick: Yeah, the sorts of person who end up on AISH are people who have, perhaps, suffered a stroke, or a person who has a permanent disability that prevents them from – that makes them extremely limited mobility. They’re people who, like you say, are unable to work, ever, and they’re pretty much at the mercy of social services to provide them with any kind of standard of living, or they are at risk of being turned out of house and home.
Joel: So AISH is getting de-indexed. It – the NDP, when it was in power, raised AISH and also indexed it to inflation, so that every year that AISH wage, if you want to call it that, was linked to inflation and would not, like, basically get diminished or worn down by the inflation rate.
Kate: I’d also like to say that AISH payments are pretty much at the poverty line, so AISH recipients are really going to be receiving substantially less after four years of a UCP government. And something I think is important here is that even if it was indexed, this is a completely unacceptable amount of money to be giving people and expecting them to live on. Like, I’m sorry, but it is, and living on AISH is incredibly grueling, incredibly humiliating, incredibly boring, incredibly unfair, even when that payment is indexed.
Patrick: Now just bear in mind that a living wage in Calgary is around $36,000 a year. It’s $18 an hour. AISH is already way, way below that, and typically, this is a population that often has medical needs that are above and beyond what the ordinary population does, so they’ve got more drugs that they need to afford, for example. This is absolutely, incredibly punitive, and it wasn’t enough to begin with, and it’s not enough now.
Rory: Yeah, and I think the most grotesque thing about all of this is that AISH recipients – like, people who are some of the most vulnerable people in this society – are taking a cut so very large, profitable corporations can get a very big handout in the form of a corporate tax cut.
Kate: Oh, yeah. I mean, that’s what underwrites all of this, is your kid has to go to school with a teacher who is overworked and underpaid in an overcrowded classroom so Suncor can give more money to their shareholders; nurses have to work under worse and worse conditions; housekeepers have to take wage rollbacks so, like, incredibly, incredibly rich people can make slightly more money and take it out of the country and return it to their shareholders. Like, that’s what – that is the ghastliness that kind of undercuts this entire thing.
Patrick: So the next myth up: “We eliminated the carbon tax. We’re going to save the average family $665 per year. Wow, great big tax cut.” Except for the part where the federal carbon tax is going to be reimposed on us January 1st, 2020, so this is just not true.
Rory: Yeah, plus, like, the way that both the federal carbon tax and the provincial carbon tax were structured is that they had a rebate system. So with the Alberta one, six in 10 households got the full rebate anyway, so they theoretically weren’t paying any taxes unless they were spending an awful lot on gasoline or other – or had, like, a really inefficient furnace. So this means that this tax cut primarily benefits the top income earners.
Patrick: One more thing to keep in mind, talking about the carbon tax being repealed. We have now de-indexed income tax brackets, meaning that inflation is now going to gradually push low-income earners into higher tax brackets, and this effect is going to net the government around $200 million per year. And puzzle yourself this: the cost of this tax hike by stealth, and others, is about $150 per family – the same amount as the carbon tax, at the end of the day. Hmm. Have we really actually even had any sort of tax cut at the end of the day?
Rory: Yeah, this is – this is the party of low taxes for you. Just – and what’s even funnier about this is that – so federally, between 1985 and 2000, the federal income tax personal amount was not indexed to inflation. So the Reform Party at the time made an awful lot of hay out of this, what they call “bracket creep,” and you can actually find Jason Kenney regularly denouncing this in Parliament as an MP, as this unacceptable bracket creep, and here he is introducing it in Alberta for the first time in 18 years.
Kate: Wow, I can’t believe conservatives would lie to us.
Rory: Yeah, so most Albertans’ household’s taxes are going up, and the only people getting that tax cut our big business.
Joel: It’s still bad. It still sounds terrible, and I hate to hear it.
Kate: I actually haven’t heard anything good from the budget so far.
Joel: Yeah, it sounds like it sucks so far. Let’s go on to the next myth. Maybe it’ll be good.
Next myth: Reducing the corporate tax rate from 12% to 8% by 2022 so businesses can grow and create more jobs.
Kate: Well, I love jobs, so this is a great start. Now, time to take a big sip of water and just see what’s been happening in Calgary over the past couple weeks.
Joel: Let me just open the old newspaper that I still read every morning.
Kate: Oh, it turns out that Husky collected a one-time gain of $233 million, thanks to the cut, and then laid off hundreds of workers in October.
Oh, it looks like Encana pocketed $55 million, thanks to this tax cut, and now they’re rebranding and relocating to the United States of America.
Rory: Or Canadian Natural Resources Limited got $1.6 billion, thanks to the tax cut, and now appears to be engaged in unionbusting activities at their Jackfish site south of Fort McMurray. And N. Murray Edwards, the executive chairman of CNRL, and who sits on their board, is co-owner of the Calgary Flames. The Flames recently got $275 million in public money from the city to build a new arena.
Joel: I’m really glad that folks like N. Murray Edwards, co-owner of the Calgary Flames, were able to get both, at his workplace, a $1.6 billion tax cut for his company, and also for his, like, small business, the Calgary Flames, was able to get, like, half of a stadium subsidized by public dollars. That sounds like a really good society that we live in.
