EDMONTON – Premier Alison Redford has given a provincial political appointment to a veteran Conservative insider who allegedly brokered a $430,000 donation from Oilers owner and billionaire Daryl Katz.

Media reports quoting unnamed sources suggested Wednesday that Calgary businessman Barry Heck is the party fundraiser who persuaded Katz to make the donation now under investigation by Alberta’s Chief Electoral Officer.

Redford has named Heck chairman of the Alberta Economic Development Authority.

Heck has declined to comment on the allegations, citing the ongoing investigation.

“I’m not saying I did or I didn’t … I’m neither confirming nor denying,” Heck said in an interview Wednesday. “I’ve got nothing to say on it.

“I’m not involved in the investigation, that’s between the party and the chief electoral officer. I haven’t been asked to give a statement by the investigators.”

Heck said he has known Katz since the two attended law school at the University of Alberta three decades ago, and added he has long worked to raise money for the governing Tories.

“I have nothing to hide,” Heck said. “I make no secret of the fact that I’ve been a volunteer for the PC party for 30 years, going back to Premier (Ralph) Klein and before that.

“I’ve been financially supportive of various candidates and constituencies in the PC party for many years. It was well known I was involved in the premier’s leadership campaign.”

Heck also confirmed he made a $5,000 contribution to Redford’s leadership bid in 2011, and said he has worked “door knocking, delivering flyers and picking up pizza” in her Calgary-Elbow riding for years.

He took umbrage at suggestions he had somehow received a “plumb post” in exchange for his volunteer efforts, noting the position is unpaid.

“I’ve been asked to serve and to try, to the extent I can, to help our province,” Heck said. “That’s what this is about for me.”

Redford announced Heck’s appointment in a lunch hour speech to the Canada Club at the Fairmont Royal York Hotel on Wednesday. She said the allegations against him are unfounded.

“Barry Heck has been a volunteer in our party for many years. He was someone who decided he wanted to help our party raise money. That’s what we do in a campaign,” Redford said.

“We have right now in Alberta the chief electoral officer who’s taking a look at this. We’re going to leave that there. I’m entirely confident with respect to everyone’s conduct. I’m not going to stop the business of government because of unfounded allegations that people are making for political purposes.”

During the fall sitting of the legislature, the Globe and Mail published a story quoting an unnamed source who said Katz wrote a single $430,000 cheque to Progressive Conservative Party during the spring provincial election.

Alberta election laws prohibit an individual from giving more than $30,000 to a single party during an election campaign.

The source alleged the single cheque was split into smaller amounts that were attributed to people affiliated with Katz, in an alleged effort to skirt the election laws.

Chief Electoral Officer Brian Fjeldheim launched an investigation into the allegations and hired retired Court of Queen’s Bench Justice Ernest Marshall to oversee it.

Fjeldheim has not said when the investigation will conclude.

With files from the Calgary Herald

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EDMONTON – Alberta’s Progressive Conservative party has asked the province’s chief electoral officer to reverse orders mandating that the party repay thousands of dollars in illegal donations tied to post-secondary institutions and local governments.

Progressive Conservative Association of Alberta president Jim McCormick said Wednesday that the party returned $6,900 to prohibited donors where ordered by Elections Alberta in cases dating back the last three years.

But the party feels it is unfair for the political organization to pay for mistakes by individual donors who later went back to prohibited organizations and asked to be reimbursed. Under Alberta’s campaign finance laws, political parties are prohibited from knowingly receiving money via organizations funded by taxpayers such as school boards or town councils.

“We acknowledge the spirit of the act where we do not want to be the beneficiary of public dollars back as donations, period,” McCormick said.

“However, we accepted this money from individuals primarily in good faith as donations directly from them. We think the onus should fall more on those individuals rather than either the prohibited corporations or ourselves.”

McCormick spoke to the Journal one day in advance of Elections Alberta posting the results of three years’ worth of investigations into breaches of the province’s Election Finances and Contributions Disclosure Act. The information will be posted on Elections Alberta’s website.

Up until MLAs approved a new version of the act in the fall sitting of the legislature, Elections Alberta said it was prohibited from publicly releasing the results of its investigations, including identifying groups or parties sanctioned or censured by the office.

Those disclosures will only go back as far as Dec. 10, 2009, however, since the new Elections Act imposes a three-year limit on how far back the information can go.

