Big Idea #3: Become the “Affordability Party”

Win the support of Alberta workers by tackling the affordability crisis

The cost of living in Alberta has been skyrocketing. Alberta currently has the highest inflation rate in the country – and the slowest wage growth.

Rent, mortgage payments, groceries, gas at the pumps, power, insurance, school fees, municipal taxes … you name it, it all costs a lot more today than it did three years ago.

A growing number of Albertans are worried that they might fall out of the middle class if something doesn’t change. And most working-class and lower-wage Albertans are starting to think they’ll never make it to the middle class, at all.

People are worried about themselves, but they’re also worried about their children and grandchildren. In particular, they worry that young Albertans will never be able to afford their own homes.

But it’s not just individuals and families who are hurting. When people face higher costs, they have less discretionary income. And when they have less discretionary income, they spend less in the local economy.

That’s what’s happening in Alberta, right now. Cash-strapped Albertans are spending less on restaurants, clothes, consumer goods, entertainment, cars and basically everything else. The result is that economic pain is being felt both on the home front and on the business front.

The rising cost of living is being felt by all Albertans, but some are being hurt more than others. For example, for middle class Albertans, the problem is less discretionary spending. But for working class and low-income Albertans the pain is more fundamental: they’re literally wondering if they’ll be able to put food on their tables and keep a roof over their heads.

So, what’s going on? And how do we fix it?

If we New Democrats hope to win the support of the working Albertans we need to defeat the UCP in 2027, then we need to present a credible and compelling plan to tackle the affordability crisis.

There should be no higher political or policy priority.

1. Understanding the problem

The first step to fixing a problem is understanding its causes. Some cynical players on the political stage have been offering overly simplistic prescriptions. For example, federal Conservative leader Pierre Poilievre has blamed it all on the carbon tax.

If only it were that simple! The truth is that the spike in the cost of living has roots at the international, national and provincial levels. It also has a lot to do with the choices and behaviour of large corporations.

2. International Causes of Inflation

The pandemic and the Russian invasion of Ukraine created shortages and supply chain shocks that drove up costs and prices around the world.

3. Corporate Causes of Inflation

Many big corporations used these price shocks as a pretext to jack up their profits and gouge consumers. This has been especially true in sectors where a handful of giant corporations dominate the market and have few competitors to undercut them.

The biggest culprits can be found in the oil industry and the grocery industries. In Canada, these industries are dominated by a very small group of huge corporations.

A growing number of economists agree that these giant companies used their market power to dramatically increase their profit margins. They did it by setting prices much higher than their costs – and making ordinary consumers pay the difference at the pumps and at the grocery checkout stands.

4. National Causes of Inflation

All of this was exacerbated at the national level here in Canada by weak competition (antitrust) laws and even weaker enforcement.

The Bank of Canada’s high interest rate policy has also played a significant role. The Bank has essentially been strangling the economy to bring down inflation. Ordinary workers have felt the pain in the form of job losses, weakened bargaining power and dramatic increases in mortgage payments.

But it doesn’t stop there. The federal government’s decision to dramatically increase the number of non-permanent residents in Canada – especially international students and Temporary Foreign Workers – resulted in wave of newcomers that spiked demand and prices for housing, while at the same time putting downward pressure on wages (a painful combination, at the worst possible time).

5. Provincial Causes of Inflation

If all of this wasn’t bad enough, the UCP government in Alberta made things even worse.

Alberta’s deregulated and privatized power system (all other provinces have regulated, public power) allowed big utility companies to price gouge their residential and commercial customers, and the UCP did nothing about it.

The same thing happened with auto insurance. Alberta is the only western province without public auto insurance – and we pay, by far, the highest premiums.

To add insult to injury, the UCP’s signature “Alberta is Calling” campaign convinced tens of thousands of Canadians from other provinces to move to Alberta … without thinking about where they would live. The result was predictable: skyrocketing rents and housing prices.

The big irony is that the main claim of the “Alberta is Calling” campaign was that Alberta had cheaper housing and more jobs than other provinces. But, rents in Calgary are getting close to those in Toronto – and Edmonton and Calgary have been recording the fastest rent increases for apartments among all Canadian cities. At the same time, Alberta now has the highest unemployment rate among western provinces.

This was all exacerbated by UCP’s huge cuts to municipal infrastructure grants, at a time of rapidly increasing population. The grants are now less than a third of what they were in 2018. By law, municipalities can’t run deficits, so they’ve had to jack up property taxes much more than they wanted to in an (often vain) effort to keep up.

6. Gil’s Plan to Reduce Cost for Working Families

Gil believes that the rapidly rising cost of living constitutes a crisis for Alberta families and the Alberta economy. He also believes that the UCP is failing miserably to come to the aid of ordinary Albertans in their hour of need.

Gil thinks the NDP needs to become the affordability party. As the party with a clear plan to make life more affordable for working families, the NDP will be able to attract the kind of support they need to defeat the UCP in 2027. It’s an example of good policy also being good politics.

7. Wages

The best way to help working Albertans cope with the rising cost of living is to ensure that their wages keep up with inflation. That’s why Gil’s second major plank was to Give Working Albertans a Raise.

8. Population

As Alberta Federation of Labour president, Gil has already played a leading role in convincing the federal government to dramatically scale back the number of non-permanent residents in Canada (a policy shift they just announced in March).