Kate: I’m worried that this isn’t actually creating any jobs. I can’t even do the kayfabe. Oh, my God, I’m so mad I have to spend my limited time on God’s good green earth explaining to people on a podcast that corporate tax cuts don’t create jobs. Like, how many more times do we have to say this? Everyone knows this. No one is going to – there’s no, like, job chute that, like, they’re going to throw jobs into if you give them, like, $1.6 billion.
Patrick: Except, incredibly, we actually do need to tell people this, because there are people in our government who just don’t know. Energy Minister Sonya Savage was talking about the corporate tax cut back in August after a number of companies spent the windfall on shareholders, and she said, “We would like to see that money being invested into jobs. We’d like to see it being invested into projects; we’d like it to stay here in Alberta to create jobs. So yeah, we are a little disappointed in seeing what decisions have been made on where that investment, where that money, goes. But that’s decisions of corporate boards.”
And there you go. The fact that the money hasn’t been invested in jobs is actually blowing minds in our UCP government, and it’s just, what do you even say, right? It’s not like this is a secret. It’s not like this is a mystery.
Rory: Well, I think people have to understand, like, the basic economics of this, is that companies don’t hire workers simply because they have more money in their pockets. They hire workers when it would expand their profitability. So a blunt corporate tax cut comes with no requirements that companies invest that money, or invest it at all, let alone Alberta, and multinationals, like most oil companies are, can and will take that money to other jurisdictions where they think they can get a better return on investment, particularly since Alberta has pretty high-cost oil to produce.
Kate: Oil companies are simply not hiring back the jobs that they shed during the downturn. The Parkland Institute actually estimates that about one third of the jobs that were lost during the 2015 downturn have been just completely automated out of existence, so even if there is, like, a miraculous oil boom, we’re not going to see the same levels of employment that we saw during the aughts.
Joel: This tax break thing is, like, the dumbest thing to me. Like, I just don’t understand how bad you have to be in thinking about and analyzing capitalism to say, like, “Hmm, if we just give rich people more money, they’ll just, like, spontaneously produce a whole bunch of jobs.” Like, no. The only – like, companies would rather hire no one and make money. The only reason they hire people is because it’s necessary for them to get people hired to, like, make that money. It’s a purely, like, “How do we get around this problem of needing work to be done? I guess we have to hire someone. Damn.” It’s not because they like doing it.
So behind all of these myths is, like, a more general myth, which is that Albertans must get our house in order, because our province is one giant house with one big budget.
Rory: And a very large belt buckle that is constantly in need of tightening.
Joel: Got it. [laughs] That is such a weird image. Uh, so this is obviously crap.
Joel: I mean … [laughs] So this is bonkers, because most homes don’t have a giant asset sheet where they own a whole bunch of, like, schools and hospitals. Most homes don’t have, like, businesses operating inside of them that they can, like, change the tax rate on.
Kate: Oh, most homes cannot just levy revenue as they like. I can’t just go to my boss and be like, “Oh, this quarter, I’ll actually be making X amount of money instead of Y amount of money, because I would like to get a little bit more revenue.” I cannot pay my landlord in money that I printed off in my household.
Rory: Also, Alberta owns its own bank, which is unusual even for a province, let alone a household.
Joel: Kate, you mentioned that you wanted to talk about Rachel Notley’s recent column. Would you care to share your thoughts?
Kate: Yeah, Rachel Notley wrote a dogshit column in the Edmonton Journal, and I regret to inform you all that it truly sucks ass. It’s really bad. It starts out with a quote from the Canadian Taxpayers Federation, which is literally a right-wing astroturf group that, as far as I can tell, has about nine members and posits itself as the representative of Canadian taxpayers, but really they just launder right-wing talking points in the media.
And her first biggest critique of the Jason Kenney government and Jason Kenney’s budget is that there’s going to be a “hidden, sneaky tax” because of disconnecting the tax code from inflation. So, really, really just trying to fight on their terrain, and also, just, like, the cops are brought up a lot, like, in this article. There’s a lot about, like, no funding for rural police, and damn, there is just so much rural crime. Rural crime is just a dog whistle so white settlers can do crimes to Indigenous people. Like, there’s no such thing as rural crime. It is entirely, like, a settler colonial, like, mythmaking project used to justify violence, and I really don’t see why an ostensibly social democratic party would play into either of those two things.
And this isn’t the only place she’s laundered this type of rhetoric. On Twitter, after the budget dropped, you saw Notley being like, you know, there’s no doubt we need to make cuts and tighten our belts, but AISH is just not the place to do it. As if this budget would be fine if AISH was indexed and we gave 5% rollbacks to the public sector, like the whole thing is not part of one large ideological project that is an attack on the public service, that is an attack on working Albertans.
Rory: It’s kind of worth talking about that “sneaky, hidden tax” that – as Rachel Notley calls it. But it always – you always have to, like, frame discussions of, like, taxes, about who they fall most heavily on. So in terms of, like – like, we don’t – like, yeah, like, exactly – it is really bad to get into the right terrain on, like, saying who’s going to give you the best tax cut.
