Shifting Priorities: From Deficit Spending to Paying down the Debt and Lowering Taxes - Evidence from the Alberta Advantage Surveys: 1995-2000

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Results

Like many newly elected governments, the Klein Tories began their first electoral mandate plagued by many of the same challenges that had contributed to the disintegration of the Getty administration before them. The Alberta economy did not prosper between the mid 1980s and early 1990s: low energy prices, a continued dependence on resource revenues, and a string of politically inspired but economically questionable investment and diversification decisions had culminated in a series of deficit budgets from which the Getty government never managed to recover. The immediate challenge facing the Klein government was to balance the province’s budget and so bring its rapidly escalating debt under control.² The Conservatives faced another challenge as well. They had been elected in 1993 by the narrowest margin in recent Alberta history, with 44.5% of the popular vote compared to the 39.7% by the Decore Liberals. The relative closeness of the vote meant that, politically, a great deal was riding on the choice of strategy to tackle the deficit and debt. A straightforward Downsian response would have been to proceed cautiously, by implementing a complex mix of spending and financing, designed to maximize voter support and minimize the number of votes lost. In fact, the route actually taken seemed to have little to do with Downsian logic and the calculation of "rational choice" vote-maximization strategies. There seemed to be a clear commitment to bold position-taking over prudential vote-grabbing, though there was some indication as well that Albertans might respond positively to a decisive initiative.

In any case, the government was convinced that Albertans would not tolerate a government that simply sought to manage the province’s debt and deficit problems. The 1993 electoral mandate and subsequent polls were interpreted as supporting both deficit elimination and spending cuts with no tax reductions. Critics, on the other hand predicted that the government’s popularity would quickly decline (Hughes et al., 1996; Archer and Gibbins, 1997). In fact, the opposite happened: the deeper the cuts, the more popular the Klein government became. And in fact the 1997 victory was greater than 1993. The question that needs to be answered, therefore, is this: what explains the Klein government’s ability to defy the conventional wisdom that is formally expressed in Downs’ logic?

Approval for the Klein Government’s Performance

Each round of the AAS begins by asking Albertans how they would rate the efforts of their current provincial government: "Would you say you strongly approve, approve, disapprove or strongly disapprove of the Klein government’s performance?" Figure 1 illustrates how the Tories approval ratings have varied since the first ASS.

Figure 1: Approval for the Klein Government's Performance

Among critics, a common argument has been to suggest that as time wears on and the impact of the government’s budget restructuring becomes more widely felt, support for the government is bound to decline. Our data, however, provide no such indication: Figure 1 shows that approval for the Klein government continued to rise, while disapproval continued to fall. Seven years after they first were elected, our evidence indicates that the Klein government is even more popular now than ever before: over two in every three Albertans (69%) currently say they approve of the government’s performance, an increase of about 10% over 1995.

There have, however, been some noticeable fluctuations in the intensity of this support. For example, between 1995 and 1999, the number of Albertans who strongly approved of the government fell from 17% to 10% over the same period. The most obvious explanation for this change is that even strong supporters of deficit reduction and program restructuring occasionally had their doubts. But by the time the century ended, however, the numbers had rebounded so that in 2000 more than one in five Albertans (23%) consider themselves to be strong supporters of the Klein government. This would appear to indicate that not only have the doubters been reassured, but that the major recent policy initiative, namely the government’s spending strategy, may have done the trick.

Notwithstanding these changes in intensity of support, it is evident from the data that an increasing number of Albertans over the years support the incumbent government. The question remains: why? What accounts for the Klein government’s remarkable success?

The Impact of Long-Term Loyalties

The most conventional explanation proposes that support for the Klein government is a result of long-term social group loyalties and/or partisan ties. We tested this proposition using two separate regression analyses reported in Columns 1 and 2 of Table 1. The first looks specifically at the effects of various socio-demographic variables (including sex, age, education, employment/income and place of residence) on approval for the Klein government’s performance, while the second examines the combined effects of both social and psychological influences. Splitting the two analyses in this way allows us to monitor the extent to which group differences remain significant once other competing explanations are brought into account (Cooper and Kanji, 2000, 90-1).

When we examine the impact of various socio-demographic variables, independent of other forces, it appears as though the political landscape in Alberta is divided into several polarized camps. Males, as expected, turn out to be more approving of the Klein government’s performance than females. And similarly we find several other important group differences when it comes to factors such as age, education, employment/income and place of residence. However, when we look at the overall impact of social group forces (as measured by the R-squared statistic), we find that altogether they account for only a small fraction (some 5%) of the entire story. Moreover, the significance of group differences begins to decline the moment that other competing explanations are introduced.

The regression analysis shown in Column 2 indicates that stable partisan affiliations have more than three times (.27) the effect of the strongest socio-demographic determinant, which in this case is age (-.08). Albertans who are loyal Conservatives both federally and provincially are more likely to approve of the Klein government’s actions than those who split their votes between the provincial Tories and another federal party. In short, among long-term factors, what counts most are party loyalties, not sociological categories.

