Alberta Politics
Alberta Finance Minister Travis Toews, tieless, at yesterday’s news conference (Photo: Screenshot of poor-quality Government of Alberta video).

The Kenney Government’s recovery plan — in times like these, we’re all Keynesians, up to a point, anyway

Posted on June 30, 2020, 1:45 am
9 mins

It’s not actually true that that everything was just copacetic in Alberta when COVID-19 kicked down the door and started smashing up the dishes.

But you’ve got to give Travis Toews some credit for his acting ability. Alberta’s finance minister sure made it sound as if that were so for a couple of minutes during yesterday’s news conference about the United Conservative Party Government’s economic recovery plan.

Alberta Premier Jason Kenney, also tieless, at the same event (Photo: Screenshot of Government of Alberta video).

“Looking back, Alberta came into 2020 poised to turn the corner on years of economic pain,” he said, tieless to symbolize that he’s hard at work. “It’s clear, our economic policies were working and we were on track with a credible plan for a balanced budget within our three-year fiscal plan. COVID-19 changed all of that in a matter of weeks.”

If they gave out Academy Awards for most persuasive performance in a news conference, Mr. Toews might be up for a nomination. A little wooden, perhaps, but he actually manages to look and sound reasonable, like one of the grownups in the room, when he steps up to the podium.

We haven’t had a politician like that in Alberta since, oh … Rachel Notley, I guess.

Jason Kenny, from a theatrical perspective, is miscast as premier. He’d be laughed off the stage if theatre critics were pressed into service as political pundits. Glib, smug and convinced he’s the smartest man in the room, Mr. Kenney is about as believable as the proverbial used-car salesman, more Nixonian than Trumpian.

So no matter how this recovery plan works out — and that will depend on many factors far outside the control of any Alberta politician — you can count on it that this will be the UCP’s reelection elevator pitch: Everything was getting better thanks to us. It’s all COVID’s fault!

If you can still have elevator pitches, that is, in the Age of Coronavirus.

Alas, it’s not actually true. As University of Alberta economics professor Andrew Leach, having one of his pedagogical moments on Twitter, pointed out: “The Finance Minister is wrong. His own ministry’s economic index says so. No, 2020 was not looking good. In fact, almost every major economic forecast had downgraded their AB 2020 outlook over the last half of 2019.”

University of Alberta economist Andrew Leach (Photo: David J. Climenhaga).

But Messrs. Toews and Kenney were right about one thing: Thanks to bad luck and bad management, Alberta’s economy under the UCP is an unholy hot mess and there’s nothing for it but to spend money and hope for our luck to change.

If you’re searching for a metaphor, it’s as if we were a cancer patient of limited financial means in that U.S. health care system the UCP loves so much. If we want to survive, we’re just going to have to spend more money than we have and try to sort it out later.

In times like these, we’re all Keynesians. There’s something about 25-per-cent unemployment that concentrates a politician’s mind wonderfully even if he’s a member of a club like the Canadian conservative movement in which economist John Maynard Keynes’s name is usually a swear word.

So we’ll spend a few billion on infrastructure in hopes of putting some of the kind of working people the UCP likes — pipeliners, for example, as opposed to teaching aides and unionized health care workers — back to work.

British economist John Maynard Keynes, 1883-1946 (Photo: Walter Stoneman, National Portrait Gallery, London).

There aren’t nearly as many billions in “the largest ever capital spend in Alberta,” as the announcement pretends, though, since close to $7 billion of the $10 billion the government is talking about had already been announced. What’s more, some of that is expected to come from the federal government. And $1.5 billion will go to that pipeline project south of the 49th Parallel that stands a good chance of being shut down by the next U.S. Administration, assuming there’s an election down there in November. Well, so be it. As they say in the Navy, a bad plan is better than no plan.

Of course, some plans are worse than no plan, and with sunny Jack Mintz and glowering Stephen Harper in the chartroom plotting our course, it was natural that this scheme would involve another “Job Creation Tax Cut” that, as history shows, is extremely unlikely to create any jobs.

Mr. Kenney claimed yesterday the 2 per cent cut that now lowers the business tax to 8 per cent would create an additional 55,000 jobs by the year after next and attract $4 billion in investment annually. More likely it will result in more stock buybacks and finance a few more corporate head office moves from Calgary to Denver or Houston while driving the provincial deficit even higher.

