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Premier Getty himself was defeated in his Edmonton-Whitemud riding by the Liberals, and he was forced to enter the legislature through a by-election in a safe Tory rural seat. The party ended up holding its 16 seats and opposition status, although its vote share dipped slightly to The major winners were the Liberals, who were now led by former Edmonton mayor Laurence Decore.

The Liberals campaigned on a platform of fiscal responsibility and open government, criticizing the PCs for their involvement in private businesses, the deficit and the growing debt. The Liberals ended up placing second in the popular vote with a solid The Liberals achieved such a result despite running a very low-budget campaign.

Between and , as federal Conservative support collapsed in Alberta, Reform quickly gained in strength and support. The Liberals were polling strongly, and other polls showed that an hypothetical provincial Reform party which never happened would be another very serious challenge to the Tories. Getty resigned in late , before the national referendum on Charlottetown and the release of a damning report on the AGT privatization. The PCs held a leadership election in November-December With over 52, votes in the first ballot and 78, votes on the second ballot, the PC election was a major success for the party.

On the second ballot, despite six of the seven other candidates endorsing Betkowski, Klein benefited from a surge in participation and soundly defeated her — 46, votes to 31, The government also passed the Deficit Elimination Act , which banned budget deficits after The Liberals had a very similar platform — also pledging to balance the budget, eliminate the deficit, cut spending, liquidate the AHSTF to pay off the debt and cutting subsidies to businesses.

However, the campaign was very much a two-way contest between the PCs and the Liberals, who believed that they had a real chance at victory. In the end, with Klein in command, the PCs were reelected but facing one of the strongest opposition caucuses in Albertan history. The PCs won The Liberals swept all seats in Edmonton, gained a foothold in Calgary with 3 members and broke through in north-central Alberta. Between and , Alberta lived through a period of deep austerity — cuts in government spending, the elimination of over 2, jobs in the civil service, cuts in funding for arts, education and healthcare programs.

In the civil service, the government introduced the principles of new public management which were in vogue in the early s, and it cut regulations across the board. In education it increased tuition fees, laid off teachers, leading to larger class sizes in , Alberta had the highest teacher-student ratio in Canada and cuts in special ed and extra resources. Sticking to its promises, Klein did not increase taxes and continued his original plan even when high windfall revenues meant that Alberta was out of deficit by FY the government had pledged in its budget not to spend windfall revenue and use it to pay off the debt.

Cuts in welfare were accompanied by declining employment standards — over the s, average hourly wages in Alberta failed to keep up with inflation and fell in real terms.

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The government privatized liquor retailing between and , selling or shutting down all government-owned liquor stores although the government retained warehousing and distribution responsibilities for wine, coolers, imported beers and spirits. Alberta remains the only province to have privatized liquor retailing.

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In , the PCs went into the election with a balanced budget, low unemployment, solid GDP growth, a plan to pay back the debt by and a record of low taxes. The Liberals were led by Grant Mitchell, who had replaced Decore not long after the election. Klein was reelected to a second term with a much more comfortable majority. The NDP, despite a lower share of the vote than in 8. The SoCreds, with 70 candidates, won a strong result 6. However, with an improved fiscal situation, spending increased beginning with the budget.

Beginning in , the PC government deregulated the electricity market, a controversial and poorly-handed policy decision which eventually led to significant rate increases for consumers by , Albertans paid the highest electricity prices in the country. The PCs deregulated the market without first ensuring adequate supply, leading to an unregulated oligopoly. On top of that, the government also cut corporate taxes and renewed its commitment not to introduce a flat tax. Despite widespread popular opposition, the bill was passed by the legislature in April Despite Bill 11 controversies and electricity deregulation, the PCs remained very popular.

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The opposition was reduced to a weak rump: the Liberals lost the most heavily, falling to The SoCreds, who had made a strong run in , collapsed to 0. Unemployment, the lowest in Canada, fell from 5. Alberta experienced strong economic growth during this time period, allowing for strong job creation numbers.

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High oil prices made developments of the oil sands even more profitable. Such investments allowed Alberta to rank near the top in Canada on several education and healthcare indicators. With booming revenues far exceeding expenditure growths, the Klein government tabled budgets with increasingly large surpluses between and The PCs ran on an uninspiring platform reminding voters of their accomplishments in paying off the debt and reiterating old planks — low taxes, deficit and debt-free, small government and investments in core fields.

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The Liberals were led by Kevin Taft, who had previously been a fairly high-profile consultant, researcher and author. The PCs, however, also faced a serious challenger on their right — the Alberta Alliance, founded in by conservatives and libertarians who wished to emulate the federal Canadian Alliance although the two parties were never affiliated. The Alliance also advocated for Alberta to take control of several key policy fields from Ottawa: unemployment insurance, pension plans like Quebec , immigration policy, a provincial police force and firearms legislation.

