Part II of this interview appears in the November 2004 issue of The Metropolitan Corporate Counsel.
Editor: In 1988, when you were Mayor of Calgary, the city hosted the world at the Winter Olympics. That must have been a wonderful experience for you. And challenging?
Klein : The Olympics were interesting, and challenging, and tremendously exciting! I'll never forget the enthusiasm with which Calgary, and all of Alberta, embraced the Olympics and the many guests who came to the city during that time. Whenever a city hosts an event as big as the Olympics, there are going to be lots of challenges. When you first receive the rights to host the Olympics, the actual date is years away, and you think you'll have lots of time to deal with all the issues that will come up. But before you know it, the event is on the immediate horizon, and you're dealing with looming deadlines, last-minute snafus, and lots of people with competing demands. However, none of that takes away from the pride and excitement that comes with having the eyes of the world focused on your city. Calgarians did an absolutely fantastic job in delivering a flawless event. It was a time in Calgary's history that I'll never forget.
Editor: You have been at the head of Alberta's provincial government since December of 1992. One of your early goals was a debt-free Alberta. Please tell us why you considered this such an important goal at the time you took office.
Klein: I've often said, Albertans are my boss and it was Albertans who said, "Get your fiscal house in order, get rid of deficits and get rid of the debt." That's exactly what we've done. A decade ago, the debt for every man, woman and child in Alberta was $8,400. Today it's zero. By aggressively paying down the debt, we've freed up over $1.4 billion in debt servicing costs. That money has gone right back into Albertans' priorities like health and education. Debt servicing costs are the single biggest expense for the federal government right now. That's money you and I won't benefit from in the way of better services from Ottawa.
Editor: In July of this year, your government announced that the goal of a debt-free Alberta had been obtained. What does this mean for the future of the province?
Klein: I already mentioned the $1.4 billion we've saved in debt servicing costs. Eliminating the debt will save us another $150 million annually in debt servicing costs that we can invest in other areas. This is an achievement that was shared with all Albertans and the government believes Albertans should have a say in what happens next. We've distributed a survey called It's Your Future to all Alberta households in which we've asked folks to rate their priorities and give us their own ideas on what Alberta's future should look like. We'll be reporting the results back to Albertans some time in October.
Editor: Obviously, the province's revenues from oil and gas contributed to its ability to pay down and then eliminate its accumulated debt over the past ten years. When world oil prices are high, Alberta prospers, but it may face tough times when oil prices drop - as they did in the mid-80s. What steps are you taking now to mitigate the impact of falling oil prices on the well-being of Alberta's people?
Klein: Like all Albertans, every member of our government wants to make sure that Alberta never again goes through what it did following the drop in oil prices and the impact of the NEP in the 1980s. As well, other global forces can affect Alberta's fiscal health, as we saw following September 11, 2001.
We've taken a number of steps to shelter Alberta as much as possible from the rollercoaster ride of energy prices. Last year, our government established the Sustainability Fund. The fund, which always has at least $2.5 billion in it, was created specifically to help the province weather the impact of sudden revenue drops. If such drops lead to revenues becoming lower than projected in a given year, government can draw on the fund to ensure that spending priorities are met without having to borrow.
The Sustainability Fund is a big move to get us off that revenue rollercoaster. As well, government continues to work to help diversify Alberta's economy, through its new value-added strategy and through promoting (though not funding!) business and investment projects in non-traditional areas. While energy remains a fundamental of Alberta's economy, our goal is to make the economy less reliant on energy revenues over time.
Editor: Alberta's economy is a great deal more than oil and gas. Would you tell us about some of the other major industries? Forestry? Agriculture? Coal? Telecommunications? Tourism?
Klein: Alberta's future prosperity will be driven by the innovation and creativity of the province's entrepreneurs in a broad range of sectors. The agriculture industry is widely acknowledged to be one of the most productive agricultural sectors in the world, responsible for almost one-quarter of the total value of Canada's agricultural production. While still rich in the production of commodities, the industry has a solid and expanding value-added food and beverage processing sector. Alberta's commercially productive timber land base covers 35 per cent of the province and includes more than 2 billion cubic metres of growing stock. Alberta's manufacturing sector has more than doubled over the past decade, with a substantial portion of value-added growth driven by the province's resource industries. Alberta has a very productive refined petroleum and chemicals products sectors, along with strong machinery and fabricated metals industries. The Alberta government's per capita expenditures in research and development are among the highest in Canada. That commitment to excellence includes the creation of the Alberta Ingenuity Fund, which will provide long-term research and development funding in science and research. And, the University of Alberta is the site of the National Institute of Nanotechnology, expected to be one of the world's leading nanotechnology centres. Alberta is also a world renowned tourist destination, and home to five of Canada's 13 UNESCO World Heritage Sites. Incredible scenic beauty, world famous national parks, an incredible range of landscapes and safe, friendly cities form a solid foundation for our vibrant tourism industry. And the world will be hearing more about Alberta as government recently announced a significant increase in budgets for tourism marketing and development, starting in our Centennial year, 2005.
Editor: Under your leadership, Alberta's government has functioned with legally-mandated balanced budgets for many years. Please tell us about the connection between balanced budgets and investor confidence and strong economic growth.
Klein: Alberta consistently records the highest investment per capita figures among the Canadian provinces. While much of that investment is in the highly attractive oilsands sector, increased investment in energy, information and communications technology, utilities, tourism, and business services is expected to remain strong in the future. The benefits of being debt-free are obvious, both to Albertans and to entrepreneurs from around the world who are looking for great returns on their investments. Today, Alberta is poised to improve on its already strong investment attraction position, currently the highest per capita in the country.