“…if you don’t mind my sayin’ I can see you’re out of aces. For a taste of your whiskey, I’ll give you some advice”—Kenney Rogers, The Gambler
If there is one thing we should take away from Finance Minister Toews’ budget presentation last Thursday it’s this: the Kenney government has run out of aces and they refuse to let anyone give them any advice because they’re afraid they’ll lose the next election.
How’s it going so far?
We are halfway through Premier Kenney’s term and despite everything he’s done to create “jobs, economy, pipelines” nothing has worked.
He slashed corporate taxes, relaxed regulations, flung the doors open to coal companies, cut public services (causing tremendous damage to education and healthcare), reduced support for municipalities, and foisted more costs on to Albertans…and for what? At the end of Kenney’s term Alberta will be stuck with an $8 Billion deficit and a $133 Billion debt.
Despite the pain, there’s been no gain.
Naturally Albertans want to know what Kenney intends to do about it.
The go-forward plan
The answer is: not much.
The government will spend $3.1 billion next year on various sectors including energy, tech, tourism, pharma and life sciences but details are sketchy and a significant chunk of the money is slated for ongoing projects, not new initiatives. Even the Jobs Now program that Kenny announced with great fanfare is a federal-provincial grant program that’s been around for years.
So what’s new?
The only part of the Budget document that offers specificity is the bit that gripes about the Feds not doing enough for Alberta and the 5 page discussion of the government’s policy to support ESG.
You remember ESG (environmental, social and governance considerations), the thing Kenney once referred to as the “flavour of the month.”
Well now the Kenny government is going to support the energy sector’s ESG efforts by piggy-backing on to the Feds’ climate change mitigation efforts (assuming Kenney isn’t fighting them in court) and allocating $1 Million to an ESG initiative that will hold entities who view Alberta’s ESG story “unfairly” to account.
Yes, that’s the War Room and the Anti-Alberta Public Inquiry’s job, but hey, what’s another million among friends.
The ESG initiative will be run by the Kenney executive council (ie Cabinet). These folks are responsible for the botched War Room, scrapping the 1976 Coal Policy (and bringing it back temporarily), suspending environmental monitoring during covid, selling off, then not selling off Alberta’s parks, cutting staff and “red tape” in the department of Energy and the Alberta Energy Regulator, etc.
In other words, the go-forward plan is a zombie version of the existing plan, which Mr Toews readily admits isn’t good enough.
Oh wait…
Could it be that Alberta can’t balance its budget because its fiscal structure is flawed?
For decades Alberta has relied on oil and gas royalty revenues to balance the budget. Royalty revenues are ridiculously unstable, yo-yoing up and down and wreaking havoc on Alberta’s budgets.
Economists and the Business Council of Alberta say a more stable, reliable revenue source is necessary (sales tax? did someone say sales tax?)
Mr Toews says oh no, not now. The government must wait two to three years when it will have “more economic clarity” at which time it might, maybe, set up a “revenue panel” to review the “efficiency and appropriateness” of Alberta’s revenue structure.
(Mr Toews graciously avoids saying Mr Kenney could have done this in 2019 when he asked the MacKinnon panel to review Alberta’s fiscal structure but restricted the review to the expenditure side only).
So, let’s talk about Mr Toews’ concern about the lack of “economic clarity.”
Have you read the 2021 Budget document? It’s chock full of statistics, forecasts, and energy and economic assumptions; assumptions the Kenney government says are prudent and solid enough to support the conclusion that there will be an $8B deficit at the end of Kenney’s first term.
The issue isn’t a lack of clarity but a lack of political will to set up a revenue panel because this would signal to Albertans that that the UCP government’s economic strategy failed and it’s time to consider a sales tax.
Besides there’s always the (tiny) chance Alberta will be blessed with another oil boom which would allow the Kenney government to slip off the hook it created for itself when it wiped out billions in corporate tax revenues, billions in carbon tax revenues, and propped up KXL by gambling Trump would win the US presidential election.
And yes, covid has kicked the stuffing out of Alberta’s economy just as it’s ravaged the economies of the other provinces and territories across Canada, but no, those jurisdictions are not making things worse for themselves by clinging to what the Business Council calls an “outmoded mythology” ie. Alberta hasn’t had a sales tax for 60 years and god damn it it’s not going to have one now.
The Kenney government is going to play out its hand. Albertans will have a chance in the next election to tell the Kenney government it’s time to fold ‘em and walk away.
Susan on the Soapbox 
In 2013, the cost of cleaning up after Alberta’s oil and gas industry was estimated by the AER to be as high as $260 billion. The Kenney government’s budget doesn’t address this issue at all and presumes MAGIC will solve the problem as they say this is the AER problem.
This is an excellent point Dale.
Budget 2021 turns a blind eye to this liability both in its number crunching and also in numerous self-congratulatory comments about Alberta’s commitment to ESG. For example: “Strong provincial policies that reduce greenhouse gas emissions and address other environmental, social and governance (ESG) considerations enable the country to capitalize on being among the most responsible energy producers in the world.”
But there’s only one reference to orphan wells and that’s in the $300M loan to the orphan well association. The only references to tailings ponds are in connection with the oil companies working to reduce their environmental footprint, once again there’s no indication of the magnitude of the problem.
