Canada: A Very Albertan Coup - NDP Must Learn From Experience of Rae Government

"I’ve worked all over the world… in some tumultuous places. I’ve never seen this kind of a transition peacefully done." - David Swann, Leader of the Alberta Liberal Party

The above quote from the leader of the Alberta Liberal Party, made just after the majority NDP government had been confirmed in Alberta’s provincial election last month, speaks to the depth of political change that has taken place in Alberta, not to mention the intensity of the class struggle.

It was no accident that, faced with a victory of the NDP in the election, the oil barons and corporations united with the Tories and the corporate media to launch a vicious onslaught against “socialism” and resorted to plain old red baiting in an effort to scare people from voting for the NDP.

While the tactics of the oil barons and corporations backfired in spectacular fashion, the reality is that the fight hasn’t even truly started. Undoubtedly, the future will provide plenty of opportunities for massive struggles as the forces of capital unite in an effort to destabilize the provincial NDP government, which they already find intolerable even before any real policies or a budget has been announced.

Loss of Political Power

Notley’s NDP was elected on the basis of a soft centre-left program of mild reforms. The NDP won the election on the promise of change. People voted for the program of reversing cuts to health, education, social services, post-secondary education, as well as for environmental reform. They voted for the program of less regressive taxation and increased taxes on the wealthy and corporations. Significantly, they also voted for an increase in natural resource royalties. This has put the NDP on a collision course with the oil barons, corporate elite and media in Alberta.

For all intents and purposes, the ruling elite in Alberta have lost firm control over their state. For 44 long years, the oil barons and corporations had complete and unfettered control of the provincial government via their executive in the form of the Tories. They are used to governments that serve their interests. They had free reign for decades to plunder the province as they robbed it blind and ruthlessly exploited the workers, farmers and aboriginal peoples of the province. This ruthless exploitation was always supported by the Tories in the form of strident legislation and the levers of state power. This has, for the time being at any rate, been lost to them.

Certainly, the electoral victory of the NDP in Alberta in May was no socialist revolution, despite whatever fears the oil barons and corporations are fomenting. Alas, Canada’s October has not yet come. But the provincial ruling elite understands very well that the NDP is not their party. The ruling class understands that while they may even be able to threaten, bully and cajole the leadership of the party into toeing the austerity line, as happened with the NDP government under Bob Rae in Ontario in the early 1990s, the NDP will never be their party and will never fully be under their control.

They understand very well that the NDP, by thousands of ties, is the party historically linked to the working class. Despite the fact that the federal NDP has formally removed the reference to social ownership from the preamble of its constitution, it will never be trusted by the forces of capital and will never be considered “one of their own”. No matter how much the NDP leadership tries to reassure the capitalists that they are the most responsible managers of capitalism, no matter how much the NDP leadership tries to position itself as “pragmatic centrists”, the ruling class will never view them in this regard.

The capitalists fear above all what lies behind the NDP leadership. The ruling elite fears the NDP’s organic connections to the labour movement. Now when they enter the halls of power seeking legislative and government support, they do not find friendly, amenable Tory ministers who wait upon their every beck and call. Instead they find across the table not loyal bourgeois ministers, but their opponents in the labour movement. They find trade unionists and - heaven forbid - they may even find ordinary working people like teachers and bus drivers. Oh, the shock and horror!

The oil barons and ruling elite understand very well that the NDP will be pulled in two opposite directions and that they may not be able to control the direction in which the party develops. The tops of the party and the labour bureaucracy, under intense class pressure from the ruling class and its various lobby groups and the media, could very well be forced to the right and may even be brought to heel. Given the historical record of NDP governments in Canada over the past 30 years, this is even a likely scenario. Yet even if they could secure the loyalty of the Alberta NDP leadership, this would not be enough for them.

They recognize that the danger exists that the NDP rank-and-file, the trade unionists, the environmentalists and activists in and around the party could radicalize and escape the control of the union and party tops. Conversely, the tops could instead find themselves under pressure from the working class, rank-and-file party members and trade unionists. This could lead to something the oil barons and corporate elite are terrified of. The ruling class above all fears the general mobilization of the working class.

A Very Ontarian Coup

One of the best and most farsighted articles on the current situation in Alberta appeared in the Globe and Mail on May 7, 2015. The article, entitled Rachel Notley will have to watch out for a very Albertan coup, was written by Gerald Caplan, a former national director of the federal NDP. This went hand in hand with another article by the same author that also appeared in the Globe on October 8, 2010 entitled The hidden history of Bob Rae’s government in Ontario. These articles should be read and discussed by all NDP members, trade unionists, socialists and activists.

