Alberta to close three diplomatic trade offices in spending cuts

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The Alberta government is shuttering three of its diplomatic outposts and suspending plans to open two more in the latest sign that low oil prices are forcing the province to check its ambitions during a time of austerity.

As part of a drive to reduce government spending, Premier Jim Prentice announced Wednesday that Alberta's trade offices in Ottawa, Munich and Chicago will close. The closing will reduce the province's budget for its international offices by 20 per cent.

"It's a question of priorities and a question of focus," Mr. Prentice said. "We want to maximize the bang for our buck and those are the choices we're making."

The planned opening of offices in San Francisco and Rio de Janeiro did not fit into the province's priorities, the Premier said. However, Alberta will add to its remaining 12 foreign stations by opening a new Chinese satellite office in the southern industrial city of Guangzhou.

The province's network of offices was established over the past three decades, often during times of booming oil prices, and was intended to give Alberta a greater voice in national and international conversations about economic collaboration and policy. Closing the offices raises questions about whether the province can hold its leadership position in a world of $50-per-barrel oil.

"Those trade offices have proved their worth to Alberta business," said Alberta Chamber of Commerce president Ken Kobly. "I do know the government is going through tough times, as far as the budget goes, but you don't eliminate your sales people when your sales are down."

The closure of the only office on the European continent and the Chicago outpost is particularly frustrating for Mr. Kobly. While many think of Alberta solely as a petro-economy, he says the promotion of the province's beef exports is a ceaseless campaign that was helped by both those offices.

Alberta's foothold in Ottawa had been a nagging problem for Mr. Prentice. The $845,000-a-year mission was established in 2012 by former premier Alison Redford as a means of increasing the province's profile in the national capital. While the office lobbied MPs on federal emissions rules and temporary foreign workers, it was held up as an example of unnecessary spending when so many MPs are Albertans and see themselves as the province's representatives in Ottawa.

"When a province runs into budget problems, these offices make easy targets," said Duane Bratt, the chair of policy studies at Mount Royal University. "But why the hell did we have an Ottawa office in the first place?"

While the office did work with the civil service and parliamentarians, it was non-partisan and could speak for the province in a way MPs could not, according to a former staff member.

"The office did outreach to all parties. It wasn't partisan and was never meant as a Conservative-to-Conservative kind of thing," said the former staff member, who can't speak publicly about the office's work. "We did a lot of good work on the policy side, and people often overlook the fact that the office helped business make contacts in the Toronto-Quebec City corridor."

Housed near Parliament Hill, the office had been empty since Oct. 31, when Calgary lawyer Alan Ross resigned as its head. "We don't need an office in Ottawa at this point," Mr. Prentice said. "I was in the centre of the national government for seven years, and I can't tell you who was in the Ottawa office through those seven years, I never met them once."

Actually, there was no Alberta office in Ottawa when Mr. Prentice was in federal government, serving as a Calgary-area MP from 2004 to 2010. The previous office had been shuttered in the 1990s by then premier Ralph Klein.

Wednesday's closures were recommended in a report by former ambassador Ron Hoffmann, now Alberta's senior representative in the Asia-Pacific basin. The report was commissioned by Mr. Prentice two days after he was sworn into office.

As the provincial government looks to shrink a possible $7.5-billion deficit, an Alberta legislative committee voted Tuesday to cut $546,000 from the Auditor-General's office. Mr. Prentice refused to address concerns from opposition members on Wednesday that he had pressured the independent, all-party committee to make the cuts when he publicly stated he would not respect a vote that didn't reduce the funding.