It is not too late to put the Stelmach Royalty Review into effect, nor is it too late to bring back a carbon tax. The integrated majors are doing just fine and could easily afford to pay some more income tax as well. Enhancement of public services provided by the government sector would also help stabilize effective demand in the economy as would expanding public infrastructure. Perhaps that would buy us some time to put some longer term policies in to bring us to a greener economy.
Stockwell Day loved flat taxes like a sales tax and let’s not forget that the so-called business council is really a collection of the same people who have run this province into the ground. We could have been Norway and that needs to be our goal on resource management. Who knows, we might even work with BC on electricity for the public good.
Let’s not panic on a set of short term deficits. This is not a household after all.
Caron: I don’t think the UCP got rid of Alberta’s carbon tax.
https://www.macleans.ca/economy/economicanalysis/both-the-ndp-and-ucp-support-a-price-on-carbon-its-time-we-admit-it/
You’re right Dwayne. I was referring to Notley’s “carbon levy” which Kenney scrapped as one of his first orders of business when the UCP formed government.
Well said Caron.
You mentioned Norway, the Globe & Mail ran an excellent piece on the weekend stating that Norway’s US$1.3 trillion sovereign welath fund blacklisted 15 businesses in 2020, four of which were Canadian oil sands players: CNRL, Cenovus, Imperial and Suncor. The fund bailed for ethical/sustainability reasons and it wanted to reduce its exposure to “unacceptable risks”..
The fund generated US$123 billion last year.
The writing is on the way, The future belongs to renewable energy players.
Hi Caron. I agree reviewing and rationalizing the royalty system are 14 years overdue, but I’d advise against holding your breath. Kenney’s too dependent on money from the small and medium oil company owners to risk annoying them.
The big companies–the vertically integrated bitumen producers–can indeed afford to pay more. In part, that’s because they’ve been replacing human beings with computer-controlled machinery. Great for cost control and productivity, not so good for morale, loyalty or provincial tax revenue.
I’m very much afraid your other points would only be possible under a progressive government, and only after a LOT of persuasion of the more reactionary types. (Although I strongly doubt Stockwell Day would have loved a sales tax, even if it was flat….)
Both the Ed Stelmach and Rachel Notley administrations investigated updating Alberta’s laughingstock-of-the-oil-producing-world royalty rates..
Coincidentally BOTH times that those reviews were underway the price of WTI (and so Western Cdn. Select) simultaneously crashed hard. These price drops obviously had a massive influence on both gov’ts’ decisions not to increase royalty rates for the industry.
Go figure.
GoinFawr: I read the Royalty Review report to the Notley government. If I recall correctly it started with the premise that Alberta oil had to be competitive with global oil (which when you think about it is difficult given the cost of mining bitumen and the transportation issues) rather than the premise that Albertans as owners of the oil deserve to be fairly compensated for it. Once the Royalty Review Panel defined the problem that way, low royalties were a foregone conclusion.
I differ to what you said GoinFawr in the fact that I think that was intentional.
They knew the report was not going to be favorable. In the case of Stelmach it was intentional. In the case of Rachel Notley she did not mind it because it is too late to change it now. We can now live with the thought that had we been not so right wing we could have had 1 trillion dollars in the bank just like Norway does and not a 100 billion debt. This is what we got with the likes of Conservatives we have in this province that certainly care more about corporations than its own citizens.
Carlos you said it all in that last sentence: the Conservatives here now care more about corporations than their own citizens. Whether it’s blind adherence to the theory of trickle down economy, which has been shown to be a nonstarter, or something more basic like a fundamental belief that those who are rich deserve to be rich and those who are not have only themselves to blame. Either way, the corporations benefit.
Mike in Edmonton: you make a very good point.
I note the Kenney budget is based on a conservative forecast of future oil prices, this is an interesting reversal of where they were last year when they published pie-in-the-sky forecasts that were out of whack even before the budget was released.
I suspect the UCP government believes oil prices will go higher than their forecasts and knows that higher prices will produce higher royalties which will reduce the deficit more quickly. That will make them look good.
But here’s the thing, oil companies (especially the big ones as you’ve pointed out) have been replacing human beings with machines. So while higher oil prices will put more money Alberta’s coffers and in shareholders’ pockets, they won’t necessarily translate into more jobs.
Albertans are in for a rude awaking if they expect higher prices to create another hiring boom.
“Alberta’s ESG story”
The WarRoom February 17, 2021 says:
“The state-owned Saudi Arabian oil firm, Saudi Aramco, was just outed for omitting up to half its carbon emissions impact.”
https://www.canadianenergycentre.ca/commentary-comparing-the-rhetoric-on-european-divestment-from-canadian-oil-and-gas-to-hard-data/
(Continued in next comment because it seems there is a one link per comment limit!)
Keith I couldn’t find your second comment (lord only knows where it went!), but you make an interesting point about Saudi Aramco understating its carbon emissions impact by failing to include emissions from refineries and petrochemical plants.
It’s unclear to me whether the Bloomberg report at the link was referring to Scope 1 emissions (all activities under Aramco’s control–ie. were these refineries and P/C plants owned by Aramco) or Scope 3 emissions (emissions generated by third parties that can be traced back so Aramco). So it’s hard to assess how well Alberta oil companies fare in comparison.
