When Jason Kenney Told Off China and It Backfired

Posted on May 17, 2020 by

Covid-19 upended everything.  

No one knows whether the world will snap back to “normal” like an elastic band or be gone forever. Economists, futurists, and historians are all over the map when it comes to what to expect in the future. Some, like conservative historian Niall Ferguson, suggest we should prepare for a world with Covid-19 because vaccines and treatments may be a long time coming.  

Given all this uncertainty, we look to our leaders for, well, leadership.

Instead in Alberta we get a premier taking pot shots at the Chinese government while at the same time expecting China to send us PPE and buy our bitumen when TMX is completed.

Premier Kenney

What he said

Last week Mr Kenney told the Canadian American Business Council “the Chinese government played a significant role in the devastating public health and economic damage that is being experienced by the entire world…and…there must be some kind of a reckoning, there must be some accountability.”

This comes on the heels of his earlier comment that “in a pandemic, you find out who your true friends are. After COVID, Canadians and Americans will remember that the Saudis and Russians tried to exploit our pain for their gain.” What’s interesting about this comment is Kenney’s naïve assumption that Trump’s America is Alberta’s friend.   

The response

Russia and Saudi Arabia took no notice of Kenney’s comments, but the Chinese Consulate General slammed back with a caustic letter telling the premier not to engage in “wolf-warrior diplomacy”* unless he’s prepared to be on the receiving end of a critique of his handling of covid-19 and indeed his policy decisions in general.

China also reminded Kenney that he’s “based in Edmonton not Ottawa” (ooh, that hurt) and Mr Trump and the American businesses which enjoy a profitable business relationship with China may not be pleased with his comments.

This entire exchange is lunacy.

Cooler heads prevail

To be clear, no one is suggesting China is blameless in the Covid outbreak.

We strongly agree with the Prime Minister who said “there are many questions for countries around the origins and behavior in early days around the Covid-19 situation, particularly questions for China”.

Mr Trudeau who is based in Ottawa did not receive a snarky reply from China, and as far as we can see he has the concern about China’s role in the spread of the virus covered, so why is Alberta’s premier waging “wolf-warrior diplomacy” with China in the middle of a pandemic?  

He’s come undone

Kenney, like many populist leaders, has a problem. He rode into office on a wave of fear and anger by manufacturing a crisis, make that crises, plural, and promising to fix them.  

He was going to return Alberta to prosperity by saving the energy sector. He created a $30 million/year war room to stamp out misinformation about the energy industry (it failed miserably) and set up a $2.5 million public inquiry to flush out foreign operatives who mounted anti-Alberta energy campaigns (we have yet to see the Commissioner’s report, let alone a horde of foreign operatives heading for the hills).  Meanwhile global oil prices plummeted and the industry tanked.

He was going to balance Alberta’s books by imposing draconian cuts on public services. Albertans grumbled and finally lost it when cuts to physician compensation resulted in doctors reducing services and leaving the province. He backtracked, a bit.    

He was going to redress Ottawa’s unfair treatment of the People of Destiny (or is it the Buffalo People) by creating the Fair Deal panel to force Trudeau to give Alberta a better deal with veiled threats of separation, only to see his agenda highjacked by the Wexiteers who launched a serious separatist movement.

He was going to increase Albertans’ freedoms but spooked everyone, including his staunchest supporters, by using the covid crisis to pass Bill 10 which gives his Cabinet the power to suspend laws and create new ones indefinitely. This one is going to court.

Then to add insult to injury, along comes covid-19 which drove Trudeau’s approval ratings up and Kenney’s approval ratings down. Funny how a little thing like generous social assistance from the federal government, and meh social assistance from the Alberta government will swing public sentiment.    

Kenney put himself squarely between a rock and a hard place.

The fake crises he created fizzled and the real crises created by the Saudi/Russia oil price war and covid-19 will not yield to his I-can-bully-my-way-through-this rhetoric.

So he upped the ante, he’s demonizing China, Russia and Saudi Arabia to demonstrate he’s still in charge.

A reckoning

Covid-19 exposed shortcomings in our global institutions like the WHO, which successfully controlled SARS and Ebola but fell short with the coronavirus, and the EU which responded in a haphazard fashion.

It exposed flaws in our own federal and provincial governments’ pandemic protocols and the fragility of global supply chains, demonstrating a need for greater self-reliance and larger inventories for critical products.

But there’s one thing covid-19 did not do.

It did not give Jason Kenney the authority to position himself as a wolf-warrior parroting Donald Trump, when he’s nothing more than the premier of a small province in a “middle power” country that’s trying not to get trampled in the new cold war emerging between China and the US.

If Jason Kenney doesn’t understand this simple fact, then yes, there will be a reckoning; but it’s not going to be with China, it’s going to be with Mr Kenney.

*Wolf-warrior diplomacy refers to China’s increasingly aggressive and hostile engagement with the West.  

Posted in Economy, General Health Care, Politics and Government, War | Tagged , , , , , , , , | 52 Comments

Kenney Rejects Notley’s Request for a Public Inquiry. Why?

Posted on May 10, 2020 by

At last count there have been 1,550 Covid-19 infections and three deaths connected with the Cargill, JBS and Harmony Beef meatpacking plants in Alberta.   