As Premier, Gil would continue to lobby the federal government to be cautious about levels of non-permanent residents.

He would also cancel the UCP’s “Alberta Is Calling” campaign and all programs like it. We shouldn’t be mucking with natural rates of internal migration when we don’t have adequate and affordable housing for the people who are already here, let alone tens of thousands of newcomers.

9. Housing

Unlike Premier Smith, who disrespects and appears to be fixated on controlling Alberta’s municipal governments, Gil has always operated on the belief that those closest to a problem usually have the best solutions. Gil knows that Alberta municipalities have good plans for housing and he would get out of their way and allow them to implement those plans.

Also, unlike Premier Smith, Gil supports the federal government’s housing initiatives and would not interfere with municipal governments who want to partner with the federal government to get more affordable housing built in Alberta communities. Gil thinks it’s ridiculous that the UCP is standing in the way of Alberta tax dollars coming back to Alberta to help deal with the housing crisis.

Gil would also: facilitate densification in all Alberta communities; create more permissive land use and planning and approval systems; work with municipalities to establish provincewide zoning standards; set provincewide housing completion and affordable targets, and provide municipalities with incentives and support to meet those targets.

Gil would also: work with municipalities to reduce fees and taxes for new home construction, especially purpose-built rental and affordable housing projects; and bring financing costs down for apartment rental and affordable housing projects by providing government-back loan guarantees.

Gil would also: make provincially-owned land available for development, with preference given to leasing the land, as opposed to selling it, in order to keep land costs as low as possible.

Gil would also: create an Alberta Housing Corporation to build housing on public land, using approaches similar to those seen in Singapore and a number of western European countries, where large swathes of the working class and middle class populations live in comfortable rental or leased homes on public land. The AHC would employ its own permanent staff of tradespeople to build and maintain the properties.

Gil would also: introduce rent control laws similar to those in place in BC, Ontario and Quebec; introduce a provincewide system of emergency rent supplements to help stop cash-strapped people from losing their homes because of exorbitant rent increases; work with municipalities and private sector partners to create an Alberta-based factory-built home construction industry, to create jobs while at the same time bringing down housing prices through routinized construction and economies of scale.

10. Food

As Premier, Gil would introduce an excess profits penalty on big grocery chains to discourage them from price gouging. The proceeds from the penalty would be redistributed back to Alberta working families.

Gil would also impose price controls on certain core grocery items – like milk, bread, eggs, butter, fruit and vegetables – in order to stop price gouging by grocery chains.

11. Fuel

As Premier, Gil would introduce an excess profits penalty on big oil companies to discourage them from price gouging at the pumps. The proceeds from the penalty would be redistributed back to Alberta working families.

The Globe and Mail recently reported that the federal government backed down from imposing an excess profits penalty on oil companies after heavy lobbying from the Canadian Association of Petroleum Producers and big individual oil companies. Gil would not be similarly swayed.

12. Power

Alberta is the only province with a deregulated and privatized market for electrical lower. It’s also the only province that saw power price increase by 128 percent last year (other provinces with regulated public power systems saw increases in the 3-5 percent range). As Premier, Gil would replace our failed privatized and deregulated system with a regulated cost-of-service model, similar to the model that provides access to cheap, reliable power in all other Canadian provinces – and similar to the system that Alberta itself had prior to 2001.

13. Insurance

All of Alberta’s neighbouring western provinces (BC, Saskatchewan and Manitoba) have public auto insurance. The auto insurance premiums paid by the citizens of those provinces are hundreds, sometimes thousands, of dollars cheaper than the premiums paid by Albertans. One of Gil’s competitors in the leadership race has promised to introduce a public option into the Alberta market. Gil would go further by following the lead of other western provinces by making auto insurance fully public in Alberta. It’s the only way to guarantee the economies of scale necessary to deliver the same low rates to Albertans that are enjoyed by drivers in BC, Saskatchewan and Manitoba.

Gil would also launch an investigation into the often exorbitant home and property insurance rates being charged to Albertans, especially in rural areas and smaller communities that have increasingly been threatened by wildfires and floods. The impacts on climate on insurance rates is an issue that needs urgent attention from regulators and the provincial government.

14. Municipal Taxes

Deep cuts to provincial funding for municipal infrastructure grants have left many Alberta municipalities with no choice but to significantly increase property taxes. Gil would restore provincial funding for municipal infrastructure in order to allow them to forego large property tax increases.

15. Public Transit

Gil would provide dedicated and ongoing provincial funding to municipalities so that they could reduce, or even eliminate, public transit fares. This would be a big saving to the lowest income Albertans – the ones who are in most need of a break.

17. New Universal Public Services

As a result of the historic supply and confidence agreement between the federal Liberals and NDP, Canada is now in the process of introducing three major new universal social programs: a national child care program; a national Pharmacare program; and a national dental care program. Once fully implemented, all of these programs will reduce costs and improve access to services for all Canadians. Sadly, Alberta’s UCP Premier, Danielle Smith, has been hamstringing the implementation of $10-a-day child care and universal dental care programs in Alberta. And she has vowed to outright block Pharmacare. As Premier, Gil would remove the UCP’s roadblocks and facilitate the implementation of all of these programs in Alberta.