Danielle Smith’s United Conservative Party won a narrow victory following a bitter Alberta election campaign, and now must tackle a long list of problems, from health care to the economy to the environment, in a highly polarized province.
Potential solutions are expensive and could prove contentious, as the election revealed a stark urban-rural political divide. Ms. Smith held on as premier, but her party lost 11 seats, and its power is now concentrated outside the major cities of Edmonton and Calgary, where Rachel Notley’s New Democrats gained important ground. Ms. Notley emerged with Alberta’s largest-ever official opposition.
That contrast will surely play out in health care. No sector in Alberta has defined the past three years of crisis and controversy as much.
The system was struggling before 2020 with rising costs and long waiting times for procedures. But the pandemic added immense strain, as emergency rooms were crowded and intensive care beds filled with patients amid staff shortages. As the COVID-19 crisis has eased, problems have persisted. In the last provincial budget, the UCP government pledged to raise health spending by $965-million, or 4 per cent, above last year’s total. Ms. Smith had said during the campaign that waiting times in Calgary hospitals were declining, but recent data show those trends worsening again.
Last week, 192 emergency room doctors signed a letter calling on the province to fix what they call “a system-wide health crisis in Alberta.” The MDs blame a lack of access to primary care that has resulted in there being 650,000 Albertans without a family doctor.
The system is also overtaxed owing to “critical” labour shortages, and that has forced smaller hospitals to close emergency rooms at times.
Questions keep arising over the role of private care, from allowing more privately run facilities to privatizing parts of the system and possibly running afoul of the Canada Health Act. Ms. Smith had previously mused about dismantling parts of the public system, though during the campaign, she pledged to maintain public funding. An aging population will only add to the pressure on the system in the future.
Of course, oil and gas remain key to the provincial economy, and that has proved to be a double-edged sword. Successive governments have promised to diversify the economy to get off the “oil-revenue roller coaster,” which has meant massive budget surpluses in some years and huge deficits in others.
The province is home to growing high-tech and green technology sectors, as well as wind and solar energy development and a growing film industry, and those are attracting billions in investments and creating thousands of jobs.
But the Alberta economy is still dominated by the fossil fuel sector, and expectations for a year of strong oil and gas prices prompted the government to project a budget surplus forecast for 2023-24 of $2.4-billion, down from $10.4-billion in the last fiscal year.
In February, the UCP government forecast U.S. benchmark oil to average US$79 a barrel – well above prices seen during the depths of the pandemic. It has been below that level since mid-April, calling the surplus projection into question.
The province could easily avoid the whims of oil markets, and set aside funds in the Alberta Heritage Savings Trust Fund more regularly, if it instituted targeted tax measures, said Trevor Tombe, economics professor at the University of Calgary, though he acknowledged that is unlikely to happen.
“What are the chances of us adopting, say, a 5-per-cent sales tax and saving a significant amount of our resource revenue? I’d say the chances are slim to none, primarily because of the political challenges of implementing that policy,” Prof. Tombe said. Both party leaders had pledged during the campaign to maintain a no-sales-tax stance.
A major concern is striking a balance between remaining a reliable supplier of oil and gas, and the need to slash carbon emissions. Both leaders voiced support for getting to net zero by 2050, in line with the federal target, and Ms. Smith announced a net-zero plan earlier this year, though it was short on details.
She has pledged to fight back against Ottawa’s plan to cut greenhouse gases from oil and gas by 42 per cent by 2030, and to restructure the electrical grid to make it carbon neutral by 2035, saying these policies would damage the provincial economy.
“As premier, I cannot under any circumstances allow these contemplated federal policies to be inflicted upon Albertans,” she said in her victory speech. “I simply can’t and I won’t.” She urged Prime Minister Justin Trudeau to halt the polices and enter into negotiations with her government.
The trick over the long term for Alberta, however, will be planning for what the International Energy Agency expects will be a peak, then long-term decline, in global demand for oil as climate concerns grow and cleaner energy forms take hold.
The government will need to collaborate with industry groups, including the Pathways Alliance of major oil sands producers, and Ottawa to win the benefits of decarbonization, said Deborah Yedlin, president of the Calgary Chamber of Commerce. Pathways has pledged to spend $24-billion on carbon capture, but the investments will also require a large injection of public funding. “We have to find ways to say yes, not no, and we have to find ways to ask how,” she said.
On Tuesday, Pathways Alliance President Kendall Dilling congratulated the UCP and said the group looks forward to developing “effective regulations and co-funding agreements to achieve our ambitious emissions reduction plan.”