Ralph Klein has gone and it is time to retire Ralph's World. Thanks to all of you who have supported this venture by contributing material and through your comments. It has been fun.

Should we get another blog underway? Let me know your thoughts by e-mailing me at johnnyslow@gmail.com.

John Slow
January 1, 2007

Monday, January 01, 2007

Ralph Klein's Legacy 

Now that Ralph Klein has officially handed things over to Ed Stelmach, there will be a spate of "Ralph's Legacy" stories. Some will praise him for eliminating the provincial debt. Others will condemn him for his shoddy treatment of those who couldn't take advantage of the Alberta Advantage; the homeless, the poor, the disabled, the seniors on fixed incomes.

Ralph Klein brings to mind another popular, long serving Premier, Joey Smallwood of Newfoundland. Joey was Premier there for 23 years after bringing Newfoundland into confederation in 1949. Both Joey and Ralph had a money machine given to them that kept them in power for years. In Ralph's case he had God given oil in the ground and the OPEC cartel to keep the prices jacked up. Joey tapped into Canadian wealth and brought old-age pensions, family allowance, unemployment insurance, and other federal support programs to his province when they joined confederation.

What they had in common was a financial windfall that they both took credit for. Joey had money from the rest of Canada to dole out; Ralph had oil from God and a high market price courtesy of OPEC. This kept both of them in power for many years and to say a bad word against either of them in their own province was considered heresy.

Neither had any business experience and only minimal education. This was perhaps their downfall. In the presence of high powered, well-educated and persuasive business men that surrounded them over the years they easily bought into schemes that sounded good at the time but that proved to be financially disastrous. Unfortunately their legacies will suffer for this.

Joey's downfall was his giveaway of the profits from Labrador's hydroelectric power to Quebec. The upper Churchill contract, signed in 1969 and not due to expire until 2041, awarded Hydro-Quebec Churchill Falls power at a low, fixed rate, without the benefit of an escalator clause. For details click here. Joey didn't understand that the price people were willing to pay for electricity might soar so he didn't provide for it in the contract and Quebec has been reaping a windfall profit since electricity prices took off in the mid 70s.

Ralph's worst venture into the world of high finance came in 1996 when he presided over the oil sands royalty regime agreement. This was implemented when the price of oil was low and did not include provision for the price of oil rising. So today when the price of oil goes up a dollar, the oil companies get 99 cents additional profit and the Alberta Government; that's you and me; get a penny. For details click here. What a shame! Billions of dollars a year that could have been used for government programs and/or tax relief. Instead Ralph gave it all away to the oil companies.

Ralph Klein will have to be content with the "cocoon of love" that his Conservative MLA's profess to have for him and awards from groups that benefited from infusions of tax payer money such as Horse Racing Alberta and others.

He could have done so much more.

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