Alberta election 2015: Why political change could make economic sense

Provincial economy may benefit by loosening the corporate stranglehold 

on power

Premier-designate Rachel Notley following her election victory. While business leaders may be worried about what will happen under an NDP government, Don Pittis says Notley can help the province, and the country, escape the economic effects of the 'resource curse.' (The Canadian Press)

When the Progressive Conservative party in Alberta swept to power under Peter Loughheed in 1971 it was definitely a party of the people. But by earlier this year, with Jim Prentice in charge, it had become like the 1950s TV show Father Knows Best, with the role of "Father" played by big business.

There is no question that business has a crucial role in a province's — and a country's — economy. But it can be dangerous when the boardroom is convinced it is in charge. And despite fears by many people in the business community, Alberta's change in government could actually make the economy stronger. 

There is no doubt that business can be a force for social good. From Bill Gates to the owner of the local car dealership, entrepreneurs large and small who are embedded in their communities make those communities better.

But there is another side to the power of business. That is the primary directive of any large corporation: to maximize profits. That pressure can be in conflict with the good of the community. It is why both banks at your nearest corner have closed their neighbourhood branches. It is why the new owners of Tim Hortons are looking for ways to cut staff.

Resource curse

It is an example of something known as the "resource curse" — where the interests of large corporations, often those extracting non-renewable riches, increasingly align with the government in power. The welfare of citizens and the health of the general economy suffer while government and industry both focus single mindedly on extraction and profit.

"Countries with large endowments of natural resources, such as oil and gas," writes Nobel prize-winning economist Joseph Stiglitz and his co-authors in their paper Escaping the Resource Curse, "often perform worse in terms of economic development and good governance than do countries with fewer resources."

Alberta is no Nigeria or Saudi Arabia but part of the anger against outgoing Premier Jim Prentice was that, as CEO-in-chief, his response to industrial failure in Alberta was to leave business taxes unchanged at the lowest level in Canada while raising taxes for everyone else.

Post-Lougheed era

It may also be why in the post-Lougheed era there was always money for corporate profits and re-election promises but nothing for the Alberta Heritage Savings Trust Fund, which he set up as a long-term savings account fed by the province's oil wealth.

'I don't think Albertans … thought they had the power to hold the government to account.'- Edmonton Journal columnist Paula Simons

Fortunately Alberta is not Venezuela either, where the resource curse backed by multinationals was overthrown by a resource curse controlled by leftist populists.

As University of Saskatchewan political scientist Greg Poelzer told me recently, Prairie socialists are practical people who value the work ethic and are "very fiscally conservative." The backbone of Saskatchewan and Manitoba New Democrats, he said, has consisted of farmers who are small business owners in their own right.

While much has been made of premier-designate Rachel Notley's inexperienced caucus and cabinet, most of those new MLAs will bring to the legislature concerns from outside the business perspective. Rather than business asking what elected officials can do for business, the newly elected members will ask what business can do for their constituents.

And that is a change. After 44 years of Progressive Conservative rule, much of it without a significant opposition, power had moved away from the electorate and deeper into the hands of the premier's closest advisors.  

Lock on power

"I don't think Albertans, until last night, thought they had the power to hold the government to account," Edmonton Journal columnist Paula Simons said during a morning-after panel, "Orange is the New Blue," on CBC Radio's The Current.

One of the panel's suggestions was that by taking a less pro-industry stance, the NDP may actually smooth the way for the oil patch, reducing opposition to pipelines and resource extraction.

In fact, said Simons, Notley's biggest problem may be that everyone from health-care workers to the oil industry itself will expect her to sprinkle "Rachel dust" on them and magically solve their problems. 

On the other hand, Calgary Mayor Naheed Nenshi has already shown that Nenshi dust works. Through him, Canada and the world now know Alberta is far from a cultural wasteland, and that Calgary is a hip, global city. Building on that base, Notley and her young cabinet must demonstrate that they can unleash a similar wave of dynamism, creating an economic rebirth that is about more than extracting oil.

They have four years to convince the waverers. Because while Prime Minister Stephen Harper may take a warning from the backlash against governments who cozy up too close to business, his opponents should examine the other reason Notley took most of the seats this week.

It wasn't that she won the popular vote. Instead, the majority was split between two opposition parties whose politics were far too similar.