Alberta Premier's Latest Economic
Plan
Massive Transfer of Public Funds to the Wealthiest Investors
- Dougal MacDonald -
Demonstration outside the UCP policy convention,
Calgary, November 30, 2019, opposed
Kenny government's neo-liberal cuts to social
programs.
On June 29, Alberta Premier Jason Kenney
announced the components of his latest "economic
recovery plan." This was supposedly based on the
findings of the premier's Economic Recovery
Council, composed of various corporate hacks,
including former Prime Minister Stephen Harper.
There is nothing new in the plan; it is the same
old neo-liberal nonsense that the United
Conservative Party and similar governments all
over the world have peddled for decades. In
essence, it is "trickle down" economics, the idea
that increasing the profits of the corporations
will somehow result in more wealth making its
way down to ordinary working people. This has
long been exposed as a complete lie, yet the
Kenneys of this world continue to promote it as
the solution to our economic ills.
Certainly, there is a need for a comprehensive
economic plan in Alberta but this latest mish-mash
proposed by Kenney just will not do. It is just
one more pay-the-rich scheme which will further
damage the economy rather than start to rebuild
it. It has nothing to do with consulting the
people of Alberta or involving them in important
decision-making and everything to do with adding
to the profits of the private foreign corporations
that control Alberta's economy and Kenney's
government. The fact that the plan is the same
old, same old is indicated by its two main and
tired components, corporate tax cuts and
infrastructure spending.
 The corporate tax
cuts component of Kenney's recovery plan is a
further cut from 10 per cent to 8 per cent. This
follows Kenney's initial cut from 12 per cent to
10 per cent. Note that under Conservative Ralph
Klein the rate was 15.5 per cent or almost twice
what Kenney has now set it at! Further, Kenney
seems to be the only person left in the world
still peddling the myth that corporate tax cuts
attract investment and create jobs. In contrast,
the general consensus among financial experts is
that corporate tax cuts make corporations richer
by increasing the huge amount of cash they sit on.
Also, make no mistake, the energy corporations
still have plenty of cash. For example, Imperial
Oil reports it had a cash balance of $1.4 billion
at the end of the first quarter of 2020 and, in
its own words, "strong liquidity."
Experience shows that corporations will use the
money they save by the tax cut, not to create
jobs, but mainly to buy back their own stock,
greatly enriching the shareholders, including
upper management who often have large holdings.
For example, in January 2019, Murray Edwards, CEO
and founder of oilsands giant CNRL, held almost 22
million shares of the company, currently worth
about half-a-billion dollars. Shareholder
enrichment is what occurred in the U.S. after
Trump's 2017 tax cut. CNN reported on August 22,
2019: "The 2017 corporate tax cut left U.S.
businesses flush with cash. S&P 500 companies
responded by rewarding shareholders with record
amounts of buybacks in 2018, with each quarter
setting an all-time high." Instead of enriching
workers corporate tax cuts will only further
enrich the owners of capital.
It is also well-known that many corporations
already pay little or no tax anyway through such
tax-dodging strategies as shifting profits to
foreign subsidiaries, accelerating depreciation,
and giving stock options to employees. As well,
the corporations take advantage of every "legal"
loophole in the tax laws to use strategies such as
sheltering their money in offshore accounts, as
revealed by the "Panama Papers" in 2016. According
to Revenue Canada, in 2014 (latest available
figures), Canadian companies managed to avoid
paying up to $11.4 billion worth of taxes they
should have paid in that single tax year. And when
all else fails, a corporation can simply declare
bankruptcy and walk away from all its financial
responsibilities, for example, stiffing landowners
and leaving orphan wells in a mess.
As for the infrastructure component of
Kenney's latest scheme, he boasts that this year
Alberta will spend $10 billion on such projects,
supposedly creating 32,000 to 50,000 jobs. No
evidence is given for this jobs claim and no
mention is made of the thousands of jobs the
Kenney government has already destroyed, nor of
the fact that jobs constructing infrastructure are
temporary. There is also no mention of the fact
that what infrastructure spending really entails
is the financial oligarchy lending money to
governments and then profiting from the government
projects and payouts many times over. Much of the
economic activity is arranged through government
contracts to global cartels, often in the form of
public-private partnership (P3) agreements where
public governments take the risk and private
foreign corporations reap the profits.
Edmonton's $1.8 billion Light Rapid Transit
Valley Line SE is a prime example of such a P3. In
2016, TransEd Partners was selected to design,
build and operate the Valley Line SE. The private
partners in TransEd are Bechtel (U.S.), EllisDon
(Ontario), Bombardier (Quebec), Fengate Capital
Management (Ontario), Arup Canada (London,
England) and IBI Group (Ontario). Bechtel, the
lead contractor, is a huge enterprise, notorious
for its close involvement with the U.S.
government, particularly the Department of Defense
and the CIA. Its executives Casper Weinberger and
George Schultz served as Secretary of Defense and
Secretary of State respectively under former
President Ronald Reagan. Bechtel co-founder John
McCone headed the CIA from 1961-65 at the height
of the Cold War.
Nowhere, however, does Kenney explain where that
$10 billion for the infrastructure projects will
come from, certainly not out of his back pocket.
As has been previously pointed out, it is borrowed
from the financial oligarchy and then a portion is
put toward financing infrastructure projects. This
becomes the seed money to begin construction.
Private construction cartels are financed by the
money the government borrows, which includes
allowance for a healthy profit. Everything is
guaranteed by the government including the
exorbitant prices the private construction cartels
charge to complete the projects. Once built, the
big private enterprises are the main users of the
infrastructure, e.g., roads, bridges, electricity,
for which they are charged lower concocted
"industrial rates."
Albertans are "directed and browbeaten not to
object to this direction for the economy, as it
'provides jobs and the infrastructure.' ... But a
new direction is exactly what is needed to bring
the economy under the control of the people who do
the work and prevent recurring crises and solve
other social and natural problems. A new direction
for the economy would prohibit government
borrowing from private institutions. A new
direction would construct, maintain and manage
public infrastructure using permanent public
construction enterprises. It would ensure that the
value from the infrastructure is fully realized by
the public and private enterprises that use and
consume the value and that this value would be
poured back into the economy and not be taken out
by the rich to some tax haven or other faraway
place."[1]
Note
1. See "Public
Infrastructure
Spending Programs to Pay the Rich and Sustain
Class Privilege and Control," by K.C. Adams,
TML Weekly, June 27, 2020.
This article was published in
Volume 50 Number 27 - July 25, 2020
Article Link:
Alberta Premier's Latest Economic
Plan: Massive Transfer of Public Funds to the Wealthiest Investors - Dougal MacDonald
Website: www.cpcml.ca
Email: editor@cpcml.ca
|
