Albertans of a certain vintage are feeling a sense of déjà vu regarding Premier Danielle Smith’s announcement of a one-time payout of $100 for every Albertan living in a household with less than $225,000 combined income per year. Premier Ralph Klein announced just such a program a little more than 20 years ago, and his rationale for the payout was very similar to that used by the Smith government today. It’s ostensibly a payout to offset the cost-of-living challenges incurred by high oil prices while government revenues have been climbing.
There are, however, some striking differences between the plans.
A motivating factor neither premier would admit is that support for their respective parties had been taking a hit in public opinion polls. At his peak, Klein was arguably one of the most popular and successful premiers in Alberta history. In his later years in office, though, the popularity of the Progressive Conservative government dropped sharply. Klein handily won the 2001 general election with 61.9 percent of the vote. In 2004, his party won another majority, but support had dropped to 46.8 percent, and party insiders were worried. With large government surpluses due to high oil prices, the Klein administration hoped that putting money into Albertans’ pockets would give their sagging support a boost.
A striking difference between the rebates is their size. Klein’s program (dubbed Ralphbucks) handed out $400 each to almost every adult in Alberta. That’s about $600 in today’s dollars, which could make a good dent in some household bills. Smith’s program offers only $100 per person, and while it doubtless will be welcomed by people having a tough economic time, it isn’t being viewed as significant in light of the rise in the cost of energy.
The government books of today are not like those of 2005, either. The Klein government had managed a period of austerity in the 1990s and wiped out Alberta’s net debt in 2005. The extra revenue from oil royalties could be given to Albertans without affecting other program spending, and there was no debt to apply it to. Alberta is currently carrying a debt of over $90 billion, and fiscal conservatives have been getting uncomfortable with the spending patterns of the government. There likely will be a budget surplus announcement soon due to high oil royalty revenues, but many still will see the payout given to Albertans as being frivolous spending.
The rebates given to Albertans by Klein were welcomed by many, but they didn’t have an impact on his declining popularity. In fall 2006, Klein received a tepid endorsement of only 55 percent from his own party members in a leadership review and decided to resign the leadership in light of it. The Progressive Conservative dynasty in Alberta continued to fade until the NDP won the 2015 election and ended a 44-year run in power. There were many factors contributing to the demise of the PC party in Alberta. Rebating funds to citizens wasn’t an effective way to reverse the trend.
It’s unlikely that Smith’s rebate to Albertans will cause her party to surge in the polls, but the UCP is doubtless hoping it will stem the losses until they can reposition themselves through policy initiatives. Perhaps Smith is considering turning the rebates into an ongoing program so Albertans can see a regular influx of funds, and it won’t seem as insignificant as this one-time payout. In choosing $100, it seems too small to make a dent in the finances of most people, and looks like an impulsive move on the part of the premier rather than any kind of nuanced plan to help Albertans.
Danielle Smith has always expressed admiration for Ralph Klein and appears to have taken a page from his playbook. That play didn’t pay off for Klein, though, and Smith will have to come up with something more if she wants to avoid sharing his political fate.