Interestingly, the War Room’s argument was founded not so much on relative GHG production but rather the position that it’s better to buy Alberta oil than Saudi Arabia oil because the Saudi’s have a worse human rights record than Canada and, by implication, Alberta.
Many BIPOC and LBGTQ people would disagree with that assumption.
In any event I think it’s a red herring. The human rights record of both countries must be improved and the GHG emissions in both countries must be reduced or we’re in for a world of pain.
I was going to point out that the WarRoom’s “reduced GHG emissions intensity by 28% from 2000 to 2017” is partly due to the fact that we are exporting proportionately more raw bitumen and less (partly refined) syncrude. We don’t know how much because neither they nor the companies publish the numbers. They don’t even say whether they are averaging in the emissions intensity inherent in the diluent (but they must be, to get such low emissions numbers).
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When I tried to post the second part separately nothing happened. I tried again and it said it was a duplicate.
I also had a problem posting two green steel links in your previous post.
And on another WP site (not even including links).
Keith, interesting point about the difficulty in understanding what’s really happening when it comes to reducing GHG emissions. Focusing on a reduction in intensity of 28% from 2000 to 2017 creates the impression Canada is making great strides, however according to the Natural Resources Dept between 2000 and 2018 Canada’s GHG emissions decreased by 0.4%.
We shouldn’t be patting ourselves on the back for reducing intensity when in fact we’re standing still in reducing emissions.
Here’s the link: https://www.nrcan.gc.ca/sites/nrcan/files/energy/energy_fact/energy-factbook-2020-2021-English.pdf
PS I am tearing my hair out with WP right now, hang in there.
Keith and Susan, the “we’re better on human rights” argument was advanced by Ezra Levant in his book “Ethical Oil.” I believe he compared Alberta’s human rights and environment laws to Nigeria. Saudi Arabia is a somewhat higher bar to clear, but I wouldn’t brag too loudly. Comparison to the UK, Norway of course, maybe even Indonesia (that’s a guess) would be more revealing.
Mike in Edmonton: that’s quite a strategy isn’t it–take a page from Ezra Levant and peg your performance against the countries at the lowest rung in the hierarchy as opposed to the highest.
i’m confused. You say Kenney will have a deficit of $8 Billion at the end of his term. Isn’t it much more than that since he has had a deficit in every year so the total accumulative deficit will be much more, like closer to $30 billion?
Douglas, like you I don’t know how the UCP government will get to an $8 Billion deficit at the end of its term. Page 8 of the budget document projects a $20.2B deficit for 2020-21, $18.2B for 2021-22, $11B for 2022-23, and $8B for 2023-24. Their economic and energy assumptions (WTI at $56.50 by 2023-24) appear on page 14.
Other than a $900M bump to healthcare to get us through covid, everything else is being cut or held flat (ie. no accounting for population growth or inflation).
They could have set up a revenue panel today to explore options, instead they’re going to dig us into an even deeper hole than we are now.
I just don’t think there’s much point in this government setting up a revenue panel, since it will assuredly just be another expensive PR exercise. If the panel could be allowed to fully and objectively reach its conclusions, that would be worthwhile. But, I imagine this panel would have a limited timeframe, a narrow mandate, and be staffed by people of similar ideology to the UCP, thus ensuring it will come to whatever conclusions are convenient for this government.
Jason, I agree with you. Frankly I don’t think Kenney has any intention of striking a revenue panel, his UCP base would go ballistic and any hope he has of re-election would go right out the window. If you listen carefully to what Toews said it was more along the lines of we’ll wait and see what happens (maybe we’ll have a boom) and when we get economic clarity (there is no boom) then we’ll talk about putting together a revenue panel (but it will be too late because there’s an election around the corner).
All talk, no vision, no action.
Susan: Thanks for another great blog: I do remember that Kenney Rogers song very well. The late country musician’s tune is fitting here for Alberta and the UCP. The only fiscally responsible Conservative premier in Alberta that I can recall is Peter Lougheed. What happened to the way he governed? Things started to get bad in the Don Getty era. Neoliberal policies took over, especially in the Ralph Klein era, and that made matters worse. Here’s an example of where things went horribly wrong.
https://theenergymix.com/2020/08/09/alberta-mismanages-heritage-fund-misses-out-on-575b-in-revenue-over-44-years/
This is an extremely large amount of money, which we don’t have right now.
As was mentioned by another person, as well as myself, in the past, (again due to Ralph Klein’s bad policies), Alberta has a $260 billion bill to cleanup abandoned oil wells in Alberta. This cost was downplayed by others, but they are misleading Albertans on that (basically, a cover-up). We have UCP members, such as Sammy Hudes (I’m sure he is part of the UCP party), trying to claim the false notion that Ralph Klein got Alberta out of debt. Ralph Klein didn’t do that. Ralph Klein was also like Don Getty was, and worse. Ralph Klein did more very costly shenanigans, left infrastructure in a decrepit state, including schools and hospitals, laid off nurses and teachers, pursued deregulation and privatization, compounding the costs, and compromising the quality of services, (our costly power and utility bills are proof of this), put in a flat tax, which drained more money out of provincial revenue, let oil companies from other countries grab our oil wealth and take it out of the province, (including by getting the worst possible oil royalty rates), pilfered the Heritage Savings Trust Fund, had a poor environmental protection track record, treated the disabled, the needy and the seniors with contempt, (yet most seniors blindly supported Ralph Klein), and so on. What are we getting with the UCP? More very costly shenanigans like the Alberta PCs have been doing for so long, a lack of any fiscal sense, and laying the blame elsewhere, such blaming Rachel Notley or the federal government. That won’t fly.