The issue of illegal donations has dogged the PC party for more than a year as documents came to light showing that organizations like municipalities, school boards and universities contributed to the party over the years, often through tickets for fundraising events like golf tournaments or dinners.

In 2012, former party president Bill Smith apologized after the party returned $850 to Calgary Laboratory Services, a branch of Alberta Health Services. Smith said the PCs thought it was still a private company.

Smith also said last spring that the party repaid about $9,200 voluntarily to about a dozen different local governments and educational institutions in the spring. Those included donations from Medicine Hat, the County of Grande Prairie No. 1, the towns of Fahler, Okotoks, High River and Redcliff and Athabasca University.

Although the party voluntarily returned money in the spring, McCormick said the organization now feels it must stand up for a principle. In two cases where the party was advised by Elections Alberta to voluntarily return the money, it has not, he said. Both cases involve an $850 donation.

McCormick said Wednesday that in all the cases to be documented Thursday, with the exception of the Calgary lab, the party issued a tax receipt to an individual who later went back to a prohibited corporation to be reimbursed without the PCs knowing.

In a letter to Chief Electoral Officer Brian Fjeldheim dated Jan. 21, McCormick said that it is the individual donors who should be ordered to return the money.

“We think it would be unfair for any return order to cause the association to be impliedly seen as having somehow offended the Act in these cases when, in truth, the only breaches have been by those who, by obtaining reimbursement of apparently proper contributions, participated in prohibited contributions and then took the benefit of them,” McCormick wrote.

Fjeldheim said he did not want to speak in detail about the investigations until Thursday, but he did say that his rulings were firm.

“I believe the purpose of the act is to ensure the political entities can’t take the benefit of prohibited corporations contributions, even in circumstances where the party may not itself have contravened the act,” Fjeldheim said.

“I can understand how this can happen. But having said that, I still feel the purpose of the act is to ensure transparency and integrity. I believe that can be achieved, if these indirect ones being accepted in contravention of the act, if they’re returned.”

McCormick shared details of the 10 cases connected the main PC party with the Journal on Wednesday on the condition that the paper not identify the prohibited corporations involved, unless they had previously been made public, such as the Calgary Laboratory Services case.

The party feels that information should be released by Elections Alberta, he said.

Elections Alberta also will report that 17 PC constituency associations had to collectively repay $9,905, according to the party.

According to documents provided to the PC party by Fjeldheim, the donations all related to tickets purchased to attend various Leaders’ Dinners. Seven took place in 2010 and three in 2011.

McCormick said the party already takes pains to ensure donors know the rules about where the money can come from, but will be doing even more in the future.

Wildrose MLA Shayne Saskiw, the former executive director of his party, said that he does not expect his party to be identified by Elections Alberta as receiving illegal donations.

Whether ordered or advised, Saskiw said the PCs should be repaying any illegal donations.

“If there is any taxpayer dollars, directly or indirectly in the PC bank account at the party level or constituency level it should be repaid,” said Saskiw, MLA for Lac La Biche-Two Hills-St. Paul.

“It is mind boggling they are having this so-called discussion with the chief electoral officer.”

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EDMONTON – The Redford government has quietly released the results of a six-month, $450,000 public consultation that will govern the overhaul of Alberta’s social service programs.

The sweeping survey found Albertans’ top priority was reducing child poverty, followed by eliminating family violence and homelessness.

The 37-page report was posted online Friday by Human Services, the new super-ministry that oversees every major social program in the province, including those for unemployed, disabled and homeless Albertans, as well as children in care.

The government did not publicize the release of the report, which details Albertans’ priorities for the remaking of the province’s social policy framework — a key plank in Premier Alison Redford’s election campaign.

Albertans who organized meetings and promoted the consultation were disillusioned by the Redford government’s decision to bury the results on an obscure Internet page.

“These are all people she appealed to when she wanted to win the (Tory) leadership and when she wanted to win the election,” said Bill Moore-Kilgannon of Public Interest Alberta, a left-leaning advocacy organization that hosted a meeting of 16 contributing groups on Wednesday.

“This can’t just be a consultation exercise that gets shelved because it’s politically inconvenient and economically inconvenient — she has to deliver on these promises.”

Some political observers attribute Redford’s 2012 election win to votes from progressive Albertans who support her commitment to improved social services, including her promise to end child poverty in five years.