Opposition Toward the Speed and Size of the Klein Government’s Budget Cuts vs. Support for the General Principles of Deficit Elimination, Spending Cuts, Taxes and User Fees

A second explanation considers the possibility that although Albertans may oppose to the pace and magnitude of the budget cuts, as predicted by Downs’ model of voters as rational calculators of their own projected interest, they are nevertheless persuaded of the soundness of the government’s broader and more long-term goals: deficit elimination, less spending, lower taxes, and increased user fees. In other words, Albertans may continue to back the Klein government because their support for a balanced budget and smaller government outweighs their concerns over the actual approach taken by the government in streamlining social programs.

Figure 2 reports Albertans’ orientations toward the pace of the Klein government’s deficit elimination plan and their concerns over the size of the budget cuts in the areas of education, healthcare, and social services. Given the Klein government’s direct approach to budget cutting, these findings did not come as a surprise: most Albertans think the speed of deficit elimination in Alberta was too fast. Moreover, as the cuts to government programs began to take greater effect, the strength of public opposition toward the size of the budget cuts continued to grow. During the three or four years following the first round of cuts, between 1995 and 1999, Albertans became 12% more opposed to the size of healthcare cuts, 12% more opposed to the size of primary and secondary education cuts, 6% more opposed to the size of the cuts to universities, and 16% more opposed to the size of the social welfare cuts. Clearly, then, when Albertans were asked to look back on what the government had done, they didn’t like what they saw and their opposition increased.

Figure 2: Opposition towards the Speed and the Size of the Klein Budget Cuts in Education, Health Care and Social Services

It is, however, one thing to dislike expenditure cuts but something else to dislike the government because of them. An analogy from personal life may be instructive: very few people enjoy going to the dentist, but they don’t for that reason also dislike their dentist or, more importantly, stop having their teeth checked. The logic is obvious: people have regular dental check-ups because they believe that a certain amount of discomfort now can prevent a lot of suffering down the road. In the same way, Albertans may have been willing to accept some short-term pain for long-term gain.

The regression analysis reported in Column 3 of Table 1 shows that concerns over the speed and size of the budget cuts between 1995 and 1999 have had a sustained negative effect on public approval for the government’s performance even after taking into account the impact of various long-term allegiances, reflected in social group affiliations and partisan ties. Indeed, a sizeable proportion (10%) of the overall variance is explained by such concerns. Because of the media-enhanced horror stories about long waiting times in emergency facilities, inadequate hospital staffing and the general deterioration of healthcare in Alberta, it comes as something of a surprise that the effect of opposition to healthcare cuts is so moderate--it occurs at about the same weight as opposition toward cuts to universities and colleges, and to social welfare.

Nevertheless, if opposition toward the pace and magnitude of the budget cuts reduces approval of the Klein government’s performance, then why do approval ratings continue to improve? This apparent paradox in the behaviour of rationally calculative voters appears to dissolve when we take into account the possibility that Albertans may have other more pressing concerns, some of which may have been strategically primed by the government. That is, the reason why Albertans may continue to stick it out is because they value the government’s broader policy objectives more than they oppose its hard-hitting approach.

Figure 3 considers this possibility by examining Albertans’ more general views towards the core principles of deficit elimination, spending cuts, taxes and user fees. The data, in this case, appear quite stable, with only a few minor fluctuations. We believe this stability is a direct result of the government’s priming, not a mysterious change of heart, sudden conversion to fiscal prudence, or reflection of provincial perversity. On the whole, more than four in every five Albertans consistently support the principles of deficit reduction and even in 1999, 84% continued to maintain that the best way to balance the budget is by implementing spending cuts. Moreover, Albertans have still not embraced the notion of paying more personal taxes: no more than one in every five Albertans supports the idea of increasing either personal taxes or introducing a sales tax, though at least two out of three respondents (66%) still support an increase in corporate taxes. Although user fees were relatively popular in 1995, support for this particular policy appears to be in decline. The most recent results show that only two in every five Albertans (40%) agree with the idea of having to pay user fees.

Figure 3: Orientations Toward the General Principles of Debt Eliminaton, Spending Cuts, Taxes, and User Fees

When we add these more general orientations towards deficits and budgeting to the regression analysis reported in Table 1, the results clearly suggest that Albertans are indeed capable of distinguishing between the long and the short term objectives (see Column 4). It is also clear that certain principles are of higher priority and carry more weight than others. For instance, support for deficit reduction is a far more powerful predictor of support for the government’s performance than are attitudes toward the speed and size of budget cuts. Likewise, two other broad objectives are also statistically important, thought to a lesser degree: Albertans opposed to corporate and sales taxes are more likely than those who support them to approve of the government’s actions.

Since the impact of the budget cuts to program spending has been absorbed and the positive economic effects have begun to appear, Albertans have supported the results with considerable enthusiasm. Figure 4, which incorporates our most recent data, shows how satisfied Albertans are with what the government has accomplished.

