At this point, Notley and Alberta’s NDP are as much to blame as the oil price drop

Yesterday in the BOE Report, contributor Terry Etam wrote a post suggesting the past 50 years of Alberta government help to create the economic problems the province now faces. You can read the story here.

Instead of defending PC policies over the past 40+ years, which were at the helm of Alberta’s governance while the province was the bastion of economic freedom and prosperity in North America, I will focus on what has been and continues to be a catastrophic NDP-led Alberta government.

To begin however, I’d like to point out a few items where I agree with Terry in his recent piece:

• There should be far more money in Alberta’s Heritage Fund
• A twinned highway from Edmonton to Fort McMurry should’ve been built long ago
• There should be a sales tax along with zero provincial income tax
• More pipelines should’ve been built

The above points, however, were fought against by the NDP for years. Furthermore, if the NDP had been at the helm of Alberta the past 50 years, there would be no money in Alberta’s heritage fund, no highway twinned from Edmonton to “the dirty Tar Sands” of Fort McMurray (as many NDPers have called it); there would be a sales tax, but also higher income, business and virtually every kind of tax imaginable. And of course, we all know the NDP position on pipelines over the years. In a sense, the very policies the NDP advocated against for years, have come back to haunt them.

Now there’s no question the NDP walked into a difficult situation with low oil prices, but let’s not forget, that was where they started, not what they ran into. Managing an economic crisis requires a steady hand. The NDP’s actions have been anything but. Since assuming office, here is the list of all the major actions which they have taken and how it will affect the oil and gas industry:

• Raised corporate taxes from 10% to 12% – Most companies are not profitable at this stage so the effect is not as drastic
• Notley immediately came out against Keystone XL pipeline in her first sitting in Legislature – This was an enormous red flag for everyone in the oil and gas industry in Alberta. Perhaps the most important pipeline for lowering differentials, and the NDP are against it
• Instituted a carbon tax -increases costs substantially for every Albertan, especially struggling oil and gas companies
• Raising minimum wage to $15/hour – Make no mistake, this will ripple through to every company in this province. For oil companies, it will mean higher costs on a multitude of services
• The AER’s tightening of rules on Liability ratings following the RedWater Energy case – The NDP has overseen its Energy Regulator putting in place a crippling regulation that will stymie deals, potentially lead to a huge changes from banks on their lending terms to oil companies
• Called for a royalty review – Conducted a long, drawn out royalty review which amounted to almost nothing, but caused spending and plans to be delayed
• Lowered small business taxes from 3% to 2% – this is positive, full credit given

So Alberta’s NDP have replied to low oil prices by primarily raising taxes at a higher rate than almost anytime in Alberta history, and tightening the noose considerably with environmental legislation. Oil prices went down, NDP took over, NDP raised taxes and fees and costs substantially for oil and gas companies.

The dark cloud the NDP has cast over Alberta has spooked investment and operating companies away from and out of this province. ConocoPhillips, ExxonMobil and Shell spend more money in third world countries than they do in Alberta. Again, there were some factors that were out of the NDP’s control, but their policies could’ve easily been that final push which sent these multinationals over the edge.

LEAP Manifesto

A few months ago, the federal NDP passed a LEAP Manifesto – which we all know is insane – and Notley denounced it (some called it courageous). Slow clap coupled with crickets. Not denouncing it would’ve been political suicide. The jury is still out on how many of the NDP MLA’s agree with the manifesto or not. But if they were truly opposed to a piece of legislation which would put hundreds of thousands of Albertans out of work and out of their homes, they should’ve left the party. That would’ve been real courage.

PC Leadership

It seems easy nowadays to criticize the PC government that ruled Alberta for so long. Sure, in the past 4 or 5 years the leadership gave themselves some special treatment at the expense of a few million taxpayer dollars. For that, they were punished; they lost the last election badly. But looking at the forest and not the trees, $3 or $4 million in dishonest perks to PC leadership is literally nothing compared to tens of billions lost in Alberta to companies pulling out, delaying plans or going bankrupt.

I would also be curious to know what the NDP’s plan is for remediating the abandoned well issue facing the province. It is one thing for the NDP to claim prudent environmental stewardship as part of their party platform, but wholly another thing to not have a plan to address one of the most baffling quagmires in the Albertan environmental portfolio. No such carbon price will have any sort of a direct effect on cleaning up billions of dollars worth of abandoned wells. And suggesting a carbon tax will somehow get pipelines built is a risky dream. It’s actually quite the mystery: the carbon tax=pipeline forumla.

No sane person blames the NDP with the situation they inherited. But there is no defense for responding to crisis by simply enacting a radical ideology which only makes a bad situation much worse.