The content of the articles and the arguments they make provide an excellent framework around which a discussion can be had in the labour movement, on the historical experience of social democratic governments and the opposition they face from the ruling class - or what the author refers to as A Very British Coup syndrome. The ideas and arguments in the articles are based on a book of that name written by former British Labour Party MP Chris Mullin and published in 1982, which was later turned into two films adapted for television.

The experience of Bob Rae’s NDP government in Ontario in the early 1990s is one historical example that perhaps best mirrors the events in A Very British Coup. In fact, many in the party and government were aware of the film.

As Caplan explains in his recent article:

“[…] And a very Ontario coup as well. One of the first thing Bob Rae’s advisers did after the shock of being elected back in 1990 was to show the video [of A Very British Coup] to all the new political staffers. It’s still available online, a must-see for Alberta New Democrats. But it didn’t help in Ontario. Even being aware that dark forces were conspiring against it, the Rae government’s goose was cooked within a couple of years. The government was seriously destabilized and a humiliating electoral defeat was guaranteed years in advance. As collateral damage, the myth of a government that couldn’t run a hot dog stand was cemented, a deadly perception the NDP has not escaped a quarter-century later.

The onslaught began within months of being elected, as the NDP faced an unrelenting, brutal five-year onslaught unprecedented in Canadian history. The attacks came from all sides. It’s no exaggeration to say hysterical fear-mongering, old-fashioned red-baiting and sabotage was the order of the day. The attackers included every manner of business big and small, highly politicized bond traders, almost all private media, the police colluding with certain media against the government, and – by no means least – lobbying/government relations firms that played a key role in organizing the wrecking crew.

The plotters were determined to undermine the NDP government every step of the way, to frustrate the implementation of its policies and to assure its ultimate defeat. In all three goals they were successful. Various corporate interests, led by Conrad Black, threatened a virtual strike of capital if the government carried out its promises of higher business taxes, beefed up union rights, and strengthened environmental regulations. The Sun newspaper often set the agenda for the entire media (to their shame) by gleefully sensationalizing embarrassing facts, unfounded rumours, vicious innuendos and obvious lies.”

The key battle in Ontario at that time was over Bill 40, the NDP’s industrial relations reform. The Bill would have outlawed the use of scab labour, lowered the required level of support for a union certification vote from 45 to 40% of the bargaining unit, and extended the right to organize to some previously excluded workers (mainly agricultural workers), along with other measures in favour of the labour movement - not capital.

While there was a sustained campaign against all the NDP government’s policies, including tax reform and an increase in the corporate tax rate, public auto insurance, etc., the concerted efforts of the corporate elite against Bill 40 were particularly intense. The campaign against the NDP and Bill 40 has even been described as a “holy war”.

Adverts were run during the Toronto Blue Jays’ run to the World Series in 1992 by the Coalition to Keep Ontario Working, demagogically threatening mass unemployment should the legislation pass. In another instance, The Mechanical Contractors’ Association of Ontario purchased billboard space in downtown Toronto with cartoon versions of Marx, Lenin and Bob Rae that said “It didn’t work in the USSR - Why Ontario Bob? Stop Proposed Labour Reforms Today!!!” The Rae government’s program was not revolutionary in any sense of the word, and was in fact quite modest. Yet, the ruling class would not tolerate it, and did everything in its power to stop the legislation and destroy Rae’s government.

The Rae government came under intense pressure. Despite having the highest credit rating in the country, Ontario was threatened with a lack of access to competitive borrowing rates, effectively quashing any proposed reforms. The government was warned that U.S. corporations would cease investing in the province unless its policies were abandoned, all while a capital strike was being organized.

On each question, in each struggle, when faced with intense pressure from the ruling class, the NDP leadership vacillated, compromised and capitulated. The leadership alienated its base and the labour movement, driving the leadership ever further into the bourgeois camp until finally they rammed through the Social Contract. The NDP abandoned its program of reforms and implemented an all out attack on public sector workers through a program of austerity. The NDP became the champions of zero-deficit and austerity cuts. Having been used, abused and thoroughly discredited, the Ontario NDP was crushed in the following provincial election, with its own austerity program paving the way for Mike Harris. The fiasco of the Rae years is something the NDP has not yet fully recovered from in Ontario.

