THE NATION’S BUSINESS

The whiz who runs Ralph Klein’s shop

Peter C. Newman December 5 1994
THE NATION’S BUSINESS

The whiz who runs Ralph Klein’s shop

Peter C. Newman December 5 1994

The whiz who runs Ralph Klein’s shop

THE NATION’S BUSINESS

PETER C. NEWMAN

Canada’s most far-reaching revolution is currently unfolding in Alberta, where the provincial government is upsetting Canadian orthodoxy by imposing radical measures to balance its budget. Ralph Klein is the Marx of this particular revolution—sounding like Karl, even when he’s behaving like Groucho.

The functionary who is putting into effect most of the policies and details is a 42-yearold ex-Dome Petroleum executive with a quick mind, alert instincts and blackjack dealer’s eyes named Jim Dinning. As provincial treasurer (the equivalent of finance minister), chairman of the government’s treasury board and a key member of the powerful agenda and priorities cabinet committee, Dinning creates financial realities out of Klein’s musings. “The day Ralph and I sat down and talked about the job,” he told me during a recent interview in Edmonton, “the premier spelled out what he wanted done, and sort of said, ‘Go away and do it.’ He realizes he has some good people around him, and uses their talents. It’s an exceptional opportunity to do what’s needed, because he’s willing to lead the charge.”

In his first budget, tabled last Feb. 24, Dinning vowed not to increase taxes or to impose any new ones, as well as pledging to re tain Alberta’s status as the only province without a sales tax. He reported that in his first year, he had reduced program spending of $13.5 billion by $830 million, cut the province’s consolidated deficit from $2.5 billion to $1.55 billion and reduced the size of the public payroll by nearly 3,000 people to 29,356.

When the Klein government was elected in December, 1992, the province faced a $3.4billion deficit and had accumulated an $11.8billion debt In February, Dinning projected a $1.5-billion deficit this year, but last week he released a good news revised deficit estimate of $655 million (which amounts to an 80-percent reduction).

Provincial Treasurer Jim Dinning is a 42-year-old former oil executive with a quick mind and blackjack dealer’s eyes

But Dinning was quick to point out that the more positive outlook was a consequence of an unexpected increase in revenues. As a result, the treasurer said it was essential to maintain the government’s cost-cutting programs. ‘We can’t rely on volatile, uncontrollable revenue sources to solve our fiscal problem,” he declared.

Next year, Dinning projects a relatively tiny deficit of $500 million. But he admits that the jury is still out on whether his bold initiatives will succeed. The hope is to table a totally balanced budget in 1997. By then, the provincial debt will have climbed to $16.9 billion, and its ultimate elimination will become the administration’s next target.

We were determined from the beginning to balance out the deficit because we were convinced that no government ever taxed its way to prosperity,” Dinning points out. We’re now collecting taxes of $11 billion to $12 billion a year and we figure that’s more than enough to spend in a province of 2.7 million people. We don’t need to ask Albertans to pay more taxes. There’s no God-given right that governments can keep their mitts in people’s pockets endlessly, and just keep on drawing the money out like a blank

cheque. But our plan is not simply to reduce spending. It’s about restructuring government so Albertans can receive essential services at an affordable price.”

What has made Klein’s revolutionary program work is his almost magical political appeal. After nearly two years of merciless cost cutting, his government’s popularity rating stands at an amazing 61 per cent. Earlier this year, three-quarters of the province’s civil servants voluntarily agreed to a five-per-cent wage cut. Dinning believes that he can get away with the tough fiscal regime he has imposed because Albertans really are different. “I don’t want to be trite or cute about it,” he says, “but there is still a tendency towards a pioneer spirit here that says, God damn it, we’ve got a problem, so let’s not point fingers and lay blame, let’s not spend a lot of time wringing our hands about it, let’s get on and solve the bloody thing. In fact, most Albertans were way ahead of the government on this issue.”

To the many loud and frequently justified complaints that he is trying to implement too many cuts much too fast, Dinning flatly declares: “You can’t cross a chasm in small leaps. To do this thing, you’ve got to get it done quickly. You only have a limited window during your mandate to effect major structural changes.” His bible is Milton Friedman’s Tyranny of the Status Quo, which claims that after 24 months in office politicians inevitably are overwhelmed by pressures against change mobilized by the civil service.

Under Dinning’s stewardship, Alberta has reduced the number of school boards from 180 to 57. He also cut 200 health and hospital boards to 17 regional authorities and charged them with putting into effect an 18-per-cent spending reduction over the next three years. University and college budgets have been slashed and professors are in the process of being denied their cozy tenures. “Cutting expenses is what has driven the creativity in restructuring and delivering services quite differently,” says he. “And it has allowed us to get out of some businesses that we shouldn’t be in, such as selling licence plates and running liquor stores.”

Alberta’s economic growth, at 6.3 per cent, led the nation last year and it is expected to do so again for 1994. ‘We believe that fiscal responsibility is the best economic development tool a government can have,” boasts Dinning. “If you’ve got a balanced budget, a good tax regime, a clean environment and well-educated folks, that’s what’s going to attract business here.” So far, the formula is working. Employment has grown by a seasonally adjusted 63,000 full-time jobs since May, 1993. At the same time, welfare rolls are down from 94,000 to just over 54,000, but there is no doubt that many people feel dispossessed and are suffering.

Every revolution must have a leader—the charismatic animator who gives it thrust and sky. Equally important is the implementer who works out the details and delivers the goods—just like Jim Dinning.