Conservatives Have Used Alberta’s NDP to Drag Down Tom Mulcair

So the federal NDP is in some pretty serious trouble.

It's been a rough few weeks for the party, beginning with the niqab debacle and quickly followed up with Thomas Mulcair's switcheroo on the Trans-Pacific Partnership. The party's now charting a solid ten percentage points below the other two major parties, and Mulcair—who participated in a VICE town hall on Oct. 13—currently sports the lowest support for his economic platform (less than half of what the other two leaders polled at).

One component that may have contributed to the NDP's remarkable drop is the unfolding fiscal clusterfuck in Alberta. Or, at least, conservative activists have been doing their very best to push for that perception: Ricardo Acuña, executive director of the Parkland Institute, says such efforts are "trying to create outrage at something that hasn't happened as a way of leveraging conservative politics."

A quick review of the facts: Alberta—governed by the Rachel Notley-led NDP—is facing a $6-billion deficit, the prairie province's largest shortfall since 1986.

Todd Hirsch, chief economist at ATB Financial, notes the situation is exclusively a result of the halving of global oil prices. The per-barrel cost for crude oil has plummeted from $106 in June 2014 to $60 in May 2015 (when the NDP were elected) and has since declined into sub-$50 territory.

This drop has gutted the prairie province's balance sheet, which usually receives between 20 and 30 percent of revenue and between half and three-quarters of exports from oil and gas (officially qualifying the province as a "petrostate").

And despite the fact there's no clear way to link the performance of the Alberta's NDP to the fact the country's sporting a very depressed dollar and measly 0.3 percent GDP growth, conservatives have certainly tried.

Lorne Gunter of Sun Media, Ezra Levant of Rebel Media, and Derek Fildebrandt of the Wildrose Party, among many others, have been blaming the new government for current economic circumstances, contending that policies such as an increase in the minimum wage, hike in corporate income tax rates, and reviews of non-renewable resource royalties and climate change policies have been enough to throw the economy farther off its game.

A Gunter column from late September featured a headline of "Canada's NDP future? See Alberta." Fildebrandt, who has since tweeted that Globe and Mail reporter Carrie Tait "intentionally torqued a story," described the Alberta NDP as "a party that is instinctively anti-business and anti-capitalism" (and also bizarrely suggested its platform "was never actually meant to be implemented as real policy").

But others suggest it's simply not reasonable to draw a line between the NDP and the wounded economy. Acuña contends: "There's absolutely no evidence to indicate that, at all. The fact that somehow in five months the NDP's policies are somehow responsible for a large chunk of the deficit, or any of it: how on earth would you draw that conclusion based on numbers and statistics? It just defies logic."

Jim Stanford, economist at Unifor, echoed that sentiment: "The main reason business investment has been deterred in Alberta is because the price of oil has fallen by more than half. These other changes are not even going to be visible in the data."

Yet there seems to be a very good reason for the hyper-precise attacks, regardless of the potentially fallacious nature of them. The federal NDP received a major boost from the Alberta victory and was leading the tight three-way sack race for a decent chunk of time.

Many voters have voiced skepticism about the NDP's ability to create jobs and strong fiscal policies. This ongoing crusade by conservative activists to discredit Alberta's NDP could ostensibly be intended to solidify that doubtfulness.

Prime Minister Stephen Harper, who has excelled at "wedge politics" during this election, recently got in on the festivities when he dubbed the Notley government "a disaster," later arguing that "the recession has been made worse because the NDP government came in and followed up by raising taxes on everybody."

It's very rare for a high-ranking minister, let alone a prime minister, to voice such ideas.

Angella MacEwen, senior economist at the Canadian Labour Congress and a fellow with the Broadbent Institute, rejects Harper's suggestion by noting that tax cuts correspond with low "multiplier effects"—that is, how much new revenue comes from new investments—compared to investments in public transit, childcare, clean tech and First Nations communities.

"If you're the situation of Alberta right now, where they've had this huge economic shock and had companies cut back their investments, it's the perfect time for the government to step in to fill that gap and make some of their own investments," MacEwen says.

The subject of deficit spending versus spending cuts is hotly contested, and one that's surprisingly divided the election into two camps: the Liberals, who argue that counter-cyclical spending is smart, and the NDP and Conservatives, both of whom pledge to balance the budget in spite of all other circumstances (like a very low price of oil).

Janice MacKinnon, public policy professor at the University of Saskatchewan and chair of Joe Oliver's Economic Advisory Council, acknowledges that deficit spending can be a reasonable thing, especially in a place like Alberta which isn't facing an Ontario-style debt crisis.

However, MacKinnon warns that consecutive deficits can normalize the tactic, which can result in poorly planned investments that don't result in growth and lead to debt problems. It's a concern MacEwan also voices: "You want to make sure you have the revenue in place to pay for the programs you want to build so they're there for the long-term."

But ultimately, the Alberta NDP have little chance to test out such strategies.

There can be almost no doubt the decision to postpone the budget release until Oct. 26 was influenced by the ongoing federal election: a major deficit out of Alberta, regardless of rationale, could suggest the NDP have a poor economic handle on things and give the other major parties easy ammunition.

And to be sure, Notley and Mulcair certainly haven't seen eye-to-eye on everything, recently spatting about cap-and-trade in the most Canadian way ever.

But Stanford argues that drawing a connection between the two leaders, or even insinuating the Alberta NDP are somehow responsible for the province's fiscal issues, runs into some serious trouble and that Alberta doesn't have to feature such an oil-dependent economy.

Hirsch of ATB, the non-partisan crown corporation, concludes: "This [situation] is by no means unusual. Anybody who's been in Alberta for any length of time knows this is the cycle we go through with quite a lot of regularity. For a lot of people who perhaps don't know Alberta very well or are maybe new to Alberta, this is going to feel like a jolt.

"But this is in fact just part of life here, this happens every so often. We'll get through this just fine."