A Very Albertan Coup

The media campaign against Notley grew louder the more the NDP continued to gain momentum during the election campaign. An anti-socialist, red-baiting campaign was whipped up in the media. Letters and articles appeared in the major papers about how the “socialists” would ruin the economy, destroy the patch and create mass unemployment. Talk of a strike of capital was rampant in the press. An all out war on the Alberta NDP and socialism was started on social media.

Since the Alberta NDP victory, the corporate media has launched a frantic search for any dirt on NDP MLAs in order to smear them and paint the NDP in an incompetent light. Articles have appeared in the press about “kids in a candy store” and how the NDP government will lead to total, devastating financial ruin in Alberta.

Kevin O’Leary frantically urged investors to pull out of Alberta and effectively called for a strike of capital. He described the Alberta NDP victory as a “horror movie unfolding,” adding that “It is going to be a horrible experiment. The whole world will watch it. The only upside I see is this is if she [Notley] goes with these mandates, she will have the light shining on her around the world. It will collapse the economy in Alberta — and the NDP will never get a federal mandate.” There followed a sharp sell off of energy stocks.

Canadian Natural Resources Limited (CNRL), the country’s largest heavy oil producer, has publicly echoed O’Leary’s sentiments in relation to a strike of capital and recently made a lot of noise about cancelling one of its recent investors’ meetings. This move has even been described as a “shot across the government’s bow.”

Alberta’s economy has already collapsed for all intents and purposes, and this had nothing to do with the provincial NDP government. However, this collapse will put limitations on Notley’s program. Moreover, it seems unlikely that Notely’s policies on their own could collapse Alberta’s economy. While the bourgeoisie whips up fear about the economic ruin bound to occur under an NDP government, they are actually consciously organizing Alberta’s downturn. They hope to cut investment, restrict borrowing, implement a capital strike and thereby frustrate policy implementation and sabotage the economy in order to discredit the Alberta NDP in the eyes of the workers and farmers of the province. While the oil barons and corporations shriek about the loss of profits, which they are genuinely concerned about in the long term and this in fact the reason for their concerted campaign, in the short term they are more concerned about their loss of political power. In fact, they are willing to sacrifice the economy and their profits in the immediate period in order to destabilize Notley’s government and regain control of the state.

Similar to Bob Rae’s Ontario NDP government, Notley’s government will come under intense pressure from all sides. The campaign in the media, already intense, will reach a fever pitch. Businesses have already threatened to leave the province. Companies, foreign and domestic, have threatened an end to investment in the province. The province’s credit rating will come under threat, thereby hampering the government’s ability to borrow. As Caplan wrote in his article, “The dangers of an NDP government to the entire Alberta way of life is already a maxim among the elite.”

The corporate elite have raised a noisy campaign against the proposed increase in the provincial corporate tax rate from 10% to 12%. They howl loudly about how this will hurt the bottom line too much and drive them out of business or force them to leave and operate elsewhere, despite the fact that corporate profits are at all-time record highs and corporate tax rates are far lower now than in the past.

This question of corporate taxation helps to explain the limitations of reformism. In the past, on the basis of the post-war boom from the late 1940s until the 1970s, the capitalists were able to afford reforms as a means of buying class peace. For example, in 1949 Alberta’s combined federal and provincial corporate tax rate was 38%. With the development of the welfare state on the basis of the boom, the rate rose to 48.8% by 1986 in Alberta.

In the epoch of the organic crisis of capitalism, the ruling class can no longer afford reforms and is not willing to pay for them. This led the capitalists to launch an all out assault on the living and social conditions of the working class. Over the course of the last 20 years corporate taxes have declined sharply. The federal corporate tax rate was cut from 28% to 21%. Harper’s Tories cut this further to 15% and worked to bring the provinces online with corporate tax cuts and move their rates down to 10%, something the Tories in Alberta were happy to do. Klein reduced the provincial tax rate from 15.5% to 13.5% in 2001 and then brought it down to 10% in 2006. Alberta’s current combined corporate tax rate is 25%, with the Notley government intending to increase it to 27%. They howl and scream madly about a minor increase in taxation when rates were actually higher during the Klein years. With the dismantling of the welfare state and sharp decreases in corporate taxation, the burden of the crisis of capitalism has been shifted squarely onto the backs of the working class.

