It was a different world back in 1993. The Alberta government announced that year that it had run $3.4 billion into the red— its eighth deficit in a row. Across the country, public concern about the level of public debt was mounting. But only a few governments were taking cautious steps towards deficit elimination, balancing modest spending cuts with tax increases. That was before the Klein revolution. Almost immediately after winning Alberta’s last election nearly four years ago, Ralph Klein’s Conservatives initiated a massive 20-per-cent cut in government spending— while generally holding the line on taxes. They even made substantial cuts to once untouchable programs like medicare and welfare. And with the help of booming oil and gas revenues, they ran up a budget surplus that could come in at over $2.2 billion this year. In the process, they emboldened other governments—everyone from the federal Liberals to Ontario’s Tories and even Quebec’s Lucien Bouchard—to join the budget battle. Klein, says Jack Carr, an eco-
nomics professor at the University of Toronto, “sent the signal that being fiscally responsible was politically a smart move.”
Soon, Klein will find out just how politically smart his policies really were—he is expected to call an Alberta election as early as this month. Although critics charge that he has turned Alberta into a divided, less compassionate province, the political winds still seem to be blowing his way. The Alberta economy is firing on all cylinders—always a happy state of affairs at election time. And according to an Angus Reid poll of 800 Albertans conducted last November, the Tories enjoy the support of 65 per cent of decided voters, while the Liberals have 22 per cent and the New Democrats 10 per cent. What is more, Klein’s own approval rating is 70 per cent.
That has left the opposition grasping for a foothold. Liberal Leader Grant Mitchell argues that the polls are wrong, that voters will make their choices in the last two weeks before a vote—and that the Grits have a good chance to form the next government. The New Democrats, who last September chose former MLA Pam Barrett as their leader, say they expect to make inroads. Meanwhile,
the huge budgetary surplus the government is expecting to apply against the province’s $4.5-billion net debt this year— a move backed by many Albertans—has at the same time prompted demands for a rollback of some program and wage cuts. Bruce Cameron, a Calgary-based senior vicepresident at Angus Reid, warns that any slip in the Tories’ poll numbers as the election battle heats up could be perceived as negative momentum—which has the potential to snowball. But the party does not seem to be in any serious electoral danger. “It’s not impossible,” Cameron says. “But given the huge lead the Tories have right now, it looks very unlikely that they could lose.”
That is a far cry from 1993, when the Liberals were widely thought to have a solid shot at winning the next provincial election. It was1 largely Klein—who took over the Tory leadership just half a year earlier from the unpopular Don Getty— who swung the June 15 vote towards the Tories with his folksy, personal campaign style. The Conservatives captured 44 per cent of the popular vote in 1993, just four points ahead of the Liberals but enough to capture 51 of 83 seats in the legislature. The Liberals took 32 seats. The New Democrats were shut out completely. Since then, three Liberals have defected to the government side, leaving the current standings at 54 Tories and 29 Liberals.
This year, the Grits are hoping to capitalize on discontent, especially in rural areas, over video lottery terminals. With critics objecting to VLTs—often referred to as electronic slot machines—on the grounds that they make gambling too readily available, the Liberals have promised to eliminate them. But the government may have taken some of the wind out of opposition sails last month when it announced that communities can vote to ban the machines while continuing to share in gaming revenues. Cuts to education and seniors programs may also emerge as important issues. And both opposition parties stand to gain from the most controversial cuts—those to health care—even in normally Conservative Calgary, where the impending closure of the Bow Valley Centre hospital, one of the city’s major medical centres, has been a sore point.
The Tories, meanwhile, are attempting to run on their record. In his annual televised speech last week, Klein boasted that government spending is under control, the debt is being paid off, and more Albertans are working than ever before. “Alberta is a better place than it was four years ago, thanks to your effort and sacrifice,” he told the province. The Liberals’ Mitchell counters that while budget balancing is great, “the question is how they have done it—and at what cost.” Certainly, the province is a much different place than it used to be. In the past four years, Alberta has privatized liquor sales and vehicle registration, cut the size of the civil service by 7,751 to 22,856, and reduced the wages and benefits of most public-sector workers by five per cent. Welfare rolls have also been slashed by 56 per cent, to 41,608 at the end of last year from 94,087 in March, 1993—a move made easier by Alberta’s economic upturn. Meanwhile, the government redistributed education funding more equally among school districts, ordered school boards to limit administration ex-
penses and dramatically reduced kindergarten funding—which was later restored. Government is now leaner than it was—and many analysts say that suits Albertans just fine. “It fits in with the small-c conservative mind-set of the province,” says University of Calgary political scientist Stan Drabek. “An awful lot of people probably support the downsizing of spending. They may not have agreed with the priorities and amounts, but as a general rule they supported the idea.”
Klein initially pledged that he would not ease up on spending cuts. And he was going strong until the fall of 1995, when the health-care issue boiled over. The catalyst was a hospital laundry workers’ strike in Calgary—over plans by the regional health authority to contract out their jobs. With the strike attracting wider support from a public increasingly concerned about health care, Klein stepped in and cancelled some health cuts—although he said his action was not linked to the strike. “That was the first blink,” insists Peter McCormick, a University of Lethbridge political science professor. “Now, his eyes are fluttering like a debutante’s.”
In fact, during the first three years of its deficit-cutting campaign, the government reduced the health budget by close to $500 million.
But in the wake of several so-called reinvestment announcements, health spending is now just $319 million lower than it was in 19921993, and last fall the government announced that it will restore funding almost to the pre-cuts level by the year 2000. That clearly relieved some of the public pressure around health care. But critics called it proof that the cuts were unnecessary, and the move, combined with the impending surplus, accelerated demands from seniors, nurses and others for budgetary relief. That, in turn, presents its own dilemma. “If you start pouring money back to replace the money you cut just three years ago,” says McCormick, “you’re almost admitting you made a mistake. On the other hand, if you just sit on the money, you look heartless.”
In his televised address last week, Klein insisted that the cuts were indeed necessary to control spiralling costs. And while he gave no hint of any dramatic new spending initiatives, he promised “constant monitoring and fine-tuning” of health care and declared that he would “invest in the things the household needs.” But he also insisted that “we must ensure that we never go back to the old ways of spending.” His only concrete promise was to foster the creation of 155,000 more private-sector jobs by the year 2000.
Mitchell argues that his Liberals have a different vision for the future, one that “embraces people” and includes a commitment to proper health care and education funding. The NDP’s emphasis is on keeping the Tories in line. After the first year of a new mandate, Barrett maintains, “they will privatize everything that isn’t nailed down, they will deregulate everything possible, and they will get out of the business of governing—unless there is effective opposition.” Apart from such a scenario, it is difficult to imagine the Tories coming up with any plan as dramatic as the one they implemented during their current term. Instead, the deficit revolutionaries seem to be hoping that the electorate will give them the mandate to manage the spoils of the budgetary battle. □
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