Premier Danielle Smith (centre) at a November 27, 2023 press conference with Minister of Environment and Protected Areas Rebecca Schulz (left) and Minister of Affordability and Utilities Nathan Neudorf (right). (source: Alberta Newsroom / Flickr)
From the price of oil to the influence of right-wing populist groups to the NDP leadership race and more
January is usually a quiet month in politics, making it a good time to look ahead at what to expect in the year to come. Here are ten things I will be watching that could have a big impact on Alberta politics in 2024:
1. Price of oil
Alberta is probably the only province where the international price of oil is at the top of the Premier’s daily briefing notes. The price of oil not only has a big impact on a lot of Albertans’ jobs, but also the provincial government’s revenue stream.
Relying heavily on the price of oil to pay for the day to day operations of public services, the Alberta government’s 2023/2024 budget projected as much as 25 percent of its revenue will come from oil and gas royalties.
“If we go into this coming fiscal year starting April 1 with $72 per barrel, that might put the government into a situation where they either have to revise their spending plans or face a modest deficit,” University of Calgary economist Trevor Tombetold CBC.
In Alberta, governments live and die by the price of oil.
2. Influence of right-wing populist and separatist groups
Without a doubt the influence of populist and separatist groups has grown in Alberta politics in recent years. Nowhere is this more pronounced than inside the governing United Conservative Party since Danielle Smith became Premier in October 2022 after riding the wave of populist discontent that pushed out former premier Jason Kenney.
In the closing months of 2023, newly elected UCP President Rob Smith spent nearly two hours on a livestream hosted by Alberta Prosperity Project CEO Chris Scott and past Independence Party of Alberta candidate Kerry Lambert.
The APP has advocated for the creation of a Republic of Alberta and is currently calling for a referendum on Alberta’s independence from Canada. Scott gained notoriety in conservative circles during the COVID-19 pandemic when his restaurant in the central Alberta hamlet of Mirror remained open in contravention of public health rules.
And, on January 24, Smith will host and interview American media personality and conspiracy theorist Tucker Carlson at an event in Calgary that has been promoted by the APP and other influential right-wing groups like Alberta Proud, and Take Back Alberta (which is reported to be under investigation by Elections Alberta).
3. The race to replace Rachel Notley
It is hard to imagine the modern Alberta NDP without Rachel Notley, but she announced last week that she will not lead the NDP into the 2027 election and will step down as leader when her successor is chosen, likely later this year.
The leadership race jockeying has already begun, with at least five MLAs sending signals that they plan to run: Calgary-Mountain View MLA Kathleen Ganley, Edmonton-Glenora MLA Sarah Hoffman, Edmonton-Whitemud MLA Rakhi Pancholi, Edmonton-City Centre MLA David Shepherd, and Edmonton-Rutherford MLA Jodi Calahoo Stonehouse.
The NDP Provincial Council will meet on January 27 to discuss timelines and rules for the leadership race. The winner of the race will lead the 38-MLA NDP Caucus into 2025 and the party into the 2027 provincial election.
I am planning to write a lot more about this leadership race in the weeks and months to come.
Alberta Finance Minister Nate Horner (photography by Chris Schwarz/Government of Alberta)
More confusing messaging about the Alberta Pension Plan
As Alberta’s United Conservative Party government continues its big $7 million advertising push to convince Albertans to leave the Canada Pension Plan and start a separate Alberta Pension Plan, Finance Minister Nate Horner told CTV’s Vassy Kapelos that the province’s decision on whether or not to hold a referendum on leaving the CPP will be based on a “high level feeling from many sources.”
Education Minister Adriana LaGrange and Premier Jason Kenney in 2019 (Source: Government of Alberta)
“Never let a good crisis go to waste” is a quote sometimes attributed to former British prime minister Winston Churchill though widely believed to be an example of Churchillian Drift.
The quote could certainly be inspiring Alberta Jason Kenney as his United Conservative Party government continues to implement a five-month old fiscal agenda that is in no way reflective of a rapidly changing world of COVID-19 and $5 a barrel oil.
In a heartless move, Education Minister Adriana LaGrange announced in a surprise 1:00 p.m. press release on Saturday that funding would be cut for school boards across the province, resulting in 25,000 education workers and education assistants losing their jobs.
This announcement came only 13 days after LaGrange publicly reaffirmed that school boards would receive their full allotment of funding for the 2019/2020 school year.
This may turn out to be one of the largest mass layoffs in Alberta’s history.
LaGrange’s press release stated that the now jobless Albertans could look to a new employment insurance program offered by the federal government to support them, which is certainly one way for a provincial government to shift costs to Ottawa. Alberta also appears to be the only province making mass layoffs in the middle of this crisis.
The press release stated that the cost savings will be directed towards the fight against COVID-19, which is a spurious claim at best. The UCP government even listed the layoffs as one of the key ways they are providing economic support during the COVID-19 pandemic, which is ridiculous.
These are not the only public sector workers being laid off. It was announced this month that more than 1,000 staff at the University of Alberta would lose their jobs because of UCP budget cuts. And it would appear that the government is pushing forward with its plans to begin restructuring the public service on April 1.
Under normal circumstances, in a pre-COVID-19 world, these kind of mass layoffs would result in large and loud protests outside the Legislature Building and MLA offices. But gatherings of more than 15 people are now banned in order to stop the spread of COVID-19.
What does the renewal of the national Equalization formula mean for Alberta? What should Rachel Notley and Jason Kenney be doing this summer? What do we think about the New Democratic Party’s latest attack ad? And how should election candidates be using social media in 2019? These are a few of the topics that Dave Cournoyer and Ryan Hastman discuss in this episode of the Daveberta Podcast.
