Kenneth Whyte is chairman of the Donner Canada Foundation and publisher of Sutherland House Books. He is the former editor-in-chief of Maclean’s, editor of Saturday Night, executive editor of Alberta Report and founding editor of the National Post. His books include Hoover: An Extraordinary Life in Extraordinary Times, and he writes a weekly newsletter, SHuSH.
Red Deer lies halfway between Edmonton and Calgary, roughly 150 kilometres from each, and despite snow and ice warnings in both directions, a couple of hundred people from all over Alberta turned up early at a hotel conference room last Saturday to address the big question: How should the province respond to a disappointing outcome in last month’s federal election?
This was a different gathering than the feral, amateurish Wexit rally at the Boot Scootin’ Boogie Dancehall in Edmonton on Nov. 2, the one with the Make Alberta Great Again hats and chants of “The West Wants Out!” The Red Deer crowd was composed of seasoned political operatives, the sort of people who run local campaigns and sit on boards of riding associations. Their hosts were the Manning Centre and its founder, one-time Reform Party leader Preston Manning. The keynote speaker was Alberta Premier Jason Kenney.
Despite their relative savvy and experience, the Red Deer people, too, were vexed and emotive. They showered applause on Financial Post columnist Diane Francis, who took the stage to expand on her thesis that federalism allows “smug and powerful” Laurentian elites to “economically strangle and disenfranchise” Alberta. The solution, she said, to general enthusiasm, is for Alberta to adopt Quebec’s playbook and threaten separatism. The result would either be a reworked federal deal or an independent Alberta.
Another speaker, Danielle Smith, former leader of the provincial Wildrose Party and now a popular Calgary talk-radio host, spends her days chatting on air to an outraged populace about a whole range of options. She raised some of them before the Red Deer crowd: a referendum on separatism, joining the United States, creating a megaprovince by combining Alberta, Saskatchewan and the Northwest Territories. But it was the notion of emulating Quebec and building a firewall around the province that generated the most discussion in Red Deer.
Largely undiscussed were the causes of the anger. Only Mr. Kenney found it necessary to recite them, probably because he was addressing a larger audience than those in the room with his prepared remarks. Per-capita incomes are down 5 per cent over the past five years. Business bankruptcies are up 50 per cent. “Thousands upon thousands of Albertans have lost their homes, their small businesses and hopes,” he said. Yet Alberta is sending $23-billion a year more to Ottawa in tax revenue than it receives back in services and transfers.
Social costs ride on the economic distress. Property crimes have quadrupled in some counties and municipalities. The opioid and addiction crises have escalated. The suicide rate is 50 per cent higher in Alberta than in Ontario.
And in addition to the economic and social costs are open wounds caused by a Prime Minister who promises to phase out Alberta’s oil sands, a federal Environment Minister who can link any change in the weather to the energy industry and has championed pipeline-assessment legislation (Bill C-69), known locally as the “No More Pipelines Act,” and a Liberal government that engaged in all manner of mischief to keep SNC-Lavalin in Montreal yet couldn’t manage a regretful tweet when energy giant Encana, once the largest company in Canada by market capitalization, announced it was decamping Calgary for Denver.
The Red Deer gathering was virtually unanimous in its view that the roots of all these problems are political, not economic.
Yes, global oil and gas prices are down. But they are especially low in Alberta because the new pipeline-assessment legislation, the tanker ban on the West Coast, the federal carbon tax and the cancelling or bungling of a series of major pipeline projects have combined to landlock resources and create enough regulatory uncertainty to kill investment in Alberta’s energy industry. Mr. Kenney ruefully noted that there is no shortage of investment, drilling activity and employment across the border in North Dakota, Colorado, Texas and Oklahoma, global prices notwithstanding.
The political crisis is double-edged: immediate and historic. Immediate because the Liberals won re-election – Alberta gave all but one of its seats to the Conservative Party of Canada – and now lead a minority Parliament dependent on votes from the New Democrats and/or the Bloc Québécois, both of which are seen as hostile to energy interests. Albertans are imagining a short-term imposition of still more limits on their ability to develop and market their resources, as well as continuing federal indifference to their plight.
The problem is historic because it is recurring: Once every generation or so, a similar crisis arises to alert Alberta to the costs of its membership in Confederation. The last one, in 1986, was triggered by Conservative prime minister Brian Mulroney’s perceived pandering to Quebec and simultaneous reluctance to dismantle vestiges of former Liberal prime minister Pierre Trudeau’s national energy program, as he had promised in the 1984 election. Over time, Alberta abandoned the Mulroney Tories in favour of Mr. Manning’s Reform movement, with its plans to reduce the size and scope of the federal government, reform the Senate to give outlying regions more clout and enact populist measures such as referenda to renew Canadian democracy.
