Max Fawcett is a freelance writer and the former editor of Alberta Oil magazine and Vancouver magazine. He previously worked in Alberta’s Climate Change Office.
In his victory speech last April, newly elected Alberta Premier Jason Kenney wrapped up a feisty campaign by stating that he had only just begun to fight. His next campaign would be aimed squarely at Prime Minister Justin Trudeau, who he accused of frustrating Alberta’s economic ambitions – ones that had already been impaired by falling commodity prices. “In Ottawa,” he told the Calgary crowd, “we have a federal government that has made this bad situation much worse.” Now, in a deeply ironic twist, Mr. Kenney is depending on that same federal government to save his province from the worst situation it has seen since the Great Depression. In public remarks last Friday, he referenced the federal government’s help for the auto industry during the Great Recession, declaring that “we need support of that scale and ambition now.”
That ambition almost certainly won’t come from the latest expert panel Mr. Kenney has struck as Premier. Yes, his new economic recovery council (12 conservative luminaries including familiar faces such as Jack Mintz, Atco Ltd. chief executive officer Nancy Southern, and former prime minister Stephen Harper) has been tasked with providing bold advice and ideas, and Mr. Kenney said he wanted them to take a “no-holds barred” approach. But given the absence of young voices on the panel, it’s hard to imagine the members are even familiar with some of the newer holds that should come into play here. Instead, their work will likely focus on the usual combination of holds that business groups tend to prefer: lower taxes, fewer regulations, and access to no-cost capital. The boldest thing it could do is resist the temptation to single out the federal carbon tax or demand its repeal.
Mr. Trudeau can afford to be much bolder than that. Since the last great financial crisis hit the country, Albertans have build up a credit position in the balance sheet of Confederation that totals more than $200-billion: the difference between what they have paid in federal taxes and received in transfer payments. It’s time for the federal government to pay that back, and do it in a way that both heals the fractures that have threatened to pull Canada apart – and silences the people who have been doing the threatening.
There’s no way, short of personally developing a cure for COVID-19 and simultaneously persuading Saudi Arabia to shut down all of its oil production, that Trudeau will be able to repair his family name in Alberta. That’s in large part a reflection of the amount of time and energy politicians like Mr. Kenney have spent over the past few years trying to denigrate it. But with the right intervention and support, this Prime Minister Trudeau could have a far bigger impact on Alberta’s future than the last one ever did with the National Energy Program.
He should start by channelling his friend Barack Obama, who used the bailout of the U.S. auto industry that began in 2008 to implement more stringent fuel-efficiency standards. For example, in exchange for direct financial support to the industry, Mr. Trudeau could insist on a clear and binding timetable for the remediation of old wells and tailings ponds. He could demand limits on executive compensation and requirements for more executive diversity. He could require the province to commit formally, in legislation, to net-zero emissions from its oil and gas industry by 2050. And he could ensure that Canadian taxpayers are represented on the boards of directors of the companies they end up supporting financially.
He should also make investments that go beyond oil and gas, and help Alberta prepare for a future in which that industry isn’t nearly as influential. That could take the form of funding for organizations such as Emissions Reduction Alberta, which invests in lower-carbon technologies and ideas. It could include direct grants to Alberta’s postsecondary institutions on the condition that the province matches the funding and uses it to reverse recent cuts. With borrowing costs at record lows, it might be time for the federal government to step up and build the new LRT projects in Edmonton and Calgary that the province seems so reluctant to fund. And if it’s really feeling ambitious, it could offer to return a portion of the goods and services tax if Alberta agrees to match it with a sales tax of its own.
If done right, these investments would support Alberta’s faltering economy, shore up its finances, and ensure that its oil and gas industry can weather a once-in-a-lifetime storm. Just as importantly, they would also sap any of the energy that might still be left in the province’s smouldering separatist movement.
With the much-ballyhooed “fair deal panel” about to release its report, the timing couldn’t be much better for Ottawa to announce its presence in Alberta with authority. And make no mistake: Albertans are watching.