The numbers are in and things have never been quite this bad in Alberta, at least not in recent decades. StatsCan reports that 52,800 fewer people are working in Alberta this year compared to the same time last year. Athabasca Oil became one of the more recent companies to announce dramatic layoffs. It joins names like Cenovus, MEG, Enerplus, and Devon. Capital is already beginning its exodus, recently exemplified by Shell abandoning its multi-billion dollar Carmon Creek project. Things are only expected to get worse.
In times like these, it is important to take stock of the situation. Premier Notley and her NDP government is taking much of the blame here. Of course, the government did not cause prices to plunge, and of course it can point to mistakes made by former governments. But Premier Notley’s team misses the point made by critics, either knowingly or not.
The criticism is not primarily a matter of her insistence on revising taxation up a few percentage points, although this is not to deny that these tax increases are ill-advised and wholly inappropriate under these circumstances. Indeed, higher taxation is merely a symptom of the bigger problem. Rather, the criticism goes much deeper, and is aimed at the fundamental assumptions and attitudes that the NDP and Premier Notley bring to the table. There is an ideological baggage fundamentally at odds with the needs of Alberta, and this baggage is beginning to take its effect on the province’s economy, its way of life, and its hopes for the future.
This should not be mistaken for partisan double standards, where the NDP is lambasted for decisions on which the PCs would have had a free pass. Such hypocrisy has no place here. The criticisms of the NDP are not rooted so much in their beliefs but rather how they put those beliefs into practice. And so far, every action up to this point has resulted in an utterly poisonous environment for job creators at a time when record low oil prices ought to be enough to contend with.
By now it is hardly news that the province is looking at a $6.1 billion deficit. Predictably, this has left Premier Notley open to attack in the legislature. And unfortunately, her default reaction has revealed a profound misreading of the situation.
“It would be lovely to wave a magic wand and create 40,000 jobs out of nowhere,” the premier told the legislature, mimicking the motions of a magic wand.
While at any other time this sarcastic, Potteresque display might be viewed with amusement, it belies a fundamental misunderstanding of what the oil & gas industry is all about. Had she ever truly understood the mentality of this sector, she would know how utterly alien the idea of government bailouts are. Put simply, utterly no serious industry decision-maker’s thought process includes asking for government help. The oil sector is firmly wedded to the go-it-alone, keep-government-out-of-it ethos of pure, honest capitalism. That is why there is no serious discussion of government intervention in Alberta, which stands in marked contrast to the ongoing debate regarding Bombardier’s troubles and Canada’s ailing aerospace sector more generally. And lest anyone suggest that the industry is a beneficiary of government subsidies, the fact remains that that argument is severely overblown.
The point here is that the industry does not want the government’s help. It simply wants the government to stop rocking the boat. For every single request to that effect, it has been given a lecture.
On the environment, Premier Notley called Alberta an “embarrassing cousin.” On her support for pipelines – always, at best, lukewarm – the premier has said that she wants at least one “drama-free” project, although she has been characteristically vague on what exactly that means. She continues to insist on vague, costly, and potentially fatal environmental regulations to an industry that already faces three separate forms of taxation – corporate, resource, and carbon – and when justly criticized, responds that these expensive, job-and-investment-killing regulations will somehow result in a nebulous and hypothetical “social license to succeed.” Is it really so surprising that the industry has trust issues when a person in power conditions continued economic prosperity on such an extralegal and unworkable concept? How exactly are investors and job creators expected to make decisions when the government willingly uses such broad, unknowable concepts subject to discretionary abuse by decision-makers? What are the governing standards and limiting principles?
In short, the premier’s words betray a staunch refusal to really explain herself or to honestly address criticisms and counterarguments.
Her actions are even more destabilizing than her words. What exactly are we to make of a cabinet of neophytes? Of appointments granted to high-profile anti-industry activists? Many argue that the nascent NDP government has not been given a chance, but this is simply not true. The aforementioned appointments sent an unmistakable signal, and that signal has hardly been conciliatory. The reaction to it has been rational and relatively constrained, given the innate hostility implied.
And at the risk of beating a dead horse, let us not forget the stubborn insistence to go ahead with royalty review and tax increases. It was abundantly obvious since before the election that the NDP was more than happy to stoop to the politics of envy. After all, Premier Notley did justify her tax-and-spend policies on something to the effect of “those who have benefited the most from the boom times in Alberta [will] now contribute a little more.” As if those who staked their best years, those who sacrificed countless hours away from family and friends, and those who put their sweat, blood, and tears into their work somehow robbed others of their due.
It might simply be that the government believes its own caricature of an industry that greedily sits on massive wads of unused cash. An examination of company balance sheets from pre-bust days would dissuade them of that notion, but such introspection would undermine the key narrative of greedy corporations and helpless common folk. Put simply, this tragic demonization of the so-called “rich” – a term which can be stretched to suit any agenda – has simply obfuscated the fact that during the “boom times,” what industry made, industry reinvested, into jobs, into dignity, and into hope.
None of the above – least of all the condescending lectures – is the fault of the PCs or low oil prices. Nor is the dogged willingness to minimize valid criticism. When bought to account for the loss of jobs and investment by Wildrose Leader Brian Jean, the premier accused him of “groundless fear-mongering.”
Taking all the aforementioned patterns into account should make abundantly clear that the fear is far from groundless. The effects are already felt, what would have been bad on its own has been made far worse. When any reasonable person’s concerns for the future are greeted with a slightly more sophisticated version of “don’t worry ’bout it,” it is all but certain that there is indeed much to worry about.
That said, Alberta is an inherently pro-business, ruggedly individualistic, anything goes province. It has maintained the frontier spirit even as it has grown into a sophisticated, diverse, and prosperous place to call home. Having a leftist government will not change the underlying culture. Federal voting behaviour all but confirmed that the next four years of NDP rule are an anomaly bred by disarray among the right coupled with poor election timing. Nevertheless, the NDP remains the legal, elected government of Alberta. It is in this vein that it ought to understand criticisms leveled are not the result of partisan prejudice, but a very real, very adamant, very urgent request by an economically crucial subset of its constituents to please stop rocking the boat.