This is frightening in a province that prides itself on having the highest testing levels in the country and was so comfortable with its Covid-19 preparedness plan that it donated PPE to BC, Ont and Quebec last month.

The only way to understand why Alberta’s meatpacking plants turned into a national Covid-19 hotspot and to prevent a similar tragedy from reoccurring is to proceed with Rachel Notley’s call for a public inquiry.

Sadly, Jason Kenney rejected Notley’s proposal. He cited three reasons; all of which are ludicrous.   

Premier Jason Kenney

Partisanship

First Kenney reverted to his default position, rebuffing Notley’s call for a public inquiry by accusing her of “politicizing” the issue.

What?

Covid-19 is a virus. A virus has no political affiliation. The coronavirus infected and killed thousands of Canadians, and brought our economy to a standstill without regard for who is sitting in the premier’s office (or in the prime minister’s office for that matter).   

One would think both parties, the NDP and the UCP, would be equally concerned about spiking infection rates at the Cargill, JSB and Harmony Beef plants and the implications of these spikes on the surrounding communities of High River, Brooks, and Balzac.  

Unfortunately, that’s not how Kenney sees it.  

Experts’ advice  

Kenney said a public inquiry isn’t necessary because his government followed the best expert advice it received from Alberta Health, public health officers, the Chief Medical Officer, Dr Deena Hinshaw, OH&S, the Canadian Food Inspection Agency, Alberta Agriculture, and “all of our expert officials”.

Bearing in mind that this is the man who cherry picks experts’ advice—he likes Janice MacKinnon on balancing the budget, he doesn’t like Mark Carney on curbing investment in fossil fuels—he’s missing the point.  

The issue is not whether the government received the best expert advice but whether it followed this advice in the most effective way.

A secondary question is: what advice, if any, did the government receive from executives running the Cargill, JBS, and Harmony Beef plants and how much weight it gave their advice compared to the weight it gave the advice it received from health experts.

We’ll never know because Kenney refuses to call a public inquiry.     

Extended debate     

Kenney’s third reason for rejecting a public inquiry is the government will bring forward a motion to allow an “extended debate” on Alberta’s Covid-19 response. If Kenney is suggesting an extended debate in the Legislature is an adequate substitute for an independent public inquiry, he’s mistaken.    

A public inquiry is heard by an impartial commissioner, often a retired judge, who has the power to subpoena witnesses, compel them to give evidence under oath and provide documentation to support their testimony. Witnesses may bring lawyers and may be subject to cross examination. The process of collecting and analysing evidence takes months. At the end of the inquiry the commissioner writes a report describing his findings and setting out his recommendations so the government will be in a better position to protect the public the next time a pandemic rolls around.  

Compare the public inquiry process to the legislative debate process.

The time for debate is compressed into days (not months). Politicians (not witnesses) make statements (which are not under oath and not subject to cross-examination) based on what they believe happened. The members’ statements are recorded in Hansard (there is no written report setting out recommendations based on the evidence). The press picks up the debate (assuming there aren’t more pressing things going on, like relaunching the economy or a precipitous drop in the price of oil). Columnists write about it for a few days and everybody moves on.   

Real question

Kenney is not opposed to public inquiries on principle. He happily forked over $2.5 million for a public inquiry into foreign funded anti-Alberta energy campaigns, a “problem” significantly less pressing than a global pandemic that wreaked havoc at three Alberta meatpacking plants infecting hundreds of people, killing three, while also devastating Alberta’s beef industry and disrupting 85% of Canada’s beef supply.

So what’s Kenney’s problem?  

Either he’s right and his government did everything it could to ensure the safety of Albertans working at the meatpacking plants and it still wasn’t enough; or he’s wrong and his government failed to do everything it could to keep Albertans safe. In either case a public inquiry would expose these shortcomings and provide recommendations that would make it safer for all employees working in close proximity in the future.

Given Kenney’s refusal to call a public inquiry let me save you the bother of waiting for the extended debate to appear in Hansard. Here’s a summary of how it will go:

NDP: the government should have acted sooner and done more.

UCP: the government did everything right, and if we didn’t, blame the experts  

NDP: public officials give advice; cabinet makes decisions

UCP: there you go again, going partisan on us

We’re fighting for our lives, our health and our economy in the face of a global pandemic. We deserve a premier who will act in the public interest by calling a public inquiry into the failures at Cargill, JSB and Harmony Beef, instead of defaulting to political rhetoric.

Posted in Alberta Health Care, General Health Care, Politics and Government | Tagged , , , , , , | 61 Comments

Leadership in the Post-Pandemic World

Posted on May 3, 2020 by

It’s been two and a half months since the World Health Organization declared Covid-19 a pandemic; infections and deaths will continue until a vaccine is found. Economists and global thinkers may disagree on what the new world will look like, but they’re aligned on one thing: it’s not too soon for us to start thinking about the world we hope to live in when we finally reach the other side of this crisis.   

We’ve learned some important lessons already.  

The quality of government, particularly its leader, is critical  

Covid-19 gave Albertans the opportunity to compare two very different governments, the provincial government led by Jason Kenney and the federal government led by Justin Trudeau.

Kenney’s government hung back waiting for the feds to step into the breach with social programs to ease the suffering of Albertans. It also doubled down on its pre-Covid agenda, attacking social services, particularly public education and healthcare, while the pandemic gained purchase. Particularly odious was the health minister’s refusal to reverse his decision to cut physician compensation until it became obvious the UCP would lose rural seats.  

