Alberta Finance Minister Travis Toews delivers his Budget Speech yesterday (Photo: Screenshot of Alberta Government video).

Alberta never learns.

If you doubt me, consider Finance Minister Travis Toews’s provincial budget yesterday. 

Alberta Premier Jason Kenney, all smiles (Photo: Alberta Newsroom/Flickr).

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. 

NDP Opposition Leader Rachel Notley (Photo: David J. Climenhaga).

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. 

Progress Report commentator Duncan Kinney (Photo: David J. Climenhaga).

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.

Well, as Mr. Toews could probably tell you, it’s in the Bible: “Let us eat and drink; for to morrow we die.” 

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. 

Progress Report commentator Jim Storrie (Photo: David J. Climenhaga).

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. 

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37 Comments

  1. “The budget is balanced…”

    This statement will age like milk.

    Of course, the inevitable O & G price will crash hard in several months, leaving Kenney crying poor again.

    It’s not like no one hasn’t seen this scene before.

    1. Unfortunately, I have seen it many times going back many decades, I am sorry to say. I recall the antics of Dick Johnston (finance minister for the Getty government in the 80s) who, during some dark days for AB, tried to pull the wool over our eyes by underestimating oil revenues, then claim a “miraculously” smaller deficit than had been forecast. This was mild and amateurish gaslighting compared to the budget that is presented to us now. We are in the pro leagues now. As the Beaverton observed the other day, the Kenney government is making a significant investment in the gaslighting industry.

      https://mobile.twitter.com/TheBeaverton/status/1496129769343225860

  2. Christ!

    May 2023 can’t come soon enough to prevent the damage this bunch of UCP Neanderthals is doing to this province.

    If they have their way, water will be contaminated due to them permitting open pit mining in the Crowsnest, millions will be wasted on unviable legal pursuits and a generation will be impeded by a universally reproached curriculum.

    And that doesn’t even include the damage they’ve already done.

    Has there been a worse government in the history of Alberta?

  3. Yes, it seems it is time to ride the roller coaster again. The price of oil has been good for the Alberta government’s fiscal position, but after the pain of most of the last decade energy companies are still very cautious to spend too freely I also doubt there will be another big oil sands construction boom given more environmental concerns/restrictions and pipeline capability issues. So, this boom is not being felt on mainstreet as much in the governments pockets.

    As well, the Alberta government has to do three things. First of all, keep some restraint on spending so the surpluses continue, as oil prices can be volatile. This may help Kenney keep those happy in his party who will vote in the upcoming leadership review. Second, spend enough to make voters in general happier. It seems Alberta’s recently elected big city mayors budget reviews ranged between quite disappointed and not impressed, which is not a good sign so far Third, Kenney needs to pray oil prices hold up enough to allow the first two somewhat contradictory things to exist together. Oil prices were fairly recently at $70, so predicting $74 average for the upcomingv year is riskier than it seems.

    Fourth, Kenney needs to somehow get people to give him credit for all the more recent good economic news for Alberta while not blaming him for the grinding, horrible last two years, which were also full of obvious big mistakes. For instance, I don’t think things like the war on doctors will be so quickly forgotten by throwing a few more dollars at health care.

    Lastly, The UCP probably needs a shiny new leader with no (carpet) baggage if it wants a fighting chance in the next election. Unfortunately time is quickly running out as the current one is so stubbornly hanging on and refusing to go.

