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March 18, 2014 - No. 29

Alberta Government Tables Phony Non-Austerity Budget

Step Up Organizing and Resistance
to the Redford Government's
Anti-Social Agenda

Alberta Government Tables Phony Non-Austerity Budget
Step Up Organizing and Resistance to the Redford Government's Anti-Social Agenda
Redford Budget Continues Attack on Post-Secondary Education - Dougal MacDonald 
Balancing the Budget -- In Whose Interests? - George Allen 
School Construction: Denounce Redford's Plan to Build Alberta by Paying the Rich - Kevan Hunter 

Stop Paying the Rich! Increase Funding for Social Programs!
Join the Work for People's Empowerment!

Step Up Organizing and Resistance to the Redford Government's Anti-Social Agenda

The Redford PC government delivered the 2014-2015 provincial budget on March 6. The budget continues the anti-social austerity agenda but with a new twist. Instead of claiming no alternative to austerity, as it did in last year's budget, the government now says it has "turned the corner" and has delivered a non-austerity budget.

Straightforward fraud has become the "new normal" in the budget speech and accompanying documents. For example, Finance Minister Horner states there will be "more teachers, doctors, nurses and other essential front-line supports for Albertans." Yet according to the government's own projections, population growth in Alberta next year will be 2.9 per cent and inflation 2.2 percent. This means that an increase of more than five per cent would be required for all population-based programs such as health and education just to maintain their current levels. Given the budget projections, investments in social programs and public services will be well below this needed level of five per cent and will not even restore funding taken from program spending in recent budgets.

Workers Rally at the Alberta Legislature on opening day to oppose attacks on pensions.

By robbing social programs and public services of funding and forcibly reducing the wages, benefits and pensions of workers who deliver them, the government boasts of "savings." In reality, the so-called savings result in a loss of value to the society, economy and the working class. This loss to the people is compounded when public funds are diverted to pay the rich such as the global energy monopolies.

Both the PCs and the official Wildrose opposition by their own admission declare their role is not to look after the well-being of Albertans and contribute to nation-building, but rather to act as salespeople for the energy monopolies and keep Alberta open for imperialist pillage and exploitation. Their anti-social program is based on selling out the resources and allowing the monopolies free rein to destroy the social and natural environment and deprive the working class and First Nations of their rights.

The working class that creates the wealth by transforming the bounty of Mother Nature, and the First Nations whose ancestral lands comprise Alberta played no role in developing this or any other government budget. Privileged private interests representing the global monopolies dictate the terms of every Alberta budget. The people have no say or control over the content of government budgets, which brings to the fore a problem in need of solution.

The working people are deprived of the economic and political power they need to set the direction of the economy to serve the public interest, provide solutions to the social and other problems confronting society and affirm the rights of all. The lack of empowerment in political affairs reflects a lack of empowerment in the main sectors of the economy. Decisions on major economic matters in the basic sectors are made behind the backs of the people. Those same private interests that control the main sectors of the economy control the levers of political power. For the people, their lack of control over the basic economic sectors is reflected in their lack of control over the public authority.

To turn the situation around requires conscious organizing of committees for people's empowerment. Opposition to government and monopoly dictate is crucial in defending the well-being of the people, but without conscious direction to organize for the people's empowerment, opposition by itself does not and cannot lead to empowerment of the people. Empowerment can only result from conscious organizing to activate the human factor in a direction to gain economic and political control for the people. This economic and political control is won by the people themselves, by mobilizing their own thinking, independent politics, determination and vast numbers to deprive the rich and their monopolies of the power to deprive the people of their right to control the political and economic affairs of the country. Join in the work for people's empowerment! It can be done!

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Redford Budget Continues Attack on
Post-Secondary Education

The Redford regime brought down its new provincial budget on March 6, 2014. Denying that education is a right that must be guaranteed, the government continues to starve post-secondary education. The budget continues the chronic underfunding of last year's cut of 7 per cent to the operating budgets of Alberta's universities, colleges, and technical institutes (PSEs).