Premier Kenney

While the Alberta government was creating havoc and heartache, the federal government delivered a dizzying array of social programs to help Canadians weather the economic upheaval caused by the virus. (It goes without saying that the Notley government’s response would be more akin to that of the federal government, than Kenney’s government).

As we move through the pandemic, we need to consider what kind of leader would be best suited to navigating the rapidly changing, and often dangerous, new world—one who is dogmatic and inflexible or one who grasps the issues and responds quickly and effectively.  

We need visionaries   

The economist, Mohamed El-Erian, is concerned governments are defaulting to remedies (like bailouts for airlines and oil companies) that worked in the past, when they should be exploring new remedies for crises we’ve never experienced before. Instead of financial models that keep zombie companies alive in zombie markets, El-Erian says governments should consider an economic model that relies on productivity and people.

He argues for a more thoughtful approach and suggests we investigate economic theories like universal basic income and modern monetary theory (MMT) that were once considered impractical.

Given Kenney’s demand that the federal government bailout the energy industry to the tune of $20 to $30 billion, it’s unlikely he or his government and its advisors have the imagination necessary to consider any remedy other than one that props up Alberta’s one-trick pony fossil fuel economy.  

As Alberta moves into the new world, we will need leaders who are willing to pressure-test old economic assumptions, instead of defaulting to the path that brought us to this economic cul-de-sac in the first place.  

The economy does not take precedence over society

Remember when the UCP said we must be prosperous before we can be a compassionate caring society? Covid-19 showed us the opposite is true. When the economy ground to a halt, the social safety net and the community reaching out to its members helped us survive.

And yet, Kenney’s faith in the preeminence of economic prosperity is unshaken.

Despite the fact Alberta has not flattened the curve, the Kenney government is reopening the economy starting May 4. This means workers with legitimate concerns about catching the virus will have to report to work.

Nowhere is this more unconscionable than at Alberta’s meat packing plants. The Cargill plant and the JBS plant together are responsible for 42% of all of Alberta’s covid cases, including two deaths. And yet the Kenney government is allowing them to operate.  

We need to decide what kind of government we want: one that puts the economy above society or one that recognizes the importance of life as well as livelihood?

What we can do now

The pandemic exposed the stark reality of inequality, underfunded public programs and the importance of a social safety net in calamitous times.

We will overcome the Covid-19 crisis, but looming on the horizon is an even bigger crisis, that of climate change.

Yes, it feels overwhelming, but as Samantha Power, former US Ambassador to the UN, said: when we think the problems are too big and we’re too small to do anything about them, we can make a difference by “shrinking the change”, by picking a manageable piece of the bigger problem and working on it.

In this case we can work with Rachel Notley’s NDP to ensure Jason Kenney’s UCP do not form government in 2023.

We need leaders and governments who are ready to tackle tomorrow’s challenges, not the battles of yesteryear.  

*Comments by Mohamed El-Erian and Samantha Power are from the Munk Dialogues: World After Covid19 https://munkdebates.com/dialogues  

Posted in Alberta Health Care, Climate Change, Economy, Employment, Energy & Natural Resources, General Health Care, Politics and Government | Tagged , , , , , , | 28 Comments

Jason Kenney’s Fight with Alberta’s Doctors

Posted on April 26, 2020 by

“The crisis we have in health care, rural included, is a void of leadership by the UCP government. They were voted in with a majority government, but do not seem to understand the difference between leadership and power.” —  Dr Ed Aasman

The Greeks defined hubris is a character flaw, a combination of pride and ambition so great they offend the gods and lead to one’s downfall.   

What level of hubris led Jason Kenney and his health minister, Tyler Shandro, to believe they could get away with passing legislation giving them the power to rip up the Master Agreement with Alberta’s doctors, violate the doctors’ right to fair negotiation and binding arbitration, and unilaterally impose a new fee structure that would dramatically cut physician compensation, without any pushback?   

Then when the doctors begged Kenney and Shandro to hold off implementing the fee changes until after the pandemic passed, why did Kenney and Shandro double down?  

The Kenney government’s draconian behavior is inexcusable and Alberta’s doctors, with the support of their patients, fought back.   

It was a tough slog.

It took hundreds of doctors telling Kenney and Shandro that over 400 community clinics would close or lay off staff, and countless doctors announcing they would leave Alberta after the pandemic was over, and thousands of Albertans flooding their MLAs with letters demanding the government reverse course, before the government paid attention.

Health Minister Shandro

Not my fault (again)

On Apr 24, Shandro gave a press conference. He was flanked by some rural MLAs (but no doctors) when he unveiled a $81 million package to support rural doctors.

He said the government:

  • would cancel rural fee changes because they didn’t realize an unintended consequence was a reduction in access to healthcare in rural areas (if they’d listened to the doctors, they might have had a clue),
  • was permanently reversing the fee changes for rural areas (that promise is as binding as the Master Agreement they ripped up in February)
  • would pause the fee changes in urban areas, pending further review (what’s to review? An appendectomy is an appendectomy regardless of where it’s performed; if the government wants to incentivize rural practice provide incentives, don’t mess with the urban fee)
  • was adding $57 million to top-up rural service (because if rural doctors distrust Kenney so much they leave, Kenney’s rural base will desert him in 2023)

Shandro stated repeatedly that the $81 million plan was the result of concrete proposals from the rural MLAs and was not, repeat, not, the result of consultation with the AMA. Furthermore the plan proceeded on an expedited basis because his government ripped up the AMA Master Agreement, and (here’s the icing on the cake), the government would not take responsibility for causing “anxiety” in the middle of the pandemic, it was the AMA’s fault, they spread “misinformation” to the doctors.   

