Mark Milke is an independent policy analyst and was the principal policy adviser to now-Premier Jason Kenney until the Alberta election in April. His newest book is The Victim Cult.
In the wake of the recent federal election that added fuel to a nascent Alberta separatist movement, and the pledge by Premier Jason Kenney to hold a referendum on equalization and revisit whether the province should remain in the Canada Pension Plan, the response from some corners has ranged from confusion to glib dismissals as to why many Albertans are angry.
I am a born-and-bred British Columbian who has spent half his life in Alberta. I know something of its political culture and present circumstances. Briefly, Albertans, as with others on the Prairies, have long possessed an entrepreneurial spirit and an openness to new ideas and political reform.
That combination explains why the early suffrage movement took hold in Alberta before anywhere else. It is why Alberta’s early ranchers, farmers and oil wildcatters, and everyone else until the recent energy boom ended in 2014, thought the future was wide open.
But this positive belief in a limitless future is now why many Albertans have reached peak frustration: They correctly grasp that their livelihoods and futures are being circumscribed by a minority of unrealistic politicians and anti-energy activists who want Alberta oil and gas dead.
To add insult to the relentless attack, it is hard-earned Alberta wealth that for at least a half-century, has paid for a greater share of Canada’s federal bills compared with any other province. As Robert Mansell and Tim Hearn from the University of Calgary’s school of public policy recently chronicled, Albertans have contributed $611-billion to Confederation on a net basis between 1961 and 2017.
Ontarians and British Columbians were also net payers ($723-billion and $121-billion, respectively) but the magnitude of Albertans’ contribution becomes clear from a calculation per family of four: $15,000 annually from Albertans since 1961 compared with $4,900 from Ontarians and $2,200 annually from a British Columbia family.
I’ve written multiple studies on federal transfers and well know why a portion of that imbalance is reasonable. (For example, when unemployment rates are low in a province, no one should expect inflows of employment-insurance payments to match EI outflows.) But there are issues with specific programs such as unreformed equalization that rewards provinces for not developing their economy while extracting wealth from those that do.
A useful example is Quebec. Its $4-billion surplus would vanish without $13.6-billion in annual equalization proceeds financed on a net basis by taxpayers in British Columbia, Ontario and Alberta. Yet, Quebec’s politicians routinely claim poverty, block in-province oil and gas extraction and also disparage Alberta energy as “dirty” as Premier François Legault did this past spring.
Alberta’s economy, employment picture and finances have been in a funk for five years while the rest of Canada recently flourishes, mostly owing to a booming U.S. economy. But the response to Alberta’s travails has been unsympathetic and often in error. Albertans are told by the uninformed that their troubles resulted from the 2014 oil price crash or that other parts of Canada have also suffered on occasion.
Except oil prices rebounded enough by 2016 that energy investment should have flooded back into Canada, just as it did in the United States. That didn’t happen. Capital expenditures in Canadian energy are still below 2014 levels.
That is a result of chronic attacks on Alberta’s own needed export pipelines to the south, east and west; former U.S. president Barack Obama’s creative stall on approval of Keystone XL for eight years (this while U.S. oil production doubled); a minority of First Nations leaders who opposed energy development; and the fact that since 2017, British Columbia’s NDP government opposed the twinning of Trans Mountain.
Another source of Alberta anger: Deliberate federal policy to injure Alberta. Prime Minister Justin Trudeau has long been clear that he wants to “phase out” Canadian oil and gas owing to the federal government’s climate concerns. That has shown up in his opposition to Northern Gateway and Energy East with the only exception being Trans Mountain. But Albertans see the federal purchase of that pipeline as a mere sop while Ottawa enacts onerous new legislation (Bills C-69 and C-48) that if ever applied to Ontario automobiles and Quebec aerospace and mining, would similarly chase investment away from those sectors, just as is occurring in Alberta.
Of additional irritation: The Prime Minister’s bias is out of touch with reality. Global oil and natural gas demand is increasing, not decreasing. The International Energy Agency forecasts energy demand will grow 25 per cent by 2040 with oil and gas consumption both rising until at least 2040 under any scenario. Yet, the Prime Minister sees Alberta as the problem, rather than say, China and India, where a sliver of progress on carbon emissions would do more than self-sacrificing Canada’s energy sector, the one that is six times the size of Ontario’s automotive industry.
Back to Prof. Mansell and Mr. Hearn and Alberta’s pains: They estimate that pipeline constraints have cost the Alberta government $40-billion in lost revenue since 2013. That’s equivalent to nearly one year’s worth of Alberta’s own-source revenues. Imagine if Ontario’s government was deprived of the equivalent – nearly $129-billion – because of politicians and activists outside that province.
Those are the realities. Yes, Albertans are angry. It would be remarkable if they had any other reaction.