https://kimsiever.ca/2020/11/26/ucp-budget-predicts-125-billion-debt-by-next-election/
Alberta already has so many types of taxes that the Alberta PCs had given us. Just where did this money go to? Also, in 2007, I have heard that the Alberta PCs had touched on getting a P.S.T for Alberta. A friend of mine (originally from Ontario) was bringing that up with me. He also noticed P.S.T showing up on receipts. He asked me why would it be there if the provincial government wouldn’t be thinking about putting it there? Furthermore, we will not be expecting oil prices to make a comeback to $100. I recall hearing in 2008, that the Alberta PCs had did that Alberta can’t sustain itself on oil prices that are less than $80 a barrel. Adjust that to today’s era, and it’s $100 a barrel. I know that Peter Lougheed was working in the oil industry in the 1950s. He carried that wisdom to his tenure as the Alberta PC premier, and he was quite aware that oil is subject to boom and bust cycles, (he was aware that oil booms can very well go bust). The UCP won’t raise taxes, and is doing Ralph Klein like cuts. This won’t help Alberta at all.
Susan: Thanks for another great blog. I do remember the Kenney Rogers song very well. The late country musician’s tune is fitting here for Alberta and the UCP. The only fiscally responsible Conservative premier in Alberta that I can recall is Peter Lougheed. What happened to the way he governed? Things started to get bad in the Don Getty era. Neoliberal policies took over, especially in the Ralph Klein era, and that made matters worse. I’ll give an example in another link, because in my first link it says Your comment is awaiting moderation. As was mentioned by another person, as well as myself, in the past, (again due to Ralph Klein’s bad policies), Alberta has a $260 billion bill to cleanup abandoned oil wells in Alberta. This cost was downplayed by others, but they are misleading Albertans on that, (basically a cover-up). We have UCP members, such as Sammy Hudes, (I’m sure he is part of the UCP party), trying to claim the false notion that Ralph Klein got Alberta out of debt). Ralph Klein didn’t do that. Ralph Klein was also like Don Getty was, and worse. Ralph Klein did more very costly shenanigans, left infrastructure in a decrepit state, including schools and hospitals, laid off nurses and teachers, pursued deregulation and privatization, , compounding the costs and compromising the quality of services, (our costly power and utility bills are proof of this), put in a flat tax, which drained more money out of provincial revenue, let oil companies from other countries grab our oil wealth and take it out of the province, (including getting the worst possible oil royalty rates), pilfered the Heritage Savings Trust Fund, had a poor environmental protection track record, treated the disabled, the needy and the seniors with contempt, (yet most seniors blindly supported Ralph Klein), and so on. What are we getting with the UCP? More very costly shenanigans, like the Alberta PCs have been doing for so long, a lack of any fiscal sense, and laying the blame elsewhere, such as blaming Rachel Notley or the federal government. That won’t fly. Alberta already has so many types of taxes that the Alberta PCs had given us. Just where did this money go to? Also, in 2007, I have heard that the Alberta PCs had touched on getting a P.S.T for Alberta. A friend of mine (originally from Ontario) was bringing that up with me. He also noticed P.S.T showing up on receipts. He asked me why would it be there if the provincial government wouldn’t be thinking about putting it there? Furthermore, we will not be expecting oil prices to make a comeback to $100. I recall hearing that in 2008, had said that Alberta can’t sustain itself on oil prices that are less than $80 a barrel. I know that Peter Lougheed was working in the oil industry in the 1950s. He carried that wisdom to his tenure as the Alberta PC premier, and he was quite aware that oil is subject to boom and bust cycles, (he was aware that oil booms can very well go bust). The UCP won’t raise taxes and is doing Ralph Klein like cuts. This won’t help Alberta at all.
Thanks Dwayne. To pick up on your point about how Klein privatized as much as he could to make Alberta debt free. I’ve seen a few comments by former progressive conservatives who say Klein reduced, but did not eliminate, the debt. He privatized as much as he could get away with and “massaged” the accounting so he could claim Alberta was debt free. I’ll see if I can track down those articles.
Anyway, I believe the Kenney government is going to embark on the biggest privatization drive ever. We’re already seeing it in entities like Telus creeping into healthcare delivery. Shandro has reached a tentative agreement with the doctors (still subject to ratification). This could neutralize the doctors (divide and conquer) as Shandro turns his attention to the healthcare unions. Toews said in his budget presentation that Shandro was going to implement the E&Y report which talks about cutting wages across healthcare. This supports a move to privately delivered, but publicly funded healthcare.
Why anyone thinks the private sector will do a better job at this than the public sector is beyond me. For one thing the duty of a corporation’s officers and directors is to the corporation (ie the shareholders), not to the patients, let alone the general public.
It’s going to be a brutal 2 years!
Dwayne and Susan, my recollection is that Ralph dabbled with privatizing minor stuff like liquor sales and driver-license approvals (allowing the same driver-training companies to issue driver’s licenses to their students directly). I’m not sure Ralph was ever really keen on privatizing (a lot of) health care. His ham-fisted approach pretty much guaranteed massive public resistance.