The entire press conference felt like an effort to sweeten the pot for rural doctors, pit them against urban doctors, weaken the AMA and shore up Kenney’s rural base.

Doctors are unimpressed

This is shameful and Alberta’s doctors are not buying it.

The rural physicians (represented by the Rural Sustainability Group) issued a letter saying they appreciated the government’s support of rural medicine, but the government still wasn’t listening. What the rural doctors want is an agreement that allows for arbitration, thereby avoiding unilateral decision making by the government.  

The president of the Section for Rural Medicine is squarely behind the AMA, noting the AMA is the “venue for physician leadership and the vehicle through which Alberta’s physicians have worked with the government for 114 years.”  

The AMA said the temporary suspension of fee changes during the pandemic is a positive step, but if the government wants to find long term solutions to healthcare challenges it should work with doctors, not rip up their contract, continually misrepresent their compensation and take away their right to binding arbitration.  

Kenney’s attempt to pit rural doctors against urban doctors did not succeed, but it does raise the question: Why did Kenney do it?

What drove him to pass legislation allowing him to rip up the AMA Master Agreement and impose his own fee structure on Alberta’s doctors? What caused him to ram this ill-conceived plan down the doctors’ throats in the middle of a global pandemic?

Was it a desire to teach the doctors a lesson after the AMA refused to bow to Kenney’s demands for cuts? Was it resentment that Rachel Notley was able to negotiate doctors’ fees without a ripple of discontent?  

Was it plain old hubris?

One thing is clear, if the Kenney government is prepared to go after our doctors in the middle of a pandemic, then none of us are safe.

Posted in Alberta Health Care, Economy, General Health Care, Politics and Government | Tagged , , , , , , | 63 Comments

Gaslighting 101: Mr Kenney Responds to Mr Trudeau’s Aid Package

Posted on April 19, 2020 by

Gaslighting: abusive behavior where an abuser manipulates information to make his victim question their sanity by using denial, misdirection, contradiction and misinformation to destabilize the victim and delegitimize their beliefs. – Wikipedia

Last week, Prime Minister Trudeau announced $2.4 billion aid package for laid-off energy workers. It includes $1.7 billion to clean up orphaned oil and gas wells and $750 million to stop the leakage of methane gas.

Given that Premier Kenney has been pounding the table for months demanding $20 to $30 billion from the Feds to save the energy sector, his response to the $2.4 billion package was surprisingly bland. Why?

Because Mr Kenney discovered that he can’t bully Mr Trudeau or the rest of Canada, consequently instead of flying into a rage he issued a press release full of statements that were (a) contradicted by the facts, (b) contradicted by his own government’s policy, and (c) a masterful piece of gaslighting.

Mr Kenney

None of which goes far to engender trust in this government.

Mr Kenney’s response

Mr Kenney said Alberta was grateful for the Fed’s $2.4 billion package, but Alberta needs and deserves much more because:

  • 800,000 Canadian jobs depend on Alberta’s energy sector making it Canada’s largest industry
  • Alberta’s energy sector is the largest subsector of Canada’s economy
  • Alberta’s energy sector is one of the biggest employers in Canada
  • If the Feds don’t bail out Alberta’s energy sector it may not survive “the next couple of years”

Okay, let’s take it from the top.

Is Alberta’s energy sector (with 800,000 employees) Canada’s largest industry?

No. Economists define an industry as a sector that produces goods or services. There are at least 10 sectors that employ more Canadians than Alberta’s energy sector, including the wholesale and retail sector which employs 2.8 million, manufacturing which employs 1.7 million, and construction which employs 1.5 million.

Is Alberta’s energy sector the largest subsector of Canada’s economy?

No. The energy sector’s share of taxes paid by all industry sectors was 7.7% between 2013 and 2017. The sector’s contribution to Canada’s nominal GDP is just over 10%; the manufacturing and real estate/leasing sectors contribute more.

Is Alberta’s energy sector one of the biggest employers in Canada?

Nope. See above.

Bottom line: the first three reasons Mr Kenney relies on to support his argument that the Feds should contribute a whole lot more to prop up Alberta’s energy sector are contradicted by the facts.

Is there a chance Alberta’s energy sector may not survive the next couple of years?

Mr Kenney said these were unprecedented times and the energy sector was facing its biggest challenges ever with threats from both the COVID-19 pandemic and the Saudi-Russia price war. He said world energy markets will improve and there would be better times ahead “but only if the industry survives the next couple of years.”   

Which raises the question: If there is a chance Alberta’s energy sector will not survive the next couple of years, then Mr Kenney’s decision to invest $7.5 billion in TC Energy and to allow AIMCo to invest billions more the Northern Courier and Coastal GasLink pipelines was utterly irresponsible. 