The 7 per cent reduction followed a Redford promise of a 2 per cent increase, a promise made even though the PSEs (which are run by Tory appointees) had repeatedly stated that a 4 per cent increase was the minimum requirement just to keep pace with normal growth. Had the PC appointees' demand of at least a 4 per cent increase been given instead of the 7 per cent cut, the operating grant in 2013 would have been $2.22 billion, compared to $2 billion in 2012.

The 2013 operating grant cuts led to a loss of jobs, courses and programs. Huge reductions were also made to PSE maintenance budgets, for example, a 67 per cent less in the case of Mount Royal University and a 40 per cent less in the case of Northern Alberta Institute of Technology (NAIT), even though all PSEs have millions of dollars worth of uncompleted maintenance projects.

In the just-released 2014 budget, the Alberta PSEs receive $2.1 billion, a miniscule increase over even the reduced 2013 budget of $2 billion. Further, the 2014 amount is still $120 million less than the minimum amount that the PSEs stated was required in 2013, the previous year. Assuming the PSEs require at least a 4 per cent increase every year according to the Tory appointees, the minimum amount required for PSEs in 2014 over the minimum amount required in 2013 (based on what was provided in 2012) would have been $2.3 billion. One could say that in 2014 the funding shortfall is about $200 million, which is 36 per cent above the shortfall in the 2013 budget.

In November 2013, due to opposition to the cuts, the government was forced to restore $50 million, meaning that the PSEs still received almost $100 million less than in 2012. With this move to try to improve its public image, the government showed the original cuts were unnecessary and damaging.

While the government advocated "fiscal austerity" for the PSE operating budgets, money for pet capital projects could always be found. For example, on October 9, 2013, the government magically "found" $142.5 million to hand over to the University of Calgary for expansion and renovation of its Schulich School of Engineering, which provides free training for employees of the energy monopolies. When the March 2014 budget was released, the government also announced $70 million for the new university-based Peter Lougheed Leadership Institute (PLLI), which aims to train a new generation of sellout, anti-working class leaders in Lougheed's image. The chairman of the PLLI is John Ferguson, current chairman of oilsands monopoly Suncor.

The Redford regime's escalating cuts to post-secondary education are part of the anti-social offensive that the provincial government has carried on for decades, particularly since the 1990s. The aim of denying the right to education and starving the education system of funds is to free up more money to hand over to the energy monopolies. In fact, the Redford regime has repeatedly expressed that the PSEs should expect less and less funding from the government budget, especially from the "non-renewable resource revenue" category, which means the profits of the monopolies that plunder Alberta's resources. Instead, the government insists PSEs should become "self-funded" via commercialization of publicly-funded research, student fees, private donations and alliances with business etc. In other words, the PSEs, like every other sector of society, should become institutions serving privileged private interests and do everything possible to ensure that the Redford regime keeps paying the rich, rather than serving the public good by providing quality education to build a bright future for the people of Alberta.

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Balancing the Budget -- In Whose Interests?

Since the publication of the provincial budget on March 6, 2014, much ado has been made about the fact the budget is not "balanced." The term a "balanced budget" has a positive sound and seems to resonate with the reality of daily life. A budget is said to be balanced when expenditures are equal to revenues. In an individual household, revenues (e.g., wages, salaries, etc.) are a certain amount and out of those revenues must come food, shelter, power, heat, transportation, cultural and recreational activities and so on. To have a balanced budget means that household expenditures are equal to revenues. Of course, circumstances may be such that earnings decrease, e.g., a plant closes and someone loses their job, or that expenses may increase, e.g., utility costs. Or, earnings may increase and costs may decrease. Such changes in revenues and expenditures would require changes in household budgeting in order to continue to have a balanced budget.

The Redford regime also has revenues and expenditures but on the scale of the entire province. It would seem likely that the government has in mind much larger budgetary goals than just making ends meet, but what are they. Analyzing what the Alberta government really wants to accomplish by balancing the budget, first requires finding out what the government's revenues and expenditures are. How is the government obtaining its revenues and in what is it investing its revenues?

Second, analyzing what the Alberta government is really up to involves investigating what the government plans to do with its revenues and expenditures in order to balance the budget, and how those plans might affect the people of Alberta whom the government claims to represent. The key question becomes — would the Redford regime balance the budget in the interests of the people of Alberta or in the interests of others?

