The four western provinces are typically viewed as a demographically and economically dynamic region that is a growing source of fascination in Central and Eastern Canada. Yet the West is anything but a homogeneous region, and major economic and political differences exist among its four provinces. For instance, regarding energy resources, Alberta and Saskatchewan are rich in oil and natural gas, while BC and Manitoba have hydro power, which the former two are by and large lacking. With regard to political life, BC remains centred on strong partisan and ideological divides while Alberta has been governed by the Progressive Conservatives since 1971. As for Manitoba and Saskatchewan, economic prosperity helped their respective ruling parties (the NDP in Manitoba and the Saskatchewan Party in Saskatchewan) win another mandate at the polls earlier this fall. In BC and Alberta, there was no general election this year but, interestingly, both provinces now have a new premier, in both cases a younger woman who is attempting to reshape the ruling party. This was a most eventful year in a region of the country that is much less homogeneous than a superficial look could suggest.
Manitoba’s status as a “western province” is ambiguous, as this older, economically diverse jurisdiction is typically closer to central Canada, both geographically and in its political identity. Compared to Alberta and even BC, Manitoba has not developed a resource-based economy largely because it is not as well endowed as the other western provinces, especially where nonrenewable resources are concerned. Yet this apparent disadvantage has become one of its strengths, because it has forced the province to diversify its economic base, which is a key ingredient of the Manitoba success story that became obvious to outside observers in the context of the post-2008 recession. The celebrated return of the Jets to Winnipeg adds to this success story while further increasing the profile of Manitoba among Canadian provinces. Politically, economic prosperity has not been accompanied by strong regional grievances such as those still emanating from Alberta. The fact that Manitoba is the only western province that currently receives equalization payments may help explain this situation.
These remarks should not mean that everything is great in Manitoba. In Winnipeg, where most Manitobans live, violent crime has become an obsession in a place where the comparison with US-style “inner cities” seems more and more appropriate. Behind the reality of crime in Winnipeg lies a problem that is even deeper and harder to tackle: Aboriginal poverty. Proportionally, Manitoba has the largest share of Aboriginal population in Canada (more than 15 percent of the overall population and rapidly growing). In this context, fighting poverty and increasing educational and employment opportunity among First Nations are some of the most crucial tasks facing Manitoba. This is a challenge that Greg Selinger and the provincial NDP must tackle in the aftermath of their historic re-election earlier this fall, which was facilitated by the positive economic climate and, to a lesser extent, the return of the Jets to Winnipeg. In the years ahead, his government may want to address Aboriginal issues systematically, working hand in hand with First Nations and the federal government. Beyond this issue, the new NDP government should keep investing in infrastructure and education while balancing the provincial budget by 2014, as Premier Selinger promised during the fall campaign. Considering the current favourable economic situation, it would be appropriate to balance the budget and invest in the long-term future of Manitoba instead of embracing a bold tax-cut agenda. Although Winnipeg deserves much attention due to the urban and social problems discussed above, the NDP should not forget rural dwellers, who remain a constituency facing challenges such as flood prevention — the other provincial obsession with hockey and urban crime.
The celebrated return of the Jets to Winnipeg adds to this success story while further increasing the profile of Manitoba among Canadian provinces. Politically, economic prosperity has not been accompanied by strong regional grievances such as those still emanating from Alberta. The fact that Manitoba is the only western province that currently receives equalization payments may help explain this situation.
The Saskatchewan economy is stronger than Manitoba’s. Featuring the lowest unemployment rate in Canada (less than 5 percent) and a balanced budget, it is now the envy of other, less prosperous and fiscally disadvantaged provinces. While the ruling NDP had to overcome a bold electoral challenge in Manitoba’s fall election, in Saskatchewan, Brad Wall’s party was so far ahead in the polls before the beginning of the provincial campaign that the basic outcome of the November 7 election — the bold victory of the ruling Saskatchewan Party, which received 64 percent of the popular votes and won 49 of the 58 seats in the legislature — did not come as a surprise (on this issue, see my article in the November issue of Policy Options). This is probably why, during the 2011 campaign, the Saskatchewan Party limited the number of costly electoral pledges, in sharp contrast with the desperate provincial NDP headed by the less-than-popular Dwain Lingenfelter. The truth is that, in Saskatchewan as in Alberta, the temptation is great to overspend in the context of the “resource boom.” In fact, during its first mandate, the Wall government increased government spending while cutting taxes, a situation that created a major fiscal challenge when potash revenues fell dramatically in 2009. The shock of this unanticipated shortfall had the Wall government struggling to avoid the advent of durable, long-term budget deficits. Related to overly optimistic assumptions about potash revenues, this 2009 episode was a cautionary tale for the Wall government, which learned the hard way about the potential fiscal instability stemming from the overreliance on resource revenues in a volatile global environment. Now in power for a second mandate with an overwhelming majority of the seats at hand, the Wall government is unlikely to repeat the same mistake.