But we do have to talk about how the tax burden gets shifted around through, like, deindexing the personal amount versus, like, giving corporate shareholders a huge tax cut. So I think that’s how we have to, like, frame these things, which is not something that the Alberta NDP has been doing the best.
Joel: Yeah, I mean, there is a point to be made in saying the way taxes work in this country, or in this province, are immensely unfair. The rich get to put all their money in tax havens; they get to evade taxes with really expensive accountants; whereas, like, middle-income and lower-income folk, it’s easy to tax, because we make our money with wages rather than anything else. So, you know, there’s not a lot of room to, like, hide it or do anything fun with it or creative with it.
There’s tons of content out there to talk about taxes and how they could be more fair. We’ve had someone from Canadians for Tax Fairness on the podcast before. Like, there’s lots of material there, but unfortunately it is not being picked up by …
Kate: You know, it’s just, like, we’ve managed to do it, and we’re, like, nine people who have a podcast, so why the opposition party in Alberta can’t, like, manage to figure out these talking points – like, we’re not that fucking smart, you know? It’s just not that hard.
Joel: It’s fine. I have a lot of faith in our official opposition and their ability to undo all of Jason Kenney’s damage. All right. Going on.
Patrick: All right, so we’ve spent a little time blowing up a few myths, but we are nowhere near done talking about all of the really awful stuff of this budget, and we need to talk about what the heck else is going on.
And where else to begin but with cities and city charter funding and infrastructure funding? City charters were a new idea for Alberta that developed dozens of powers to Calgary and Edmonton. They included powers to do things like set up tribunals for speed tickets so you can go there instead of a provincial court. They give cities more power to set speed limits within their jurisdiction. They gave the cities the power to support corporations and projects with loans, specifically for housing. They gave municipal energy efficiency organizations – they gave the cities the power to create these.
And the charters are now gone. There was no consultation; there was no warning. The replacement will be something called the Local Government Fiscal Framework, and it will have funding that fluctuates each year in response to revenues, which sounds like a recipe for absolute chaos. Edmonton is getting a 9% cut over three years. From 2022, there is a $45 million base funding cut, which will be split between Calgary and Edmonton. It’s just all sorts of downloading of all the responsibilities that these – all the funding responsibilities that the province had to the cities, effectively.
In Canada, our cities deliver almost all of our public services and they have the least capability to actually raise taxes, and this is going to place Calgary and Edmonton and all of the smaller municipalities in a really tough spot.
Rory: Yeah, and another municipal thing is the province is also trying to wiggle out of paying its share of the Green Line. So when Jason Kenney was a federal cabinet minister in the Harper government, he came to Calgary just before the 2015 election and announced the federal government was going to pay its third of the Calgary’s Green Line LRT, which was $1.5 billion dollars. And now that he is premier of Alberta, he has taken with the other hand to remove the province’s funding of it.
So basically, first it’s a delay in funding the Green Line, so from the $535 million promised over four years, it’s been reduced to $75 million, with the rest to be made up later. Then in Bill 20, which is his giant omnibus bill, it lets the province withdraw from Green Line funding commitments, with 90 days’ notice, at will. So basically, this probably means the Green Line is canceled. The city maybe might do it on its own with the federal funding it already has, but basically, they’ve reduced the province’s funding pledge by 85% and would let them just pull out entirely.
Patrick: But look – Kenney has promised to spend $300 million per year later on to make up for the downfall. Surely that will come to pass in four years, right?
Joel: This Green Line thing gets at one of the big tragedies of this budget, which is that, first of all, it’s dealing with a manufactured reality. There is no, like, fiscal crisis; there’s no reason to do all this austerity stuff.; there’s no reason to delay all these things; so it’s illogical, from a certain point of view.
But then more generally, it’s, like – it’s also such a missed opportunity. Like, we live in an age of climate crisis. We live in a remarkably unequal and inequitable society. We live in an age where, like, there’s just so much, like, desperately needed infrastructure that needs to be built – like the Green Line; like public transit. And to just see it, like, needlessly delayed and defunded and – you know, who knows, maybe the minister will wake up one morning and say, like, “Ah, I don’t think I want to fund it today,” and just cancel it. Like, it just sucks. It’s just really – it’s a tragedy of kind of a missed opportunity in a really important period of our history where we need to be investing massively in public transit and in public infrastructure.
Patrick: Something else we’ve got to talk about are the sneaky changes that the budget promises to make to public pensions in Alberta. To date, pension funds for about 400,000 workers and retirees are administered with worker and union input, and the budget says that control over these pension funds – specifically the Alberta Teachers’ Retirement Fund, employee funds at AHS and the WCB – are going to be handed over to something called the Alberta Investment Management Corporation (AIMCo). This is a giant Crown corporation that administers a whole lot of public retirement funds.
These funds, by the way, are enormous. The teachers’ fund is worth $18 billion. The WCB fund has $10 billion. The AHS fund is another $2.3 billion. And effectively what this will change will mean is that the union folks, the worker representation on those fund boards, which had just been negotiated with the previous government and had only gone into place March of this year, they got nine whole months of it, and now it’s gone. And folks are worried with no worker oversight, there’s every potential that the government will try to balance this budget by exploiting those funds in small ways.
