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'Canada's Texas' just swung hard blue. Here's why that matters. (+video)

Canadians are stunned that Alberta voted out Conservatives in favor of the NDP, a left-wing party. The switch could have a profound impact on Canada's energy industry.

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    Alberta is sometimes referred to as the Texas of the north. It's politics have been unabashedly conservative, and like Texas, it's a major center of energy production. But the Alberta oil boom, which was already under mounting pressure from cratering global oil prices, is now at risk of becoming a bust after historic elections on Tuesday ushered into power the province's first left-of-center government in 44 years.
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On May 5, the province of Alberta saw one of the biggest political turnovers in Canadian history – though from outside the country, it's easy to misunderstand the significance. Though Alberta's long-time ruling party was ousted in dramatic fashion by a party known for its radical history, the newcomers are likely to take a measured approach as they change the course of the oil-rich province’s government and energy policies.

Q: What happened in Alberta?

Alberta is best known for immense oil fields, wide open cattle country and consistent conservative politics. But in a sudden turnabout, the leftist New Democratic Party ended 44 consecutive years of Progressive Conservative control of the province.

Rachel Notley will become Alberta's new premier, or top elected leader. Despite winning just 40 percent of the popular vote, the NPD won 53 of Alberta’s 87 electoral divisions, giving her the power to pass bills at will. Another outsider party, the anti-tax Wildrose Party, won 21 districts and will be the official opposition. The PCs fell to just 10 seats, a harsh end to Canada’s longest governing dynasty.

Q: Just how big a deal is this?

Really big. It's like Texas not just voting Democrat, but voting overwhelmingly for San Francisco Democrats. Alberta is known more for long guns and wide trucks, rather than social democrat policy wonks. It had been the only western Canadian province never to elect an NDP government. It is the home to Prime Minister Stephen Harper, who represents the Conservative Party.

Q: Why did Albertans suddenly vote out the PCs?

After so long in office, the PCs had alienated its core of fiscal conservatives with boondoggle spending and new taxes.

In the last election, in 2012, they almost lost to Wildrose, which only wilted at the last minute, after the party leader declined to distance herself from an ally’s anti-gay comments. (Eighty percent of Canadians say homosexuality should be accepted, according a 2013 Pew poll.)
 
This year, Jim Prentice, Alberta’s PC premier, was especially vulnerable because he had called an early election just after introducing an unpopular budget, pollster Mario Canseco wrote in the online news outlet National Observer.
 
Ian Urquhart, assistant professor of political science at the University of Alberta in Edmonton, says the timing worked for the upstarts. “That opened the door for a popular, charismatic leader to do something different than has happened before, which is vote for NDP,” he says.

Part of the change is demographic. Alberta is an increasingly diverse, multicultural, and urban province. Its largest city, Calgary, drew attention in 2010 by electing Naheed Nenshi, the first Muslim mayor of a major North American city. [Editor's note: The original version mischaracterized Calgary.]

The growing diversity is in part a result of the province’s economic success, says Brian Milner, a columnist with the Globe and Mail newspaper in Toronto. “They’ve drawn young people from across Canada, mostly young, urban people with same concerns as those in Toronto, Montreal, or other urban areas.”

Q: What sort of changes will the NDP bring to Alberta?

The NDP is very different on style. In a break from the old-boys club of the PC dynasty, most NDP legislators are new to government. Almost half are women.

On policy, Ms. Notley promised to raise the minimum wage by 47 percent to US $12.30 an hour. She has called for the corporate tax rate to rise from 10 percent to 12 percent. And she wants to hike taxes on high earners. She says she will support the provincial health system and boost funding for education. And she has called for an end to corporate and union campaign donations.

Q: What does Alberta's reversal mean for Alberta's energy industry?

A careful, but potentially significant review of the province's relationship with the industry. As in many commodity-producing areas, people in Alberta often complain that they are exporting raw materials, letting people at the other end of the pipeline reap much of the profit and many of the jobs. Notley says she wants the province to extract more value, possibly by imposing higher royalties or by refining more oil within Alberta.
 
But the NDP is trying not to alienate the oil industry. “While we may believe there is some new consideration that needs to occur, that it will be done collaboratively and in partnership with our key job creators in this province,” Notley said.

Hence, rather than call for higher royalties, she has called for a “review.” And she’s been vague about how much government muscle she will put into expanding refining. New refineries would compete with the tar sands for scarce engineers, and would actually increase the province’s dependence on its key industry.

In what may be the biggest impact for the US, she has said she will stop promoting the Keystone XL pipeline. That doesn’t mean Canada’s national government will stop its sales push, but it may reduce pressure for the project.

Q: What about Conservative Prime Minister Stephen Harper? Should he be worried?

Not really, Mr. Milner says.

“Unlike the provincial Tories, the national economy is in better shape than the provincial economy,” he says. “And the national electorate isn’t as disgruntled as the Albertan electorate.”

Canadians also tend to put different parties in their provincial and national capitals. In short: no immediate crisis.

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