The Redford regime claims that the amounts of its revenues and expenditures are accurately stated in the provincial budget. The March 6, 2014 budget shows total provincial revenues of $44.4 billion. Few details are available on the specific revenue sources and the specific expenditures. The top two revenue sources in recent budgets have been non-renewable resources revenues and personal income tax, equivalent to over 40 per cent of total revenues.

In the 2013 budget, personal income tax exceeded revenue from non-renewable resource revenue for the first time, showing clearly that the overall aim is to take more and more revenue from individuals and less and less revenue from the energy monopolies.

The top five budget expenditures, which should more accurately be called investments, are generally health and wellness, education, advanced education and technology, human services, and seniors.

If the Alberta budget were balanced, how would it likely occur? Many recall that in the early 1990s, the same Progressive Conservative Party led by Ralph Klein advocated a four-year plan to eliminate the provincial deficit and balance the provincial budget. The plan was implemented by forcing concessions from workers and slashing much-needed social programs.

It is instructive to note that stealthy and open cuts to Alberta social programs continue to be made today. One is reminded of the saying "death by a thousand cuts." For example, Alberta Health Services has been steadily cut, post-secondary education was severely cut in the 2013 budget, promised schools have not been built, fees for seniors in long-term care facilities have been raised, and so on.

It is well known that the energy monopolies are the real rulers of Alberta, so the main purpose of the provincial budget is always to pay the rich, in particular the energy monopolies. As the champion of the monopolies, the Redford regime pays them in many different ways to facilitate their plunder of Alberta's workers and resources:

- reductions of revenue through royalty relief, tax credits, standard corporate income tax deductions, special tax deductions, and accelerated capital cost allowances;

- direct payments through subsidies, exploration and development expenses, and other ongoing pay the rich schemes;

- and, "special programs" such as the $2 billion Alberta Carbon Capture and Storage Fund, the to-date $2.9 billion Alberta Drilling Incentive Program, and the $3 billion publicly funded Alberta Oilsands Technology and Research Authority 2 (AOSTRA 2) to improve oilsands technology on behalf of the monopolies.

Since the Redford regime rules on behalf of the monopolies, any balancing of the Alberta budget will be done on the backs of the people, not by demanding that the monopolies, who make their profits by seizing the value created by Alberta workers, must turn over more revenue to the government so that investments in social programs and public services can be increased.

The question of balancing the Alberta budget boils down to on whose behalf it will be balanced. Will it reflect the public will and be on behalf of public right and the public interest, or will it reflect monopoly will and be on behalf of monopoly right and privileged private interests? Will it solve the real problems facing the people and society or will it solve problems facing the energy monopolies concerning their aim for private profits? Will it be based on attacking workers' rights and slashing social programs or will it be based on restricting the monopolies?

If the budget is to be balanced, the people want to see it balanced by increasing the amount of revenue turned over to the government by the monopolies, which grab all the value they can by exploiting the work of Alberta workers and the resources that belong to the people. The revenue taken from the monopolies should first and foremost be used to increase investments in social programs and public services, which are the sectors that produce the human means of production, the source of all value in the socialized economy, the infrastructure and meet the general needs of society. Such a plan would achieve a balanced budget based on restricting monopoly right and recognizing public right and the public interests. It would be a balanced budget not in the private interests of the monopolies, but in the public interests of the people of Alberta.

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School Construction: Denounce Redford's Plan to Build Alberta by Paying the Rich

The shortage of schools in Alberta is a serious problem facing the province. Children face overcrowded schools, classes held in spaces never designed for instruction such as front foyers and staffrooms, and in many cases, extremely long bus rides.

The Alberta government projects the number of students in Alberta schools will grow from 596,000 students in 2012 to 709,000 in 2022. Population has been growing at more than double the national average. With this in mind, the promise to build more school infrastructure was a key point in the PC election campaign last election but this promise has gone unfulfilled.

At the time of the 2013 Budget, Premier Alison Redford pledged to build 50 new schools and renovate 70 existing schools. Absent from the government's website claiming they are "Building Alberta" is any timeline as to when these schools will actually be built. Recent news suggests the answer is later rather than sooner.

