Good morning. It’s James Keller in Calgary.
Premier Jason Kenney came to power in 2019 on a promise to turn around Alberta’s economy, which had been struggling for years in the face of low oil prices. But progress was slow and uneven, both for workers and the province’s finances.
Mr. Kenney repeatedly described an economic recovery that was just around the corner, but that hope was dashed at the start of last year when COVID-19 arrived like a bomb. Alberta’s economy, like pretty much everywhere else in the world, ground to a halt. The oil market crashed so severely that prices briefly dipped into the negative. Billions of dollars in expected provincial government revenues vanished in an instant.
But now, Mr. Kenney is once again predicting an economic recovery – which he says is not just likely, but a near certainty. Alberta is back, he has repeatedly predicted, and the downturn is coming to an end.
The Premier told The Globe’s Kelly Cryderman in a year-end interview that 2022 will be the year the province will “finally, and fully, recover from six tough years.”
Mr. Kenney has been buoyed by a recent string of positive news, including rosy economic projections from analysts like RBC Economics, and the news this past week that DBRS Morningstar, a major credit-rating firm, viewed the province’s long-term outlook as stable, rather than negative, for the first time since 2017.
His Finance Minister, Travis Toews, told me this week that a balanced budget in 2022-23 – an unthinkable possibility just a few months ago – is “not out of the question.”
And there’s a lot riding on a recovery – for Albertans who have been struggling to find work, a provincial government seemingly trapped in steep budget deficits, and a premier whose popularity has been shredded over the past two years.
A definitive economic turnaround could be critical for Mr. Kenney, who has fended off repeated challenges from within his party and whose unpopularity rivals some of his predecessors, like Alison Redford, who were forced out. He faces a leadership review in April, the timing of which was a concession designed to quell a revolt from MLAs and UCP riding associations. The review was initially set for next fall.
If the economy is firing on all cylinders by the spring, Mr. Kenney’s pitch to his party will no doubt be that he deserves credit for ushering the province out of the pandemic and the oil downturn. If that doesn’t happen – if his predictions turn out to be overly optimistic – the knives will almost certainly come out again.
Another hurdle is the COVID-19 pandemic. Mr. Kenney has faced criticism both for failing to do enough to contain the virus and also for doing too much. Both seemingly contradictory views are at play in the discord within the UCP.
If the Omicron variant fuels another disastrous wave in Alberta that causes infections to soar and hospitals to become overwhelmed, which would essentially be history repeating itself, that could derail the economic recovery while further inflaming criticism of Mr. Kenney’s handling of the pandemic.
On that point, Mr. Kenney is again optimistic, but perhaps less definitive.
He said he hopes the new variant will be “relatively mild,” and future waves of the virus will be “smaller and more manageable.” But at the same time as his top public-health official is warning that the COVID-19 situation in Alberta remains precarious, the Premier is musing about easing restrictions somewhat for the holidays.
This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief James Keller. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here.