  4. The UCP’s 2022 budget was like the Seinfeld TV show. It was really about nothing. The UCP are bragging about higher oil prices, which they aren’t responsible for, and these oil prices are likely to go back down. In the Bible, it shows examples of where lean times can come, such as crop failure, due to drought. Pharoah, in ancient Egypt, had a couple of dreams about this, with the lean fleshed kine and they ate up the fat fleshed kine, and the stalks of corn damaged by the east wind, ate up the stalks of the good corn, and Joseph, through God, interpreted Pharoah’s dreams. There would be years of bad famine. Joseph, through God, told Pharoah to prepare for the years of famine. The UCP aren’t preparing for the lean times that will certainly come about. They keep doing the most pricey shenanigans, losing billions of dollars, and Alberta is no better off. Peter Lougheed, who was a true conservative, knew that lean times can come, and he utilized his background as an employee of the oil industry to ensure that Alberta received the right oil royalty rates, orphaned wells in Alberta were cleaned up, proper corporate taxes were collected, and that foreign interests weren’t allowed to gobble up the profits from our oil. Premiers, such as Ralph Klein, who wasn’t even a conservative, but a Liberal, who then followed the Reform path, changed that. $575 billion was lost from a very substandard oil royalty rates, $260 billion is left for Albertans to deal with abandoned oil well cleanup in Alberta, $150 billion was lost from the worst tax policies, and lots of very pricey shenanigans were done by the Alberta PCs, for a very lone time, until their long overdue exit from power, in 2015. The UCP aren’t any different. It’s quite appalling that Albertans have been duped by the UCP’s nonsense.

  5. Its about damn time we privatized. Publicly funded education is a joke and public health care COLLAPSED during covid. Canada needs to quit this lefty experiment and allow the free market to prevail. And mean an ACTUAL FREE MARKET. No more bailouts for unions OR failing businesses (I cant believe I OWN Air Canada thanks to that evil troll in Ottawa). Im so sick of the left touting failure as success then demanding more “funding” for their broken services. If you want to keep going down this publicly funded path, FIRE THE ADMINS of all these unions and hospitals and schools because theyre all a waste of money (maybe even air).

    1. Great idea! But why stop with the evil public health care system. Let’s include all of the other tax-wasting services that would obviously be so much better delivered as a for-profit system.

      Start with the Fire Departments. Why should I pay when my neighbour’s building starts to burn down? (Except for the obvious risk that my own house will catch fire from the adjacent flames).

      Next let’s privatize the Police! They only seem to protect the interests of the wealthy anyways, so might as well make them pay directly. As for the occasional rape or assault or fraud victim, well in the wonderful world of free enterprise, they obviously had it coming, so f^ck em!

      The road leading to your house has washed out or has car-swallowing potholes? Get out the Visa card, because I’m sure as hell not paying to fix a road that I don’t directly use regularly.

      I would so much rather pay a premium to cover the profit margin that has to be paid for but doesn’t actually go to paying for the services themselves. And having competing Fire/Police/Road Repair companies showing up to negotiate with you while your house burns down or the burglar is getting away is so much more efficient.

      BTW, the above is sarcasm, in case you thought that I agreed with you in any way or form.

    2. Wow, the bat-shit crazy fever dreams of the Freidman, Buchanan, Hayek, and all the undeserving hack recipients of that sham Noble Prize in Economics all rolled up into one. Europe is doing very well, the terrible war notwithstanding, with high levels of public funding for education and health care. In Switzerland, for example, according to a Swiss friend of mine, it is a 3rd rail of politics to even whisper about defunding public education. There is a reason Switzerland does so well economically, despite having very few resources: significant public investment in providing high quality education to its citizens. In this province, we are going in the opposite direction by defunding and privatizing education: a well-trodden path to economic ruin in the long term. Without significant public funding in high-quality education, you can say goodbye to any hope of economic diversification.

    3. JIM: Well, I guess I’ll have to be more specific as to the very pricey shenanigans I was saying these pretend conservatives and Reformers did in this province. There’s others. Has Gainer’s, Alpac, NovaTel, MagCan, and other assorted metal smelting facilities, Swan Hills, Miller West Pulp, the pricey saga with West Edmonton Mall, AISH, B.S.E misappropriated relief, the deregulation of our utilities in Alberta, a bitumen processing facility that is perpetually requiring provincial government bailouts, the UCP’s $10 billion that vanished from corporate tax breaks, with no bolstered employment, $1.6 or so billion from a flawed accounting issue, $7.5 billion that has vanished from an error in judgement from the UCP, thinking that Donald Trump would still remain president of America, and the pipeline would get the green light, and scores of others been acceptable to you? This is a lot of money these pretend Conservatives and Reformers threw away. It totals billions upon billions of dollars. There’s far more than that, which went on. The Bible also talks about looking at the speck in someone else’s eye, and not beholding the beam that is in your own eye. What has transpired here, in Alberta, under these pretend conservatives and Reformers is so much worse than anything Ottawa could ever conjure up. Neoliberal policies simply do not work. Privatization of healthcare and education is the last thing we need to have. How successful was deregulation of utilities in Alberta? We now have among the most costliest power prices in North America, right here in Alberta. That’s letting the market decide. We then see how TransAlta is reaping record profits, while we pay outrageous power bills. The flawed free market concepts that TransAlta was using to manipulate power prices in Alberta, and causing them to get slapped with a fine that was in between $50 million to $60 million. This private for profit and free market nonsense for the essential basic services we all rely on won’t fly.

