As oil deflates Alberta's swagger, it's time to face some harmful economic myths

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Now that the "swagger" is gone out of Alberta, as the news reports say, and Albertans are getting on pogey as the oil economy has collapsed, you'd think we'd at least be spared the lectures about how economically virtuous Albertans are as compared to us bedraggled Maritimers.

Let's recap the argument as thumped out regularly by the cross-country profusion of right-wing think-tanks and other neo-con commentators: Alberta (and Saskatchewan) is rich because of its low-tax regime and its entrepreneurial spirit. Nothing to do with oil. I've read entire reports to that effect that never mentioned oil once. The corollary being that if the Maritimes cut taxes and got entrepreneurial Alberta-style we'd be rich too, presto!

On the contrary, it's all about oil -- a fact so obvious that I naively thought the thumping would stop when oil crashed.

Last November I carefully clipped from this newspaper what I thought was surely the last such oil-renouncing fiction: a piece by Kevin Lacey of the Canadian Taxpayers Federation: "Alberta added 1.5 million more people between 1996 and 2015, a 55 per cent increase. Alberta has some of the lowest income taxes in Canada and no sales tax."

The Maritimes should do the same, he said: wipe out taxes and get rich. No mention of oil.

So, who knew -- oil jobs wasn't why we were flocking there after all. We were looking for low taxes.

Then in Thursday's paper, this from the author of an Atlantic Institute of Market Studies paper on taxation: "Lower taxes and smart investment policy is why Alberta has thrived for decades despite occasional bumps like now."

Surely there must be some economic category of stand-up comedy where these guys could be more gainfully employed, with finger-wagging as their main schtick.

The first point to be made is that, according to regular studies, Alberta is only marginally more entrepreneurial than the rest of us, and then mostly because talent from the rest of the country are over there because of, you guessed it, oil money.

When oil really got rolling in the 1970s, the whole aim of the Peter Lougheed government at the time was to save some money and use it to diversify the economy.

That failed -- "smart investment policy" being sorely lacking. Alberta remained a one-commodity economy and now the Rachel Notley government -- and kudos to Albertans for getting rid of the old pack -- is back to square one.

Truth be told, there's only been one true entrepreneurial jurisdiction ever in Canada.

That was the Maritimes at Confederation, when local manufacturing was financed by local industrial banks, of which every town had a couple, along the same lines as the U.S.

Confederation destroyed all that by imposing a colonial economy geared to moving commodities -- timber, furs, wheat, minerals.

I think of that every time the common complaint goes up that Canada is not "innovative" or "productive."

Nor can it be as long as we're stuck in the old commodities rut and outsiders own most of the economy with little incentive to innovate.

And, of course, when the Maritime economy came to nothing in the 1920s the long struggle began -- without the help of the vast new mineral-rich territories other provinces were given and which have since been the source of their wealth.

Finally there's the psychology of the piece. Over time, different regions of this country were essentially belittled and mocked by a mentality of metropolitan snobbery -- the West itself, for example, before oil put a stop to the image of wheatfields and cow pasture.

Or Quebec, "priest-ridden" and backward -- until it learned to hit back and put an end to that, too.

Or, in perhaps the most spectacular example of overthrown prejudice, when oil started flowing in Newfoundland the "Newfie joke" disappeared.

In all these cases, the prejudicial image was of simple one-dimensional societies.

Now that leaves only the Maritimes as the subject of such putdowns and warped interpretations -- not only from finger-wagging neo-cons but from straight commentators in Central Canada who can't seem to refer to politics or economics in these parts in terms other than Employment Insurance.

In this assumption we're just a string of quaint fishing villages who vote for EI perks and nothing else.

No cities here, apparently, or other modern complexities where EI is of no more concern than in downtown Toronto.

Not that we don't have bagfuls of self-inflicted problems. All the more reason to ignore advice, based on false interpretations of what's going on in Alberta, that would have us ruin our public finances completely.

And, after all, if taxes are so outrageously high that no self-respecting business would set foot here unsubsidized, why did the KPMG international auditing firm just, once again, declare Maritime cities to be the most cost-effective ones in Canada for doing business, and Calgary, Edmonton, Vancouver and Toronto the most expensive?

Ralph Surette is a freelance journalist in Yarmouth County. This column was first published in the Chronicle Herald.

Photo: Jeff Wallace/flickr

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