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The Alberta government's post-COVID recovery plan: we're all Keynesians, up to a point

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Alberta Finance Minister Travis Toews at a press conference on June 29, 2020. Image: Government of Alberta video screenshot/YouTube

It's not actually true that that everything was just copacetic in Alberta when COVID-19 kicked down the door and started smashing up the dishes.

But you've got to give Travis Toews some credit for his acting ability. Alberta's finance minister sure made it sound as if that were so for a couple of minutes during yesterday's news conference about the United Conservative Party government's economic recovery plan.

"Looking back, Alberta came into 2020 poised to turn the corner on years of economic pain," he said, tieless to symbolize that he's hard at work. "It's clear, our economic policies were working and we were on track with a credible plan for a balanced budget within our three-year fiscal plan. COVID-19 changed all of that in a matter of weeks."

If they gave out Academy Awards for most persuasive performance in a news conference, Toews might be up for a nomination. A little wooden, perhaps, but he actually manages to look and sound reasonable, like one of the grownups in the room, when he steps up to the podium.

We haven't had a politician like that in Alberta since, oh … Rachel Notley, I guess.

Jason Kenney, from a theatrical perspective, is miscast as premier. He'd be laughed off the stage if theatre critics were pressed into service as political pundits. Glib, smug and convinced he's the smartest man in the room, Kenney is about as believable as the proverbial used-car salesman, more Nixonian than Trumpian.

So no matter how this recovery plan works out -- and that will depend on many factors far outside the control of any Alberta politician -- you can count on it that this will be the UCP's re-election elevator pitch: Everything was getting better thanks to us. It's all COVID's fault!-

If you can still have elevator pitches, that is, in the age of coronavirus.

Alas, it's not actually true. As University of Alberta economics professor Andrew Leach, having one of his pedagogical moments on Twitter, pointed out: "The finance minister is wrong. His own ministry's economic index says so. No, 2020 was not looking good. In fact, almost every major economic forecast had downgraded their AB 2020 outlook over the last half of 2019."

But Toews and Kenney were right about one thing: Thanks to bad luck and bad management, Alberta's economy under the UCP is an unholy hot mess and there's nothing for it but to spend money and hope for our luck to change.

If you're searching for a metaphor, it's as if we were a cancer patient of limited financial means in that U.S. health-care system the UCP loves so much. If we want to survive, we're just going to have to spend more money than we have and try to sort it out later.

In times like these, we're all Keynesians. There's something about 25-per-cent unemployment that concentrates a politician's mind wonderfully even if he's a member of a club like the Canadian conservative movement in which economist John Maynard Keynes's name is usually a swear word.

So we'll spend a few billion on infrastructure in hopes of putting some of the kind of working people the UCP likes -- pipeliners, for example, as opposed to teaching aides and unionized health-care workers -- back to work.

There aren't nearly as many billions in "the largest ever capital spend in Alberta," as the announcement pretends, though, since close to $7 billion of the $10 billion the government is talking about had already been announced. What's more, some of that is expected to come from the federal government. And $1.5 billion will go to that pipeline project south of the 49th parallel that stands a good chance of being shut down by the next U.S. administration, assuming there's an election down there in November. Well, so be it. As they say in the Navy, a bad plan is better than no plan.

Of course, some plans are worse than no plan, and with sunny Jack Mintz and glowering Stephen Harper in the chartroom plotting our course, it was natural that this scheme would involve another "job creation tax cut" that, as history shows, is extremely unlikely to create any jobs.

Kenney claimed yesterday the two per cent cut that now lowers the business tax to eight per cent would create an additional 55,000 jobs by the year after next and attract $4 billion in investment annually. More likely it will result in more stock buybacks and finance a few more corporate head office moves from Calgary to Denver or Houston while driving the provincial deficit even higher.

But then, it's a law of North American media coverage that deficits only matter when liberals are at the helm or conservatives need an excuse to cut public services.

Rather than add a few hundred more words to bolster this point, dear readers, I suggest you merely Google, "Do corporate tax cuts create jobs?" and read what appears.

Some aspects of the UCP plan are comedic. For example, given Kenney's unquenchable faith in propaganda over analysis, and the Alberta energy war room having flopped so miserably, Kenney will create war room 2.0. Invest Alberta will be "a dedicated investment promotion agency" that will tell the same fibs as the war room, but with a smiley face.

Mintz, the University of Calgary economist favoured by neoliberal politicians, and Harper, the dour former Conservative prime minister that almost no one misses yet no matter what the memes say, were named to Kenney's economic recovery panel in March. Back then, the full impact of COVID-19 on the world economy as a result of the negligent and incompetent response to the disease by the United States was not yet fully apparent.

Republicans at heart, the baleful pair were certain to recommend an orgy of tax cuts, anti-worker legislation and health care privatization, supposedly as a response to COVID-19 -- the shock doctrine in other words.

Some of this is already apparent in the recovery plan announced yesterday. More is bound to be along soon.

But at least if Toews, instead of Kenney, is telling us about it, fewer shoes will be thrown through television screens.

David Climenhaga, author of the Alberta Diary blog, is a journalist, author, journalism teacher, poet and trade union communicator who has worked in senior writing and editing positions at The Globe and Mail and the Calgary Herald. This post also appears on his blog, AlbertaPolitics.ca.

Image: Government of Alberta video screenshot/YouTub​e

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