And, you know, pensions are deferred wages. These are wages that a whole bunch of workers in this province earned, and it is incredibly sneaky and evil to go and claw those back after workers negotiated in good faith for, you know, very frequently taking less in pay in order to have more in pension later.
Kate: The only reason to take union representation off of the pension boards is if the government wants to do something and they think that they won’t be able to get the union to sign off on it, and that, to me, is an incredibly worrying sign about what they are planning to do with these pension funds.
Patrick: Enormous red flag.
Kate: Considering this is a government that hates unions and hates working people, I can’t imagine that they’re just looking for good governance of these pension funds.
Joel: Yeah. I’m pretty sure the government appoints the AIMCo board, also, so it’s kind of a little more direct control over that giant pile of money. Definitely worrisome.
Patrick: Yeah. And as you’ve seen, this government is perfectly willing to clean house with any sort of agency or board commission that is likely to oppose its project in any way.
Kate: So the next thing that I have in this research document is an article that Trevor Tombe wrote that made me so mad that I was just literally, like, storming around my flat at one in the morning, unable to sleep because I was so furious. And what this article is, is it’s about how, yeah, Alberta’s budget raises taxes; yes, it cuts social services; but no, it’s not actually austerity. And he doesn’t actually give any sort of concrete framework or definition for what austerity would be. The piece seems to argue that it’s not austerity because he doesn’t personally feel like it should be austerity.
One of our pod comrades, Tyler, actually went through the academic article that Tombe cites in this piece to look at their definition of austerity and see if he was just using, like, a really weird article, but that article’s definition of austerity is actually perfectly congruent with what is currently happening in Alberta, austerity being a political project to siphon money from working-class people to the wealthy through a project of, you know, cutting public services, raising taxes, things like that.
Joel: Actually, Tyler, because he’s so awesome, not only did he read that academic piece that Tombe linked to, he then went and emailed the author, saying, like, “Hey, do you mean something different by austerity, or is this common conception that we have the right one, and Trevor Tombe probably off his rocker?” And the author emailed him back and said, like, “No, no, no. Yeah, I’m definitely using it in this kind of general sense, so you’re correct.”
Kate: So, Trevor Tombe: like, get stuffed, frankly. And my honest question for Trevor Tombe is, like, how many public sector employees should be put out of work? How many kids should be stuffed into these 40-person classrooms? How many structural murders because of lack of healthcare do we need before it’s austerity? Like, what’s the body count we’re looking for here? How many people have to fucking die before I can write an op-ed in CBC saying that what we live under is austerity? Also, how do you sleep at night?
Joel: I’m imagining Trevor Tombe with a graph, and it’s got, like, a line and then another line, and one side of the graph says “social murder,” and then once the rate gets beyond, like, a – once a – you know, a particular threshold, then you’re able to call it austerity, but not before.
Kate: Below that, that’s the number of poor and working-class people that can just fucking die.
Joel: That’s called normal murder, not social murder. Another really bad part of this budget is industries suddenly and rapidly losing their tax credits and being canceled. Anecdotal evidence from Calgary’s tech sector – Patrick, do you have more to share?
Patrick: I happen to work in Calgary’s tech sector, and anecdotal evidence from a few people I’ve spoken to recently is that business cases have been destroyed left and right, and expect about half as many startups to get off the ground this year as last. You know, corporate tax cuts do not help young companies that have low revenues and high employment costs, because the salaries they pay help write off whatever they would’ve paid in profits anyways, so this does very, very little to help all of the sectors that need to get off the ground and maybe be the next thing we’re going to do after the oil patch doesn’t support us anymore, you know?
It’s wild that we are five years into an oil price-induced downturn. Now would be a really good time to diversify into sectors with a future, like the tech sector. And UCP has inexplicably decided to just dump all over this highly targeted investment system we had in place.
Rory: But also, the way that they did it … So you may have heard in the news recently about a game developer by the name of Beamdog, out of Edmonton, was planning on expanding and, from the previous government, had gotten a bunch of tax credits that were targeted at digital and the tech industry. So they actually made, like, hiring and expansion decisions based on the availability of these tax credits, and then the UCP just, like, nuked it, without – there wasn’t, like, a, you know, one-year phaseout or anything. It was just, like, nuked. And then it just leaves a bunch of these businesses scrambling.
It’s very interesting how the UCP, like, represents not even really the business class, but just, like, a faction of it.
Kate: Yeah, that’s what’s so interesting to me about this, is that we live in a province so poisoned by ideology that even people that could reliably be counted to come out in support of businesses getting tax cuts are, “Like, well, you deserve it, because you aren’t an oil company. Maybe you should’ve been extracting bitumen from the Alberta tar sands. Why didn’t you think about that, huh?”
Rory: Yeah, that was actually what the Canadian Taxpayers Federation director here in Alberta said about Beamdog, and then it was retweeted by the justice minister, Doug Schweitzer, to just basically rub it in, that, “We raised your taxes; suck it up.”
