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Ralph Klein’s true legacy

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Balancing the books left today’s Alberta poorer

The death of Ralph Klein on March 29 brought forth an outpouring of tributes and remembrances from Albertans and Canadians of all stripes about the man who governed Alberta from 1992 to 2006. Most of these folks commented on Klein the person: his sense of humour, his friendly demeanor and his humility and modesty.

But Klein was also a leader who ushered in one of the most significant periods of political and ideological change Alberta has ever seen, and it is crucial that Albertans be able to critically assess his political legacy and the impact it has had, and continues to have, on our province.

The first thing to keep in mind when considering Klein’s legacy is that he neither came up with nor popularized the right wing agenda that he proceeded to implement for Alberta. That was done by the extreme right wing ideologues in places like the Fraser Institute, the CD Howe Institute, the University of Calgary department of Political Science and their friends in Alberta’s right-wing media who only made room in their editorials and news stories for one political opinion. Klein was also not the only Alberta politician to espouse that particular set of radical anti-deficit, anti-government, anti-tax policies. Alberta’s 1993 election, Klein’s first as leader, also saw Alberta’s Liberal Party under the leadership of Laurence Decore embrace virtually the exact same policies and platform. In that sense, Klein was neither a leader nor a visionary—he was simply able to jump in front of a parade that was already moving in a certain direction.

By the time Ralph Klein came to power in Alberta, the province was just starting to recover from the economic crash of the ’80s. Klein’s decision to put thousands of public servants out of work, cut spending in key areas like health care, education and social services, and stop funding infrastructure altogether actually had the effect of slowing down the province’s economic recovery. Those same cuts were responsible for the health-care wait times, the overcrowded classrooms and the crumbling infrastructure we are still dealing with 20 years later. Our province also lost an entire generation of well-educated professionals, teachers and nurses, who were forced to leave Alberta in search of jobs in other provinces and countries.

Klein’s policies did serious damage to the public good in Alberta, and contrary to popular belief, were not even primarily responsible for eliminating the province’s deficit. That was accomplished, at least in the first few years, by selling off Alberta’s public assets like the Alberta Energy Company and Alberta Government Telephones at fire-sale prices and using the money to pad the government’s bottom line. These were profitable assets that contributed significantly to a diversified revenue stream from the government that were sold well below market value for the short-sighted goal of balancing the books in the short term. This is a big part of the reason that the Alberta government is more dependent on volatile oil and gas revenues today than it was when Ralph Klein took office.

At the same time, Klein did even further damage to the province’s revenue stream when he slashed royalty rates and introduced the one-percent royalty rate for Alberta bitumen projects. Although Conservatives often claimed that this is what spurred growth in investment in the late ’90s, the reality is that rapidly increasing oil prices would have spurred that investment regardless and actually provided the government some revenue. For the better part of Klein’s tenure as premier, the province sadly generated more revenue from gambling and casinos than it did from oilsands royalties.

Then, as the price of oil was really starting to take off and money flowed back into provincial coffers, Klein made the decision that Alberta should become the first jurisdiction in North America to introduce a single-rate tax structure, resulting in a huge tax break for the province’s wealthy and corporations, higher taxes for those on the bottom and the middle of the income scale, and forgoing close to $2 billion a year in provincial revenues. At the same time as most Albertans were paying more in taxes than folks in other provinces, they were also paying more for electricity as a result of Klein’s decision to deregulate pricing of those utilities and more for services, like registries, that Klein had privatized. These policies are responsible for the fact that today Alberta has the greatest income inequality in the country.

In the end, the real legacy of Klein’s tenure as premier is not one of general prosperity, economic growth and general well-being. He was a premier who was fortunate to be leader during a period of increasing oil and gas prices and who did not have to face the consequences of his policies once the price of oil crashed in 2008. Klein’s true legacy is today’s growing deficit, our ridiculous over-dependence on oil and gas, an incredibly volatile government revenue stream, over-crowded classrooms and emergency rooms, crumbling infrastructure, a Heritage Fund that has not grown in over 20 years, and a rapidly growing gap between rich and poor in the province.

Yes, there is no doubt that this is a difficult time for his friends and family, and our thoughts and condolences should go out to them. At the same time, however, ignoring the legacy of Ralph Klein’s policies and government to the well-being of our province would be dangerous and irresponsible. We can’t move forward if we sugarcoat the mistakes that got us here. V

Ricardo Acuña is the executive director of the Parkland Institute, a non-partisan, public policy research institute housed at the University of Alberta. The views and opinions expressed are his own and do not necessarily reflect those of the Institute.

1 Comment

  • Low Debt, Low tax radical “right wing ideal” . In what household is “high debt” a good thing? Anyone who espouses high taxes as good has been drinking the socialist koolaide for a little too long. Why tear down ol ralph now anyway? Trying to make the tax, spend, credit downgrading NDP look good?

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