Who Will Save Alberta from Disaster?

By Henry Srebrnik, [Fredericton, NB] Daily Gleaner

 

Alberta seems to stagger from one disaster to another. 

First it confronted its inability, thanks to a coalition of environmentalists and some native groups, to build pipelines.

This was followed by a precipitous decline in oil prices thanks to a Russian-Saudi price war, and now, of course, we have the shutdown of entire sectors of the economy due to the COVID-19 pandemic. 

“We now project Alberta’s economic contraction -- at minus 5.6 per cent -- to be the most severe the province has ever experienced in a single year and the largest in Canada,” concluded a forecast from RBC Economics released March 25. The collapse in oil prices has been a “massive blow.” Some are calling it an “apocalypse.”

Alberta’s unemployment rate was already higher than the national average. A TD Economics Forecast, which appeared two days later, suggests the unemployment rate would rise to 9.5 per cent this month. Alberta is potentially looking at a deficit this year of $15 billion or higher.

Many of its largest employers, including oilsands producers Suncor Energy Inc. and Athabasca Oil Corp., and WestJet Airlines, are being hit particularly hard by the decline in oil demand and tourism, laying off thousands of employees.

The province revealed March 28 it was cutting funds for some 26,000 educational assistants and substitute teachers.

University of Calgary economist Jack Mintz asserted that the oil-price shock alone is expected to take at least $45 billion out of the Alberta economy this year. “The impact is over $200 million per day,” he said. “The government could spend money on stimulus, but they’re not going to spend that much money.”

The province is reeling – and it has already been suffering economic hardship for more than five years, following a previous drop in oil prices. 

Nonetheless, TC Energy Corp. is proceeding with its long-delayed Keystone XL pipeline and oil prices may rebound if the Russians and Saudis cut production.

Premier Jason Kenney compared the current economic crisis the province is facing to the Great Depression. “We must begin to prepare ourselves for a time of adversity unlike any we have seen since the 1930s in this province,” he warned Albertans March 19.

Kenney announced a number of financial programs including six-month mortgage, credit-card and line-of-credit payment deferrals through the provincially owned bank, ATB Financial. As well, there will be $50 million in income supports for people self-isolating. Oil sands workers will be declared essential.

Mintz has been appointed Chair of a new Alberta Economic Recovery Council to provide insight and advice on how to protect jobs during the economic crisis.

The council will also focus on strategies for long term recovery, including efforts to accelerate diversification of the Alberta economy.

Albertans are angry at the lack of support from other parts of Canada despite Alberta’s huge $650-billion financial contribution in transfer payments over 60 years. They feel Ottawa would never allow central Canada to twist in the wind like this.

Kenney has been quite vocal in telling the rest of the country about Alberta alienation. He created a Fair Deal Panel last fall that was tasked with studying whether to withdraw from the Canada Pension Plan, form a provincial police force and establish a formal provincial constitution.

It included a question on separation, which NDP opposition leader Rachel Notley argued stoked the fires of a fringe movement.

Alberta is landlocked within Canada, a major concern if new oil and gas pipelines fail to gain approval. It was created as a creature of the federal government in 1905 and didn’t even control its natural resources until 25 years later. Many central Canadians have, psychologically, seen it as a semi-frontier region, to be exploited by the population in the east.

How’s this for a suggestion? The difference between what Albertans have paid in federal taxes and received back in transfer payments totals runs to hundreds of billions of dollars. Why not have Ottawa reimburse the province some of that money?

Canada is a country with vast geographic, ideological, and linguistic differences, and it takes skill to keep it united. National-unity rifts with Alberta were already an issue. If Alberta cannot get a fair deal from the rest of Canada, the separatist option is bound to grow.