Alberta laid out a plan to bolster its struggling economy in a Speech from the Throne Tuesday, including continued pleas for eastern provinces to buy crude produced in the west and for Ottawa to amend Canada’s employment-insurance rules.
The Throne Speech, out of the ordinary for highlighting what the federal government and other jurisdictions can do for the province rather than what it can do for itself, is Alberta’s second in nine months.
Premier Rachel Notley’s government, which will release a budget in April, said it “cannot meet current deficit targets” in light of collapsed oil prices.
Ms. Notley’s appeal to Ottawa and her provincial counterparts comes as Alberta’s unemployment rate edged slightly above the Canadian average in January and is expected to climb further. But while the Premier argues her provincial counterparts recognize that Canada must quickly get energy to new markets, the proposed Energy East pipeline faces opposition in parts of Ontario and Quebec.
Canadians are supporting foreign countries, rather than their own, by importing oil instead of ferrying crude produced in places such as Alberta and Saskatchewan to eastern consumers, Ms. Notley’s government said. “It makes no sense to finance the economies of other countries in this way, when it would be both more economically and environmentally responsible for Canada to rely on its own abundant energy resources,” the text of the Throne Speech reads.
The speech does not specifically mention Energy East, but that is the project Alberta touts as key to opening new foreign and domestic markets for its oil.
Alberta’s limited access to markets in Eastern Canada reflects a national problem, Ms. Notley told reporters before the Throne Speech was delivered.
“It is almost a narrative, or an example, or a picture, of how we have failed to develop our infrastructure in this country in a way that benefits … all Canadians,” she said. “We just need to get it together on this one.”
Pipelines to refineries and tidewater in the east would help “reduce both Canada’s dependency on foreign oil imports and the flow of Canadian capital to other countries,” Ms. Notley said.
According to the Throne Speech, the New Democrats will look for fat in the budget, but will protect health care and education, introduce a $340-million child-benefit plan for low-income families and maintain its $34-billion infrastructure spending plan.
Alberta warned at the end of February that next year’s provincial deficit could reach $10.4-billion. The third-quarter fiscal update indicated the deficit in this fiscal year, which wraps up at the end of March, will hit $6.3-billion, up from the government’s previous projection of $6.1-billion.
Alberta Official Opposition Leader Brian Jean said Ms. Notley’s blueprint is not enough to rescue the province.
“The NDP failed to show in today’s speech how they will get a grasp on spending and reduce dangerous levels of borrowing and get Alberta back on the path to balanced budgets,” he told reporters before the Throne Speech. The Wildrose Party, Mr. Jean said, will soon introduce alternative policies such as reducing taxes on small business, tax relief for families and “providing stability for our energy sector.”
Ric McIver, the Progressive Conservatives’ interim leader, also said Ms. Notley’s strategy during the recession is risky.
“What the NDP doesn’t realize is that a little belt tightening now will prevent the need for major fiscal surgery down the road,” he said in a statement.
The benchmark price for oil in North America closed at $36.44 (U.S.) a barrel Tuesday. It was worth about $60 a barrel when the NDP took office last May after it slipped below $100 a barrel at the end of July, 2014. Energy companies operating in Canada shelved projects and let go thousands of employees to cope with the slide. This, in turn, has meant layoffs in other parts of Alberta’s economy, given its reliance on the energy industry.
The provincial unemployment rate reached 7.4 per cent in January, while the Canadian unemployment rate hit 7.2 per cent, according to Statistics Canada.
The Conference Board of Canada notes Alberta’s unemployment rate has not been this high since March, 1996. Alberta’s real gross domestic product is forecast to contract by 1.1 per cent this year, it said in a report on Tuesday.
“One thing that will help the economy is public infrastructure spending,” the Conference Board said.
Ms. Notley argues that the federal government should change employment-insurance rules in light of Alberta’s problems.
“These rules must be updated as quickly as possible, to take account of the current economic shock affecting the resource industry and related industries in Western Canada,” said the Throne Speech, delivered by Alberta Lieutenant-Governor Lois Mitchell.
Federal Employment Minister MaryAnn Mihychuk responded in a statement to Alberta’s request by saying she is “focused on helping Albertans and all Canadians get the skills, experience and opportunities they need to help our economy grow and prosper, and investing in programs to provide support when people need it most. We will continue to collaborate.”
With a report from Chris Hannay in OttawaReport Typo/Error