What did Canadians do to deserve having Ralph Klein as premier of Alberta, our oil-rich province, and Ralph Goodale as Minister of Finance in Ottawa? The two Ralphs may make good material for Rick Mercer, but they add up to bad policies for Canadians. Let us look at what they have in common.
Both of these public-spirited gentlemen like to talk about debt. Alberta is debt free says Klein; Ottawa must continue to pay down the debt says Goodale. Each in his own way could not be more wrong.
Klein forgets the oil industry when he says Alberta is debt free. Much of Canada's oil and gas reserves belong to foreign-owned companies. That means much of the current and future profits are going to leave Canada forever because foreign ownership equals debt an external liability, it is called in the balance of foreign payments.
How could the premier of Alberta not notice the oil industry?
Of course Goodale is wrong on the oil industry too. He pushed through the sale of what was left in public hands of Petro-Canada, the peoplesâe(TM) oil company, we named it when Pierre Trudeau created it. Now with oil prices high, and rising, someone other than the public will be getting the benefit of public investment.
Klein could tax the oil companies of course, and put the money into making the best public sector in the world. Instead as the Parkland Instituteshowed in an important study, Alberta taxes oil companies less than Alaska does, and far less than Norway does.
Now there is an election issue. Alberta goes to the polls November 22 let's have fair taxes for oil companies.
Since Klein does not want the oil tax revenue for Alberta, Goodale could get some for Ottawa, through an export tax, for instance. Of course that goes against the free trade agreement with the U.S., but then so does mad cow, softwood lumber, steel, etc. If the Americans want to be protectionist, we should get something in return.
Goodale points to Ottawa setting aside about $60 billion in debt repayment. He takes pride in it, and wants to do more. This is probably the worst single public policy since the noose. Just as the government introduced abolition of the death penalty by refusing to go ahead with executions, so the current government could take its surpluses and reinvest them in public policy measures needed for the environment, health and child care, culture, etc.
But no, Goodale pretends the law says he has to apply any surplus to the debt. And who makes the law, Ralph?What is gained by paying down the federal debt? Interest payments are lower says Goodale. Really? Watch what happens when interest rates go up. If you borrowed at three per cent and the rate goes to four per cent, your cost of borrowing just went up by 33 per cent. It is the rate you pay, not the amount outstanding, that gets you dramatic improvement, or worsening circumstances.
Taking $60 billion in public money out of circulation makes Bay St. happy. Instead of creating public wealth which is what debt is an asset that pays interest there will be more incentive to create private debt which is how Bay St. makes money.
Goodale is an MP and a former MLA from Regina. Klein is a proud former mayor of Calgary seeking another term as premier. What do they have in common? They both work overtime for corporations.
And Canadians do deserve better.
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