Bottom line: Mr Kenny’s rationale that Alberta’s energy sector is in danger of collapse unless the Feds contribute significantly more is contradicted by his policy decision to invest Alberta taxpayers’ money in the energy sector.

Trust?

What are we to make of this bizarre press release? Either Mr Kenney doesn’t care about the facts or he’s comfortable betting Alberta taxpayers’ money on a dicey future, either way he’s gaslighting us to get what he wants out of the Feds.

Which leads me to wonder, if you can’t trust your government in the middle of a pandemic, who can you trust?

Posted in Economy, Energy & Natural Resources, Politics and Government, Uncategorized | Tagged , , , , , | 79 Comments

Checking In

Posted on April 12, 2020 by

How are you? Are you okay?  

The Soapbox family is fine. We’re the lucky ones, we’re doing reasonably well under the circumstances. We check in with each other every day. We go for walks and play more board games than we’ve ever played before (I still suck at Rummikub).  Emails, texts and phone calls keep us connected with friends and family.  We’ve discovered Facetime is perfect for Scatagories or simply catching up over coffee.

But it’s not enough. We need our community.

When my sister in BC spends her free time sewing masks for my family and says she’ll leave the house for the first time in two weeks to take the package down to the local post office instead of leaving it in her rural mail box for pickup and delivery so we’ll get it quicker, I tear up.  

When I walk the dog and meet someone coming the other way with his dog and we scramble to get away from each other, I understand but am saddened.    

When I attend a board meeting by conference call and our chairman starts the meeting by saying it’s so nice to hear our voices, I’m moved.  

Something has happened. Time slowed down. And we’ve learned a few things.

First and foremost, we now recognize the importance of every single member of our society, regardless of their position in the economic and social hierarchy.

Second, we know our local, provincial, and federal governments can move mountains in a very short space of time if they have to. It turns out there’s always enough money to do what’s right and decent.

Third, we understand that when this is over, we cannot go back to the old way of doing things. As the economist Armine Yalnizyan said, COVID-19 fast tracked the discussion of economic policies like universal basic income and modern monetary theory into the mainstream. The pandemic is changing the way we think about economic policy and how we implement it.

If we can tackle the fallout from a pandemic, then nothing is too big or too difficult to contemplate.

And you know what, the politicians can and will get it done…if they get a big push from the community.  That must be our focus when we reached the other side of this tunnel.  

Until then, how are you? Are you okay?

Posted in Economy, General Health Care, Politics and Government | Tagged , | 57 Comments

Jason Kenney and the KXL Deal

Posted on April 5, 2020 by

Last week Mr Kenney threw away (yet again) his belief in the sanctity of the free market by announcing his government (ie. us) would invest $1.5 billion in TC Energy (formerly TCPL) to complete Keystone XL and provide a $6 billion loan guarantee.

Saved by the Alberta government

Mr Kenney speech was peppered with comments about Saudi “predatory dumping” and “lawfare” waged by foreign funded interests, but his most disturbing comment was that if Alberta did not intervene, KXL “would not be built” or would not be built at “any time in the foreseeable because “there are no prospective private sector bidders for the KXL project at this time.”  

This raises two questions (1) was TC Energy looking for “private sector bidders” for KXL and (2) without such “private sector bidders” was KXL doomed to fail.

The answer these questions lies in TC Energy’s filings under Canadian and American securities laws. There TC Energy takes a sanguine position, simply saying KXL “continues to advance” and TC Energy will continue to manage various legal and regulatory matters before making its final decision to start construction.

Premier Kenney buys a pipeline

Unlike Teck who made it crystal clear it would not proceed with Frontier unless it had a partner, TC Energy has never said it would not proceed with KXL unless it found a “prospective private sector bidder” which I think is Jason Kenney’s convoluted way of saying, a partner.  

So unless Mr Kenney knows something TC Energy’s executives, Board of Directors, bankers, shareholders and investors do not know, one has to wonder why he said KXL was kaput without the intervention of the Alberta government.

But let’s assume for the sake of argument that Mr Kenney was correct when he said KXL could not proceed without billions of dollars from the Alberta taxpayer; is the risk of this investment worth the benefits?  

Risks?

Mr Kenney said while the risks are “obvious” this billion-dollar investment was a “solid bet” because it will deliver $30 billion in royalties and taxes over the next 20 years. However, he refused to provide the forecasts supporting his prediction and given how badly he miscalculated oil prices in Budget 2020 we will take Mr Kenney’s promise of a $30 billion upside with a grain of salt.

Mr Kenney told the House that Alberta taxpayers are protected because our $1.5 billion equity investment is “at the top of the capital stack” and this is a “preferred investment where we’ll sell the shares at a profit.”

Umm, no, this doesn’t allay our concerns.  

Firstly, while TC Energy has agreed to reacquire the Alberta government’s “preferred investment” after the project is completed and placed into service, TC Energy says there’s no agreement on the “sell back” price so how can Mr Kenney promise he’ll sell at a profit?  

Secondly, can someone nudge Mr Kenney’s Justice minister, a bankruptcy lawyer, and ask him to explain to Mr Kenney that equity investments whether they’re preferred or common, rank below debt, and creditors take priority over shareholders (that would be us).

Bottom line: not only are Alberta taxpayers bearing the risk of losing their $1.5 billion investment, they’re on the hook for $6 billion in loan guarantees. And they’re taking this risk on the strength of Mr Kenney’s fuzzy assurance they’ll reap $30 billion down the road.  

