In Ancient Rome, a key imperial duty was to maintain the flow of grain and gladiatorial entertainment to the masses of Rome. Woe to the Emperor if the flow of grain was interrupted and the entertainment fell in quality. The Empire’s mantra was that the grain must flow! For Alberta premiers, charged with the guardianship of an exceptional economy whose prosperity is rooted in the volatile revenues of the oil and gas sector, the mantra is the natural resource revenues must flow! It is no surprise that Alison Redford is leaving. There seems to be a relationship between the weakening of government resource revenues and premier exits.
The accompanying figure plots the natural resource revenue share of Alberta provincial government revenues from 1980/81 to 2014/15.The data for 1980/81 to 2012/13 is from the Alberta Department of Energy and the period since 2013 are estimates from the 2014 Alberta government budget. Over the entire period 1980-2014, natural resource revenues have averaged 27 percent of Alberta provincial government revenues. Abundant resource revenues have enabled Alberta governments to fuel high levels of government spending but resource revenues are volatile and when oil and gas prices decline it signals a poor economy, fiscal deficits and can eventually sow the political landscape with dissatisfaction and discord.
Vertical lines plot the fiscal year exit of premiers going back to Peter Lougheed. Note a couple of interesting points. Getty replaces Lougheed at a point where the resource revenue share of provincial government revenues is plummeting. However, Getty’s tenure is not accompanied by a recovery in the resource revenue share – it remains below the average for his entire term - and is replaced by Ralph Klein. Klein has the longest tenure of the post-Lougheed premiers but then his premiership was marked by an eventual upward trend in the resource revenue share of government revenues. The Klein era sees the resource revenue share climb up above the average again but Klein departs as a major downturn begins. This downturn has persisted despite a weak recovery during the Stelmach period and has resulted in much shorter terms – compared to Klein – for both Stelmach and Redford.
I would venture that one key mark of success for an Alberta premier is to have their term coincide with high natural resource revenue shares that allow for Albertans to have public spending in a manner they have grown accustomed to. A weakening of natural resource revenues leads to difficulties and a tinderbox of dissatisfaction looking for a match. Premier Redford’s travel expenses were that match and the knives came out.