Globe & Mail: Key affordability issues ignored by UCP and NDP in Alberta’s election
Originally published in The Globe & Mail on May 19, 2023
Affordability is a top concern for Alberta voters. So it is surprising that the United Conservative Party and the NDP have blind spots on this issue, especially when it comes to younger Albertans.
UCP Leader Danielle Smith will tout her party’s plan to cut provincial income tax rates from 10 per cent to 8 per cent on income under $60,000. But this maximum $760 tax cut is not the primary thing that will keep Alberta more affordable. A bigger influence will be two factors that distinguish Alberta from B.C. and Ontario: housing prices and the age gap in provincial spending. Both merit more attention during this election by all parties.
The average price of a home in Alberta is approximately $447,000. It requires about 10 years of full-time work for a typical young person to save a 20-per-cent down payment, up from six years in 1976. Despite this erosion of housing affordability, these prices still represent a major affordability advantage for Alberta when compared with Ontario and B.C., where the average home prices are $932,000 and $996,000, respectively.
As of May 19, housing is not even identified as one of the 27 priority issues on the UCP’s campaign website. With housing unaffordability soaring across the country, there are serious questions about fitness to govern when a party intends to rely on luck to stabilize housing prices, instead of careful and deliberate policy design.
A new study of party platforms shows the NDP is better on housing, but not great. While relatively strong at offering plans to scale up non-profit housing, the NDP largely ignores the policy levers available to address problems in the regular market, where the vast majority of residents find their homes.
For example, both the UCP and the Alberta NDP are silent about proposals to discourage foreign buyers, empty homes, money laundering or short-term rentals that reallocate housing as hotels for vacationers rather than preserving it primarily for those who work and study in the province. These policies became common in B.C. and Ontario after they lost control of housing prices and could be used to protect current levels of affordability in Alberta.
Both parties also overlook the value of supporting municipal efforts to produce comprehensive housing needs assessments that revisit low-density zoning to build more supply, including lots of rentals. Nor do the parties promise to encourage energy-efficiency objectives in new housing, so that efforts to reduce housing unaffordability work hand in hand with efforts to reduce the kind of extreme weather that now plagues the province.
Whereas the gap between home prices in Alberta and elsewhere represents an affordability advantage for younger residents, the age gap in provincial government spending does not. A study of the 2023 Alberta budget (from which all parties build their platforms) shows that the province spends approximately $16,700 for each of the 777,000 Albertans 65 and older – some $1,400 more per retiree than is budgeted in Ontario and B.C.
By comparison, the Alberta government spends just $9,900 for each of the 2.9 million Albertans under 45. The $6,800 spending gap between an Alberta retiree and a younger Albertan is larger than in Ontario ($6,600) and in B.C. ($4,800). Since this large gap was also evident under the NDP, both parties share accountability for why Alberta spends less per resident on elementary and high-school education than Ontario does and less on postsecondary education than B.C.
Doubling down on this age gap, Ms. Smith is offering a 25-per-cent seniors’ discount to court older voters. Since the slogan applies to small costs such as campground reservations and driving tests, it will have little impact on people’s wallets. Still, given that kids have higher rates of poverty than seniors, I can imagine many Alberta families wish they were promised the discount too.
The biggest source of savings for many younger people will be the $10-a-day child care promised by 2026 by the UCP. Much of the spending that pays for this fee reduction comes from Ottawa. Given that the Alberta Sovereignty Within a United Canada Act was Ms. Smith’s first piece of legislation as Premier, it’s ironic that her party platform relies on investments from the federal government to deliver the largest savings she offers to Alberta families with kids.
The Alberta NDP promise to add $1-billion to the federal money to expedite the implementation of $10-a-day child care over the next three years. This makes the NDP financially stronger on child care, although the party says little about how it will spend the extra money.
The history of retail politics shows that an easy-to-understand tax cut can be a successful electoral strategy. Perhaps it will work again for Ms. Smith. But promoting affordability requires more multifaceted thinking than a simple tax cut. Careful protection of the province’s housing affordability advantage, and a review of the age gap in provincial spending, will be key to protecting affordability for younger Albertans regardless of who wins the election.
Dr. Paul Kershaw is Founder, Lead Researcher & Executive Chair of Generation Squeeze. He is a policy professor in the UBC School of Population and Public Health, and Director of the UBC Masters of Public Health program.