It is the recurring nature of the problem that convinced most at the Red Deer gathering to support systemic change as opposed to simply regrouping to fight the Liberals in the next election. “The ballot box does not work,” Ms. Francis said flatly. Regardless of who is in power, Alberta “is treated like a stepchild” despite being the country’s breadwinner.
Her comments were consistent with Mr. Kenney’s approach. He denounced a federalism that has squeezed $200-billion more out of Alberta in the past decade than it has returned and a federal equalization program that allowed Quebec to recently “post a $4-billion surplus while receiving $13-billion in equalization payments generated primarily by Alberta taxpayers.” He announced a commission to examine the viability of the 20-year-old proposal to build a policy firewall around his province.
The firewall strategy, associated with former prime minister Stephen Harper (before he was a federal leader), former provincial cabinet minister Ted Morton and former Harper and Manning policy adviser Tom Flanagan, begins from the premise that Alberta needs to quarantine itself against the disease of federalism.
The plan would see the province follow Quebec in opting out of the Canada Pension Plan and creating its own pensions; launching a provincial police force to replace the Royal Canadian Mounted Police; seeking representation in federal treaty negotiations that affects its interests; requiring municipalities and school boards to obtain provincial approval before entering into agreements with Ottawa; collecting its own revenue from personal income taxes and opting out of federal cost-share programs with full compensation; among other measures. Mr. Manning, who has been pushing for a renegotiation of the federal deal throughout his decades-long political career, will chair Mr. Kenney’s commission.
It is a measure of the depth of Alberta’s anguish that storming to your room and slamming the door seems the reasonable, middle-of-the-road strategy, the let’s-meet-in-Red Deer compromise for managing electoral disappointment. Granted, it is less childish than running away with separatists.
It is another measure of Alberta’s pain that it would emulate Quebec (or, at least, investigate the viability of emulating Quebec). Over the past 50 years of what journalist Josh Freed calls its “neverendum” on separation and sovereignty association, Quebec has sunk from fifth to seventh among provinces in GDP per capita and from 30 per cent to 22 per cent in its share of the Canadian population. Talent, capital and head offices have fled to stable jurisdictions, leaving behind chronic unemployment, high bond rates on uncomfortable levels of debt and an insular, insecure political class far more effective at nursing slights than building an economy. Only blind anger could make that seem like the right approach.
Like any large organization, a province can concentrate on one big thing at a time. Alberta can decide that federalism is the problem, hive itself off and struggle against it, as Quebec has done. Or it can live up to its self-image as an enterprising, self-reliant people, admit that global economic forces and its own failures have contributed to its predicament, then work constructively to set things right.
The fact is that economics, separate from politics, are a huge part of Alberta’s problem. Oil and gas prices dropped by half in 2014 and have stayed down. There was no screaming about the inequities of federalism in the decade prior to that decline. Economics were also a huge part of the problem in 1986. Oil and gas prices dropped by half then, too. That does not delegitimize Alberta’s arguments – federal inequities exist – but the province has shown it can tolerate the federal system in good times.
Alberta had one of its own as prime minister for a decade and failed to address the province’s complaints with the federal equalization regime (arguably, Mr. Harper’s tinkering with the formula in 2009 made it worse). The Harper government’s record on providing Alberta with pipeline capacity is reasonably good but patently insufficient. And Mr. Harper failed to move on a range of other irritants – one that has long been an article of faith among Canadian conservatives is the perceived bias of the CBC (it came up often in Red Deer, where the network’s coverage of the election was as violently declaimed as the result).
The opportunity to set things right will almost certainly come within two years and seven months, which is the longest a minority parliament has lasted in Canada. Electoral solutions may seem unappealing after watching Justin Trudeau execute a difficult triple blackface manoeuvre and stick his landing in 24 Sussex, but Alberta and the West are well-positioned to return the Conservative Party of Canada to office.
It’s as though Alberta and the West have forgotten and are prepared to squander the enormous gains they have made within Confederation since the 1986 crisis. It took almost two decades, but the Reform Party and its successor, the Canadian Alliance, arranged the friendly takeover of a Progressive Conservative party steeped in the Red Toryism (watered Liberalism) of Robert Stanfield, Dalton Camp and Joe Clark.
Those efforts earned Western conservatives command of a powerful machine with which to chase federal Liberals from office. The Conservative Party’s name is no longer a contradiction in terms, and its strength and leadership are largely in the West, the most dynamic part of the country. Year after year, Canada’s economic and demographic might tilts a little more toward the Rockies. Mr. Harper proved in 2011 that it is possible to win a majority government with just five seats in Quebec. Mr. Trudeau learned this year that it’s very difficult to win a majority with four seats between Ontario and the Lower Mainland of B.C.