“If you go to the front of the social policy website, it’s not even there,” Moore-Kilgannon said. “I just think the politics here is they want to downplay any expectation of substantive changes to our social policy and that’s a real shame, because there’s so much that does need to change.”

After taking office in October 2011, Redford combined four existing government departments to create Human Services. In her mandate letter to Minister Dave Hancock, she asked him to create a social policy framework to guide the redesign of social policy programs in Alberta.

The first step in that process was public consultation.

More than 14,000 Albertans took part in nearly 400 meetings in 59 cities and towns across the province, and more than 5,000 people filled in an online survey.

Human Services spokesman Craig Loewen said the consultation cost taxpayers $455,100, including $127,100 for community discussion grants and $325,000 for consultants. The figure does not include salaries paid to government staff who worked on the project.

“Given the reach of our consultations … this was money well spent,” Loewen said in an email.

“There was also a lot going on last Friday, being the day after the Premier’s televised address – so the preference was to have more focus on it this week. … Minister Hancock will be publicizing the recent summing up document when he gets back to the office.”

Cabinet will review and endorse the framework over the next two months, and the department will then “begin engagement on identified strategies,” the report says.

Albertans also told the government they believe promoting good health is as important as treating illness.

“Many respondents believed that poverty needs to be eliminated,” says the report, titled Summing Up: Albertans’ Perspectives for a Social Policy Framework.

“In particular, many respondents were concerned about child poverty and its progression to chronic poverty. Many felt that a preventive approach should be used to address poverty.”

NDP MLA Dave Eggen said the government’s handling of the report shows Redford is not prepared to deliver on the promises she made during the provincial election.

“This is something that Alison Redford has to answer for,” Eggen said. “You cannot balance the budget on the back of Alberta’s most vulnerable people … I don’t know why she is so attracted to regressive politics, when Albertans expect something better.”

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EDMONTON – Albertans will not be forced into fixed-rate electricity contracts, and government will take steps to control costs on major new transmission lines now under construction, Energy Minister Ken Hughes said Tuesday.

Hughes also predicted that residential power bills would go up “very modestly” in the next few months as utility companies begin to recover administration and other non-energy costs that were frozen for the past 11 months while the Retail Market Review Committee produced its report.

Hughes noted he does not have a fixed contract himself and is among the 65 per cent of Albertans still preferring to pay the regulated-rate option for electricity — a fluctuating price approved each month by the Alberta Utilities Commission.

“It’s important to continue to provide Albertans with choice,” said Hughes.

Hughes also said until he became energy minister, he didn’t take time to study his electricity bill and work out which was the best deal.

“Like most Albertans, I never determined there was enough time in my day to actually take the time to make a decision,” he said.

Hughes announced several other steps to improve consumer protection and stabilize power prices — though critics said whether those steps will be effective depends on the details to be worked out later by a new MLA committee.

Companies like Edmonton-owned Epcor that offer the regulated-rate option will be allowed to buy electricity up to 120 days ahead, as opposed to the 45-day lead time currently in effect.

That could be a key factor in avoiding sudden price spikes such as occurred a year ago when prices jumped to record rates, said Epcor’s Doreen Cole, vice-president of electricity services.

Epcor is also pleased that the government decided to maintain the RRO, despite the fact the Retail Market Review Committee recommended it be abolished.

Cole also noted that Epcor customers will see 25 cents more a month on their bills for about six months to recover the costs of the freeze of ancillary costs.

Hughes said the province’s utilities advocate, a consumer office currently under the energy department, will be more independent and “will have more teeth” — though he declined to say how that might be achieved. That will be up to the MLA committee he will appoint at an unspecified date.

He also announced measures to strengthen the Alberta Utilities Commission’s powers to scrutinize costs of building new transmission lines when the companies apply for rate increases to cover those costs.

When companies apply for a rate increase, the onus will be on the companies to justify the costs, rather than on consumers to show costs are unreasonable, he said.

In addition, the government will direct the AUC to take steps to spread the cost of new transmission lines over many years, said Hughes. That directive comes instead of proceeding with a promised inquiry to look at how to amortize transmission costs.

“This current generation is not going to foot the entire bill for lines future generations will also use,” he said.