    4. Is there a country you would say is a good model we should follow for education and health care? Going by your emphasis on privatization, I would guess the US, but I would also be very surprised to see a reasonable adult who believed that the US produces better education and health care outcomes than Canada.

    5. Air Canada was privatized in 1988. Last year, due to Covid , the Government of Canada acquired a 6.4 % stake in the airline as part of a 5.9 billion aid package. So I guess you do own a very small part of it. (0.000000172973 % based on our total population). Based on current estimated value of the company’s assets, that is about 50 bucks.

    6. I think it’s time we stopped paying $30M a year for internet troll$. Troll$ are evil. They’re all a waste of money (maybe even air). FIRE THE WAR ROOM. Alberta needs to quit this right-wing experiment. Also, it would be nice if pipeline companies stopped putting their snouts in the corporate welfare trough. I’m so sick of the right wing touting failure as success and paying for executive bonuses and share buy-backs. I can’t believe our provincial government bought into a pipeline with a snowball’s chance in hell of being built. No more bailouts for private pipelines and pipe dreams.

    7. It is clear you have never actually lived under a system of private healthcare. I’ll educate you. We did in the US for about 25 years. We and our employers paid over $600 per month in private insurance premiums. When you have to go to a hospital ER, the cost of admission is at least $5000 before you actually see a doctor. If you went by ambulance that’s about $750 + mileage. Attending physician’s bill is probably $400. Radiology likely around $550 assuming you only need a couple of x-rays. If you needed surgery, the surgeon and anesthesiologist might be another 2 to $3000. The hospital itself will likely need another $4,000, if you have to stay for the night. Of course, since you have insurance, you’re only on the hook for 20%. So, all told, that one trip to the ER can be bought for only 20% of $13,700. Only $2740 plus $600 per month for insurance to put a couple of stitches in that bump on your forehead. And you know what, for that price you won’t have to deal with a single union person, except maybe the postman who delivers the stack of bills you’re going get and if you don’t pay up that stack gets bigger, more frequent and all those highly skilled, highly paid health professionals have highly persistent bill collectors who will make you wish you never went to the hospital in the first place. You have absolutely no idea how bad private, free market healthcare really is and how great we still have it in Canada

  6. Doug Ford’s Ontario goes you Albertans one better. He’s eliminated vehicle licence renewal fees and will refund renewal payments for the past two years costing the treasury one billion each year. Coming just in time for the provincial election on June 2, will my fellow rubes take the bait? Likely.

    1. Also, no doubt making it easier to ignore those pesky parking and speeding tickets, thus depriving municipalities of a revenue stream; making the roads more dangerous; and increasing the risk that, if you have an accident, the other party will not have any insurance. Sounds like a great idea!

  7. It also says in the bible at Revelations 18:11 “and the merchants of the earth shall weep…..for no man buyeth their merchandise anymore”. The oil and gas folks will eventually see the light; oncoming train or bright sunshine!

  8. Between 2015 and 2019 I heard way too many times that Rachel and Justin crashed the world price of oil. So I hope that those who said this are now giving them credit for the price of world skyrocketing. Funny, anyone else hearing crickets.

    Jason is crowing, but for the average Jane and Joe who were already struggling with the costs and associated profiteering by business due to Covid mandated layoffs and supply chain issues. These issue coupled with stagnate take home pay (if they are back to work) is making it harder and harder for Jane and Joe to make ends meet. Yes lets crow about that Jason.

    The UCP, party by the one percent for the one percent.