Jason Kenney is less concerned about blowback. Not immune, thanks be, but more stubbornly certain he’s right.
Sadly, our lord and master Jason Kenney is a believer in the incompetence fallacy. He believes, like so many other Republicans, that governments must by their nature be incompetent. As soon as he formed a government, he set out to prove himself correct.
Mike in Edmonton, I remember when one of Klein’s successors, it may have been Redford, commissioned a report on how to privatize healthcare. It was called The Third Way and was leaked to the Liberals who made it public. The blow back was so severe the PCs backed off.
Kenney seems to be numb to blow back (perhaps for the reason you suggest, he’s convinced he’s right) so while he may back off a little, he always comes back. I’m very worried that at the end of the vaccination period for covid he and Shandro are going to go full bore on privatizing healthcare. We have to fight this with everything we’ve got.
Susan: All I can do is give you one link at a time: It’s due to how this is able to work. Sorry about that.
https://theenergymix.com/2020/08/09/alberta-mismanages-heritage-fund-misses-out-on-575b-in-revenue-over-44-years/
Susan: Here is another link.
https://kimsiever.ca/2020/11/26/ucp-budget-predicts-125-billion-debt-by-next-election/
Dwayne, missing out on $575 billion over 44 years by mismanaging the Heritage Fund is unbelievable. But you know the PC mantra…give the oil and natural gas companies what they want. You can’t raise royalties when they’re making money hand over fist because you don’t want to kill the golden goose and you can’t raise royalties when they’re not making money because they’ll leave, so we did nothing. The oil/gas companies made out like bandits and Albertans paid the price. Stupid.
Susan: This is the third link:
https://oilprice.com/Energy/Oil-Prices/Trading-Giant-Gunvor-60-Could-Be-The-Ceiling-For-Oil-Prices.html
I disagree with implementing a broad-based provincial sales tax, such as an HST. Sales taxes are inherently regressive: those of limited economic means pay a higher proportion of their incomes in sales taxes than those who are better off. Sales taxes are levied on far too many good & services that people cannot choose not to purchase in order to avoid paying them.
We need a truly progressive income tax system, with a fairly high threshold for paying no tax at all — any income below the annual equivalent to a minimum living wage for a full-time worker over a whole year, & indexed to inflation — and multiple escalating tax brackets to ensure those who benefit most from the economy contribute the most. We also need some form of wealth or inheritance tax, and equitable taxation of non-wage income such as capital gains, stock options, etc.
Finally, we need to restore rationality to corporate & business taxes. Costs that create employment, from wages to suppliers’ invoices, should be deductible before taxation. Costs that don’t, like mergers & acquisitions, dividends, etc. should not. And wealthy corporations should once again pay their fair share.
Hi Jerry. The regressive effect of a sales tax could be alleviated by rebates to people below a threshold (the poverty line? something higher?) as has been done with the federal GST since its inception. Not ideal, but much easier to implement quickly than multi-level progressive income taxes. As an alternative, what about taxes on luxury goods? The definitions would cause conniptions among the rich, but it’d be a start.
I agree with all of your other points, but we’d need to elect a government RADICALLY to the left of Notley’s NDP to implement any of them.
Yes, a luxury goods sales tax would be good, as would rebates to lower-income taxpayers if a PST were implemented.
As for how left the Alberta NDP is — or isn’t — I agree their government was a bit too centrist & hyper-cautious for my tastes, but let’s cut them a little slack. Firstly, winning the 2015 election was as much of a shock for them as it was for the rest of Alberta. The campaign was almost halfway through when the polls started showing what was happening. If I recall correctly, the provincial campaign pulled back on a couple of Leader’s tour events so the Leader & party staff could start planning for a possible transition of power. When they took office, remember, it was after 44 years of uninterrupted PC rule, and not one NDP MLA had ever been in government. This situation was unprecedented virtually anywhere else in Canada, where elections are, as a rule, far more competitive than Alberta’s had ever been up until then.
They were also faced with a senior public service that had never served any government that wasn’t conservative. In fact, you’d have had to flip the calendar all the way back to 1935 to see the last non-conservative government in Alberta. In my view, the first mistake the Notley Government made when they took office was to leave the senior bureaucracy untouched. I felt they should have shown every Deputy Minister, and many of the ADMs, the door on Day One. I can’t believe they were as genuinely non-partisan as we have been told in the years since. For instance, I feel very strongly that the fiasco behind the introduction of Bill 6 — the farm safety legislation — was very likely attributable to poor staff work in the Ministry.
Besides, there is no viable party to the left of the Alberta NDP …
Mike and Jerry: thanks for the good discussion. I agree with Mike who talked about rebates, Trevor Tombe has addressed this question numerous times and has offered other ways to reduce the impact of a PST on lower-income taxpayers. So this would be an area worth pursuing.
I also agree with Jerry that we should cut the NDP some slack. (Jerry you’re correct that Notley had to cancel some of her events towards the end of the 2015 campaign when the polls showed she was going to win with a majority and she had to put her mind to setting up her Cabinet and formalizing her agenda). I’d also add that not only is there no viable party to the left of the Alberta NDP, there’s no centrist party to the right of it. I believe Notley did a good job given what she was up against and we need to give her another chance to clean up the UCP mess and get on with her agenda.
