Money, resources and politics in the North

Our Alaskan friends just put on a big show of democracy in action, with over 150,000 citizens voting on whether the oil industry should pay higher taxes, or enjoy lower rates to encourage future production.

Our Alaskan friends just put on a big show of democracy in action, with over 150,000 citizens voting on whether the oil industry should pay higher taxes, or enjoy lower rates to encourage future production.

Alaska’s oil companies also put on an impressive demonstration of money in politics, with the industry-backed “No” campaign outspending the “Yes” side by around 30-to-one. The “No” side raised roughly $13.5 million, an eye-popping sum for a political campaign in the North.

The vote was close: 52 percent versus 48 percent, a gap of just 7,000 votes. The campaign was a lively one, pitting Governor Sean Parnell, the oil industry and Alaska native development corporations against a strange alliance of Alaskan progressives and Sarah Palin. Palin positioned herself as the populist defender of Alaskans getting a fair share of their own resources, but some thought she was just mad at her successor for replacing the oil tax scheme which she put in place before she quit as governor.

According to the Alaska Dispatch News, as of July 21 the “No” campaign had raised over $10 million from the Alaska’s big three oil companies, who of course would benefit from lower taxes. Most of the rest came from other industry sources, although $673,000 came from six Alaska native regional corporations whose economic development corporations do a lot of energy work.

The Alaska native regional corporations gave more than just money to the campaign. The CEOs wrote a thoughtful public letter in July, saying it was one of those “times in Alaska’s history when the First Alaskans have felt the need to speak with one voice for our future.” They also showed a gift for a catchy headline, saying that the way a high-tax regime maximized short-term tax revenues but hurt the economy in the long run was because it was “like taking all of a salmon run.”

I was in Alaska the weekend before the vote and noticed that the only campaign signs were for the “No” side, even though the panhandle is less oil-friendly than the rest of the state. My Alaskan friend pointed out they were the only ones with money.

The ADN report mentioned above said that Vote Yes! Repeal the Giveaway only spent around $100,000. It got $20,000 from an Alaskan grocery store magnate and $10,000 from the state employee union. It even had two staff at one point, although one had to resign for an over-the-top attack on Democratic ex-governor Tony Knowles for supporting the industry side.

The “No” side’s $13.5 million works out to over $18 per Alaskan. To put that in perspective, the spending by all three of the biggest Yukon political parties in the 2011 election was only half of that.

In fact, the $365,237.18 that the Yukon’s three big parties spent in 2011 would literally be a rounding error in something like Alaska’s “No” campaign.

The Yukon Party’s winning campaign in 2011 cost about $140,000. Running a losing campaign cost the NDP only $8,000 less, while the Liberals spent around $90,000 to come in third.

I looked through the list of major donors for the Yukon Party in 2011 looking for resource industry donors. It’s the Yukon so anything over $250 will get you on the list. Unlike Alaska, there were no major oil companies or First Nations development corporations. There were about a dozen mining companies – mostly small ones from Vancouver I had never heard of – giving a total of $52,000. The biggest contribution was $10,000, while most were a few thousand bucks.

There were also contributions by local construction companies and diamond drillers, as well as $21,000 in cash from various numbered companies. Some or all of these could benefit directly from resource development.

There was also $16,356 in in-kind contributions from a local aircraft company and $2,313 in sandbags from one of the Yukon’s sandbag magnates.

No mining or oil companies gave money to the Liberals or NDP, although the latter did get $37,500 from various unions who might have members in the resource sector. Nor did the sandbag industry give the orange or red teams anything.

All this makes the outcome of the 2011 election a bit clearer. Not only did the Yukon Party have the money to buy more signs, but voters could also see them better since the sandbags stopped them from blowing over in the wind.

By Alaskan standards, the numbers are remarkably small. They are also remarkably small compared to the size of the Yukon’s resource potential.

There are a few possible explanations for this.

Perhaps Yukon politicians have higher moral standards than political parties in other places.

Or maybe Yukon politicians want the money, but are laughably inept at asking for it.

The biggest explanation might be that resource executives don’t see the value in political contributions, either because their projects are too small, or they don’t think Yukon politicians have the gumption or skill to fast-track a project through the regulatory process even if they wanted to.

If either of those things ever changes, Yukon political campaigns will be transformed. And not in a good way.

In the meantime, it is somewhat reassuring to know that our politicians are still spending most of their time chasing three-digit cheques and asking for free sandbags.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. You can follow him on Channel 9’s Yukonomist show or Twitter @hallidaykeith