Andrew Leach joins Dave Cournoyer on the Daveberta Podcast to discuss the state of Alberta’s economy, economic diversification and how the politics of oil and pipelines are developing in 2020. He also shares some thoughts and reflections on climate change policy from his time as chair of Alberta’s Climate Change Advisory Panel in 2015.
Leach is a Canadian energy and environmental economist and an Associate Professor at the University of Alberta. You can follow him on Twitter and read more about him on his Wikipedia page.
This episode sounds great because of the skills and technical expertise of our hard-working producer, Adam Rozenhart.
The Daveberta Podcast is a member of the Alberta Podcast Network. The Alberta Podcast Network includes dozens of great made-in-Alberta podcasts.
You can listen and subscribe to the Daveberta Podcast on Apple Podcasts, Google Play, Spotify, Stitcher, or wherever you find podcasts online. We love feedback from our listeners, so let us know what you think of this episode and leave a review where you download.
Wildrose MLA Derek Fildebrandt marked New Year’s Eve by posting photos of himself filling up his truck and jerrycans to avoid any increase to gas prices caused by the carbon tax on January 1. It is estimated that he may have saved a few dollars, but in many locations across Alberta the price of gas actually dropped after the weekend (gas at the local station in my neighbourhood in northeast Edmonton is six cents cheaper per litre today than it was on Dec. 31).
Progressive Conservative leadership candidate Jason Kenney probably levelled the silliest criticism of the carbon tax when he tweeted on January 4 a photo of Tesla charging station in Fort Macleod, which was empty. This was apparently meant to be an argument that the four day old carbon tax was a failure.
But arguments in favour of the made-in-Alberta carbon tax have been, well, confusing and technical.
Environment and Parks Minister Shannon Phillips’ statement that the province is “still standing” the day after the carbon tax was implemented was factually correct but probably not the statement most Albertans were waiting to hear. Phillips is one of the government’s smartest cabinet ministers, and has done a good job promoting the flagship Climate Leadership Plan, but the NDP have fallen short when it comes to easing Albertans worries about the cost of implementing the carbon tax during an economic downturn.
In November 2016, Prime Minister Justin Trudeauheaped praise on Notley for Alberta’s climate change plan, which includes the carbon tax, as a key reason for the approval of the Kinder Morgan Trans-Mountain pipeline expansion and the Enbridge Line 3 pipeline replacement.
But as anyone involved in politics knows, emotion and anger can sometimes trump facts, science and research. The recent presidential election south of the border confirms this.
Advertisements recently released by the Ontario government are, in my opinion, a good example of an emotional argument in favour of a climate change plan.
Overall public opposition to the carbon tax might start to fade in the coming months as many Albertans begin receiving their rebate cheques – around sixty percent of Alberta households will get a rebate, with full rebates for single Albertans earning $47,500 or less, and couples and families who earn $95,000 or less – but the NDP government will need to work overtime to provide clear evidence of how the carbon tax will benefit Albertans.
Of the funds collected by the carbon tax, the government says $2.3 billion will go towards rebate programs, $3.4 billion will help businesses adjust to the carbon levy, $6.2 billion will go toward energy industry diversification and job creation, $3.4 billion for large scale renewable energy and technology, and $2.2 billion for green infrastructure. As well as $645 million will be directed towards the new provincial agency Energy Efficiency Alberta and $195 million to assist coal communities, which will be impacted by the phase out of coal-fired power plants by 2030.
The NDP also cut the small business tax from three percent to two percent, a change that came into effect as the carbon tax was implemented.
Taxes in Alberta remain low, some of the lowest in Canada. Investing in measures that could create a cleaner environment for the next generations is not a burden, it is a responsibility. The carbon tax is a sensible policy, but it could be an uphill battle to convince Albertans to embrace it.