There is a line item missing in the budget. Expenditures for development and renewal of Land Titles. And the projected revenue rises while expenses fall.
They are planning on selling our land titles and personal property registries, despite having only announced they are exploring options.
The cost of LTO registrations will jump by 4 to 10 times. This might be tolerable for individuals but consider municipalities that register thousands of notices and caveats. It’s tax dollars that will pay for that.
Anthony thank you for bringing this into the conversation!
I’ve seen a few (not many) newspaper articles about what the UCP intends to do with Land Titles and personal property registries, one day they’re pushing ahead with privatization, the next day they’re “considering” it (nothing to see here), — typical UCP bafflegab.
When we moved to Pennsylvania we had first hand experience with a privatized land titles system. It was bad enough that PA did not have the Torrens system of land registry and transfer (in Alberta the top title is “the” title and it is indefeasible, no one can challenge the transaction by producing a title from decades ago). The land registry process was so complicated that our real estate lawyer was involved in every step. Between lawyer’s fees and filing fees, buying a house is considerably more expensive in PA than in AB. These additional costs are borne by the buyer and the municipality. This extra cash flows to those who own registries. I can see why this would be good for the registry company owner, but why does that make it good for the economy?
Oh wait, it’s just part of Kenney’s plan to decrease the deficit by selling off the furniture.
Susan: Though it’s not something you can control, it’s hard to post links, because there is a risk of them not showing up. Sorry about this.
Hi Dwayne, I may have a work-around for you. See my comment below (once it gets through moderation).
Thanks for another great post. Yes this is a disappointing budget, I supposed I’m not that surprised in year with crashing oil and prices, and the pandemic making things difficult. It’s been a tough year, okay a couple of tough years and we probably have another year before we start crawling out of this. Albertans were hoping for a plan forward. I for one, like all Albertans wanted to see a vision of what we have to look forward to. Agriculture, technology, tourism, creative industries, small business I don’t see much focus on diversity. This government appears to be in love with big business as the path to balanced budgets. I don’t see it. My big question of this government is what is the plan for resource development? The heydays of oil and gas royalty revenues of the past aren’t coming back. This government appears to believe that coal and other mining might generate new jobs and revenues. The evidence just isn’t there. In 2017 Alberta government collected $15.7 million in royalties from coal. Last year 1500 jobs were directly working in coal. Even if you were to double the jobs the economics just don’t outweigh the environmental impact, the evidence is thin and hard for this Albertan to find, I’m trying see the evidence to justify expanded mountain development. The government on a broad scale appear to be income opportunists and balance sheet morons, because the concept of public stewardship is erased from their operating paradigm and lexicon. What happened to the leadership, the vision? During the election Jason Kenney said this in Canmore, “Conservatives believe in conserving those things that are best, including our natural environment. We believe in our responsibility to future generations, not only to pass on important institutions and customs and an economy that is prosperous, but also a magnificent natural environment.”
I don’t see it in the actions of our government. They are panicking, best laid plans, if they had them have been tossed out. Recent news of making mistakes and that they will be better aren’t convincing. Consultation without having clear vision, guidelines which the 1976 coal policy provided leaves Albertans wondering what the government’s priorities are.
Coal development is top of mind. I suspect that the delay until the end of March on a plan for consultation is a strategy in the hopes that Albertans will have forgotten. I mentioned that I have been trying to find answers, why was “directive 61” erased from the AER website?
Jefflennard: You asked: “what is the plan for resource development?” This is indeed the essential question because resource development idrives resource revenues which drive royalties which make or break the budget. So far all the Kenney government has offered is the ESG panel (or whatever it is) run by Cabinet (who exactly?) which will supplement (supersede? compliment?) the War Room and the Public Inquiry, and public consultation to “modernize” the Coal Policy. So it appears Kenney’s plan for resource development is (1) more words to attack those who don’t support oil and natural gas and (2) renewed exploitation of coal.
You raise a very good question at the end of your comment. You asked what happened to Directive 61. I’ll admit I had to look it up. According to the AER website—Directive 61: How to Apply for Government Approval of Coal Projects in Alberta—was rescinded on April 08, 2020. That was months before the coal policy blew up in the UCP’s face. This leads me to believe it’s been replaced by something the coal companies like better, which may have been “paused” by Sonya Savage when she backtracked temporarily on killing the Coal Policy.
It’s always smoke and mirrors with these guys, isn’t it.
Most gamblers know when you are playing with someone else’s money you will likely lose no pain no gain. Premier Kenney and the UCP is playing with our money as they are working for the tax payers of Alberta and since they where elected we seem to be losing!!! No logic just bad gambling 2023 seems so far away.
Paul your comment got me to thinking about Kenney’s gamble that Trump would win the 2020 election and KXL would proceed. Kenney did not include the impact of the $1.5B equity investment or the $6B loan guarantee (that’s $7.5B unaccounted for) when he calculated the deficit, he said that’s because the government does not know yet whether it can recoup some or all of those losses. That’s not how these things usually work. An equity investment is gone the minute it’s made, all you can do is hope you get a return on your investment (not likely here where KXL is dead). The loan guarantee crystallizes the minute the company calls on the government to make good on the guarantee. The liability is there. The fact Kenney may or may not recoup any of his losses down the road is a different issue and should not be a barrier to him disclosing what the liability is today. I’m going to take a look at TC Energy’s securities filings on this point and update this comment once I get more information.