Figure 4: How Satisfied Are Albertans? (% indicating they are either "somewhat satisfied," or "very satisfied")

Most Albertans, some 92%, indicate they are satisfied with the financial situation of the provincial government, an 11% increase from 1999. Moreover, Albertans are not merely content with the province’s financial situation, nearly two out of three Albertans (63%) say they are very satisfied, which is a 40% increase from 1999. As was indicated above, during the mid-1990s, there was considerable criticism of the government’s policy. The most recent survey indicates that things may well be changing: 67% of Albertans, for example, indicate they are satisfied with the amount of money the Klein government has spent on social programs.

Likewise when one examines the specific program areas targeted for earlier cuts, which subsequently have become the beneficiaries of "reinvestment"—namely health, education, and welfare—support is currently well over 60%. Moreover, the number of Albertans who report they are very satisfied with these program areas has increased considerably over the last couple of years.

To summarize: Albertans strongly supported the general principle of deficit elimination far more than they opposed in detail the speed and size of program cuts. Subsequently, after having absorbed the pain, they take pride in the province’s gains, namely the targeted spending strategy, and the condition of the provincial social programs.

The Lack of An Effective Opposition

A third potential explanation of why the Klein government continues to prosper may be because of an ineffective opposition. The data presented in Figure 5 help to illustrate what Albertans think about the opposition Liberals in Alberta. The evidence in this case is overwhelming: more than a majority of Albertans consistently indicate they disapprove of the opposition Liberals’ performance. The Liberals have had occasional high points, specifically as reflected in the 1999 data. At that time, shortly after Nancy MacBeth took over the party, the party’s approval rating increased substantially (46%). But, as with her predecessor, Grant Mitchell, MacBeth and the Liberals have been unable to sustain this level of support. By 2000 the Liberals had reverted to about the same position as they traditionally occupied, an approval ratio of about one in three.

Figure 5: Approval for the Liberal Party of Alberta

There is even more bad news for the Liberals: just because a third of Albertans say they think that the party is doing a good job under the leadership of Nancy MacBeth, that does not mean they ever would vote for them. High approval ratings do not translate into a greater ability to "detract" voter support from the Klein Tories. The regression analysis reported in Column 5 of Table 1 indicates that the performance of the Liberals in Alberta has no discernible impact on approval for the Klein government’s performance. Whether Albertans think the Liberals are doing a good job or not appears to make no difference to how much they approve of the Klein government.

The Impact of Leadership

The fourth and final explanation for the continued success of the Alberta government may be that it results from the independent and positive impact of the Premier himself. Evidence from a long line of Canadian electoral studies indicates that voting preferences are often based heavily on how voters feel about a party’s candidate or a leader, as distinct from the party itself or a specific policy or policy mix. Support for the Klein government, therefore, may be contingent upon the strong popular appeal of Premier Klein, and conversely, the lack of voter support for current opposition Liberal leader, Nancy MacBeth, even though a sizeable portion of Albertans think the Liberals are doing a good job.

Figure 6 represents the results of a "feeling thermometer," used to indicate how warmly respondents felt towards Klein and MacBeth. As indicated above, the election of MacBeth as Liberal leader did give the opposition a temporary boost in their party’s overall approval ratings. Even so, our evidence shows Albertans feel much "warmer" towards Klein than towards MacBeth. Moreover, over the last year or two, ratings for MacBeth appear to have declined. This is a significant finding because the regression analysis, reported in Column 6 of Table 1 above, shows that leadership is a major factor in maintaining the high approval for the Klein government’s performance. Those who approve of Klein’s leadership are also very likely to approve of the government’s performance, whereas MacBeth’s weak popular rating turns out to have a small negative effect.

Figure 6: Leadership Ratings (% of respondents rating Klein and MacBeth as being above netural on a "feeling" thermometer)

The impact of leadership is clearly illustrated by its effect on the bottom line: leadership improves our understanding of the overall variance in the government’s approval ratings by 17%, a significant amount in election studies. Moreover, the effects of leadership all but wash out the impact of all other factors except for three. And even then, both the effects of orientations toward the general principle of deficit elimination and stable party ties are noticeably reduced, and orientations towards education cuts are barely significant.

The conclusions, therefore, to be drawn from the preceding analysis are as follows: first, the most important explanation for Albertans’ continuing support of the government is their strong approval of leadership of Ralph Klein along with their relatively weak approval of Nancy MacBeth. Second, Albertans continue to support the Klein government because they see the forest as well as the trees; that is, they support the gain of deficit elimination more than they oppose the pain of budget cuts to programs. And third, Albertans continue to support the government because they have strong Conservative ties, although the relative weakness of this latter factor lends support to other findings that suggest that long-term party affiliations are less important today than once they were. Conversely, social group affiliations and the performance of the opposition Liberals do not seem directly relevant overall.³

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