Joel: Uh, wow. Yeah, so, I mean, you know, there’s kind of counterarguments – okay, should we be subsidizing businesses, and all this kind of stuff. Listen – most sectors get their start by getting subsidized somehow. The oil sands, for example, were massively subsidized for decades through research and development, through all kinds of things, at a federal and provincial level, which made oil sands development into actual bitumen commercially viable after decades of investment and work.
And then, like, fossil fuel companies generally, in Canada, enjoy giant subsidies. So it’s kind of rich for the UCP government to cut all these diversification efforts and say, like, “Oh, well, you’ve got to just live in a free market, bud,” when they’re all basically in the tank and defending an immensely subsidized fossil fuel industry.
Rory: We bought a pipeline. That’s a subsidy – a very targeted subsidy for one specific industry.
Kate: Not good.
Joel: Sounds bad. Sounds quite rather bad.
Kate: Fortunately, fossil fuels aren’t causing any kinds of massive problems in the world that we need to urgently address.
Joel: Yeah, nothing to worry about with that sector of the economy at all.
We’re irony poisoned. We can’t say anything seriously anymore, because we’re so …
Kate: I just, like – I’m sorry. I’m just, like, so depressed.
Patrick: It really is pretty – pretty special, right? Like, you can imagine another almost-as-awful, slightly different conservative government that would be in favor of, you know, policies to prop up – intelligent policies to prop up all sorts of businesses and get things going on a purely capitalist basis in this town going forward. And we don’t even have that. It’s just – it’s bad even on its own – it’s bad on its own terms. It’s bad on its own metrics. I don’t know what else to say.
Kate: This budget in particular really singles out post-secondary education for pain. They’re taking the bulk of the cuts this time around. So interest on student loans has been increased by one percentage point, and this will probably cost students, on average, $1800 more over a 10-year repayment. So they are basically making money by extracting money from people who took out loans to go to post-secondary, which is absolutely despicable. Students will no longer receive tuition tax credits, so that is a thousand-dollar-a-year increase on taxes for students.
Patrick: And there is a fun little lie in this one here: UCP messaging has been that there is no tuition increase this year, since they’re funding the extra costs, but the tuition tax credit is actually a giant tax hike by stealth, because – because, yeah, exactly, it lets you claim about 10% of what you’re paying on tuition each year.
Kate: So tuition will no longer be capped to inflation. That was a policy of the former NDP government, and it’s going to be allowed to rise at 7% a year for the next three years, which is an absolutely massive increase. It amounts to around a 30% increase over the next four years or so. And this is because the government is cutting spending on post-secondary by 12.5% over four years, with an 8% cut in operating grants this year alone, so in order to maintain services, students are going to have to make up the difference by paying a lot more, or there’s going to have to be a lot of layoffs of staff who work at post-secondary institutions, or those staff are going to have to take wage rollbacks.
One thing I want to say here is that I think the government chose to cut post-secondary because they correctly identified that students in this province are incredibly poorly organized and that they would face incredibly minimal amounts of backlash from students. I would be incredibly happy to be proven wrong about this, but from what I’ve seen living in Alberta over the past little while, I really don’t think that students in Alberta have the capacity to be organized to the extent, so quickly, to successfully face off these cuts, although I certainly hope that they really give it a shot.
Patrick: One more thing that the UCP has correctly identified, and that the PCs correctly identified before them, is that because a post-secondary education is really, really important, people are willing to pay for – they’re willing to do absurd fiscal financial things – in order to get to it, and that is part of the reason why they feel that they can do this. Where in other sectors people might blink, students are willing to go, and they have to take on this debt in order to stand any sort of chance in the economy that we’re in right now.
Joel: And again, this is another case of, like, what a tragedy in terms of a missed opportunity. If Alberta is going to transition from its fossil fuel dependency, a lot of that transition is going to happen in the academy, in universities, and so it would make a lot of sense to, like, try to increase the number of people that can think creatively, that can tackle all kinds of problems, and load them up into universities and make it really affordable for them to do so, so that when these challenges pose themselves, you have an ability within the population to actually tackle it.
Patrick: We know that being born rich does not mean that you’re going to be a successful student. The reality is that the folks who should be going to university, the folks who should be going to trade school, come from every economic background, and what you really want is an educational system that will find those people and get them into school, because that benefits all of us, when the folks who have the most talent, when the folks who have the most potential, get to get that schooling.
And what making school more expensive, what making it a pay-to-play game like this does, is it entrenches power of established – of rich people. It gives us something closer to a gentry, a noble class.
Rory: While public universities feel the pain, private Christian ones were spared cuts in what appears like a very crass reward to Kenney’s socially conservative base.
Kate: The Student Temporary Employment Program, colloquially known as STEP, has also been canceled. STEP provided wage subsidies to employers that were looking to hire students in the summer. Labor Minister Jason Copping actually called this “free money,” and he decided the pay cut that they gave to the youth minimum wage is their contribution to student employment, which is incredible. Just magnificent.