Benefits?

Mr Kenney listed other benefits of investing billions of taxpayer dollars in TC Energy, including:   

  • Kick-starting the oilsands. He did not explain how KXL will reverse the double whammy of rock bottom oil prices as a result of the Saudi-Russia price war and tepid demand due to the Covid crisis. Perhaps because KXL will have zero impact on either.
  • Creating 1,400 direct jobs in Alberta, 1,200 in Saskatchewan and 300 elsewhere in Canada and 5,400 indirect jobs in Alberta and 12,000 indirect jobs in Canada…oh wait, that’s not the whole story…KXL will also create 10,400 direct jobs and 42,000 indirect jobs in the United States. Listen, I have no problem with Americans going to work, but I question why Mr Kenney was satisfied with Albertans bearing all the risk while Americans reap eight times the benefit.  
  • Getting to work now. Mr Kenney and his energy minister insist Albertans are working on KXL right now (with “now” being Apr 1 or 2 depending on who’s speaking), however TC Energy’s CEO said in light of the Covid crisis “construction will advance only after every consideration for the health and safety of our people, their families and of those in the surrounding communities has been taken into account.” On Apr 3, TC Energy posted a video describing its Covid protocols which at this point appear to apply only to its construction site in Montana. We’re still waiting for a Covid protocol video relating to Alberta.  

?????   

At the same time Mr Kenney told Albertans our financial position was so dire we could no longer afford to pay our healthcare workers, teachers and other public servants properly, he was negotiating a deal which required him to borrow billions of dollars to support TC Energy’s KXL pipeline.

TC Energy posted record financial results in 2019. It says dividends will grow by 8% to 10% through 2021 and 5% to 7% thereafter. It prides itself on its ability to “access sizable amounts of competitively-priced capital” while preserving its financial flexibility to fund its capital program “in all market conditions.”

TC Energy’s securities filings do not paint a picture of a company under financial stress.

So why did Mr Kenney decide it was necessary for Alberta taxpayers to make a $1.5 billion equity investment in TC Energy and issue $6 billion in loan guarantees?

If, on the other hand, TC Energy is legitimately concerned that legal and regulatory challenges will sink the KXL pipeline why did Mr Kenney (who has no jurisdiction whatsoever over American federal and state legal/regulatory matters) make a $1.5 billion equity investment that is not repayable until after the completion of a pipeline that may never get built and further, agree to backstop $6 billion in loans.

Either way it looks like Mr Kenney made a questionable decision.

All we know for certain is Albertans will be living with the consequences of his decision for a very long time.

Posted in Economy, Energy & Natural Resources, Law, Politics and Government | Tagged , , , , | 62 Comments

The Leader and His Team

Posted on March 29, 2020 by

It’s been a tough week for everyone; especially that “young, energetic and diverse team with deep experience” that Jason Kenney (his words by the way) appointed to Cabinet.

Health Minister Shandro took it upon himself to turn up at a Calgary doctor’s house and yell at him for reposting a Facebook meme that suggested the health minister was in a conflict of interest position because he and his wife own a supplementary health benefits company called Vital Partners. Minister Shandro also told another private citizen that if she didn’t stop sending threatening emails to his wife (they were sent to Vital Partner’s corporate web page and weren’t threatening) he’d refer the matter to “protective services”.

A Minister of the Crown yelling at citizens or threatening to send “protective services” to their doorsteps is not the way to allay their concerns.     

Education Minister LaGrange issued a press release this weekend informing 25,000 teachers and non-certificated staff they were fired, at least temporarily. It’s okay, she said, the Feds will take care of you and besides we’ll re-allocate the money saved from this cut to Alberta’s COVID-19 response.

Premier Kenney

Economist Trevor Tombe called this a cut of “massive scale” and said it was “false” for the government to say the savings were being reallocated to COVID-19 because the savings will impact Alberta’s debt, not its health spending.        

And while we’re on the topic of so-so cabinet ministers, what happened to Sonya Savage, our Energy Minister? She’s completely faded off the scene, replaced in all but name by Mr Kenney. Yesterday he was urging the federal government to go after Saudi Arabia and other OPEC countries for predatory dumping (“we cannot let them win”); he also said he’ll be speaking with American politicians and administrators about a coordinated plan to defend the industry. 

The only thing he didn’t say is that he’d shut down the $30 million/year war room and reallocate the savings to fighting COVID-19.  

Deep experience?   

No one is expecting the Alberta government to fix COVID-19 and its impact on our social and economic well being overnight. However some of us would argue that the “young, energetic and diverse team with deep experience” appointed by Mr Kenney is coming apart at the seams. Either that or Mr Kenney lacks the confidence in them to let them do their jobs.  

Which leads us to wonder whether Mr Kenney’s characterization about the competence of his Cabinet is valid.  

Albertans have no way of checking whether Shandro, LaGrange or Savage have the experience necessary to do their jobs at the best of times, let alone in the middle of a pandemic and global economic downturn, because their biographies do not appear on the Alberta government website.*

This is peculiar given that the descriptions of the remaining 17 cabinet ministers, 3 associate ministers, 3 parliamentary secretaries and one military liaison include their biographies. (Even the 27 deputy ministers have biographies for god’s sake).

