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Kenney’s Big Promises Face Economic Realities, Grassroot Expectations

On his first visit to Ottawa last week as Alberta premier, Jason Kenney rattled sabres about national unity and fossil regulation, briefly stepped back from a campaign promise to abandon his province’s cap on greenhouse gas emissions, and mostly managed to avoid the economic and political realities and grassroot expectations already confronting his new government.

Kenney’s trip was devoted to a meeting with Prime Minister Justin Trudeau and an appearance before the Senate committee that has become a focal point for the relentless fossil assault on Bill C-69, the federal government’s effort to re-establish a regulatory regime that was gutted by the Harper government in which Kenney served as a senior minister. “This is not just a slight against the people of Alberta,” he said last Thursday. “This is the culmination of a full-frontal attack on our economic prosperity. I plead with you, as federalists, to understand the national unity implications of this.”

For the most part, media coverage of the visit either took Kenney’s position at face value or amplified it. But the last few days have seen just a couple of analyses that placed Alberta’s economic predicament in its wider context.

“Albertans have been had,” writes retired fossil executive Ross Belot, echoing the opening line but not the conclusion that drove Kenney’s election victory last month. “But it isn’t by special interests outside this country. It’s by Canadian politicians of all stripes who continue to sell a myth, a myth that the reason the oilsands have stopped seeing major new investment is that we don’t have enough pipelines.”

Belot says what’s odd about that myth is “that most major players, no matter their stance on whether pipelines projects should proceed or not, want the public to believe it. Whether it’s Alberta’s incoming new premier Kenney, Prime Minister Justin Trudeau, the Canadian Association of Petroleum Producers (CAPP), or environmental activists 350.org, all tell you that a lack of pipelines is holding back oilsands investment.”

The reality, he says, is that no amount of reinvestment or profligate taxpayer support in Canada will offset “an unprecedented oil boom south of the border. Fracked U.S. oil is attracting the capital. And that is because it is a much better resource to exploit,” compared to a tar sands/oil sands product that is “difficult to produce and process and yields a lot of low-value product” that is more complicated to ship through a pipeline.”

Against the massive fracking boom in the U.S., “it isn’t lack of pipelines holding back the oilsands; it’s the fact that it isn’t as attractive to invest in oilsands.” Alberta may have enjoyed a decade-long tar sands/oil sands boom, but “if industry had known how to frack for oil back in the year 2000, that big surge in oilsands investment never would have happened.”

But that wasn’t the crowd-pleasing message that propelled Kenney to election victory. And now, he’ll have to deal with the high, but not terribly realistic expectations his campaign created among the Albertans who’ve been hurting the worst since the oil price crash in 2015. Less than 48 hours after he unveiled a new cabinet that includes a former pipeline association executive as energy minister, CBC carried a profile of three desperate former oilpatch employees who were already hankering for the jobs the newly-minted premier promised to create.

“Premier Jason Kenney has been on the job only a few days, and already some unemployed and underemployed Albertans are wondering when his promises of reigniting the economy, building new pipelines, and creating jobs will get them back working in the careers they loved,” the national broadcaster reports in a dispatch from Calgary. “It’s a matter of urgency for some who have maxed out their credit lines, blown through their severance, employment insurance, and savings, and are still searching for permanent, well-paying jobs while struggling to make ends meet.”

Some of them, CBC says, are on the brink of bankruptcy.

“Right now, the province is not a happy province,” said occupational health and safety specialist Brian Mavin. “So I think the new premier needs to have in mind that we need to get jobs happening right now for the people of Alberta.” He added that the last four years have ruined his credit, and the strain and worry literally keep him up at night.

“I apply for safety job after safety job,” he recently wrote on Facebook. “I have been working out in the oilpatch firefighting, but that work is up and down, and I know I can’t be greedy because my co-workers need work, too. Sorry guys, just venting. I’m just feeling so defeated and broken.”

Robyn Stimson, a single mother who worked as an administrator with a land survey company until 2016, told CBC she doesn’t want to leave the industry or the province. “Primarily, I was good at it,” she said. “I enjoyed my work. I always felt accomplished when I came home. And I could always look my daughters in the eye and, you know, have that sense of worth as well as just being a mom.”

In the immediate aftermath of Kenney’s swearing-in, Stimson had the new premier and cabinet on a short leash to keep their promises. “For this government, it needs to be essential. It needs to be. The province is going to go even further into disarray because of the fact that they can’t get, you know, the middle to lower class working again,” she said.

“And if they can’t get them back working, they’re not going to have the support of Alberta.”

“I hope Jason Kenney’s bark is just as big as his bite and we can get a lot of us Albertans back to work as soon as possible,” added Oilfield Dads founder Chad Miller, who ran for the Freedom Conservative Party in the provincial election.

But beyond the searing economic realities flagged by Belot and other analysts, Kenney had a cluster of other challenges waiting for him when he got home from Ottawa. In an update to a provincial economic outlook published last October, University of Calgary economist Trevor Tombe said the United Conservative Party’s plan to cut corporate taxes, scrap the provincial carbon levy, and impose a government spending freeze might succeed in balancing the budget by 2022, but will do nothing for the long-term fiscal challenges Alberta faces.

Last fall, Tombe concluded that it would take a menu of new taxes—including a provincial sales tax—plus spending restraint to avoid spiralling provincial debt. “The long-run challenge is lessened, it’s cut by nearly half, but there remains a significant fiscal challenge in the long run for us to address,” he told CBC, pointing to an aging population and a lack of government revenue streams as key challenges.

“Should we freeze spending to grow only with inflation and population after 2022, which would be hard in the face of an aging population, or should we start talking about sales taxes or other types of revenue streams for the Alberta government?” he asked.

And the pressures Kenney can expect to face go beyond the perils of a fossil-dependent economy—where economic “diversification” has typically meant refining the raw product before shipping it out of the province, rather than embracing a wider mix of economic opportunities. On his way home from Ottawa, Kenney dropped in on Ontario Premier Doug Ford to celebrate their loud (if not terribly successful) crusade against the federal carbon tax. But late last month, CBC Parliamentary reporter Aaron Wherry pointed to a potential deal-breaker for the two allies: with Ford now claiming Ontario has contributed more than its “fair share” to help Canada meet its targets under the 2015 Paris Agreement, where can the country expect to make up the considerable difference between promise and reality, if not in Alberta and Saskatchewan?

“That the Ford government is willing to celebrate the emissions reductions achieved by its Liberal predecessor is at least an endearing display of bipartisanship,” Wherry writes. “But Ford’s definition of ‘fair’ might present a significant challenge to the rest of the country—particularly Ford’s conservative allies in Alberta and Saskatchewan.”And a more immediate interprovincial battle is brewing with British Columbia: Premier John Horgan’s government promptly filed a constitutional challenge last week, after Kenney proclaimed a Notley-era law empowering Alberta to cut off oil shipments over B.C.’s effort to regulate the environmental impacts of the Trans Mountain pipeline expansion.