This week’s release of Alberta’s Fair Deal panel report in many respects feels like a relic of pre-pandemic times, like handshakes or buffet dinners.
The panel wrote its report as the first wave of COVID-19 struck Canadians, but the political exercise was conceived before the virus dominated nearly every policy decision. Mandated to focus on ways of increasing Alberta autonomy and political influence, the panel held town halls between December and March – a period when the federal approval of the Teck Resources mine was still a major public debate rather than a historical footnote. The main thrust of the report is about halting “federal overreach,” a phrase that feels incongruous with a time when many individuals and businesses in Alberta have benefited from emergency aid programs originating in Ottawa.
The idea of withdrawing from the Canada Pension Plan to create its own system has also lost some of its lustre with the news that Alberta Investment Management Corp. (AIMCo), the public-sector money manager that Premier Jason Kenney wants to take over control of the province’s pensions, lost $2.1-billion in an investment strategy linked to volatility earlier this year.
But still, it’s a mistake to dismiss out of hand the report’s recommendations – or the political weight behind them.
Economic angst and the belief the province’s concerns continue to be mostly ignored by Ottawa – the key factors that led to Mr. Kenney and his United Conservative Party winning the 2019 election over the NDP – still exist. These issues could be exacerbated as the full financial impact of the COVID-19 shutdowns, including oil production cuts and layoffs from energy and dependent companies, become clear in the months ahead.
The timing of the release of the panel’s report is also meant to remind Ottawa that Alberta is not setting aside the issues of federal fairness, according to a senior government source. (The Globe and Mail is not identifying the source because they are not authorized to speak publicly about the issue.)
Ottawa has provided pandemic help directly to Alberta in the form of $1.72-billion to clean up orphan and inactive oil and gas wells. But the province is now trying to re-engage Ottawa on the long-standing issue of reforming the Fiscal Stabilization program, which could provide Alberta with billions of dollars more in federal funding.
The headline item of the Fair Deal panel report is its call for a referendum on equalization – the issue that truly rankles many Albertans.
Explaining how federal equalization works is complicated, but within the world of Alberta politics it has become shorthand for a grievance much broader than the program itself. The province has long paid more in federal taxes than it gets back in federal spending. The outflow of billions has become of greater importance as many Albertans believe some other parts of the country – and members of the federal Liberal government – are at best indifferent, and at worst hostile, to the oil and gas industry.
Once overflowing with energy wealth, Alberta hasn’t helped its case by keeping taxes low and spending relatively high. But even before the pandemic, the province’s future economic prospects were still more challenged than other parts of the country.
Mr. Kenney has long promised a referendum on equalization if Ottawa did not amend new energy and environmental laws that he says punish Alberta. The Kenney government now says for certain it’s going ahead with that vote in 2021. It may or may not use the wording suggested by the panel: “Do you support the removal of Section 36 – establishing the principle of equalization – from the Constitution Act, 1982?”
The panel report argues that a result in favour of removal would “morally obligate the federal government and other provinces to come to the table and negotiate the proposed amendment to the Constitution.”
Although the Premier has made legal arguments that Ottawa would be forced to negotiate if Albertans voted in favour of a change, he was completely transparent this week that the referendum is almost entirely about forcing Ottawa to pay attention to his province’s issues.
“What this does, politically, is to elevate our fight for fairness to the top of the national agenda in the same way that Quebec has dominated the politics of the federation for the last 40 years,” Mr. Kenney said of the referendum, speaking to broadcaster and conservative ally Danielle Smith.
Most Albertans don’t know it yet, but the province has just entered into a 16-month campaign period (the equalization question is likely to be asked in conjunction with municipal elections in October, 2021). There are already forces being marshalled. The well-funded Buffalo Project, backed by prominent Alberta and Saskatchewan businessmen, says the issue is so urgent that the question should be put to voters this fall instead of 2021.
While many Albertans believe the whole referendum exercise is ridiculous, the Premier is also having to manage those who are asking for an even more forceful pushback against Ottawa and the rest of Canada, including the continued calls to consider outright separation, including from within his caucus.
If you were craving some level of normalcy, Mr. Kenney is back to political battles with Ottawa. The COVID détente is officially over.