There is a “big gain for consumers” in giving the AUC more oversight of construction costs of new transmission lines, said Vittoria Belissimo of the Industrial Power Consumers Association of Alberta.

“That is a huge win so we can identify problems in advance,” she said. “ A lot of expenditures are not being incurred prudently and those costs deserve a test.”

Consumer lawyer Jim Wachowich says the package of reforms show the government is “attuned to the issue” of electricity prices and the need to make utilities more accountable for costs that go on the customers’ bill.

But it’s not clear, for instance, whether the stronger oversight measures will apply to the two new north-south transmission — projects of $3 billion — already underway.

“Huge and significant costs are already being talked about,” said Wachowich.

“Are we closing the barn door when the horse is out — or can we catch the horse? We need some clarity,” said Wachowich.

In its 390 page report, the Retail Market Review Committee called for an end to the regulated rate option which they called “a significant impediment” to bringing more retailers into the market.

But Joe Anglin, Wildrose critic, said the electricity system “does not need more middle men” in a retail market. Customers should have direct access to wholesale prices, he said.

Anglin also praised the government for shifting the onus onto companies to prove their costs justify rate increases. But he noted there are few challenges to those costs, as the government limits funding to interveners.

“So it’s not a balanced field,” he said.

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CALGARY — The $6-billion revenue shortfall in the coming budget year is finally confirmed by Premier Alison Redford. She calls this the “bitumen bubble,” although it seems more like a crater.

Apart from that one fact, there was disappointingly little detail in Redford’s televised speech Thursday night.

Her strategy for tackling the province’s immense challenges remains murky — not just to us, but perhaps to her as well.

Next month, she’ll hold an Alberta Economic Summit to consult “industry experts, business and not-for-profit sector leaders and academics from our colleges and universities.”

We won’t get all the answers in one day, she added, but “it will allow us to continue the conversation.”

But really, how long can this yakking go on, and how useful is it on the virtual eve of the budget?

The date has already been announced — March 7. There’s little chance that a summit held a few weeks before will alter decisions already being made by politicians and bureaucrats.

This summit is sure to be a political exercise more than an economic one. If you care to bet, put your money on a stacked consensus that there must be some cuts, but more borrowing.

Cuts there will surely be. Even Alberta cannot swallow a $6-billion revenue loss without serious pain.

“Some programs and services will change,” the premier said, “especially those that are not sustainable over the long term.”

The language was vague, as usual, but the meaning is clear enough.

It’s highly likely, according to government sources, that smaller programs within departments will be cut back or wound up entirely.

Health care will get a small increase, apparently; but to afford that, plenty of this lower-level government clutter will have to go.

Ten days ago, the government appeared to be looking for about $1.5 million in operating cuts and $1 billion in capital project deferrals.

Now, there’s talk that the capital target may rise to $2 billion.

If that much is deferred, Redford could continue to argue that she’s “building the province” because nearly $5-billion worth of projects would still go ahead, many with borrowed money.

The capital and operating cuts would knock $3.5 billion off next year’s $6-billion revenue loss. Other factors may intrude, but the math suggests a projected deficit of some $2.5 billion in 2013-14.

Two things are inevitable in a revenue crunch that comes with a flat promise not to raise taxes — lots of borrowing, and government layoffs. Redford didn’t mention either in her speech.

She did say, however, that amid this fiscal crunch “we have a plan to once again begin investing a portion of our resource revenue in the Heritage Fund — the first time that will have happened in over 25 years.”

Every PC government has talked about this for 25 years. Not one has ever done it. To promise this now takes Redford’s rhetoric to the level of wishful thinking, if not actual fantasy.

Wildrose Leader Danielle Smith immediately attacked Redford for having no plan or vision. The whole problem was predictable the moment the PCs dropped their last budget before the 2012 election, Smith claimed.

One thing surely was predictable back then — the problem caused by this price differential between West Texas Intermediate crude and Alberta bitumen.

Along with Redford’s speech, the government released a chart that showed the differential was almost as wide last spring, during the budget debate and the election campaign, as it is today.

Back then it was never mentioned. Today it’s suddenly a crisis. If you feel somewhat manipulated, welcome to the fiscal support group.

Don Braid’s column appears regularly in the Herald.

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CALGARY — As Finance Minister Doug Horner warned Albertans of a no-fun provincial budget this spring due to a massive revenue shortfall, he acknowledged Monday the government will be billions of dollars off in its projected bitumen royalties this year.