Surely, the biggest battle in Alberta will be on the question of oil royalties. The Notley government’s program has promised a review of natural resource revenues. People in Alberta don’t just want a review of royalties, they want an increase. A loud opposition has already been organized against this review. When the Tory government under Stelmach opened a royalty review, a vicious campaign was initiated in the media, including the U.S. press. If such a campaign were organized by the oil barons and media against a Tory government then, we can just imagine what will happen when it is proposed by an NDP government now. 

One of the biggest failures of the Rae leadership in the Ontario NDP government was that in the face of the campaign organized against it by the ruling class, rather than mobilize the working class and the fight for genuine socialist policies, it sought to appease the ruling class, find an accommodation with the forces of capital, and eventually capitulated on all fronts. However, despite the efforts of the Rae leadership the Ontario NDP was never able to appease the ruling class, and nor could it. 

The campaign organized against Notley’s Alberta NDP government is more than strikingly similar to that organized against the Rae government. They are already identical in composition, content, basic form and meaning. The Alberta NDP can rest assured that the campaign already under way will intensify into a total effort to destabilize and discredit the party and government. Amongst the oil barons and corporate elite there is already no tolerance for NDP policies, no matter how “pragmatic” they try to be.

There are other similarities as well. Ontario was in a deep recession when Rae came to power, just as Notley faces the collapse in oil prices and a sharp economic decline. Significantly, Notley had one message and one message only the day following the election victory - that the Alberta NDP would be a good partner to business in general and the oil and energy sector in particular. She emphasized that her government would “work collaboratively” with them. What the Notley NDP leadership does not seem to understand is exactly what the Rae leadership did not understand - that despite the overtures, compromises and capitulations of the NDP, the ruling class will never be interested in working collaboratively with it. The oil barons want nothing less than to destroy the NDP and its government.

The Notley government will have a honeymoon period, though it will be brief. There is still a period of excitement and optimism amongst the working class about the victory. But if the Notley government doesn’t deliver on its social policies, this will quickly lead to its opposite. The Notley government has been rather quiet since coming to power. While some policy details have been released, not much has been fundamentally said. While this has softened and slightly dulled the corporate media campaign against it, this cannot and will not last very long. In fact, the softening of the campaign will only last until the Alberta NDP begins to announce substantial policy initiatives and introduce budgets into the legislature.

The Rae Ontario NDP leadership and the tops of the labour bureaucracy had no confidence in the working class. They had no confidence in the struggle for socialism. Under the intense pressure of the ruling class they capitulated to capitalism and betrayed the working class of Ontario. This severely discredited the Rae government and tarnished the Ontario NDP in the eyes of the working class. The Ontario NDP has not fully recovered to this day.

The Notley government will be subjected to the same campaign and will come under the same pressure from the oil barons. A Very Albertan Coup is already being prepared, and the Alberta NDP must prepare its defence. The only forces that the NDP government can rely on are those that will actually come to the defence of the government. The Alberta NDP will not find that support amongst the oil barons. The only support the Notley government will find is with the working class and youth. The Alberta NDP must mobilize the working class, the trade unions, the students and the farmers of the province to counter the campaign of the bosses.

But simply fighting the bosses’ campaign in support of moderate reforms will not be enough. The bosses will never be satisfied and will use their economic power in an attempt to bring the Notley government to its knees. One cannot control what one does not own. In the face of the organized hostility of the oil barons, a key task in the coming period will be preventing corporate sabotage which seeks to send capital out of the province. The only way to stop this is for capital to be controlled by those who make it – the working class. To avoid continued economic decline, the main levers of economic power – starting with the oil sector – need to be nationalized and placed under the democratic control of the workers. If a capital strike is organized, then nationalizations under workers’ democratic control must be the response of the NDP provincial government. The bourgeoisie must be relieved of its economic power.

The Alberta NDP’s program of modest wealth redistribution through minor increases in taxation on the wealthy and the corporations, and its planned royalty review will not be enough to reverse austerity, growing unemployment, and the cycle of booms and slumps in the oil patch, especially in the face of the concerted opposition of the ruling class. Neither will Notley’s moderate program appease the oil barons. If the Alberta NDP wishes to avoid the fate of the Ontario NDP, it must mobilize the working class on the basis of a decisive break with capitalism. Otherwise, sabotage, downturn and defeat lay ahead, and the discredited legacy of Bob Rae may be shared by the Alberta NDP. Rank-and-file NDP members, student activists, trade unionists and anybody fighting the power of the oil barons, need to start organizing now: to defend the government from corporate attack; to stop the government capitulating; and finally, to fight for the socialist policies that can solve the crisis in Alberta.