Defaulting Alberta As Strategy

April 17th, 2019  | J. Hodgson
default alberta

In the past four years, the NDP has saddled Alberta with more debt than ever before in our history. Jason Kenney is now about to do the fiscal conservative schtick of using that debt as an excuse to impose austerity. This will turn voters against him and hurt his chances of re-election.

I suggest he take a tactic out of Ernest Manning’s playbook and announce that he’s considering defaulting on the NDP debt. There’s a variety of reasons this is a good idea… let’s begin.

1. Just by making the announcement it would terrify the Trudeau Liberals

Back in the early '90s, Saskatchewan was loaded up on massive amounts of debt. When Roy Romanow won his election in 1991, he realized the books were even worse than expected. So bad in fact, that it looked like Saskatchewan may not be able to continue servicing the debt. This would be a default and risked sending shockwaves throughout the international community. If a sub-national level of government within Canada were to default on the debt, it would make all of Canada look risky and suspicious.

Brian Mulroney saved the day with a secret bailout from the federal government.

Imagine if Alberta played a similar move today? With Justin Trudeau faltering in the polls, saddled with scandal and facing a looming recession… Alberta announcing that we may default on our debt would be a kick to the rear end of a drunken falling lout.

Who knows, maybe we can get some of the equalization money returned in the form of a “bailout” in exchange for dropping the conversation.

2. Handcuff the future

The problem conservatives always have with fiscal conservatism is that their hard work is eventually undermined due to democracy. Someone like Ralph Klein gets the debt eliminated and people then vote in the next traditional pandering politician promising something for everyone. Before long the deficits return, and eventually a real conservative needs to deal with the situation… the cycle continues.

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship." – Alexander Tytler

In order to arrest this cycle why not default on the debt and destroy Alberta’s ability to borrow for a generation? This will ensure fiscal conservatism regardless of the politician. It served Ernest Manning and the Social Credit Party quite well. After Manning renegotiated the Great Depression debt, the province went on to remain fiscally conservative for the next 20 years. Even after Manning left politics, this action entrenched fiscal conservatism into the culture until the 1980s.

3. It would correct a mistake

The election of the of 2015 was a hiccup of democracy. Despite high-minded political rhetoric that “the people are never wrong”, the truth is that the people are often wrong. They were terribly wrong in 2015 as the results of the election of 2019 have shown. The greatest value of democracy is its ability to offer an ejection seat when mistakes need to be corrected.

In 2015, people were presented with a cluttered landscape of political parties and a weird tumultuous recent history of drama and scandal. Through vote splitting and voter ignorance the NDP was able to squeak out a win. The people of Alberta shouldn’t have to spend the next twenty years paying for that mistake.

Let’s clear the deck and start fresh with a new government. A debt jubilee is in order and we should take the opportunity to learn from this valuable lesson and say… never again.