The full court press against the Alberta government’s Climate Leadership Plan continued today as Postmedia business columnists Gary Lamphier and Claudia Cattaneo dutifully and uncritically weighed in on the latest report from the right-wing Fraser Institute. The report claims the emissions cap included in Alberta government’s climate change plan will cost Canada’s oil sands industry $250 billion and is the latest in a concerted effort by conservative opponents of the NDP to undermine its flagship policy.
Both columnists unquestioningly quoted in length the dire warnings of the Fraser Institute report, with Ms. Cattaneo giving the closing word in her column to Wildrose Party leader Brian Jean, who surprised no one by describing the emissions cap as “damaging.” Focused on attacking the government’s policy, neither columnist bothered to provide any actual analysis of the report or delve into what a Wildrose government would do, if anything, to reduce carbon emissions.
Offering their support for the Climate Leadership Plan at the November 2015 press conference were industry heavy hitters like Canadian Natural Resources Limited chair Murray Edwards, who said: “The framework announced will allow ongoing innovation and technology investment in the oil and natural gas sector. In this way, we will do our part to address climate change while protecting jobs and industry competitiveness in Alberta. (Ms. Catteneo actually interviewed Mr. Edwards a few days after this announcement)
And Brian Ferguson, President & Chief Executive Officer of Cenovus Energy, who said: “We fully support the Government’s new climate policy direction. It enables Alberta to be a leader, not only in climate policy, but also in technology, innovation, collaborative solutions and energy development.”
And Steve Williams, President and Chief Executive Officer of Suncor, who said: “Today we reach a milestone in ensuring Alberta’s valuable resource is accompanied by leading carbon policy. It’s time that Alberta is seen as a climate, energy and innovation leader.”
And Lorraine Mitchelmore, President and Country Chair of Shell Canada and EVP Heavy Oil for Shell, who said: “Today’s announcement sets Canadian oil on the path to becoming the most environmentally and economically competitive in the world.”
And finally, Tim McMillan, president and chief executive officer of the Canadian Association of Petroleum Producers, who said: “…the province’s climate strategy may allow our sector to invest more aggressively in technologies to further reduce per barrel emissions in our sector and do our part to tackle climate change. That’s what the public expects, and that’s’ what we expect of ourselves.”
It is not to say that these energy executives will agree with every policy the Alberta government will implement over the next three years, but these two Postmedia business columnists owe it to their readers not to omit these important facts from their columns.
Note: The results of the Fraser Institute report are disputed by the Pembina Institute‘s Simon Dyer, who told the CBC that the report “is based on unreasonable production levels that don’t consider the world making progress on climate change.” University of Alberta economist Andrew Leach, who chaired the Climate Change Review Panel, told the CBC that “given what I can tell, the study does not assume any progress in oilsands emissions per barrel and no ability to reduce emissions other than shutting in production.”
Bill 20 would legislate Alberta’s carbon levy and carbon levy rebate, ensure revenue from the carbon levy is invested in addressing climate change, and establish Energy Efficiency Alberta. As economist and Climate Change Panel chairman Andrew Leach pointed out on Twitter today, carbon pricing has wide support from economists from N. Gregory Mankiw to Paul Krugman.
After years of inaction by the old Progressive Conservative government, it is refreshing to have a government that believes in climate change and has actually presented a policy to address it.
The Alberta NDP’s climate change plan defies supporters of the much-maligned LEAP Manifesto, which was spearheaded by more radical elements of the federal NDP at that party’s recent convention in Edmonton. By defying the LEAPers, Ms. Phillips and Ms. Notley are demonstrating a clear difference between an NDP government that takes action and an NDP opposition that just talks big.
Bill 20 will spark some interesting debate on the floor of the Alberta Legislature.
Ms. Notley has fended off the radical environmentalists in her party and presented a sensible policy and bill. How will the opposition respond?
Wildrose MLAs will likely focus their energy attacking the carbon levy and calling for more oil pipelines, but will the official opposition defy the radical climate change deniers in their own ranks and present a policy alternative to the NDP’s Climate Leadership Plan? Will Brian Jean‘s Wildrose Party join the debate with a policy alternative beyond ‘we will repeal whatever the NDP does on climate change‘?
