When it comes to diversifying his province’s economy, Jason Kenney has a plan to make plans.
The way that the Alberta Premier had hyped Monday’s unveiling of an economic recovery strategy, in the days leading up to it, it was reasonable to expect something more than that – a package of well-developed policies to help it leverage its oil-and-gas expertise into more sustainable industries.
Instead, those sorts of specific commitments were largely limited to $175-million in new venture capital funding. That will be welcomed by a technology sector that is perpetually frustrated by the difficulty of moving from startup to commercialization in this country, but it’s hardly going to pivot the province in and of itself. And neither will a new Innovation Employment Grant that may only serve to replace some of the innovation funding that Mr. Kenney’s government cut after taking office.
Much more of the package is devoted to trying to return Alberta to past glories by breathing life into its economy while its fossil fuel industry recovers from reduced global demand and low prices. That means $10-billion in traditional infrastructure projects meant to provide short-term stimulus, and an accelerated corporate tax cut, and a new agency tasked with wooing foreign investment by (among other things) defending Alberta’s existing environmental performance.
And yet, for those willing to squint a little, it’s possible to see this announcement as a potential first step in Mr. Kenney’s reckoning with forces – a global fight against climate change that threatens to decimate Alberta’s resource sector in the long run – toward which he was highly dismissive after coming to office last year. And it could even signal some fresh willingness to work with Ottawa to confront that reality.
Not that Mr. Kenney is about to say any such thing, explicitly. While making room for an assertion that oil prices will soon return to $60 a barrel, and that “every credible forecast of future world energy consumption sees oil and gas continuing to dominate the supply mix for the next several decades,” his government’s new 29-page strategy does not include the words “climate change” anywhere.
But it does feature the word “diversify,” a lot. That in itself is noteworthy, coming from a government whose Finance Minister last fall dismissed the idea of spending money on diversification as something it could worry about once its budget deficit was eliminated – an achievement now further from happening than it was then.
The document also promises so many forthcoming “sector-specific diversification strategies” – including “agriculture and forestry, tourism, technology and innovation, aviation, finance and fintech, and creative industries” – that the volume could be interpreted as either a sign of great ambition or an admission that the government hasn’t really zeroed in on much yet.
Particularly intriguing, though, is its commitment to “energy diversification” toward low-emissions energy sources such as geothermal and hydrogen, and a coming strategy to meet rising demand for minerals (including those used in clean-economy products such as electric vehicles).
“Leveraging Alberta’s natural geological advantages,” as the document puts it, is not something Mr. Kenney has opposed previously, but it’s not something he’s done much to prioritize, either – certainly not in any way that could be construed as recognizing that oil-and-gas alone won’t cut it in the future.
Exactly how much his mentality has changed won’t be clear until the sector-specific plans are released. And it’s entirely possible that a paltry commitment of government funds will prove the energy-diversification talk to be lip service.
It could also turn out that the more blustery insistence on oil’s bright long-term future was the real empty rhetoric on Monday – a message to appease Mr. Kenney’s political base.
In recent conversations with people who are in Mr. Kenney’s government or work with it, and even some environmentally minded interests in Alberta who are usually frustrated by it, there has been some sense that the current economic crisis has at least given Mr. Kenney cause or excuse to abandon his own certainty about oil and gas rebounding the way it did from cyclical downturns in the past. And it seems to have somewhat increased his openness to engaging with a federal government – currently developing its own Alberta-centric hydrogen strategy, and keen on clean tech in general – on which he has previously tried to pin all of the resource sector’s problems.
Mr. Kenney is not exactly blazing a bold trail, however it plays out. Alberta’s government was starting to go more down the diversification path when Rachel Notley was premier, before he took office. And there’s been talk about needing to do so for so long, with governments intermittently taking an interest, that it’s a bit of an indictment that as of now the province is still in the vague planning stage.
But perhaps a Premier known for being highly attuned to political calculus is carefully laying the groundwork for a diversification strategy that could actually stick. The proof will be if and when the real plans arrive.
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