One of the greatest policy challenges in Saskatchewan is to invest in the future of the province and, more specifically, in the diversification of an economy that is heavily dependent on natural resources where prices fluctuate sometimes dramatically from year to year or even month to month. Here, Saskatchewan may not want to imitate the short-term approach of its powerful Albertan neighbour, which is stuck in a “boom-and-bust” logic and a combination of low taxes and acute spending sprees that have resulted in large budget deficits in recent years. Instead, looking at Manitoba is a better idea, as over time, this province did find a way to diversify its economy. Looking abroad to Alaska or Norway for a model in long-term fiscal planning would also be well advised, something the Saskatchewan NDP suggested during the 2011 provincial campaign. Clearly, the limited “contingency fund” currently in place is too modest to generate the type of savings and long-term investments that are needed to build a sustainable, more diverse economy. Moreover, just as in Manitoba, the Saskatchewan government needs to do more to help fight Aboriginal poverty and job train First Nations youth, who currently represent more than a quarter of the population aged 15 and younger in Saskatchewan.
Finally, energy policy and the environment are two related challenges the second Wall government should take extremely seriously. Because the idea of building a nuclear power plant in the province is overly controversial and probably unnecessary despite growing demands for electricity, the recent focus on “carbon capture” is equally ill-advised. As a growing number of experts believe, buying clean, renewable hydro power from Manitoba is the best solution to the growing electricity needs in booming Saskatchewan. Although pressures are strong on the Wall government to exploit the low-quality coal found in the province, long-term environmental sustainability should triumph over the short-term interests of the mining industry. Buying hydro power from Manitoba and creating the infrastructure needed to transport it across provincial borders does not only make sense from a financial standpoint; it would improve the environmental record of an increasingly polluting province that needs to improve its “green image.”
Another province that suffers from a major image problem in the environmental realm is Alberta. Like Saskatchewan, it depends extensively on nonrenewable resources. As opposed to aluminium and potashrich Saskatchewan, however, Alberta is centred on the energy sector (especially oil), a situation that makes its economy even more vulnerable to boom-and-bust cycles. Fortunately for Albertans, oil prices bounced back after reaching a low in late 2008 and early 2009, a situation that helped restore economic prosperity in the province. In September 2011, the unemployment rate in Alberta fell to 5.4 percent, compared to 6.2 percent just a year earlier. This is good news for a province that faced a significant downturn after the 2008 financial crisis and the fall in oil prices it triggered. The deterioration of the economic situation and the decline in resource revenues had a negative impact on the provincial budget, which remains in the deficit zone — along with the depletion of Alberta’s ill-baptized “Sustainability Fund,” and where fiscal conservatism has been replaced by big spending, coupled with the enduring obsession for low taxes, including the absence of a provincial sales tax.
In the end, a better environmental record, especially where the oil sands are concerned, corresponds with the long-term interests of Albertans, who do not want to see markets close because of the short-term view of oil companies and government officials.