You can listen and subscribe on Apple Podcasts, Google Play, or wherever you find podcasts online. We’d love to hear what you think of this episode, so feel free to leave a comment on the blog, Facebook or Twitter or send us an email at podcast@daveberta.ca.
We are always thankful to our hard working producer, Adam Rozenhart, who helps make each episode of the Daveberta Podcast sound so great.
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).
Jason Kenney
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.
Despite claims by opposition Wildrose and PC politicians that they would repeal the tax if elected in 2019, a federal carbon tax dictated by Ottawa would likely be imposed in its absence.
But arguments in favour of the made-in-Alberta carbon tax have been, well, confusing and technical.
Shannon Phillips
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.
Economists like Trevor Tombe and Andrew Leach have penned or compiled intelligent arguments defending the carbon tax. Even executives of Canada’s largest oil and gas companies have come out in support of the carbon tax. Many of those executives stood on stage with Phillips and Premier Rachel Notley, along with environmental leaders, when the climate change plan was released in November 2015.
Justin Trudeau
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.
One of the arguments that I continue to hear is that Alberta and Canada should not implement a carbon tax because Donald Trump does not support a carbon tax. Trump also tweeted that he believes climate change is a conspiracy created by the Chinese government, so I am not confident that he is someone we should be looking to for leadership on this issue.
Donald Trump
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.
Premier Rachel Notley applauds Finance Minister Joe Ceci as he presents the Alberta NDP's first budget.
When Finance Minister Joe Ceci stood in the Legislature on Oct. 27 to deliver the Alberta NDP’s first budget, it marked the first time since 1972 that the budget was not tabled by a Progressive Conservative finance minister.
Rachel Notley
The first budget of Premier Rachel Notley‘s NDP government includes a 15 percent increase in capital spending over the next five years, with a goal to create jobs and tackle the province’s aging and neglected hospitals, schools, roads and other public infrastructure.
The NDP budget includes modest increases and projected stable funding for health care, education, advanced education and human services – core services that Albertans depend on. This was a key component of the election platform that helped propel the NDP into government on May 5. The job creation and economic stimulus elements of the budget followed last week’s creation of an Economic Development and Trade portfolio, led by Edmonton MLA Deron Bilous.
Deron Bilous Edmonton Alberta MLA Minister
A projected $6.1 billion deficit in the NDP budget is larger than the $5 billion deficit presented in the Tory spring budget, which was tabled but never passed. But the Alberta government’s eighth consecutive deficit budget is “…hardly sky is falling territory,” wrote University of Calgary economist Trevor Tombe in Maclean’s Magazine this week.
“While not trivial, obviously, it is completely manageable. Alberta is fully able to handle it and no one need panic. It represents 1.8 per cent of the province’s GDP, which is fairly small, as far as some deficits go,” Dr. Tombe wrote.
The NDP government will borrow to pay for parts of its operations budget starting next year, which will hopefully be a short-term move. Decades of bad financial management and poor long-term planning by the previous conservative government has exacerbated the provincial government’s current fiscal situation. The PCs simply became too comfortable and dependent on unreliable revenue from natural resource royalties to fund the province’s operations budget.
Jim Prentice
Mr. Ceci also announced that the government would legislate a debt ceiling of 15 percent debt-to-GDP in order to hold off a risk of credit downgrades and higher debt service costs.
Former premier Jim Prentice was correct last year when he warned about getting “off the royalty roller coaster.” The Alberta government faces serious revenue problems and moving Alberta away from its over dependence on resource revenue will be a significant test of Ms. Notley’s first term in government.
Any plan to deal with the revenue problem will likely come after the government receives a much anticipated report from the royalty review panel chaired by ATB President and CEO Dave Mowat. The panel is expected to finalize its recommendations by the end of the year. But it will not be enough to simply wait for the international price of oil to rise again. Albertans need to have a serious conversation about revenue and taxation, including the potential introduction of a provincial sales tax.
Mr. Jean’s post-budget press conference was somewhat overshadowed by Mr. Fildebrandt’s bizarre decision to refuse to answer a question from Globe & Mail reporter Carrie Tait (see the ~8:50 mark in this video). Mr. Fildebrandt is sour from a recent interview Ms. Tait published in which she quotes him as claiming the NDP duped Alberta voters by actually implementing promises made during the election (and he later referred to Ms. Tait as a b-list reporter and accused her of auditioning for a job in the Premier’s Office – a comment he later retracted).
Brian Jean
A joint opinion-editorial written by Wildrose MLAs Rick Strankman (Drumheller-Stettler), Grant Hunter (Cardston-Taber-Warner), and Don MacIntyre (Innisfail-Sylvan Lake) and Dave Schneider (Little Bow) and circulated to rural weekly newspapers in September 2015 provides some sense of how that party would approach provincial budgeting if elected to government:
“When governments borrow and spend, there’s no marketable asset. There’s only debt. It’s like using a credit card to buy pizza. Even when governments borrow to spend on bridges and highways rather than programs, the debt is still not connected to a marketable asset. It’s a liability. Mortgages can be liquidated. Houses can be sold. Who buys used government bridges and worn-out highways?”
This is a crude ideological approach to public governance. Using capital financing to pay for the construction and maintenance of public infrastructure like hospitals, schools, bridges and roads is nothing like using a credit card to buy a pizza.
The Alberta NDP’s first provincial budget is sensible and reflects the thoughtful approach that has defined the first six months of Ms. Notley’s tenure as Alberta’s Premier. Rather than follow a disastrous road taken by some of her predecessors, and slash funding to government services while the price of oil is low, the NDP government is taking an opportunity to invest in much needed public infrastructure when the economy is slow and the price is right. It’s not a brand new approach in Alberta politics, but it is refreshing to see a government focus on building rather than tearing down.