Joel: Let’s take a moment just to appreciate this. “I reduced the minimum wage from $15 to $13 for youth and eliminated the STEP program. You’re welcome, students.”
Patrick: Enjoy your 18th birthday, when you will be fired and replaced by a younger student because your wage has to go up by two dollars an hour.
Kate: So one thing we haven’t touched on yet is the proposed wage rollbacks in the public sector, and the reason that the government is proposing these wage rollbacks is because of the wage reopener which was included in a lot of public sector contracts over the last kind of cycle of negotiations. And what a wage reopener is, is basically a lot of government contracts, the workers in them agreed to take zeros for two years, so they took absolutely no increases in pay for two years, with the promise of an arbitrated wage reopener in the third year. So that meant that their wages would be reopened, evidence would be presented during hearings to an arbitrator, and then the arbitrator would rule on how much that increase would be. And it is expected and was expected that it would be an increase, simply because the cost of living goes up, and an arbitrator takes things like that into consideration. Whatever the arbitrator decides will be retroactive to around spring of this year.
The finance minister has come out with regards to the negotiations with the employees that work for AHS and said that their position now is that employees in AHS should receive wage cuts. So these are wage cuts of 2% for Alberta Union of Provincial Employees who work Alberta Health Services, wage cuts of 3% for the United Nurses of Alberta, and 5% for the Health Sciences Association of Alberta.
You might be thinking that a 2% wage cut isn’t actually a lot, but a 2% wage cut is working one week a year for free, so it’s actually quite a substantial amount of money. I personally would not care to just go to work one week a year and not get paid for it, so even though these wage rollbacks might be in small numbers, they are quite substantial when looked at in those terms.
Rory: Especially, when you think about it, if many of these public sector workers have taken years of wage freezes. Like, for example, the teachers have had six years of zeros.
Kate: So the government hasn’t indicated yet whether they intend on making Government of Alberta employees or the teachers take wage rollbacks, but I would imagine, given with how aggressively they’re dealing with workers in the healthcare sector, like, this is absolutely something that is on the table.
Rory: And the government has also threatened massive layoffs if they don’t get the wage rollbacks, so they’re telling the third-party arbitrator that that’s what they’ll do, because they are saying they have the same amount of money for wages, regardless of how much each individual person is paid. So they’re saying if wages go up, there will be less people working.
Kate: The government is also lying about this. So in the Klein years, laundry workers took a 28% wage rollback, and two years later Klein privatized their jobs. So people might think that, “Oh, if we take the wage rollback now, at least we’ll be able to protect our jobs and protect the public service,” but, like, whatever you take now, this government is going to come for more later, because they are committed to austerity as a political project.
And these wage rollbacks are part of massive, massive cuts to the public sector. So in healthcare alone, we are cutting acute care funding; we are cutting ambulance services; we’re cutting diagnostic, therapeutic, and other patient services; we’re cutting admin; we are cutting infrastructure support. The Misericordia Hospital in Edmonton, its expansion is being canceled. Red Deer community hospital, its expansion is being canceled. The new child and adolescent mental health center, that is being canceled. Bloodwork, mental support, surgeries, and preventative medicine – those are getting small reductions.
Like, there are really massive cuts taking place all across the public sector, and there are also massive reductions in wages. So the budget indicates that the UCP is going to decrease what they spend on wages, and this could come in the form of either a wage rollback for the workers currently employed in that sector, or it could come in the form of job loss, or likely a combination of the two, so really just taking a machete to the public sector.
Joel: Also seems kind of bad.
Kate: It’s not great.
Jason Kenney has also indicated that he wants to reduce staffing in the public sector by 7.7%. This is the job loss of a little over 16,000 full-time-equivalent positions, so that is a massive amount of people to have just laid off, and this is going to hit especially hard in rural communities, where, often, AHS and government services are major employers in these regions.
Also, the government can now bring scabs into workplaces, and it’s legal. So the NDP brought in this new legislation called essential services agreements, and what these means is that if the union and the government agree to maintain a minimum level of staffing during an industrial dispute – so, during a strike or during a lockout – the employer can’t bring in scabs during the industrial dispute. That is now gone, and the employer can just bring in scabs.
Joel: Seems bad.
Kate: Yes. I for one would simply never scab.
Joel: All right, so we know this budget is bad, and we know a lot of the reasons the government is giving for delivering this budget are also, like, full of crap and completely artificial and – fabricated, let’s say. So if the government’s messaging about the budget is false, and if – the more sort of, like, ideological messaging around, “Oh, well, it’ll create jobs,” or something, that’s generally false, as far as we’ve seen it, as well, right? We’ve seen companies basically, like, take this giant tax cut and say, like, “Sweet, thanks,” and then immediately lay hundreds of people off, and I expect that to continue.
So if it’s not creating jobs and bringing investment, and if the reasons for doing it are false in the first place, I’m really interested in talking about, what are the actual reasons for delivering austerity? Because the sort of, like, positive messaging that is given for it is just so obviously false. Like, what actual reasons – what are the consequences that the UCP and Jason Kenney want to see happen? What is the actual agenda at play here?
Rory: Well, austerity is a political project.