    1. On the global price of oil, Jason Kenney’s barely suppressed glee at the probable spike in that price, and the provincial royalties that will come pouring in, due to the Russian invasion of Ukraine and the resultant geopolitical instability — which always increases oil prices — is so absolutely despicable, no words are adequate to describe it. It’s schadenfreude on steroids.

  9. “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.”

    Was there something in the budget related to this? Didn’t see it in the article.

    1. From the Budget Speech:

      For those Albertans who need a hand up in order to get onto that path, this budget provides new and additional funding with the goal of eliminating barriers to work.

      For those who want to upgrade their skills and improve on their current work situation, we are designing a new program of bursaries for low-income workers.

      For those re-entering the job market but unable to meet all of the job qualifications, we are providing targeted supports, from work equipment, to training, to micro-credentialing.

      Mr. Speaker, we recognize the need to create pathways to success for all Albertans, wherever they are on their career path.

      Budget 2022 provides over $600 million dollars in incremental funding over three years to help to create those pathways.

      DJC

  10. I predict the hilarity of Kenney’s regime will get weirder when after, say, he really loses his leadership review. I am willing to bet serious money that he calls a snap election the day after.

    You wanna get rid of Kenney? Throw him overboard and he’s determined to take all of the UCP with him.

    Unless, they can soften the blow and avoid that snap election. The only way to do that is to buy Kenney’s resignation. He has a figure in mind, of course, but the UCP bowing to his likely exorbitant demand would surely ruin their position with their voters. The rural MLAs would surely throw a Trucker sized tantrum if the matter was treated as a serious way to save the government.

  11. Fully agree that AB is far too dependent on non-renewable resource revenues. Hence the need for more austerity. The health and education budgets should be sized for oil at a low number, say $40 WTI.

  12. It’s obvious Kenney is trying to save his ass. I doubt they have any intention of going through with any of it, other than the privatization end of it and if you are dumb enough to believe that he isn’t going to make the public pay for his privatized health care after he deliberately created this delay of surgeries mess your a damn fool.
    After whining about the high cost of health care in Alberta and blaming it on our overpaid doctors the fool wants to increase it with more privatization , how stupid does he think we are?

    When Ralph Klein played this game his own party forced him into early retirement.

  13. Pointedsticks We have heard these stupid Kenney supporters saying the same thing. Those of us who had ties to the oil industry wonder why these people are so stupid considering that the international oil industry crash took place in 2014 before Notley or Trudeau were even elected. Kenney can tell these mindless supporters anything and they believe it.

    In addition he took the caps off our power bills that Notley put in place now our senior friends are paying for this stupidity and Kenney doesn’t care. Looking after his rich friends is all he cares about.

    1. ALAN K. SPILLER: That is correct. It was Ralph Klein who thought that deregulation of our utilities would be good. He make his already rich corporate friends richer. We got stuck with higher utility bills. A former power engineer, Keith Provost, did say that power deregulation in Alberta has passed the $30 billion price tag. There were also deals made by Ralph Klein, with power companies in Alberta, which made their executives richer, and Alberta go $10 billion more in the hole from this, while Albertans got spiking power costs. PPAs were another foolish move by Ralph Klein. The UCP has removed the cap that Rachel Notley put on power and utility prices in Alberta, and the supporters of these pretend conservatives and Reformers blame Rachel Notley for this. Where’s the sense in that?

  14. Nobody forced parents to put their children in charter schools. They go because they want their children to get the best education possible. Better results will come with school flexibility. I suggest you get used to idea of choice.

    1. As usual, you have no clue what you are talking about. Please consider carefully the origins of public choice theory (the intellectual rationale behind charter schools that are funded by public money), to wit, James McGill Buchanan, winner of the sham “Nobel” prize in economics, which was funded by a Swedish bank to give some very neoliberal pro-capitalist and pro-business views a veneer of credibility (but I digress). Here is a summary of some of the background and effects of the pernicious economic theories that James Buchanan devised to essentially suppress “democracy on behalf of the very rich”:

      https://www.theguardian.com/commentisfree/2017/jul/19/despot-disguise-democracy-james-mcgill-buchanan-totalitarian-capitalism

      https://www.nakedcapitalism.com/2020/11/james-m-buchanan-segregation-and-virginias-massive-resistance.html

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