So what gives?

Health Minister Shandro is responsible for the government’s response to the biggest public health emergency Alberta has ever faced; Education Minister LaGrange is responsible for K-12 education which is experiencing unprecedented upheaval as a result of COVID-19 and Energy Minister Savage is responsible for energy, the mainstay of Alberta’s one-trick pony economy; is it too much to ask for a modicum of transparency so Albertans could view their qualifications for the job?  

They say a leader is only as good as his team. Unfortunately, the Kenney government has chosen to hide the biographies of three critical Cabinet ministers.  

Given the performance of his team over the last few weeks of escalating crisis, this is deeply concerning.

*NOTE: A reader tells me he can see Sonya Savage’s bio. I’ve check on a few different browser, but still see nothing but a button marked “Learn More”. In any event, the question still remains, does Jason Kenney’s Cabinet have the bench strength necessary to lead Alberta through these difficult times?

Posted in Alberta Health Care, Economy, Education, Energy & Natural Resources, Politics and Government | Tagged , , , , , | 79 Comments

The Impact of COVID-19 on Democracy

Posted on March 22, 2020 by

James Madison said tyranny arises “on some favourable emergency”.

The COVID-19 pandemic is today’s “favourable emergency.” It’s being used by unscrupulous politicians as a smokescreen for undemocratic behavior in Alberta’s Legislature and an excuse for Jason Kenney to enlist the crème de la crème of right-wing conservative thinkers to reshape Alberta’s economy.

Undemocratic behavior in the Legislature

Last week NDP opposition leader Rachel Notley told the House about a number of instances where the Kenney government violated the principles of democracy.*  

She said the Kenney government introduced motions without allowing the NDP Opposition to see them beforehand and then lied to the House by claiming written notice had been provided when it had not.

Rachel Notley NDP Opposition Leader

She described how the Kenney government threatened to withdraw the $500 million it had promised support frontline workers battling COVID-19 if the NDP Opposition did not unanimously support what she described was an “unorthodox” change in the budget numbers.  

Government lies and threats have no place in the democratic process.

Lastly, the Kenney government rammed through the budget with 3 hours of debate when House rules require 30 plus hours of debate time. It’s not as if the time wasn’t available. The government simply cancelled the 10 hours of debate time that had been scheduled for the prior evening and that morning.

Why the rush?

Because by short-circuiting debate the Kenney government could shield itself from financial accountability, oversight, and transparency; and (perhaps just as important) shield spineless UCP MLAs who supported cuts that will harm their own constituents.

Hiding from accountability and oversight while ducking your own constituents is undemocratic and cowardly.

The Kenney government said the COVID-19 pandemic justified its behavior and yet other governments, including Saskatchewan, Ontario, and the federal government delayed their budgets, recognizing the pandemic had rendered their budget numbers irrelevant.     

The Harper Council

The Kenney government promised to do everything in its power to protect jobs and job creators in the face of COVID-19 and plunging oil prices. It created the Economic Recovery Council to guide Alberta through the downturn and to develop strategies for long-term recovery, including economic diversification.    

The Council is chaired by economist Jack Mintz (who believes Alberta could Wexit easier than the UK could Brexit) and includes Stephen Harper, former prime minister and now chair of the International Democrat Union (IDU), an alliance of centre-right, conservative political parties. Margaret Thatcher was one of its founding members.

The Harper Council (let’s face it, Stephen Harper will have more sway over the outcome than the other 11 members put together) is top heavy with executives from banks, private equity funds, and the energy sector and light on everything else. This is an indication of what Albertans can expect from the Council—recommendations that echo Kenney’s call for more government support of the energy sector at the expense of everything else (there’s a reason why the AIMCo CEO is at the table).  

One might ask why the Kenney government did not commit to doing everything in its power to protect its citizens from the social consequences of COVID-19 and plummeting oil prices and set up a parallel Council of healthcare and other professionals to develop strategies for our long term social recovery.  

The answer is simple. Kenney accepts responsibility for the economy (sort of, when things go bad it’s someone else’s fault, when things go well he takes a bow), but he will not accept responsibility for society, hence his government’s continuing attacks on Alberta’s doctors smack in the middle of the COVID-19 crisis.  

Thankfully Albertans can rely on the Trudeau government which is committed to spending billions to help Albertans weather this crisis.   

Compassion vs prosperity

Remember when the UCP said we can’t be a compassionate, caring society until we’re a prosperous one. This Thatcherism became the foundation of Jason Kenney’s election promise of “jobs, economy, pipelines” and was reflected in one of his first pieces of legislation, the “job creating tax cut.”

We knew Jason Kenney was wrong, but it wasn’t until the coronavirus hit that we realized just how wrong he was.  

All the tax cuts in the world aren’t going to put Alberta’s economy back on track because as economist Jim Stanford says, it is “work” (which he defines as human effort) that’s critical to economic activity. Human effort transforms the materials we get from nature into useful goods and services. Sure, corporate investment is important, but it is by no means the only driver.  

And until human effort returns to the economy in the form of production and consumption, the economy is going nowhere.

Think about that for a moment.

The COVID-19 pandemic forced human effort to withdraw from the economy in all but the “essential” sectors (some of which were invisible to us until now).