Kate: And Jason Kenney wants to redistribute wealth from working-class people to people who own capital, and that, more broadly, is what neoliberalism is. Neoliberalism is really a theory of the state, and it’s very much a political project that uses the state to reestablish conditions that are more favorable for capital accumulation and to restore the power of economic elites, and it does this by destroying the power of the people who have the best opportunity and the best chance of stopping this accumulation of capital, and that’s trade unions. So I think antiunion sentiment, picking a war with the unions, is a really, really big part of Kenney’s austerity as a political project.
Joel: And I think this is where I’ve seen some progressive commentators kind of, like, start to fall off the analysis, because they’ll get so far as to say, “Okay, like, the reasons that we’re doing austerity seem to be bad.” And then they’ll get to the kind of second level of analysis where they say, like, “Even the supposed benefits of this kind of economic program are supposed to bring investment or whatever, and that doesn’t seem to be the case.”
But then they fall off on this final step, which is to say, “Yeah, no duh” – like, because, you know, expanding the economy and economic growth for everyone is not what Jason Kenney and the UCP are interested in at all.
Kate: He’s doing it on purpose. He did it all on purpose. Like, all the people who are going to suffer under the budget – that’s on purpose. He did it on purpose, because – this is going to sound very crass – but, like, the suffering is the point. You know? Like, it is the means through which rich people can accumulate more capital.
Jason Kenney doesn’t care about any of the well-intentioned reasons you might have to oppose some of these things. Jason Kenney doesn’t care that licensed practical nurses in Alberta have a larger scope than licensed practical nurses in Ontario and therefore deserve to get paid more money. He doesn’t care that wages in the public sector actually haven’t gone up that much, or that de-indexing AISH is cruel, or that students learn better in smaller class sizes. He cares about facilitating capital accumulation for his rich friends.
Like, you could tell him all of those things and really make him understand them, and it wouldn’t make a difference, because addressing those problems is not the point of the United Conservative Party as a political project.
Joel: What’s really interesting to me is that it’s giant giveaways for fossil fuel capitalism, right?
Kate: Yeah, it’s not just a project of capital. It’s a project of fossil capital.
Joel: It’s a very specific faction of capital that is really, really winning here.
Kate: And it’s also, in some ways, kind of almost an old-fashioned form of capital. The capitalist class right now in the world is, in many ways, kind of divided along really fundamental lines between fossil capital and between a more, like, data or tech capital – think, like, your Mark Zuckerbergs or your Jeff Bezoses or your Elon Musks – and then you have your more traditional fossil capital, so that’s, like, Rex Tillerson, what have you, and Jason Kenney is very fundamentally a political project of the latter – of fossil capital – and I think that is one of the ways in which, like, the UCP is a very reactionary political project.
Rory: Yeah. Well, I mean, I think, certainly, a great way to, like, kind of look at this here is that in, like, how the narrative that the UCP sells around the need for austerity is, like, they spent all this time in the lead-up to the provincial election and since then warning of a fiscal apocalypse. And one of the very first things they did in government was to instantly forgo $1.1 billion in revenue by cutting the corporate tax rate for their first budget. So – and this was done before their Blue Ribbon Panel was struck to look at balancing the budget – a panel that was not allowed to consider revenue – and then public sector negotiations, for example, were then legislated to take place after the MacKinnon report was released, yet corporate tax cuts didn’t require that consideration.
So it really tells you that balancing the budget isn’t really the point of this austerity, and the UCP government isn’t hiding this, when you look at the numbers. Like, Kenney will run a $14.5 billion deficit over the next two fiscal years compared to the NDP’s projected $14.9 billion, so it doesn’t really matter.
Kate: That’s because it’s not about the deficit. It’s about who pays. And they are keeping the deficit similar, but given all this lost corporate tax revenue, the UCP government is going to extract the difference from the working class in this province, and we are going to pay for it. And I really do want to drive home just the pain and misery that this budget is going to cause. Like, it’s going to kill people. People are going to die because Jason Kenney sat down and made a budget like this. And this is a budget that very firmly says that, like, working-class people will pay for this.
Joel: The idea that this is about numbers or about balancing the books – absolutely false. It’s a project about transforming society – and transforming the relations between people in society – so that if you work for a living, if you earn a wage, you’re on rougher terrain; you have to kiss more ass; you’re in a more vulnerable position; you’ll earn less. Also that the owners can make more, and are more comfortable. It’s really – it’s simple in that way.
Patrick: One of the other very few movements that has any sort of capability to resist what the government wants to do is the environmentalist movement, and you’ll notice that the war room got its $30 million in funding way before the budget was passed, without any sort of discussion of austerity or cutbacks for them. It’s a tiny priority, but it is a big priority for the government that this gets funded so that they can sling lots and lots of propaganda against people who are trying to do the right thing on the climate crisis.
Joel: We should pay attention to it precisely because what they are – fundamentally, the assumption that they’re going after there is that it is good and ethical to continue to extract, produce, process fossil fuels in this day and age. That’s really being put into question by a lot of environmental critique, and so of course, right off the bat, priority number one is to hand out a big tax break to corporations and then, like, to basically subsidize a giant PR and, like, witchhunt against the environmental sector.