The Alberta Alliance won 8. The Greens won 2. Very high oil prices led to large surpluses in the and budgets, which allowed the government to deposit funds into the sustainability fund but also to increase spending, notably on infrastructure projects which were big spending areas in both budgets. Taxes remained low, and it continued bringing down corporate taxes — overall, corporate taxes in the province fell from In June , the government abolished the royalty tax credit, a program which allowed oil and gas companies to get a credit on their income tax returns for a percentage of the royalties paid.

Some residents and academics criticized the cheques, as some would have preferred to see the money used for tax cuts, the abolition of healthcare premiums or for spending on core areas. Prior to the election, Klein had announced that he would serve only one more term in office, but did not put a firm date on that.

Pressure mounted on Klein to set a firm date, and he finally announced in March that he would resign at the end of October , although the resignation would only take effect after his party chose a successor so in The drawn-out schedule for his retirement, along with his announcement that any cabinet minister who wished to run for leader must resign by June , generated controversy including within caucus and cabinet one minister was fired and suspended from the caucus.

He announced within days that he would resign in September, and the PC leadership race was held in November and December However, in the top-three preferential ballot second round, Stelmach — who had been endorsed by three eliminated candidates — won Oil sands production in Alberta had started to take off since , as a result of high oil prices which made extraction profitable and generous investment incentives from the provincial and federal governments.

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However, as oil sands production increased, so did criticism of the environmental impacts. Finally, the tailings ponds — byproducts of bitumen extraction from the oil sands — poses one of the most important environmental challenges. Stelmach was a vocal advocate of the oil sands industry in his province.

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One of the major projects of the Stelmach government was a royalty review — a major commitment he had made in his bid for the PC leadership. Alberta was receiving much less in royalties than other oil producers, notably Alaska and Norway, were. Oil sands royalties had been fixed in , at a time when the industry was nascent and required favourable conditions to get off the ground.

For conventional oil and natural gas, the new framework established a simplified sliding scales determined by prices and well productivity. The new framework was introduced in This was due both to the major drop in natural gas prices after and the new royalty framework for gas.

Although the province did get more in royalties from oil sands, the study faulted Alberta for its low royalty rate compared to other countries and Newfoundland and for pushing the Canadian price of oil below the European and US price. Following a throne speech in February , Stelmach called an election for March The PCs ran on a largely unexciting and uninspired manifesto, more pragmatic than ideological.

On the right, the Alberta Alliance — which was failing to take off the ground — had merged with an ideologically identical unregistered party the Wildrose Party in January and changed its name to the Wildrose Alliance Party. Although few people had thought much of Stelmach in comparison to his emblematic predecessor, Stelmach was able to win a landslide victory in the election.

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The PCs increased their vote by nearly 6 points to The Liberals and New Democrats both lost votes and seats, falling to The Liberals fell from 16 to 9 seats, while the NDP fell from 4 to 2. The Wildrose Alliance saw support fall to 6. The Greens won 4.

The election was also noted for its very low turnout: only After the election, the government controversially voted to award cabinet ministers and the Premier a pay increase. The government eliminated healthcare premiums as of January 1, In the summer of , with oil prices through the roof, the government revised its estimates to project a bigger surplus, but oil prices fell dramatically following the summer of during the global recession.

Ultimately, the government ran a deficit in However, overall spending fell in the budget — the first incidence of spending cuts since the budget. In , the government again used the sustainability fund to protect priority programs education, healthcare, support for the elderly and disabled and continued investments in infrastructure, while making cuts — mostly outside of frontline departments.

As Alberta slipped into recession in , the PC government faced an unexpected surge in support for the Wildrose Alliance. In a September by-election in the suburban riding of Calgary-Glenmore, Wildrose candidate Paul Hinman captured the seat — held by the Tories since — with In June, another defection gave them a fourth member and qualified them as a recognized political party in the legislature.

Wildrose support surged in the polls in late and early , increasing speculation that Stelmach could be forced out at the November PC leadership review. Stelmach announced in January that he would retire, and provided official notice of resignation at the end of May The PCs organized a leadership race for September-October Once again, the winner was not the early favourite.

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On the first ballot, Mar, the favourite, was miles ahead of the others with Morton and Orman, eliminated, endorsed Gary Mar. Even on the second top-three ballot, Mar retained a narrow edge with In the February budget, the government was unable to deliver on its previous target of balancing the budget by that date, although it now planned for a balanced budget in The legislature was dissolved at the end of March for an election on April 23, As the campaign progressed, Wildrose gained a consistent lead over the PCs — in fact, the rival right-wing party led in all polls conducted in April.

The PCs had taken flack from the right for the budget, which Wildrose argued was a campaign document with unrealistic revenue projections and reckless spending, accusing the PCs of depleting the sustainability fund and AHSTF. When in surplus, Wildrose said it would use the extra money to grow the AHSTF, pay off the debt, lower personal and business taxes and make investments in critical infrastructure.

The PCs promised to return to a balanced budget in with no new taxes and no service cuts; a good part of their platform repeated pledges from the budget or earlier legislative action — including improvements in student aid and grants, extra funding for education, improvements made to education laws etc. The New Democrats would have funded their projects by increased corporate taxes, increased income tax on the wealthy and changes to bitumen royalties.