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Alberta Premier Jason Kenney delivers a statement on the construction of the long-delayed 8 billion dollar Keystone XL crude oil pipeline project, in Calgary, on March 31, 2020.TODD KOROL/Reuters

With Western Canadian heavy oil priced around US$5 a barrel, and worldwide consumption of crude down by as much as 25 per cent, Jason Kenney’s decision to put billions of public dollars on the line for the building the Keystone XL pipeline is the ultimate in countercyclical fiscal policy.

The North American price for oil is now worth about one-third of what the Alberta government pegged it at in its most recent budget. Stockpiles of unneeded oil are building in tanks and ships around the world. Prices are so low for Western Canadian Select, a blend from Canada’s oil sands, that producers could be paying others to take their output.

Alberta is headed into a period of economic turmoil unlike anything seen since the Great Depression, according to the Premier.

TC Energy proceeding with long-delayed Keystone XL pipeline with assistance from Alberta

With that in mind, there are an array of potential upsides to Mr. Kenney’s venture. There are many risks, too.

The Alberta Premier says his government will borrow money to take a US$1.1-billion ownership stake in the TC Energy Corp. pipeline, an amount which covers planned construction costs to the end of 2020, and will also issue a US$4.2-billion debt guarantee next year.

The government says this infusion of cash gives the project steady financial backing and will lead to the immediate creation of construction jobs at a time when tens of thousands in the province have been, or are about to be, laid off.

Mr. Kenney said some people will be put to work as early as Wednesday for the project in which a new pipeline will be built from Hardisty, Alta., to Steele City, Neb. – piecing together an oil transportation system that will give Alberta a new route to refineries on the U.S. Gulf Coast.

The investment injects money into a sector to keep it afloat in a period when banks and other lenders are beyond gun-shy because of the global coronavirus pandemic.

The Alberta government says better transportation for Canadian oil – a product that constituted 15 per cent of Canada’s total exports in 2019 – will mean producers will be able to net better prices for decades. It also might ensure that Canadian oil producers hold onto market share in the United States for oil when prices and demand for oil return, after the pandemic.

The pipeline would also act as a small rebuke to Saudi Arabia and Russia, who are trying to squeeze higher-cost oil producers, including U.S. shale producers, out of business with a global market share battle that is an unparalleled case study in gamesmanship. Both the Alberta Premier and TC Energy chief executive officer Russell Girling, who thanked U.S President Donald Trump during his remarks on the investment announcement Tuesday, positioned the building of Keystone XL as a win for North American energy security.

Mr. Kenney said the announcement is notice to Russia and Saudi Arabia, and environmental campaigners, that they will not succeed in shutting down North American oil.

“Our post-COVID recovery is at stake," Mr. Kenney said. “Canadian and American energy independence is at stake. ... We will not allow the world’s worst regimes to have a monopoly on global energy markets.”

Despite a checkered past of government investments in private industrial endeavors, Mr. Kenney also said Alberta taxpayers have a reasonable protection against risk. Just like Ottawa wants to unload its ownership of the Trans Mountain pipeline if and when the expansion project is completed, Mr. Kenney said Alberta will sell its preferred share position once the project is completed, when “it will be a very attractive utility.”

But even Mr. Kenney, a near-constant energy booster, acknowledges there are other risks, too.

There are legal challenges to the pipeline, and a new Democratic face in the White House come November might not be as supportive of the project as Mr. Trump. However, Mr. Kenney said he hasn’t heard the presumptive Democratic presidential nominee, Joe Biden, say anything negative about the project.

Beyond the Premier’s concerns, the investment doubles-down on the province’s economic reliance on its plentiful bitumen reserves at a time when, even pre-COVID-19, the world wasn’t exactly clamouring for more heavy crude from Alberta.

Mr. Kenney said his government has been working on the deal with TC Energy, formerly called TransCanada Corp., for more than six months. “And it was all but complete before the outbreak of the coronavirus.”

He insisted the project will not be a distraction from his government’s focus on slowing the spread of coronavirus and its resulting COVID-19 disease, but “construction season starts now. And we cannot afford to lose another season.”

But politically, the optics of borrowing money to invest in a pipeline just days after announcing the layoff of thousands of Alberta teaching assistants, school secretaries and janitors are awful. More than 20,000 jobs in the education system could be affected.

The government put out news of the funding cut with little notice on Saturday, after promising this month to hold the flow of dollars to school boards steady this year – even after schools were closed and classes cancelled because of the pandemic on March 15. In its weekend announcement, the government said “any savings from these adjustments will be reallocated to support Alberta’s COVID-19 response.”

It’s money for pipelines but not school workers during one of the worst economic periods the province has faced. And that adds to the narrative from critics that Mr. Kenney and his United Conservative Party government prioritize (male-heavy) oil and gas and finance jobs above all others.