In 2008, the government announced that it would build schools as public-private partnerships (P3s). It opened 28 P3 schools by 2013, with 12 more scheduled to open in the 2014/2015 school year. While schools in the newer neighbourhoods of Edmonton and Calgary are overcrowded and bursting at the seams, none of the schools currently under construction are located in either of Alberta's two largest cities.

P3 schools have been totally discredited as a pay-the-rich scheme. However, the government, citing reports by the "big four" multinational accounting monopolies, states "cost savings" can be achieved through P3 arrangements. The "big four" firms are infamous for their creative accounting in service of the owners of capital. For example, an inflated "risk factor" is tacked on to the estimated cost of building schools, and then a claim is launched that the P3 arrangement will save the government money by externalizing the "risk factor."

Similarly, the government cites the existence of a common architectural plan for all the schools built in each phase, even though this has nothing do to with P3s. Public institutions could build and have built schools using a common architectural plan when deemed to be in the public interests. In addition, P3s extract huge profits through the maintenance of schools, which is much lower for the first years after construction, compared to what will be needed in 30 years when school ownership reverts to the public authority.

Now it appears that even this P3 pay-the-rich scheme is not enough. Information obtained by the Alberta Federation of Labour indicates that the latest procurement process has come to a halt. The government put out a Request for Qualifications to design, build, and maintain 19 schools as part of "Building Alberta's School Construction Program" and received only one response.

Deloitte, one of the "big four accounting firms," was contracted to investigate the reasons for this low response. The main issue, according to Deloitte's capital-centred outlook, is that building schools is simply not profitable enough. The big construction companies have many other construction opportunities to make big profits and expect the energy industry will continue to heat up. Deloitte says the P3 model is "price competitive" and provides "diminishing margins." Relative to other opportunities, schools do not deliver "high value per location," making it less profitable for monopolies to send their limited number of project managers and equipment to those sites.

In addition, Deloitte's report reveals that Alberta's P3 model, as it stands, favours the largest construction monopolies. P3 school construction is tendered in bundles of 10 to 20 sites. Smaller companies claim they lack the capacity to participate in such large undertakings. As well, many smaller companies feel that large developers with previous experience in Alberta's P3 projects have a better chance of landing a contract.

What will be the solution to this lack of interest on the part of the construction monopolies in building schools? How will the government provide "incentives" for school construction? Eerily, the Deloitte report states, "The Alberta P3 model restricts innovation: In the case of Alberta's schools, P3 participants noted there is a limited opportunity for proponents to add value through innovation which could reduce costs and increase efficiency."

This talk "to add value through innovation" is capital-centred code for handing over even more control of the education system to the monopolies. In their eyes, governments serving the public interest are nothing more than a restriction on their freedom to explore new ways to make maximum profit. More control over schools could mean handing over activities such as food service and after-hours rental of school facilities to the P3 consortiums.

Why should Albertans be held hostage in this manner? It is not acceptable that children will have a school in their neighbourhood if, and only if, the construction monopolies find it profitable to build. Just because big scores are to be made in the oil patch, should badly needed schools be placed on the back burner?

To pose the issue as one of making school construction a more attractive business for private profit is objectionable and unacceptable. Every dollar that the construction monopolies claim in profit from schools is a dollar not directed towards educating the youth. The refusal of the construction monopolies to build schools unless their demands for more private profit are met really shows to the people of Alberta that they should dispense with these monopolies and deprive them of their stranglehold over the economy, an iron grip that blocks the people from solving problems.

An issue of great concern to Albertans and people in those regions where private mining interests predominate, is the control that the oil, gas, mining and construction monopolies exercise over the building of schools. It cannot be permitted that these monopolies build whatever they want while the people suffer for lack of infrastructure. Instead of allowing the unrestricted development of the oil sands or gas fields for example, a government upholding public right and public interest and not monopoly right and private interest would demand that infrastructure needed by workers and their families be built as a precondition for expansion of industry. The government would also demand that the value workers produce from the oil sands, gas fields and mining projects in exchange would realize the value from public infrastructure.

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