But then, it’s a law of North American media coverage that deficits only matter when liberals are at the helm or conservatives need an excuse to cut public services.

Rather than add a few hundred more words to bolster this point, dear readers, I suggest you merely Google, “Do corporate tax cuts create jobs?” and read what appears.

Some aspects of the UCP plan are comedic. For example, given Mr. Kenney’s unquenchable faith in propaganda over analysis, and the Alberta Energy War Room having flopped so miserably, Mr. Kenney will create War Room 2.0. Invest Alberta will be “a dedicated investment promotion agency” that will tell the same fibs as the War Room, but with a smiley face.

Dr. Mintz, the University of Calgary economist favoured by neoliberal politicians, and Mr. Harper, the dour former Conservative prime minister that almost no one misses yet no matter what the memes say, were named to Mr. Kenney’s economic recovery panel in March. Back then, the full impact of COVID-19 on the world economy as a result of the negligent and incompetent response to the disease by the United States was not yet fully apparent.

Republicans at heart, the baleful pair were certain to recommend an orgy of tax cuts, anti-worker legislation and health care privatization, supposedly as a response to COVID-19 — the Shock Doctrine in other words.

Some of this is already apparent in the recovery plan announced yesterday. More is bound to be along soon.

But at least if Mr. Toews, instead of Mr. Kenney, is telling us about it, fewer shoes will be thrown through television screens.

16 Comments to: The Kenney Government’s recovery plan — in times like these, we’re all Keynesians, up to a point, anyway

  1. Dave

    June 30th, 2020

    Oh where to begin with the Kenney economic action plan. At least Scheer was more unabashedly obvious in his platform that he was recycling the best Harper hits from 2008 to 2015. Although, look where that got Scheer, maybe better to not be quite so obvious.

    I take this as another sign of Kenney’s desperation, he has now become an unabashed Keynsian in all but name. Once, during the COVID lockdown, could be passed off as an accident, but twice seems habit forming. On the bright side, we will probably never ever hear Kenney and the UCP complain about the size of the NDP deficit again, unless they want to be laughed out of office.

    As with many things Kenney, I suspect this will all turn out to be less than it first appears. It seems a lot of the 10 billion is a mix of already announced spending and a reversal of previous cuts to infrastructure spending. The only thing that will probably be truly bigger is the deficit, but that is more due to the state of the economy than so much more spending.

    I’m not sure the 7 billion plus on a pipeline being constructed in the US that is quite vulnerable to shifting political winds in the US will turn out to be a good investment. Also, I am quite sceptical that more of the corporate tax cuts which didn’t work before will work this time. My bigger concern is we are not in a good situation, so we shouldn’t be throwing away huge amounts of money foolishly. I get the sense in its desperation, and for lack of a better plan, that is exactly what Kenney and the UCP is doing.

    Reply
  2. Just Me

    June 30th, 2020

    Never let a good crisis go to waste.

    There can be no doubt that a fair portion of these monies will come from pensions because…there’s a crisis.

    And the government will be leveraging substantial debt because…there’s a crisis.

    And the government will initiate spending on a wide variety of vanity projects because…there’s a crisis.

    And so on.

    I have no doubt Kenney’s fetish about bringing the abbreviated NHL playoffs to Edmonton as a hub city with command a fair portion of funds. It’s been said that the league wants $1B USD + to buy in and secure a spot as a hub city. Kenney has always been free with other people’s money, so he’s going to go wild and commit to this insanity.

    And given that another downgrade is in the offing, all the more reason to hit that bond ATM right now, before it’s too late.

    And I can imagine there’s a lot of O&G related projects and companies that are lining up for the bailouts. (IPL’s massive project is one of them.)

    This establishes that Kenney has no intention to seek another term.

    Reply
  3. Bob Raynard

    June 30th, 2020

    All these actions are taken to get the economy going again. Based on what is happening in the US, that may not necessarily be a good thing.

    Reply
  4. Abs

    June 30th, 2020

    Here’s a number Kenney and his UCP should put front and centre: 47.2 per cent. That’s the U.S. unemployment rate in May.