The NDP have told their radicals to take a hike. Can the Wildrose do the same?
Ms. Notley proved to be a smart, likeable and charismatic leader on the campaign trail. I would argue that she was then and remains now her party’s greatest asset.
Voters opted for wholesale change by choosing 75 new MLAs, a huge turnover, to serve in Alberta’s 87 seat Legislative Assembly. The NDP started the election with 4 seats and ended it with 54 seats, including every seat in Edmonton, 15 seats in Calgary, seats in Lethbridge, Medicine Hat and Red Deer, and a handful in rural Alberta.
The PCs lost a total of 60 seats and were relegated to third place with 10 MLAs (9 after leader Jim Prentice resigned on election night) and the official opposition Wildrose won 21 seats, four more than the party won in 2012.
A record number of women were elected to the Legislature, including 26 in the 54 MLA NDP caucus and 7 of 13 cabinet ministers.
Thomas Dang, age 20, became the youngest MLA in Alberta history.
Optimism was in the air as thousands of Albertans showed up to the Legislature Grounds to watch the new Premier and cabinet be sworn-in to office.
In their first session as government, the NDP banned corporate and union donations, restored $1 billion in health care, education and human services funding cuts made by the PCs, increased Alberta’s corporate tax rate from 10 percent to 12 percent and announced a phased in $15 per hour minimum wage by 2018.
Ms. Notley demonstrated an ability to reach outside NDP circles for expert advice by appointing Alberta Treasury Branches President & CEO Dave Mowat to lead a Royalty Review Panel, respected economics professor Andrew Leach to lead a Climate Change Panel, and former Bank of Canada governor David Dodge to provide advice on infrastructure investment. Calgary Liberal MLA David Swann was asked to co-chair a review of the province’s mental health services and Joseph Doucet, Dean of the University of Alberta’s School of Business, was tapped to chair the Premier’s Advisory Committee on the Economy.
The PC Party patronage machine ground to a halt. University and college boards of governors are still dominated with well-connected conservatives, but some high-profile appointees have been replaced. For example, Alberta’s representative in Washington D.C. Rob Merrifield, a former Conservative MP, was replaced by Gitane De Silva, a former Deputy Minister of International and Intergovernmental Affairs and Canadian Consul General to Chicago.
On the financial front, the NDP government faces serious problems inherited from the old PC government.
After years of poor long-term planning and over-reliance on royalty revenues to fund the province’s operations budget, the sharp decline in the international price of oil had a huge impact on the government’s coffers. The drop in the price of oil has also led to significant job losses in Calgary and northern Alberta, which have impacted tens of thousands of Albertans.
Instead of dealing with the drop in revenue by cutting budget funding and slashing public sector jobs, like the Wildrose and PC parties proposed, the NDP have decided to invest in public infrastructure, such as highway, school and hospital construction.
As well as keeping many Albertans in the construction industry employed during the economic downturn, investing in building public infrastructure now means the government will spend less time playing catch up when the next oil boom arrives. Ironically, this is similar to what Wildrose leader Brian Jeanargued in favour of when he resigned as Fort McMurray’s MP in January 2014.
Despite a constant barrage of criticism from conservative critics, who claim the NDP election win was simply a fluke, a recent poll showed the NDP with a narrow lead in Calgary and a wide lead in Edmonton. The poll was not fantastic news for the governing party, but it undermines the argument that the NDP were elected by accident. The NDP appear to be developing a solid base of support among moderate and progressive voters in urban Alberta.
This election was a reminder that Alberta has defied its stodgy political stereotype and has rapidly become a young and urban province.
The city of Calgary, long known for its conservative political roots, has now elected progressive politicians in the municipal, provincial and federal levels of government, something that would have been unheard of in past years.
According to Statistics Canada, in 1961, 53 percent of Albertans lived in rural areas. As of 2011, 83 percent of Albertans lived in urban centres with only 17 percent of our province’s population living in rural areas. This is a massive population shift that has and will continue to impact our political map for decades to come.