So they are predicting that at the end of their mandate we will have exactly the same deficit of 8 billion that the last government of the NDP left. Four years of nothing as I expected. Except that they will leave the province the way they wanted – they will privatize more, people like you and me will have less and the corporations will have more profits and less taxes.
Nothing changes for the better in the name of pure deformed ideology. No thinking no improving just cutting and putting everything that belongs to all of us in the hands of half dozen private interests. The profits will then flow under the table to themselves.
That’s right Carlos, four years of grief to be in a worse place that where we started. If the conservatives really wanted to run the province like a business the first thing they would do is fire their CEO, Jason Kenney.
Oh I love that one and you are so absolutely right
FIRE the CEO
Kenney’s budget is supposed to be a non-event, no dangerous cuts to health care and a cease-fire in the war on doctors. (What about universities? Big slash to their budg–“Look there! No new taxes!”) The result is, they’re not doing enough of anything to help anyone.
After slashing support (dating back to the Old Tories) for tech startups, tourism, film (movie companies LOVE southern Alberta locations) etc the Cons are reluctantly handing out Band-aids to slow the bleeding. Yay. It feels like “Back to the Future” number N, where N is way too high.
“The only part of the Budget document that offers specificity is the bit that gripes about the Feds not doing enough for Alberta”…wait. What? The Canadian Centre for Policy Alternatives would beg to differ. Copy this line, add the three W’s prefix, and search via your web browser:
policyalternatives.ca/thetab
But I gotta say…it’s a great joke, knowing Kenney and Toews are bragging about how they’re going to help oil companies be responsible (to someone other than their top shareholders).
At least they’ve learned one lesson from the Ralph Klein Tories. They’ve low-balled this year’s estimate for oil prices. I’ve seen various news reports saying “some analysts” (the optimistic ones) expect oil prices to approach $100 per barrel, if only briefly. Given how easy it is for Saudi Arabia, Russia and the US to pump more oil, I’d suggest you limit your bet to what you can afford to lose.
Mike in Edmonton: what’s really sad about this pathetic budget is many Albertans are fine with it. I saw a conversation on social media where someone was ranting about how awful Trudeau was, someone else replied, well what about Kenney? And the ranter said, at least Kenney is trying. Trying? Really?
That’s the hardest part about all this…ideology blinds us to reality.
Thank you, Susan, for your insight and for your thoughtful replies to the very interesting comments you receive. In your reading of the Budget, did you discover if the UCP is still giving $ 5 million this year to a private, elite school that, according to Progress Alberta’s 2018 research, had $ 42 million in the Bank (thanks in part to the 30.8 million in public subsidies 2010 to 2017? https://www.progressalberta.ca/webber-academy J
Progress Alberta, in their 2018 study, has another heading worth searching: “How did Alberta get the most expensive private school subsidies in all of Canada?” But not content with the current 70 percent per student, Jason Kenney has expressed a wish “to ensure equal funding regardless of school choice — public, separate, charter, home or private.”
There are public schools in our inner city that cannot find volunteers to work a Casino to raise a pittance for library books every few years. The Alberta children in the 15 elite schools with annual enrollment of $ 10,000 or more, for example, will succeed – even without the $ 27 million of public subsidy. Wouldn’t we, as taxpayers, get immensely more “bang for our buck” by investing these millions in Alberta’s low-income schools to help these kids (who may have a rough start in life) develop into well-educated, contributing (other than just as taxpayers) members of our society?
Verna, you’ve asked a very important question. The Budget document makes no mention of funding for public education, other than the government’s promise to hold the budget flat which in reality means a cut because that fails to account for the impact of inflation and population growth (we’re expecting the student population to grow by 20,000.) Equally troubling is the slashing of university budgets. The only reference in the budget to money for universities was $20 million in support over four years to the Ki Ka Shing Applied Virology Institution. That’s only $4 million/year, which is significantly less than the funding for the War Room. This shows you where the UCP’s priorities are.
It is sad to watch the UCP and its 2021 budget. At this point, I think even they have figured out their ideas of cutting our way to prosperity and fighting on pipelines and energy hasn’t worked for them, although of course they wont admit it publicly. Unfortunately they have a limited imagination and no other ideas, so they sort of continue down the same path, but realizing the political peril they are in, somewhat more cautiously. Mostly, they have toned down the rhetoric and been more selective in where they are cutting. So, health care is spared for now, but not post secondary education.and a number of other areas that are not quite as politically sensitive.
I suspect the UCP strategy now is reduced to praying for another boom in oil prices and promising not to mess it up next time. On that note, their budget projections for oil prices are considerably lower than current levels, so if this holds up, they may have some big reductions in the deficit in the next few budgets. I doubt they will do more than pay lip service about looking into additional revenue sources, just to distract us and buy time until things hopefully improve some on their own.
Oh yes they will call them Fees rather than taxes so we will have a Sales FEE
Carlos: “fees” not “taxes”…there’s a plan. 🙂
I think you are right about there being more fees. Things have already been going in that direction for some time. However, I don’t think nickel and diming us with fee increases here and there more will solve the revenue problem. It will probably just irritate everyone who has to pay these additional fees, so even if the UCP tries to spin it as not tax increases I suspect most people will not buy that.