Continuing a recent public relations blitz by the Tory government, Horner made the case at a Calgary Chamber of Commerce luncheon that the province is being slammed by the steeply discounted price for bitumen.

Speaking to reporters later, he suggested the price discount for Alberta oilsands versus benchmark light crude oil — a differential that exceeded $40 a barrel last month — will put the province more than $3-billion below its revenue projections in the 2012-13 budget.

“It’s not pretty,” he said. “This differential has widened out during a period of time where seasonality would normally indicate we would get a better result.

“We did not.”

Horner said an accurate picture of Alberta’s bitumen royalties will be seen in the government’s third-quarter financial report, to be released next month. The province had projected oilsands bitumen royalties of $5.7 billion this year.

Last spring, the Redford government said total resource revenues would top $11 billion — including $2.1 billion from conventional oil and $1.2 billion for natural gas. Both those commodities are also taking a hit because of lower-than-projected prices.

Horner told the chamber crowd the government is facing a “structural change in its key commodity” that requires belt-tightening in the medium term. Departments have been told to aggressively rein in spending ahead of the March 7 provincial budget, he said.

“This is not going to be a fun budget,” the finance minister added.

The speech came the same day the government released the results of its “Dollars and Sense” consultations on the provincial budget and long-term fiscal plan.

Among those Albertans who took part in panel discussions or responded to an online survey, most supported increased savings, borrowing for capital expenditures if it made financial sense, and weaning the province from its reliance on resource revenues — potentially through tax changes.

The government has been bedevilled politically by the question of whether it will look to new taxes — such as introducing a provincial sales tax or hiking the flat tax on income — to deal with the revenue shortfall.

Horner reiterated there will be no new taxes in the upcoming financial plan. He said there could ultimately be a provincial debate about tax measures, but only after the government has looked at all aspects of its $40 billion in spending.

“The first thing we do is look to our own house before I start digging into the pockets of those in your house,” he told reporters. “That’s something Albertans told us loud and clear.”

But Wildrose MLA Rob Anderson said the latest report is simply part of the government’s efforts to pave the way for future tax hikes and debt. He also castigated the PC government’s plan to borrow to pay for infrastructure.

“Borrowing for politicians is heroin. That’s what it is. Once will never be enough. They will borrow and they will borrow and they will borrow for every pet project they say is important,” he said.

Chamber of commerce economist Ben Brunnen said borrowing to finance capital projects can make sense as long as the government sets binding parameters on its debt servicing cost.

Brunnen said the message of Horner’s speech was good news for the city’s business community. “The provincial finance minister committed to no tax increases and also prioritizing government spending … as opposed to looking for different revenue sources,” he said.

With oilsands companies making investments expected to be worth about $23 billion this year, Alberta’s energy sector is attracting job seekers from across Canada, and the province’s population is forecast to climb to five million within two decades from 3.7 million.

To keep pace with the growth, Redford promised in last year’s election campaign to spend almost $4 billion on 50 new schools, 140 medical clinics and post-secondary education, a pledge largely based on growing oilsands royalties.

Lower revenues means “tax increases are going to have to come,” said George Gosbee, chairman of Calgary-based investment-banking company AltaCorp Capital Inc. “This is going to be a tough political decision.”

Other parties in the legislature said the Tories are avoiding the larger revenue issue, even while program reductions loom in the budget.

“Unless the government sobers up and deals honestly with its revenue problem, Albertans are going to face significant cuts to essential services,” said NDP finance critic David Eggen.

Liberal Leader Raj Sherman said the budget consultation study showed the government is out of touch with provincial residents.“Albertans understand you get what you paid for,” he said.

The tough budget talk comes as the province is embroiled in contract talks with the Alberta Medical Association and faces expiring contracts with the Alberta Union of Provincial Employees and United Nurses of Alberta. The Alberta Teachers Association is also in negotiations with government-funded school boards.

The PC government’s message of restraint is already raising concerns among public sector employees. Health Sciences Association of Alberta president Elisabeth Ballerman said medical care in the province is already feeling the strain in areas such as community care and ambulance service.

“There are worrying signs that point to vital health-care services being cut again — and we all know that when health care is cut, patients bleed,” she said in a statement.

With files from Bloomberg

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