The year’s election was a rejection of establishment politics and a reminder that Albertans are largely politically moderate and more populist than conservative, which is an important distinction that the ruling PCs forgot after 44 years in power. It was also a reminder of how dramatically voters can abandon their traditional patterns of voting and embrace change.
This year was filled with many exciting firsts for progressive politics in Alberta. And while it is impossible to tell what the next year will bring in Alberta politics it is clear that our province changed in a significant way in 2015.
I had the pleasure of joining Ryan Jespersen on 630CHED on Dec. 16, 2015 to talk about the past year in Alberta politics. Take a listen and let me know what you think about what happened in 2015.
Pigs continued to fly in Alberta politics today as energy industry leaders and environmental groups joined Premier Rachel Notley and Environment and Parks Minister Shannon Phillips at a press conference to release Alberta’s much anticipated plan to take action against Climate Change. The Alberta government received the final report from the independent panel led by University of Alberta economics professor Andrew Leach and announced its plans to phase out coal burning electricity plants, phase in a price on carbon, introduce a limit on overall emissions from the oil sands and introduce an energy efficiency strategy.
Here is what energy industry executives, environmental leaders and opposition politicians had to say about today’s climate change announcement:
“Responding to climate change is about doing what’s right for future generations of Albertans – protecting our jobs, health and the environment. It will help us access new markets for our energy products, and diversify our economy with renewable energy and energy efficiency technology. Alberta is showing leadership on one of the world’s biggest problems, and doing our part.” – Rachel Notley, Premier of Alberta (full release)
“I thank the panel members and the many Albertans, including Indigenous people, industry, environmental groups, municipalities and other partners and stakeholders for their contribution. This is the right plan for our province, and now is the right time to implement it.” – Shannon Phillips, Minister of Environment and Parks (full release)
“The announcement is a significant step forward for Alberta. We appreciate the strong leadership demonstrated by Premier Notley and her government. The framework announced will allow ongoing innovation and technology investment in the oil and natural gas sector. In this way, we will do our part to address climate change while protecting jobs and industry competitiveness in Alberta.” – Murray Edwards, Chair, Canadian Natural Resources Limited (full release)
“Today we are making history, with Alberta taking its rightful place as a leader on the world stage. Premier Notley promised Albertans leadership on the issue of climate change and she and her government have delivered. This is the right thing to do for both for our environment and our economy. The world needs more of this kind of leadership from major energy producing jurisdictions if we are to avoid dangerous climate change.” – Ed Whittingham, Executive Director, Pembina Institute (full release)
“We fully support the Government’s new climate policy direction. It enables Alberta to be a leader, not only in climate policy, but also in technology, innovation, collaborative solutions and energy development. I believe it will lead to Albertans and Canadians receiving full value for their oil and natural gas resources, while addressing climate change.” – Brian Ferguson, President & Chief Executive Officer of Cenovus Energy (full release)
“After a string of pipeline victories and over a decade of campaigning on at least three different continents, the Alberta government has finally put a limit to the tarsands. Today they announced they will cap its expansion and limit the tarsands monster to 100 megatonnes a year.” – Mike Hudema, Greenpeace (full release)
“This new carbon tax will make almost every single Alberta family poorer, while accelerated plans to shut down coal plants will lead to higher power prices and further jobs losses. Wildrose will be looking at every detail of this plan closely, and we will speak out against policies that hurt Albertans and the economy.” – Brian Jean, leader of the Wildrose Party (full release)
“Canadians have high expectations of themselves when it comes to protecting the environment and managing economic growth, and the world expects much of Canada. Alberta’s new climate change policy sends a clear message that Alberta intends to live up to those expectations. Today’s announcement sets Canadian oil on the path to becoming the most environmentally and economically competitive in the world.” – Lorraine Mitchelmore, President and Country Chair Shell Canada and EVP Heavy Oil for Shell (full release)