The prospects of the Conservative Party are bright, in large part because those of the Liberals are not. Mr. Trudeau survived the election, but his standing among Canadians has been irreparably damaged by personal and political scandal. His brand, once the primary asset of this incarnation of Liberalism, is now a burden. His party is likely a couple of years from a rebuild.
It is true that the performance of Andrew Scheer’s Conservatives in 2019 disappointed their followers, but it was never going to be easy. Employment across Canada was reasonably high, and it is always difficult to knock a sitting prime minister with a majority government off his pedestal in one fell swoop.
The Conservative Party, moreover, was (and still is) in transition. For a decade, it was dominated by Stephen Harper, Stephen Harper’s priorities and Stephen Harper’s people. Mr. Scheer had the challenge of rebuilding his party while running an election. It was similar to the challenge that frustrated a succession of Liberal leaders – Paul Martin, Stéphane Dion and Michael Ignatieff – after the long reign of Jean Chrétien. And still Mr. Scheer’s Conservatives won substantially more votes, if not seats, than the Trudeau Liberals.
The next six months are critical for the federal Conservatives. The party must decide if Mr. Scheer is the leader to return it to power. It needs to articulate a clear reason why it belongs in government and it needs to improve its effectiveness as an opposition force in Parliament. It needs to understand the role of social conservatism in the party and, to the extent it exists, learn how to answer obvious questions about it. It needs to better integrate itself with seven like-minded provincial governments, in particular the Doug Ford gang in Ontario.
That is a lot of work, and it requires the full participation and attention of the entire Canadian conservative movement, as does preparation for the opportunity of regaining power in another year or two. How does that happen while Alberta, the keystone of Canadian conservatism, is making a bunker of itself? The West either wants in or it wants out. It either wants to lead Canada or defend itself from Canada. It can’t suck and blow.
While Mr. Kenney has no defined federal role, he is, by virtue of his staunchly conservative outlook and political talent, his long experience as a Harper minister, his willingness to campaign for fellow conservatives around the country and his deliberate bridge building among conservative premiers, the most important figure in contemporary Canadian conservatism. To the extent he is firewalling Alberta and managing the four separate provincial referendums he has said could be part of the province’s near future (on the CPP, on the RCMP, on entrenching property rights, on ditching equalization), he is less useful to the larger movement.
In fairness to Mr. Kenney, he has no choice but to get out in front of his people on the firewall plan. The alternative is to be stampeded while asking citizens to remain calm. He, at least, was steadfast and eloquent in his opposition to the separatist option, no doubt to the disappointment of many followers. Recent polls put support for independence at a third of Albertans.
Mr. Kenney has also left himself options. By striking an arm’s-length commission to study the various quarantine measures, he can pick and choose from its recommendations. It’s quite possible, for instance, that leaving the Canada Pension Plan makes good economic sense, although a provincial police force won’t. The several months his commission will devote to its work buys Mr. Kenney time to gauge the intentions of Mr. Trudeau’s minority government and to see how the Federal Court of Appeal handles the Trans Mountain pipeline expansion case next month.
It is also possible that the firewall measures are simply Mr. Kenney’s way of managing public sentiment and reducing tensions in his province. There was more than one dimension to his Red Deer speech. In addition to detailing the firewall project, he laid out how federalism can be made to work for Alberta:
"I don’t understand how it would be to our advantage to isolate ourselves … I think many Albertans have a sense that we are isolated, but that’s not true. We’ve been developing a robust alliance with like-minded provinces that frankly I do not think we have seen before in our modern economic history. We have nine of the 10 provincial governments who expressed their support for energy and resources corridors, including oil and gas pipelines. We have nine of 10 provinces who are strongly opposed to the federal government’s Bill C-69 – the ‘no more pipelines law.’ We have the majority of provinces opposed to the imposition of the federal government’s carbon tax. We even have the government of Quebec that has agreed to join us at the Supreme Court to oppose that intrusion in provincial jurisdiction.”
That sounds like a man who could still go either way – or some combination of ways. Mr. Kenney also told the federal government what it could do to make peace with Alberta. His demands are reasonable.
The first is for firm guarantees on the construction and completion of the Trans Mountain pipeline expansion, which Mr. Trudeau has already committed himself to. The second involves retroactively lifting a cap on the fiscal stabilization program back to 2014 or 2015, to give Alberta a $1.75-billion rebate on equalization, which apart from being fair is a small price, in the greater scheme of things, for enhanced national unity. Mr. Kenney also wants federal help for environmental investment and technology, which should be a no-brainer, and support for liquefied natural-gas exports, which accelerate coal-to-gas conversion in the developing world, another win-win.
So there are choices to be made all around. Alberta and the conservative movement will decide if they want to lead or shrink from federalism. The Liberals will decide if they are sincere in their recent statements about the primacy of national unity and balancing the economy with environmental concerns. This is hardly an insoluble mess, at present, but it does have the makings of one.
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