The recent election of Alison Redford as the leader of the Alberta PC is yet another challenge to this traditional image of Alberta-the-True-Conservative-Bastion, which the opposition Wildrose Party seeks to renew through its right-wing and regionalist platform. Here, the contrast between Wildrose leader Danielle Smith and Premier Redford is striking. Compared to Smith’s staunch conservatism, Redford appears as the reddest of the “Red Tories.” Yet it would be wrong to think that the new premier is disconnected from popular sentiments. In reality, Alberta is a rapidly changing, urbanized and dynamic province where the old conservative ideas that remain dominant in rural areas have long been challenged in places like Calgary and Edmonton, two multicultural cities where many inhabitants come from outside the province and the country in search of prosperity and employment opportunities rather than an ideological and regionalist creed. With all these newcomers moving into this “land of opportunity,” public sentiments are much more diverse than the cartoonish image of Alberta popular in central and eastern Canada suggests. Core conservative principles such as lower taxes remain fundamental in Alberta; however, access to good public health and education services is also a priority for most Albertans, something that Premier Redford seems to understand well. The Alberta PC Party has been in power since 1971, and one of the factors behind this stunning political success is not only economic growth but its capacity to reinvent itself as the province changes. For instance, many of the newcomers (Canadians as well as new immigrants) who move to Alberta are not necessarily obsessed with “western alienation” and “family values.” Like most Canadians, they want to have access to good public services, and they are willing to pay for them as long as they feel their money is not being wasted. If Premier Redford can deliver on that front while restoring fiscal balance in Alberta, it is possible that her party could stay in power for many more years. At this point, the only clear thing is that defending the legitimate economic interests of Albertans is compatible with real measures to improve the environmental performance — and as a consequence the image — of this booming “land of opportunity.” In the end, a better environmental record, especially where the oil sands are concerned, corresponds with the long-term interests of Albertans, who do not want to see markets close because of the shortterm view of oil companies and government officials.
British Columbia is a growing province that attracts people from all over the world, as well as workers and families from other provinces, who often find the province’s beautiful natural surrounding and laidback atmosphere appealing. Politically, however, life in the province was everything but laid-back in 2011. As in Alberta, although no provincial election took place, BC has a new premier, who is also a younger and dynamic woman. Like Alison Redford in Alberta, Christy Clark faces many great challenges, partly because her party’s brand had been damaged in recent years. The main political challenge for the BC Liberals over the past two years has been the enduring controversy over the unpopular Harmonized Sales Tax (HST), which triggered a misguided and populist US-style “tax revolt.” In the end, although the HST was generally a sound policy, it was killed through a referendum held in early August. Importantly, the crass populism everpresent in the campaign against the HST raises the fear of a broader “tax revolt” in Canada. In BC as elsewhere, citizens must learn about the need for effective tax policies, as long as they are matched with a shared conception of justice. The HST episode in BC is a striking episode of tax populism that policy experts and politicians around the country should study in order to avoid political disasters like this one, which compelled the previously successful Gordon Campbell to leave office.
The Alberta PC Party has been in power since 1971, and one of the factors behind this stunning political success is not only economic growth but its capacity to reinvent itself as the province changes. For instance, many of the newcomers (Canadians as well as new immigrants) who move to Alberta are not necessarily obsessed with “western alienation” and “family values.”
Now that the HST debate is over, BC policy-makers must refocus on key policy issues like health care reform, public transportation, housing affordability and economic development in northern BC. Dealing with these issues will not be cheap, and the province will have to find a way to generate new revenues without alienating citizens, something difficult in the aftermath of the HST episode. Ironically, the NDP, which participated in the “tax revolt” against the HST, could soon become a victim of this logic, if they win the next provincial election. The campaign against the HST makes this electoral scenario more likely than before, as it considerably weakened the ruling Liberals.
Beyond the paradoxical position of the NDP vis-à-vis the HST, the recent debate over this tax issue illustrates the highly contentious nature of the BC political culture, which can trigger over-the-top electoral dramas that could push the province in the wrong direction, as far as the future of public policy is concerned. More than the other western provinces, BC has to fight against its own political evils to create a civil political environment where real policy debates can take place beyond pure partisan rhetoric, at least between elections. The HST debate suggests that efforts are needed for BC to achieve this goal.
The West is hardly homogeneous, and each province faces different political and policy challenges in a rapidly changing environment that frequently defies the traditional images of these provinces and, sometimes, of the parties that govern them. Today, at the federal level, the West has more political clout than ever before but, as far as provincial politics goes, it is a diverse world that is more heterogeneous than what many people out east typically believe. Each Canadian province is unique. This is as true in the West as it is in the other regions of the country.