This is obviously a very distressing state of affairs, and people that read up on this or listen to the podcast will probably say, like, “Wow, this sucks,” and they’ll probably feel sad, like the rest of us do around this table. What is it that people can do, or start to do, in order to put themselves in a position where they can take further action?
Kate: Well, a good start is that if you belong to a trade union or if you belong to any sort of formal institution, start working within that. Particularly if you are within a trade union, start making connections on your shop floor; start talking union with other people; make connections with your shop steward, with your local-level officers; and also reach out to the infrastructure of the union itself to encourage them to take more bold and more direct action against the Kenney government.
And if you’re part of any other kind of institution, whether that is a students’ union or a church or any of those types of things, these sorts of places are natural constituencies with people who theoretically have shared values or social positions or something like that, and they’re a really good way to start having one-on-ones with people and talking to them about these things and drawing them to the only conclusion that I think matters, which is: we can stop this if we take action together – if we are willing to escalate, if we are willing to disrupt, and if we are willing to create a crisis for this government.
Patrick: Yeah. That’s exactly it. My advice is, don’t be mad alone. Talk to your apolitical friends, complain to your apolitical friends, about the damage that is going to come from this budget. Point out the wild unfairness of these extremely profitable corporations getting billion-dollar handouts while the rest of us are all going to have to pay for it in service cuts and tax increases. Kenny would like us all to live these highly individualized lives, to try and confront all of this power as just ourselves without any backup from people who are in our circumstances.
And I think the task falls to each of us to combat that on, like, a very personal level; to decide that, actually, these changes and what they represent are not what I believe in, and I am going to start talking to the folks that I know and try to pull them together to resist it.
Rory: Yeah. Or look for things in the budget that impact you personally. And there’s definitely other people who are in that same boat, who are going to be impacted by this. So this is kind of an opportunity to talk to other people, and also an opportunity to potentially organize around a specific issue. It could be over, like, cuts to, like, funding for children with disabilities. Or, for example, if you’re, like, say, a university student, you could look out for others unhappy about a tuition hike. In 1993, U of C students blockaded Crowchild Trail to protest Klein’s tuition increases.
Joel: More substantially, I think, you know, part of Jason Kenney’s project is to put Albertans against each other to say, like, “Oh, you’re getting more, and I deserve it,” to have a kind of, like – in a kind of negative solidarity. And I think what we really need to extend to each other now at this point is positive solidarity – to say, “I’m not a public sector worker, but I think it’s absolute crap that you’re trying to give public sector workers a wage rollback, or haven’t had any increases for years and years.”
Patrick: And on that note, there will be lots and lots of different people, lots and lots of different groups, who are forming – who are getting together to try and act on this, and my advice is: connect with them to the extent that you can. Build that little network.
The AFL has this resistance mailing list – I don’t know where exactly it’s going to go, but – http://www.kenneyscuts.ca/join – that at least will begin to get you connected with some of the community that is going to be doing actual on-the-ground action to resist all this.
Kate: If you see a picket line, picket line means “do not cross.” And even if you’re not in that worksite, workers on pickets are often very bored and very lonely, so stop by, bring food or coffee or even just your company. It’s always a really, really lovely experience to go walk the line with other people.
And one of the things I want to say, too, is that it’s totally meant and designed to feel, like, really overwhelming and really individualizing, but, like, we literally can’t do it alone. Like, there’s absolutely nothing I can do as an individual person to stop austerity, and there’s nothing you can do as an individual person to stop austerity. But we can participate in collective political projects that have the best chance we’ve got at facing down this government, I think.
Patrick: And if nothing else, when you drive by that picket line, give them a honk. People will holler back.
Kate: Please honk at picket lines. It’s rude not to.
Now that we’ve discussed how much austerity sucks, how much this budget sucks, and what we can do to fight back, I’d love if we could all just go around the table and share what we’re going to do if we happen to see a Tory cabinet minister in public.
Patrick: Well, I’m not going to do anything in particular, but, you know, I’m a pretty clumsy person. I’m likely to catch my foot on a flagstone or on a chair or something, and my tea is going to go flying. That’s – that’s – you’re going to need a fresh tie. That’s – that’s – that’s just how life is. Sorry.
Rory: I’ll probably stick with the classic just clearing my throat really loudly and then yelling “Tory scum.”
Joel: I’ll probably be walking around with a giant pie shell filled with whipped cream, as I usually do, as is my custom, and I might just, like, accidentally trip and land my pie accidentally into the face of a minister. That might happen – accidentally.
Kate: Yeah, it could. I’m a good trade unionist, so you know that if I see a Tory minister in public, I’ll be hitting him with one of those, “Shame.”
Group: Shame. Shame. Shame.
Kate: Extremely on-a-picket-line voice.
On behalf of all of us here at the Alberta Advantage, take care of each other out there, and-
Kate: The Alberta Advantage is part of a loose affiliation of left-wing podcasts hosted by the bilingual journalism collective Ricochet, who you can find at ricochet.media.
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Thanks so much for listening, and take care out there. [end]