I think you’re right Dave, the UCP is proceeding more cautiously, however one drum they haven’t stopped beating is the anti-Trudeau, anti-federal government drum. The budget document looked like a pitch for the Fair Deal Panel. It’s packed with statements about Alberta funding Canada’s economic recovery and how hard done by Alberta is as a result of the federal equalization, health transfers, fiscal stabilization programs (which he could have fixed when he was in Harper’s cabinet) and what Alberta needs now from the feds.
Interestingly the budget made no mention of the billions it has received from the feds for orphan well recovery, Covid funding, not even that the Jobs Now program which was created by the Feds and will require a significant federal financial support. Kenney is so small minded he can’t bring himself to give Trudeau credit where credit is due.
Well the blog is having a bad day so if 4 different copies show up I apologize
Mike I totally agree with your ‘RADICALLY to the left of Notley’s NDP…….’
We do not need the neo-liberal social democracy they are. The NDP is too right wing to make a difference. We definitely need Democratic Socialism which is way more left than the NDP. Social Democracy has been so diluted that made itself useless. That is why Rachel Notley was not as successful as she could have been. People say that she should have made her policies more visible and that they failed on communication but I disagree. We just did not see much difference than what we already had. People want change and especially want a government for the citizens instead of for corporations. We desperately need to start a lot of education about what government really is and how to nurture how our democracy should work. We do not need compassionate center. I am done with soft love from moderates. We need to move definitely out of the fascist sphere and for that I totally agree with Mike. We have become servants of the business class and this is why we are where we are. We have been so indoctrinated for so long we are behaving like lions in small cages. We do not realize how strong we can be as a society and that to me is the tragedy.
Thanks Carlos. Given that Oilberduh is the most Americanized province in Confederation, it’s going to be difficult to move this place to the left. As jerrymacgp points out in his reply, even Notley’s NDP were caught by surprise when they won the 2015 election. And Notley is still the only viable alternative to Kenney & the Klowns. My point to Jerry was that change will have to be incremental, or–as we saw in 2019–there’s going to be a backlash.
That’s a problem the UCP will have to face in 2023. Hopefully, the contrast between novice but well-intentioned NDP and novice but mean and nasty UCP will convince Albertans to give Notley a second chance. (Also–and I agree with Jerry’s point above–maybe next time, Notley will clean house and put the Old Tory bureaucrats out to pasture.)
Hopefully you are and Jerry are right and incremental change will happen but from what I have seen from the NDP I would say not likely.
She had the great opportunity to change the Election system to Proportional Representation to avoid the majorities the Conservatives get from the rural vote and make the system fairer and she ignored it. She chose to just change the party donation law. You know why? Because just like the rest of them she wants the majorities.
We do not know what democracy is and we believe coalitions are worse than majorities but we are very wrong and you just have to look at the Nordic Countries where they always govern with coalitions because even when a party has the majority, the government has to have the percentage of cabinet ministers with the other parties representatives. That is how democracy works because as opposed to what we are witnessing now, no party can destroy what has been built unless the other parties the change is actually needed. So in our case changing the Health care the way Jason Kenney is doing, by privatizing is not as easy. Here it does not matter because the parties all represent the interests of corporations.
Mike and Carlos, as you can tell from my earlier comment I agree with Mike that Notley is our only viable option. Having said that there are other ways to influence government. A friend reminded me of the good work carried out by citizens’ assemblies. For example the We the Citizens assembly in Ireland deliberated on a number of issues, including Ireland’s anti-abortion laws. It recommended changes which were eventually adopted by the government. As my friend put it, if the people lead the way the politicians will follow. These assemblies usually have the blessing of government to start with (something Kenney would never abide), but we’ve seen how effective the anti-coal campaign has been. Maybe there’s a way to combine these civil society groups with a non-partisan assembly that would influence the government. We’re stuck with the UCP for another 2 years, we need to do everything we can to slow them down.
Conservatives have lost their marbles and I cannot see how they recover from this – it is every week stories like this
https://albertapolitics.ca/2021/03/alberta-mp-launches-petition-to-make-house-of-commons-stop-calling-assault-rifles-assault-rifles/
OK this is truly bananas. So this Alberta based Conservative MP crawled out of the woodwork to advocate for not calling an assault rifle an assault rifle because this demonizes firearms owners. Who knew firearms owners had such thin skins. This reminds me of the guy who took to Twitter to say strong men like meek women. I guess they’re not as strong as they think they are if a strong woman or using the the word “assault” is too much for their delicate psyches.
“…delicate psyches.” Indeud.
Which would just be a curious little character foible, if it wasn’t so dangerously reactive, so instead it exposes a glaring fault.
“All talk, no vision, no action.”
No way. The Used Car Partiers have a vision all right, it’s just that they see through the eye of Mordor, so their legislative action is either ignorant and/or downright sociopathic, but decidedly prolific.
So many great points in this article and these comments!
The UCP unprecedented sell-off of Albertans’ assets for pennies on the dollar, knowing full well Albertans will need to buy them back (one way or another) later at an inflated price, does not go completely unannounced; heartening!
GoinFawr: point taken. Seen “through the eye of Mordor”, very evocative!
I think is as evocative as the cartoon and should be read
https://www.nationalobserver.com/2021/03/03/opinion/alberta-debt-problem-blame-former-premier-ralph-klein