Alberta anxiety over the federal Throne Speech set for Sept. 23 is running high. And the uncertainty is the killer.
When Chrystia Freeland was named Finance Minister three weeks ago, she committed to a recovery from the pandemic that will be “green,” but also equitable, inclusive and focused on jobs and growth. Since then, the Prime Minister has said his government wants to “rebuild our economy so that it comes back stronger.”
You can read almost anything you want into the remarks from Justin Trudeau and Ms. Freeland. But the worry in some quarters of the province, including the Kenney government, is that this means new laws, regulations and policies that will further hamstring the Canadian oil industry and, with it, the ailing Alberta economy.
Certainly even before this point there had been plenty of political tension and concern over federal energy rules. The province is inextricably linked to oil production – 80 per cent of which is shipped to the United States – as well as resource projects on both sides of the border, such as pipelines that are in constant threat of being indefinitely delayed. The federal Liberals won their minority government, with votes from outside Alberta and Saskatchewan, in part with a promise to take serious action on climate change.
Alberta was struggling before the pandemic. It now has the second highest unemployment rate among the provinces – save for Newfoundland and Labrador, also oil focused. Its prospects for quickly climbing out of the COVID-19-induced economic hole are more limited than other parts of the country.
There’s no answer from Ottawa on whether the federal government will alter the 25-year-old parameters of the Fiscal Stabilization Fund by lifting a $60-per-resident cap on the payments, as Alberta and other provinces requested last year. That change to the program, designed to kick in when a provincial economy takes a sharp and sudden hit, would see Alberta get billions in payments annually, instead of hundreds of millions.
What tangible policy pieces are on the horizon? On Friday, a report in the National Post said the details of Ottawa’s Clean Fuel Standard – which were delayed because of the pandemic – could be coming soon. The column highlighted the costs of regulations, which will cover all fossil fuels used in Canada and require producers to find cleaner sources of fuel, or buy credits.
The price of credits under the standard could be set as high as $350 a tonne, with no plan for exemptions for large emitters in trade-exposed industries. The standard is certainly on Mr. Kenney’s radar, with the Alberta Premier this week calling it “another effective carbon tax in the middle of an economic crisis.”
If there was a recipe for upping the tension between the Prairies and Ottawa, and encouraging political instability on the Prairies, this could be it. And while Jason Kenney is often blamed for raising the temperature, a recent Twitter exchange between Natural Resources Minister Seamus O’Regan and Alberta Energy Minister Sonya Savage shows that the federal Liberals are no slouches, either.
Mr. O’Regan responded to an opinion piece about Alberta being part of a low-carbon economy, suggesting that Alberta is defined by hydrogen, batteries, carbon-capture technology, geothermal energy and electric vehicles. Ms. Savage replied, yes to all of the above. But please don’t leave out oil and natural gas.
Mr. O’Regan has a good relationship with his provincial counterpart, and coming from Newfoundland, he has an understanding of the ups and downs that oil creates for a province. He has noted Ottawa’s purchase of the Trans Mountain pipeline expansion, and reiterated the unarguable point that there’s no getting to the goal of net-zero emissions by 2050 without Alberta. But underlying the cordial Twitter exchange was the continued Alberta-centred frustration that the federal Liberals, as a whole, at times speak as if the Canadian oil industry doesn’t exist.
A plan on greenhouse-gas emissions is crucial. An energy transition in inevitable. Some in Calgary see this and some companies and parts of the industry are getting more thoughtful and innovative. But messaging that suggests oil isn’t a big deal in this export-focused country is counterproductive. It doesn’t provide confidence that the federal plan is grounded in the current Canadian economic reality or that it will live up to promises to balance the environment and the economy – or build a better relationship with Alberta.
A big question for Alberta now is how provincial governments in Ontario and Quebec, and voters there, react to what is shaping up as a massive plan from Ottawa to remake the Canadian economy, says David Taras, a political scientist at Mount Royal University in Calgary.
With a minority government, the possibility of an election is ever-present. A Liberal failure to read the mood of a COVID-19-weary country, and how worries over economic growth and the size of the deficit weigh on voters, could be a gift for new Conservative Leader Erin O’Toole. “This is the first time Canadians will take a look at him," Dr. Taras said.
Still, anyone paying attention to global energy matters has their eyes trained on a number of sometimes conflicting markers.
There are surging volumes of U.S. oil being shipped to China and questions about whether concern of virus spread on public transit leads to more commuters choosing to drive. At the same time, the governors of California, Oregon and Washington are all saying climate change is at least partly responsible for the deadly wildfires that are ripping through their states. The disaster alone could push a potential Biden-Harris administration to take tougher action on climate.
Change is coming, one way or another. The question is whether Ottawa can speak and act in a way that shows it’s moving beyond political calculations and is serious about jobs and a future for a province that likely won’t elect Liberal MPs for a generation.
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