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Alberta 43-Year Petro-Dynasty Wavers Amid Expense Probe

Cracks are forming in Alberta’s Progressive Conservative dynasty, which has governed Canada’s petro-province without interruption since 1971.

Already under attack by voters for posting six consecutive budget deficits even as the oil sands boomed and the province created most of Canada’s jobs over the past year, the ruling party now is facing a report published yesterday by the province’s auditor general that showed improper use of government planes by former Premier Alison Redford.

“They were already vulnerable without a scandal,” said Duane Bratt, political-science professor at Mount Royal University in Calgary, in a phone interview. “The auditor general’s report goes well beyond Alison Redford to the party as a whole. That’s going to be very difficult for them to overcome.”

The Progressive Conservatives have held power in Alberta more than twice as long as the Republicans have held the governor’s office in Texas. Danielle Smith, the leader of their main challenger, was four months old when the Conservatives gained power.

Redford was forced to resign as premier in March after a revolt in her caucus. In its first 35 years in power, the Progressive Conservatives had three leaders. A convention in September will hand the reins to the fourth leader in the past eight years.

Contenders are attempting to distance themselves from Redford, as the Smith-led opposition Wildrose Party prepares to try to unseat the government in the next election in 2016.

Mandela’s Funeral

According to the report, Redford didn’t follow government policy on the use of aircraft and used planes for personal trips as well as those associated with party business. Interim Premier Dave Hancock, Redford’s former second-in-command, has called for the Royal Canadian Mounted Police to investigate.

The Auditor General’s finding of improper jet-setting comes five months after Redford stepped down with her party sinking below 20 percent in polls amid criticism mounting over a trip to attend Nelson Mandela’s funeral last year that cost taxpayers about C$45,000 (C$41,000). Redford has since paid back the money and earlier this week stepped down as an elected member of the legislature.

Alberta’s solicitor general has forwarded the report to the RCMP and has arranged for the Ontario Attorney Generals’ Office to work on legal advice if the RCMP goes ahead with an investigation.

The RCMP will announce an investigation if it is determined that criminal charges will be pressed, Josée Valiquette, a spokeswoman for the RCMP said by phone from Edmonton.

‘Accept Responsibility’

“I recognize that mistakes were made along the way,” Redford wrote in a letter published Aug. 6 in the Calgary Herald. “In hindsight there were many things I would have done differently. That said, I accept responsibility for all the decisions I have made.”

Redford’s office didn’t respond to requests for comment by Bloomberg News

“With Ms. Redford no longer in caucus, the PCs will no doubt attempt to tell Albertans that all of their problems were her fault and hers alone,” Kerry Towle, a Wildrose member of the legislature, said at an Aug. 6 press briefing. “Ms. Redford might make for a convenient scapegoat for the PCs now desperately trying to cling to power.”

With the Conservatives looking for a new leader, policy for the jurisdiction in control of the world’s third-largest recoverable reserves of oil sits in limbo. A decision on whether to renew the province’s carbon tax and at what price has been put off.

Pipeline Bottlenecks

“It’s fair to say that for the past two leaders, the party has been adrift,” said Lisa Young, a political science professor at the University of Calgary. “Having governed so long, the party is focused on staying in power instead of thinking about long-term policy.”

Under both Redford and current leader Hancock, the province has failed to address the most pressing issue for the economy and its oil-industry mainstay: construction of new pipelines to get the ever-increasing volumes of oil-sands crude to market.

Redford made regular trips as premier to Washington in an attempt to persuade U.S. lawmakers to approve TransCanada Corp.’s (TRP) Keystone XL pipeline from the province to the Gulf Coast, which is still under review. And while Enbridge Inc.’s Northern Gateway line to the Pacific was given a green light by Prime Minister Stephen Harper, its construction and operation are still in question amid stiff opposition from aboriginal and environmental groups in neighboring British Columbia.

Wildrose Party

Offsetting the bad news for pipelines, Alberta’s finances have recently benefited from an improvement in heavy oil royalties. The discount to the main U.S. West Texas Intermediate benchmark yesterday narrowed to $19.25 a barrel from $42.00 in November, according to figures compiled by Bloomberg.

Meanwhile, the Wildrose party is attempting to expand its support from the rural districts of southern Alberta to the cities of Calgary and Edmonton, where immigrants and economic growth are changing the province’s cowboy image. The party currently holds 17 of the 87 seats in the legislature in the capital Edmonton.

The upstart party was formed in 2007 by some disaffected former Conservative party members. Smith, a 43-year-old former television host and newspaper columnist whose political tutelage came under the same University of Calgary professors instrumental in Prime Minister Harper’s rise to power, has challenged the Conservatives from the right.

Distancing Themselves

Smith narrowly missed forming a government in 2012 after scaring off urban voters during the campaign with questions about the science of climate change and her failure to condemn a party candidate who criticized homosexuals. During a leaders debate, Smith was reprimanded by Liberal leader Raj Sherman for confusing Alberta with Alabama.

Alberta is used to long runs for governments and radical changes of power. The previous governing party, the Social Credit, ruled the province for 36 years, overseeing a transition from agriculture to energy as the province’s primary industry. Before that, Alberta has only had two other governing parties after being carved out as a province in 1905 from former Hudson’s Bay Co. land.

Governing parties have typically been replaced by newly formed ones in the province because long-standing opposition is considered to have lost too many elections, said Preston Manning, a former member of Parliament from Alberta and leader of the now-defunct Reform Party and son of Ernest Manning, who was premier of Alberta for 25 years until 1968.

‘From Within’

“The challenge for the governing party is to renew from within,” said Manning, who now heads the Manning Foundation, a political think tank based in Calgary. “But each time you do it, it gets harder.”

Candidates vying for leadership of the party are scrambling to distance themselves from Redford. Thomas Lukaszuk, a former deputy premier under Redford, told an audience in Calgary this week that “no one is above the law.”

Jim Prentice, a former environment and industry minister in

Harper’s cabinet who then joined the Canadian Imperial Bank of Commerce as vice chairman, is widely seen as the front-runner in the race. Prentice, now on leave of absence from CIBC said Redford did the “right and honorable thing” by resigning.

To contact the reporter on this story: Jeremy van Loon in Calgary at jvanloon@bloomberg.net

To contact the editors responsible for this story: Jacqueline Thorpe at jthorpe23@bloomberg.net Edward Greenspon, Carlos Caminada

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