Alberta never learns.
If you doubt me, consider Finance Minister Travis Toews’s provincial budget yesterday.
Dubbed “Moving Forward,” the Budget Speech read by Mr. Toews in the Legislature would be better called “Back on the Rollercoaster.”
Promising to get the province off the rollercoaster of volatile petroleum prices is a hardy perennial of Alberta politics, especially when oil prices are down, as they have mostly been since 2014.
But when oil and gas prices turn up again, as they have recently, all is forgotten.
“Global oil demand is expected to exceed pre-pandemic levels in 2022 and many expect it will continue to increase for the next several decades,” Mr. Toews said in his upbeat Budget Speech.
“Given the increased demand for oil, we have an opportunity and, indeed, a responsibility to maximize production,” he went on. (Emphasis added.)
But will prices remain as high as the Kenney Government guesses? As the troubling events of the past few hours have shown, even sound predictions can turn out to be dramatically wrong.
Whatever the future holds, Premier Jason Kenney and his United Conservative Government have been experiencing a pretty serious political crisis, so they’re all in with the traditional Alberta formula of tossing caution and qualms aside the moment energy prices move north.
Accordingly, Mr. Toews proclaimed, “it gives me great pleasure today to present Budget 2022, a balanced budget.”
Indeed, Alberta expects to post a small surplus in 2022-23, $511 million over predicted revenue of $62.1 billion, he said. Sleight of hand or solid accounting, this appears to be a dramatic turnaround for Alberta’s fiscal fortunes, the first time in eight years the budget hasn’t been in the red.
With Mr. Toews chanting the ultimate magic spell of Alberta politics – “the budget is balanced” – that may be enough right there to settle down Premier Kenney’s angry UCP Caucus, riven for months over COVID-19 mitigation measures and mandates.
The provincial fiscal estimates released with the budget yesterday forecast the North American benchmark oil price will average $74 US per barrel in 2021-22, then fall to $70 US in 2022-23 and $66.50 US in 2024-25.
If oil prices were to average $85 per barrel, observed University of Calgary economist Trevor Tombe soon after the Budget Speech, Alberta’s surplus at current royalty rates would be $8.1 billion. If they average $44 per barrel, then its deficit would be $8.3 billion.”
“No effort at all in the budget to address this significant fiscal risk,” Dr. Tombe tweeted.
Of course there isn’t. That would mean considering new revenue sources, viz., taxes. And that would be un-Albertan!
“Albertans continue to pay less in overall taxes than any other province, with low personal income tax and no provincial sales tax, payroll tax or health care premiums,” Mr. Toews exulted to the applause of his fellow UCP MLAs, united for once.
High oil prices, partly a gift to Mr. Kenney from Russian President Vladimir Putin who delivered a stunning blow to the economy of most of the world Wednesday with his invasion of Ukraine, are bound to be greeted with the traditional Alberta never-mind-tomorrow attitude.
Then there’s the $133 million in capital set aside for what the government calls its Alberta surgical initiative – read using public funds to subsidize private surgical services, which take skilled human resources out of the public health care system. Operational costs are unknown.
Not mentioned by Mr. Toews: When this was tried in Saskatchewan, it led to some of the longest surgical wait times in Canada.
There is another $72 million to set up more charter schools over the next two years.
In other words, as Duncan Kinney and Jim Storrie of the Progress Report said in their hot-take analysis yesterday, “the stink of privatization hangs over this budget.”
“You don’t have to pay or worry about unionized teachers, the government foots the bill for all of your costs and you don’t have to worry about a pesky democratically elected school board looking over your shoulder,” they wrote. “It’s no wonder so many people connected to the conservative movement are involved in charter schools.”
Mr. Toews also claimed a dozen times in his speech there’s a “labour and skills shortage” in Alberta, notwithstanding recent unemployment the UCP blames on Ottawa.
So what’s with that? The answer, probably, is that “there is of course no real shortage of workers in Alberta, which has one of the youngest populations in Canada and is full of people who specifically came here to work,” Messrs. Kinney and Storrie said. “The employers lobbying Toews don’t want to spend their own money making their jobs attractive enough to draw in new hires, so they’ve convinced him to subsidize them with our money instead.”
A few other tidbits: $59 million for large animal veterinarians; $90 million to replace and keep the rural physicians driven out of the province during the government’s War on Doctors, and $64 million to try to fix the province’s now-broken ambulance system.
The finance minister ended up with a nice story about how “Larry,” the depressed veteran pipefitter, finally found a job.
That’s nice for Larry, even if he doesn’t really exist. One hopes he’ll be able to retire comfortably soon.
But as NDP Opposition Leader Rachel Notley said yesterday, the budget had no meaningful plan to create jobs in Alberta, do anything about Albertans’ soaring bills, or put more teachers into classrooms.
“The bottom line is this: Families under pressure won’t find relief in this budget,” she said. “Instead, they will continue to see the bills pile up every month. … pressure is building and the premier is focused only on his own leadership campaign.”
And our economic fate remains dependent on factors entirely out of Alberta’s control – a formula that’s led to economic instability, western separatism, and political extremism, a phenomenon that seems to grow more extreme with each cycle.