Alberta Premier Redford Resigns Amid Expenses Scandal

Alberta Premier Alison Redford, facing mounting criticism over travel expenses and her leadership, will step down this weekend as head of Canada’s fourth most-populous province.

“I am not prepared to allow party and caucus infighting to get in the way of building a better future for our province,” Redford, 49, said at the provincial legislature late yesterday. “Too much time has been spent over the last few weeks on questions of loyalty and allegiances and character.”

The departure leaves a political void for the governing Progressive Conservative party, which has ruled the oil-rich province in Western Canada for 43 years. Redford, Alberta’s first female premier, steps down less than three years after being named leader, and will remain a member of the provincial legislature. Lawmakers from the party chose Dave Hancock, deputy premier, as interim leader.

Redford’s resignation, effective March 23, follows the departure of two caucus members who became independents after raising questions about the premier’s expenses and her leadership. Redford billed the province C$45,000 ($40,000) for travel costs to attend the funeral of former South African leader Nelson Mandela. After first defending the trip, she apologized and later repaid the expenses.

Government Planes

That failed to lift public support for Redford, according to a ThinkHQ Public Affairs Inc. poll released yesterday. Redford’s support fell to 18 percent according to the survey, the lowest among party leaders in Alberta, with 70 percent saying they’d be less likely to vote for the Progressive Conservatives due to the expense controversy.

Redford also repaid costs associated with flying her daughter and friends in government planes, and her office came under fire for increasing its annual budget after online travel receipts showed a staff member regularly billed the province to stay at a pricey Edmonton hotel.

“The sign of a successful government and a successful political party is the ability to understand what Albertans want,” Hancock said, in televised comments to reporters in Edmonton.

Female Premiers

Redford was part of a group of female premiers in Canada who controlled governments representing the majority of Canada’s economy and population, with Ontario, Quebec and British Columbia also run by women leaders. Kathy Dunderdale was also part of that group until she resigned as premier of Newfoundland and Labrador in January after a party member defected to the opposition, citing her poor handling of power outages after a storm.

Redford took over from former Premier Ed Stelmach in 2011, capturing the party leadership as an underdog and outsider. Her party was re-elected in 2012 with a 12th consecutive majority government, defeating the Wildrose Party.

Voted in as a centrist, Redford couldn’t win support from a caucus dominated by right-wing men, said Keith Brownsey, a political science professor at Mount Royal University in Calgary. The expense scandal gave the caucus an excuse to push Redford out after she failed to consult talented legislators or deliver on some campaign pledges, he said.

“We can’t just say it was the rednecks in the party, the sexism of the members, their turn to the far right,” Brownsey said in a phone interview. “She did a lot of this to herself.”

Resource Revenue

The last sitting Alberta leader to see approval ratings under 20 percent was Don Getty, the premier from 1985 to 1992 who was grappling with a struggling economy, successive budget deficits and plunging oil and gas prices, according to ThinkHQ.

The Alberta government said this month it will post a C$1.09 billion surplus from higher resource revenue and corporate taxes in the year starting April 1. The province, home to the world’s third-largest crude reserves, will see its economy expand 3.7 percent in 2014, budget documents show. That compares with national growth of 2.3 percent, according to the median forecast in a Bloomberg survey of economists.

The province’s finances are benefiting as higher prices for Alberta’s heavy oil boost royalties. The crude’s discount to the main U.S. benchmark narrowed to $19.25 a barrel today, from $42.00 less than West Texas Intermediate oil in November, according to figures compiled by Bloomberg.

‘Weeks Ahead’

Redford’s decision to resign came just one day after Jim Flaherty, one of Canada’s longest-serving federal finance ministers, announced he would step down immediately to seek work in the private sector.

Redford made no comments about a successor in her address, saying the Progressive Conservative caucus and party “will have a decision to make in the weeks ahead.”

The Progressive Conservative party board of directors will next meet on March 24, Jim McCormick, party president, said in a statement late yesterday, calling the last four weeks “difficult” for party members. The party’s constitution requires that a leadership contest be held between four and six months after a leader resigns.

Contenders for Conservative Party leadership, according to Mount Royal’s Brownsey, may include Alberta’s Justice Minister Jonathan Denis, Minister of Service Doug Griffiths and Finance Minister Doug Horner. Government outsiders also on the list include Stephen Mandel, Edmonton’s former mayor, Jim Dinning, a former Alberta Progressive Conservative legislator and Jim Prentice, the former federal Conservative cabinet minister who is vice-chairman at Canadian Imperial Bank of Commerce.

While a major policy shift is unlikely with Hancock as interim leader, investors are right to regard Alberta as somewhat unstable after Redford’s departure, Brownsey said. “We’ve had three premiers in less than eight years,” Brownsey said. “It illustrates a political instability that doesn’t do investment any good.”

Keystone Pipeline

The most prominent international file for Redford was advocating for U.S. approval of the Keystone XL pipeline, and she traveled often to Washington to press for its approval. Redford’s departure coincides with the appointment of Joe Oliver as Canada’s new finance minister, removing him from the natural resources portfolio where he also promoted the project.

The $5.4 billion TransCanada Corp. (TRP) proposal to link rising volumes of oil-sands crude with Gulf Coast refineries, which has raised the ire of environmentalists who say it would accelerate climate change, was first rejected by President Barack Obama over environmental concerns with its path through Nebraska. A revised pipeline with a new route is now being reviewed to determine whether it’s in the U.S. national interest.

The Alberta Progressive Conservative party’s ability to recover lost public support under a new leader before the next election may hinge on bringing in an outsider, Brownsey said.

“It’s two years away and anything can happen in two years but the prospects don’t look good,” unless an outsider is voted in, Brownsey said. “The others in cabinet will not be able to revive the party in the polls.”

To contact the reporter on this story: Rebecca Penty in Calgary at rpenty@bloomberg.net

To contact the editors responsible for this story: Paul Badertscher at pbadertscher@bloomberg.net Chris Fournier

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