Thursday, May 14, 2015

Oops! Alberta Shifts to the Left

Oops! Alberta Shifts to the Left

Alberta NDP premier-designate Rachel Notley and her orange wave actually decimated the province’s 44-year-old Progressive Conservative dynasty which forced its leader Jim Prentice to resign from politics.

The province of Alberta enjoyed capitalistic economy for almost eight decades non-stop with ups and downs, indeed.

The outgoing premier Prentice was busy raising taxes and the other costs for Albertans with no acceptable justification.

With her good sense of public feelings, Ms. Rachel Notley did her campaigning excellently. Moreover, hundreds of thousands of people from across the country and from around the world settled there in Alberta who facilitated the recent switching from the Right to the Leftist party founded on socialistic ideology. This is a case of shifting away from capitalism. Many of the new settlers were fed up because of poor delivery by the dysfunctional PC government. Obviously, the frustrated Albertans needed a regime change, so they did.

With the NDP in power, the socio-economic and the political landscape of this province are in the re-positioning mode. The business community can’t be as happy as is general public; reason is simple - social benefits and reduced taxes. But there are consequences in the form of capital flight and decreased investment resulting in low or no revenue.

Economics based on promises and Taxation: The NDP has promised to raise the corporate tax rate to 12 per cent, increase taxes on the highest-income earners and review the province’s oil and gas royalties program, among many other elements in its platform.

Other perception: The outgoing PC Leader claims his party has a completely different vision from the NDP; he is highly uncomfortable with the “NDP Plan,” as that could be ruining the economy. He is entitled to his opinion.

The fact: NDP always supports big, unionized business.

Furthermore, there has been a long history of failed pipeline diplomacy, but NDP majority means it’s back to the pipeline drawing board. Ms. Notley favours domestic refining and more stringent environmental controls in the oil sands. She is also supportive of some export schemes over others. She has pledged to tone down Alberta’s lobbying efforts for long-stalled pipeline proposals.

Nevertheless, the shocked investors showed less enthusiasm, dumping their oil and gas stocks.

Good thing is Ms Notley is socially progressive but fiscally responsible leader similar to the former Manitoba premier Gary Doer who led his province to a decade of balanced budgets.

 “For the business community, Rachel Notley’s influences first and foremost will be other prairie NDP governments, in terms of reaching out to the business community and creating a prosperous environment,” says Brad Lavigne, a former campaign director for the federal NDP who now works for Hill+Knowlton.

“Already on her first day following the election, she had one message and that was to the business community, and it was that she seeks a collaborative relationship. That’s consistent with what she said throughout the campaign.”

“To the extent an approach on pipelines could be augmented by a climate change policy that works for both industry and governmental interests, it may well cast Alberta in a more favourable light with respect to potential pipeline development, even up to and including Keystone XL.”

The NDP’s other campaign promises including plans to implement a twelve percent increase in corporate taxes, plans to boost the minimum wage to $15 per hour, a proposal to launch a review of energy royalty rates, and plans to increase homegrown refining of bitumen are likely to remain highly contentious, provided, the  oil prices stay low.

Environmentalists aren’t likely to change their tune on pipeline projects, even with a charismatic, socially progressive NDP premier leading Alberta. The opposition to pipelines here includes greenhouse gas emissions from the oil-sands, opposition to oil companies, native fears of spills into salmon streams.

There is a need of thriving business climate, getting the highest prices for our resources, the best wages possible for our citizens, the best healthcare, the best education, of course!

The corporate sector exists to undertake business to make a profit. In doing so it generates wealth which makes taxes possible, hire employees, and pay their wages.

The voting Albertans did not realize that they went too far to the left this time risking the smoothness of the corporate world which is essential to economic vitality.

And, they can do some damage control by voting for the Federal Liberals in October. The liberals are known for staying in the middle lane accommodating social programs as well as looking after the corporate vital signs.

Fact is the trade unions don’t support the Liberals and have a mindset to always campaign against the PCs.

Let’s get back to Alberta provincial election which had nothing to do with Harper or Mulcair or Trudeau.

No doubt, the Albertan People were fed up with the PC government and opted for change, and the Notley NDPs were there to take advantage of the available opportunity.

Since the NDP is more for social programs, it ends up being highly costly with insufficient or no funds. The rise in cases of bankruptcies and liquidations is normal.

Good luck Alberta!

For Notley, this convincing majority is a gift, she carried a message of hope, renewal and positive change, and Albertans responded for the change of status quo.

Questions: What if the corporations pull back from this province, would this help job creation? No way!

In Nutshell: The New Democrats have promised significant investments in health care and education, to establish city charters. hike corporate taxes and provincial income-tax rates for high earners, freeze post-secondary tuition fees, expand public home care, and introduce school lunch programs for kids in low-income households.

If the NDP fulfils its promise of balanced budget by 2018, that will be great.

Surely, Nutley’s popularity will depend heavily on restoring Alberta’s struggling economy back to health.



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