Assuming at least some of the ideas put forward at Saturday’s Alberta Economic Summit in Calgary actually represent the Redford Government’s policy plans and preferences, it was extremely interesting to hear investment banker George Gosbee call for privatization of ATB Financial.
The sale of the former Alberta Treasury Branches financial institution created by premier William Aberhart as a Social Credit remedy to the darkest days of the Depression would net about $4 billion for the government, Gosbee noted.
This sum, he didn’t add, could be used as a temporary fix to patch up the government’s crumbling bottom line in time to get Premier Alison Redford and her Progressive Conservative government re-elected one more time in 2015.
If the quiet buzz in plugged-in Alberta circles for the past few days is anything more than sound and fury signifying nothing, this is exactly what the Redfordites would like to do with ATB Financial, which with $30 billion or so in assets has had larger financial institutions sniffing around for purchase opportunities for years.
And if the government and people of Alberta had nothing much to show for the sale once the dust had settled, well, so be it — any old port in a storm, and the 2015 election campaign is shaping up to be quite a storm for the Redford government.
Media covering Saturday’s “summit,” naturally, took the bait and focused almost exclusively on the sexy non-starter of a sales tax for Alberta.
This is what got the farther-right Wildrose Party worked up into a swivet, screeching about broken promises and unpopular new taxes — exactly, it is said here, as intended by Stephen Carter, the premier’s sleekit Svengali widely credited with cooking up the idea of the one-day economic planning session by 300 handpicked participants.
The hitherto unheard-from Gosbee quotably weighed in on this one too, telling participants and the world via live feed and Twitter that Alberta has a revenue problem — which is most certainly true — and rebranding the sales tax a “differential sales tax,” or DST, as the answer to it.
Never mind that what’s really needed is a fair progressive income tax — the summiteers mostly ignored that horrifying possibility.
Gosbee also called for the return of the regressive health care tax — known in Alberta as a health care “premium” — that was eliminated by premier Ed Stelmach in 2008. This is another idea the Redford Tories would probably like to implement.
After all, that would generate another $1 billion or so. Together with the privatization of ATB and a little fancy accounting, a skill to which Alberta PCs are no strangers, they could then pretty well write off the deficit for one more election cycle, which is all anybody thinks about in politics anyway when it comes to planning.
Wildrose Leader Danielle Smith blundered right into the trap laid by the PC Party’s strategists, assailing the government for planning a sales tax — and handing the premier an opportunity to convincingly deny a policy she has no intention of implementing.
When the budget comes down on March 7, bet on it that there will be no mention of a sales tax. Redford will look steady and Smith will appear hysterical. Mission accomplished!
Meanwhile, a sell-off of ATB Financial — with close to 300 offices throughout the province, many of them in isolated rural areas haughtily ignored by larger financial institutions — is sure to cause major political problems for the Wildrose Party.
As a party of the market-fundamentalist right, led by a glib former Fraser Institute apparatchik, it will be hard for Wildrose spokesthingies to argue against the privatization of a Crown corporation, even one that has served the government well for generations just as Aberhart foresaw.
But as a party with most of its seats in rural Southern Alberta ridings, the Wilrosers have to know their constituents will view it as an epic failure of their MLAs if ATB is sold off to any of its likely buyers.
Count on it — and count on it too that savvy rural Alberta voters know this — that if ATB is sold, say, to the likes of RBC or BMO, most of its rural branches and agencies will blow away on the Prairie wind within months, just as the topsoil did in the 1930s.
So the Wildrose Party will have little choice but to defend the maintenance of ATB Financial as a Crown corporation, a position sure to make them look inconsistent, or worse like “flip-floppers.”
Being called a flip-flopper, of course, is the bugbear of the Tea Party sensibility that drives so many Wildrose supporters, who would be deeply shocked to know that ATB is one of the few unionized banks in North America — another reason an eventual private buyer is certain to shut down its branch network faster than you can say “Wal-Mart.”
In fact, for all that it has been misused for questionable loans to the likes of Peter Pocklington and West Edmonton Mall from time to time, ATB has been and could continue to be a useful policy tool for the Alberta government. It has brought financial services to rural Alberta, provided seed money for Alberta projects, and, back in the day, served as a convenient local government office where a citizen could be licensed to drive or marry, get plates for the pickup or a loan for the combine, and accumulate modest savings in a reliable government-backed account.
Most important, it gives the government a mechanism to influence the financial industry — or circumvent it when it won’t co-operate.
The Wildrose Party is the inheritor of the psychic mantle of Aberhart’s Social Credit League, or rather, Ernest Manning’s conservatized version of the Depression-era movement. So, in this way at least, it can come to the fight to defend ATB with a clear conscience.
Privatization of ATB would be as unpopular with rural PC MLAs as their Wildrose counterparts, for the same obvious reason, so a fight over privatization would also be a useful litmus test of who is really in the PC Party’s driver’s seat — Ms. Redford’s Calgary urbanites or their party’s backcountry mainstays.
However Gosbee came up with the idea, watch for it in the Budget Speech, or slipped soon after in via changes to the Alberta Treasury Branches Act and the Treasury Branches Regulation.
This post also appears on David Climenhaga’s blog, Alberta Diary.
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