    Does the Wonder Wizard think American companies will be falling over themselves to set up shop in Alberta? Hello, “Empty Offices”R” Us” is no draw. They’re everywhere.

    What was that I have been saying for many months now? Oh yes, idle hands do the devil’s work. Think of all those people who could be kept busy at universities and colleges, retraining for future careers. Now with post-secondary cutbacks, they might find themselves with lots of free time on their hands. Think of all those people let go because of Kenney’s cutbacks to public education and other public sector work. More people with free time to protest in the streets.

    There’s money in Alberta for corporations, but none for people. It’s as if saying the word “people” would make Kenney choke on his own bile. We’ll see how well that works out when people are backed into a corner, with no money for food, and families are about to become homeless as winter sets in. Hope is a commodity sorely lacking in Kenney’s Alberta. People with no hope have nothing to lose. Federal financial relief under CERB will dry up. Then we’ll see how well Alberta’s anti-protest law works. Time is not on this government’s side. The Wolf is at the door.

    Reply
    • David Bridger

      June 30th, 2020

      The problem for the UCP and I am sure they don’t see it as a problem, is that corporations who donate to a political party do so as an investment and accordingly want either a capital gain or dividends and usually both for their “donation.

      Whereas we individuals only expect honest and fair government policies. By giving a couple hundred bucks our dividend would only be $10 or fifteen dollars so we treat our donation as just that (A donation just like when we donate to a charity). And we get 75% of it back when we file a tax return so in the end we are only donating fifty bucks.

      Reply
  5. Political Ranger

    June 30th, 2020

    Reminds me of the ol’ days of King Ralph. Remember they would have these 3 day fests in Red Deer and come up with a brand new education plan for the 21rst Century, or an updated health plan. Three days with lots of booze and bullshit followed by a week or so of positive, glowing, optimistic press … then, crickets. Nothing, nada, not a thing!
    The Albaturda gov’t then, as it is now, couldn’t deliver. They couldn’t plan lunch, let alone a 2 or 3 year policy rollout. Senior management in the gov’t is the same bunch of wankers and navel-gazers today as it was a decade ago. There is very little demonstrated capacity to manage large time-sensitive projects and absolutely no process to follow if there was.

    $10 billion is an unfathomable amount of cash; we’ll have to wait and see if the UCP clown-car can actually get anything done with it. Or will it all go to the capable folks at the petro-corps. Again.

    Reply
  6. Murphy

    June 30th, 2020

    The Used Car Placeholders are the heirs to a proven track record of graft when it comes to Keynesian “diversification”.
    https://www.cbc.ca/news2/interactives/unproven/

    https://www.google.ca/amp/s/calgaryherald.com/news/politics/liability-for-swan-hills-hazardous-waste-plant-clean-up-keeps-growing/wcm/e8e18a26-f13b-44fc-b2b3-080771252cfd/amp/

    The Usual Suspects will soon be back to sharing Alberta’s wealth in the Bahamas and Caymans, and all will be right with the world.

    Reply
  7. karl roth

    June 30th, 2020

    as per usual your lowdown on the Kenney/UCP economic recovery plan is right on the money, particularly pointing out the “things were going so well before covid” shtick talk about the UCP putting lipstick on a pig

    it always gives me pause trying to understand how people end up with these ways of looking at economics and society
    i’m stumped

    in many ways these policies are actually killing the goose that lays the golden egg – the middle class – if you want proof you can see these policies in action and their results just across our southern border

    yAy Kenney/UVP cabal !! nOt

    Reply
  8. Jim

    June 30th, 2020

    Wait how is this Notley’s fault? Oh that talking point hasn’t been used yet, just wait it will come and some will believe it.

    Wasn’t the Mintz created talking point used by the PCs, Wildrosers, and some Liberals in the past that a 1% tax increase costs 10,000 jobs? So now a 2% tax decrease will lead to 55,000 jobs? Does a 1% tax increase now lead to 27,500 lost jobs? Has Jack been fiddling with his spreadsheet again?

    In terms characterizing the US response to the pandemic the term you are looking for is going full Cuomo. What he did in New York with his executive order is perhaps the most cruel act to come out this pandemic. But yeah I get it orange man bad….