“Now it’s time for the government to unapologetically promote Alberta’s emissions reduction successes to date and clearly articulate support for the long-term growth of Alberta’s energy industry, including the oil sands, conventional production, natural gas power, cogeneration and renewable energy.” – Greg Clark, leader of the Alberta Party (full release)
“Today we reach a milestone in ensuring Alberta’s valuable resource is accompanied by leading carbon policy. It’s time that Alberta is seen as a climate, energy and innovation leader. This plan will make one of the world’s largest oil-producing regions a leader in addressing the climate change challenge.” – Steve Williams, President and Chief Executive Officer, Suncor (full release)
“On a public policy Richter scale, Alberta’s new Climate Leadership Plan is an 11. It is enormously positive and forward-looking and will yield measurable benefits for the health and quality of life of Albertans. Significantly, the new plan is supported by oil industry leaders, environmental organizations and other important stakeholders.” – Rick Smith, executive director of the Broadbent Institute
“Alberta’s decision to move away from coal-fired electricity generation and dramatically increase its use of renewable energy reflects a trend happening in countries all over the world. More renewable energy in Alberta will reduce greenhouse gas emissions, clean the air, and produce significant new investment and jobs – particularly in rural areas of the province.” – Robert Hornung, President of CanWEA (full release)
“As Premier Notley said today, we expect today’s announcement to further enhance the reputation of our sector and improve our province’s environmental credibility as we seek to expand market access nationally and internationally. As well, the province’s climate strategy may allow our sector to invest more aggressively in technologies to further reduce per barrel emissions in our sector and do our part to tackle climate change. That’s what the public expects, and that’s’ what we expect of ourselves.” – said Tim McMillan, president and chief executive officer of the Canadian Association of Petroleum Producers (full release)
This week’s Council of the Federation meeting in St. John’s, Newfoundland marked Alberta Premier Rachel Notley’s first appearance on the national stage since the NDP won a stunning victory in the May 5, 2015 provincial election. The new premier used the meeting to strike a more collaborative tone than her Conservative predecessors, who sometimes appeared more interested in chest-thumping than negotiating with their counterparts from other provinces.
The premiers signed on to a Canadian Energy Strategy, which could be an important first step in national cooperation but does not approve pipelines or targets to reduce carbon emissions. As long as Prime Minister Stephen Harper and the federal Conservative government refuse to participate in these meetings, there is only so much that can be achieved.
What is clear is that previous strategies used by Alberta premiers to promote expansion of pipelines from Alberta’s oilsands has fallen flat. And with this week’s major oil pipeline leak in northern Alberta, critics and opponents of pipeline expansion to change their minds without assurances of stricter environmental regulations.
Compromise and negotiation should be part of politics in any democratic country. On any controversial projects, like cross-Canada pipeline expansion, it should be expected that local political realities in provinces and First Nations will slow, or block, attempts to force through industrial projects.
With a new government, Alberta has an opportunity to show our critics, through collaboration, negotiation and action, that strong leadership on economic and environmental issues are not mutually exclusive. That would be a refreshing change.
I was honoured to be the recipient of the Best in Political/Current Affairs Award and a Special Lifetime Achievement Award at last night’s Yeggies celebration at La Cité Francophone. The Edmonton New Media Awards, or the Yeggies, is an annual awards show created to recognize and celebrate outstanding social media content creators in Edmonton.
I knew was up against some tough competition in the Political/Current Affairs category – Andrew Leach, Extreme Enginerding and Radical Citizen Media – but the Lifetime Achievement Award was a complete surprise. It may seem strange for a 31-year old to accept an award like that (I hope to live for a few more decades), but it does feel like a lifetime since I launched this blog ten years ago.
I had no idea what this blog would become when I first hit the publish button back in January 2005, but 6 Premiers and 3 provincial elections later, I am still writing about the always exciting world of Alberta politics. And although it remains my hobby, it is still an honour to be recognized for the work I have put into this blog over the past ten years.
Congratulations to all the other award winners and nominees and Thank You to the Yeggies Committee and to everyone who continues reading this blog.