What if something as powerful as a pandemic, say a desire to stop the degradation of public services like education and healthcare, were to capture Albertans’ imagination and they withdrew their human effort for, say, one day a week until politicians agreed it was time to reconsider the balance between the economy and society.

Oh wait, we already know how to do that. It’s called a General Strike.

Hmmm…

*Alberta Hansard, Mar 17, 2020 p 221

Posted in Alberta Health Care, Economy, Energy & Natural Resources, General Health Care, Politics and Government | Tagged , , , , , , , | 51 Comments

COVID-19: A Study in Leadership

Posted on March 15, 2020 by

 “The first role of government is to help people in crisis or need. That’s why we have government.”– John McCain

Crisis separates the leaders from wannabes.

We will be watching our leaders and wannabes very carefully over the next few months to see how they respond to the COVID-19 pandemic. Specifically, we want to see whether they adopt what Chris Hadfield calls “boldface” procedures—“boldface” is a term used by pilots to describe the procedures that could save your life in a crisis.

The coronavirus pandemic is moving very quickly and we’ve learned some boldface procedures from other jurisdictions that will help “flatten the curve”, but these procedures require governments to have the wisdom and the courage to spend the money and take the steps necessary to meet the pandemic head on, rather than hanging back until it’s too late to catch up.

How are we doing so far?

Stepping up…or not

At the federal level, Prime Minister Trudeau is taking action.

He’s committed $1 billion to fight COVID-19: $500 million is allocated to provincial and territorial governments which are responsible for health care delivery, $5 million goes toward increased Employment Insurance sickness benefits for those who need to go into self-isolation, $50 million is earmarked for protective equipment for health care workers, over $275 million is for prevention and research, and millions more will go to regional public health services.

And that’s just the beginning, Mr Trudeau promises there’s more to come next week.

The prime minister is demonstrating strong leadership in a time of crisis.  

On the provincial front, Premier Jason Kenney has been much slower to react.    

Yesterday Mr Kenney made a faith and hope speech, brimming with patriotic platitudes and warning that things would get “much worse” before they got better. Mr Kenney called for “direct and timely interventions” by governments (plural) to support workers, employers, families and businesses, so we can take care of each other, especially the vulnerable, the old, the sick, and the unemployed.

He did not offer any “direct and timely interventions” until this afternoon when he announced $500 million in funding to ensure frontline health professionals have the staffing, resources and supplies they need for testing, surveillance and treatment.

Mr Kenney, coming in on the heels of Justin Trudeau

Mr Kenney’s funding commitment is better late than never, but the fact he waited until after prime minister Trudeau made his announcement is a concern. “You first” is not a sign of good leadership, it’s a cop out.    

The frontline and Budget 2020

Now here’s where it gets tricky.

When Mr Kenney announced the $500 million commitment he said, “Alberta’s public health workers are doing an outstanding job, and we are here to support them with whatever they need.” If he really meant it, he’d take another look at Budget 2020.

Budget 2020 reflects Mr Kenney’s contention that Alberta’s healthcare professionals are overpaid and inefficient. It purports to address this by (1) significantly cutting nursing jobs and (2) materially reducing physician’s compensation.

This left Alberta’s healthcare professionals feeling demoralized and burnt out…and then COVID-19 turned up on our doorstep.   

Rachel Notley has been fighting to reverse the cuts to nurses, and has urged Mr Kenney to “pause” the implementation of changes to doctors’ compensation until the COVID-19 crisis is behind us.  Mr Kenney refuses to budge.

Why?

Mr Kenney says the budget must pass because the government needs spending authority by Mar 31.  This implies that the government will implode if the budget is not in place on April 1.  

Guess what, we’re not the US government, we don’t have to shut down and furlough staff because the government fails to pass a spending bill by a certain date. The Alberta government has the power to pass interim supply bills (which it does on a regular basis) and special warrants to pay as needed.

If Mr Kenney were inclined to address the challenges posed by the coronavirus, he could delay passing Budget 2020.  He simply chooses not to do so; likely because he’d have to revise the budget’s revenue forecasts which are wrongly based on rising oil prices. He simply doesn’t want to admit that economists like Trevor Tombe are predicting Alberta’s deficit will rise to $11-12 billion this year, $8-9 billion next year and $4 billion the year after that and our overall debt will balloon to over $100 billion.

Being afraid to admit you made a mistake is not effective leadership, it’s lunacy.

Instead of facing the music, Mr Kenney tried to fob off Alberta’s doctors and nurses with the promise that there will be no healthcare layoffs during the COVID-19 crisis. How nice, they can work until they drop and run a higher risk of being infected with COVID-19 than the general population…and get fired after the crisis has passed.  

Leadership?

Mr Kenney has been quick to respond to a failing economy by implementing a $4.7 billion corporate tax cut (which failed to create jobs) and a $30 million/year war room (which failed to improve the energy sector’s reputation).

He’s been slow to respond to a pandemic that threatens to upend Alberta’s healthcare systems and he continues to exacerbate the chaos and uncertainty by refusing to “pause” his government unilateral imposition of pay cuts on Alberta’s physicians.    

Thankfully our healthcare professionals will honour their commitment to care for us and our families.

They will lead us through this crisis while Mr Kenney huffs and puffs on the sidelines.  

Posted in Alberta Health Care, Economy, Energy & Natural Resources, Politics and Government | Tagged , , , , , , | 59 Comments