    Reply
  9. Athabascan

    June 30th, 2020

    We are so screwed. That is all!

    Reply
  10. Mike in Edmonton

    June 30th, 2020

    Aaand here we go again. “Infrastructure” means more highways, or wasting more money on another pipeline that’s tied up in American courts. It MIGHT mean a new hospital somewhere, but won’t include staffing or operating budgets (remember the Sherwood Park “hospital” that became an oversized drop-in clinic).

    Maybe the “infrastructure” will be owned by some oil company or other. Would Teck Resources restart their bitumen mine project with a big enough loan guarantee? Is $50 billion enough? Imagine Alberta’s credit rating after the announcement….

    Any public infrastructure that gets built will be P3’s, which is not good news for the tax-payers. For a little perspective from Saskatchewan, see this report from the Canadian Centre for Policy Alternatives:

    https://www.policyalternatives.ca/publications/reports/partnership-name-only-0

    It WON’T mean upgraded sewers and sanitation. It WON’T mean improved public transit. It WON’T mean restarting the medical-lab facility that was supposed to serve central and northern Alberta–unless Kenney decides to give it away.

    Maybe worst, Kenney will restart his war against doctors. That won’t end well.

    It most likely won’t mean more jobs for Albertans, either. Always remember that Kenney’s tax cut didn’t save jobs at Husky. Economists warned that Kenney’s Kuts would push Alberta into a recession, while the rest of the country grew. That was before the COVID crisis. It was like predicting an egg will break, just after you’ve dropped it. This time around, Kenney’s going to drop the whole carton.

    Anybody want to bet that private-sector job numbers will climb past where they were in February? Anyone? The goal is to significantly exceed the number of paying jobs that were available before the COVID shutdown. Three conditions:

    – The recovery has to be before the provincial election in 2023
    – Jobs should be in high-paying permanent categories
    – The gains must be due to the UCP plan, i.e more jobs than would be expected without the stimulus plan.

    Three years is enough to show results–if any.

    “Looking back, Alberta came into 2020 poised to turn the corner on years of economic pain,” said Mr. Toews. That’s not how I recall it. But the Kenney Krowd likes to remember things as they should have been. Tax cuts combined with corporate welfare–the classic Republican tactic. Lose the next election and yell, “It’s all YOUR fault!”

    Rachel–we need a good plan NOW.

    Reply
  11. jerrymacgp

    June 30th, 2020

    The just as a column appears in the Mop & Pail in which Brian Mulroney — aka Jessica Mulroney’s father-in-law — put forward some interesting ideas on how the economy might recover post-COVID. https://www.theglobeandmail.com/opinion/article-canada-i-know-you-can-beat-covid-19/

    I don’t agree with all of his ideas, and don’t know enough about some others to pass judgment — the one on Indigenous Canadians is something I know nothing about — but based on the policy positions of the current Conservative Party, they seem almost socialist by comparison. Who knew we’d hear reasonable ideas from that old Tory?

    Reply
  12. Bill Malcolm

    June 30th, 2020

    Interesting to me that one Jason Markusoff, a staff writer for Macleans from Calgary, seems to be on exactly the same page as you, Mr Climenhaga. And he’s not a bad wordsmith at that. His last two articles on the stumblebum of a right wing pork-barreller you have as premier takes the message of his gross incompetence to a wider Canadian audience — no bad thing. So the two Daves from Alberta have been joined in spirit by a Jason. Will wonders never cease?

    Reply
  13. June 30th, 2020

    In times like these, we’re all Keynesians. With mortgages draining the tub with interest over 2% inflation is inevitable. I think if we tracked it we would see the number of times our money turns over a year and see how money re-spent fills the tub that is continually emptying. As people create new product, they want to claim the money for that which is really new money into the supply. But if you have someone like JT spending actual money without product it drains a different tub. It literally supplies you nothing and takes things off the shelf. Mr. Kenny Spender is at least doing projects that create product. So after its all done, and everyone goes home to bed, there will be more than a truckload of worthless cash. There will be something. And the more White collar we get rid of and the more blue collar we get employed the larger our homes will be the better our roads will be and the lower the inflation will be.

    Reply
  14. Murphy

    July 1st, 2020

    No lithium available due to Covid?

    Reply

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