Alberta Premier Jason Kenney, soon to ride off into the proverbial sunset, during July’s Calgary Stampede (Photo: Chris Schwarz, Government of Alberta).

Inquiring minds want to know: Why is Premier Jason Kenney announcing big plans for Alberta’s latest windfall when he won’t be premier much longer?

Alberta Finance Minister Jason Nixon (Photo: Alberta Newsroom/Flicker).

Is he trying to shore up his threadbare historical legacy, in a shambles after not much more than three years as Alberta’s premier?

Or is it just Mr. Kenney’s political lizard brain asserting itself, making dubious claims in preparation for the next election – in which he won’t be running? 

“Thanks to fiscal discipline and a relentless focus on economic growth, Alberta is once again in a position to save for the future,” Mr. Kenney chirped yesterday on Twitter, touting a big plan to deposit $2.9 billion of the province’s expected $13.2 windfall surplus in the long-neglected Alberta Heritage Trust Fund.

The government also said it would pay down $13.4 billion in debt coming due this year, which it described as the largest single-year debt repayment in the province’s history.

I’d wager that there aren’t very many adults in Alberta who don’t understand the reason this province is suddenly awash in cash again has nothing to do with fiscal discipline or a relentless focus on anything, by Mr. Kenney or anyone else. 

If you doubt this old blogger, consider what the real experts have to say. 

University of Calgary economics professor Trevor Tombe (Photo: Government of Alberta).

For example, here’s Trevor Tombe, University of Calgary economist and no one’s idea of a raging lefty: “Some in AB’s Govt are saying the surplus is due to ‘fiscal discipline’. All govts will spin, of course. That’s what politicians do. But this claim is way off.”

In the tweet thread that followed, Dr. Tombe set out the reasons why there’s only one explanation for Alberta’s sudden surfeit of cash, concluding: “To say that ‘fiscal discipline’ is the reason for the 2022/23 surplus rather than oil prices is not true.”

In other words, he explained, “Alberta’s finances are improving largely for one reason: oil prices. More than one in every three dollars in 2022/23 revenue are expected to come from natural resources. Back to early-2000s levels.”

Mr. Kenney is a rare bird: a politician who got into enough trouble to be fired by his own party at a time when the cash was pouring in through the door, thanks to events elsewhere in the world over which no one in Alberta has any control. 

Things may turn around soon enough and, if they do, whoever is in power in Alberta will have to wear whatever happens as a result, no matter how unfair that seems. 

In the meantime, though, what makes Mr. Kenney think he gets to decide what will be done with the $13.4 billion surging resource revenues have bestowed upon Alberta’s books?

NDP Energy Critic Kathleen Ganley (Photo: David J. Climenhaga).

A long press release on the province’s first-quarter fiscal update published by the Alberta Government yesterday repeats Mr. Kenney’s fib from his tweet and crows, “We promised Albertans we would get our fiscal house in order and that’s exactly what we’ve done.”

The release then goes on to announce a series of policies that Mr. Kenney’s successor, who presumably will be in a position to take up the reins of power soon after the results of the party’s leadership vote are announced on Oct. 6, may or may not wish to follow. 

For starters, there’s that huge debt repayment, channelling Ralph Klein’s obsession with debt reduction at the cost of other priorities.

In addition, Alberta income taxes will be once again indexed to inflation, raising the basic tax amount this year and next. Is there any guarantee that whoever succeeds Mr. Kenney will follow through on that announcement?

Then there’s the decision, touted in Mr. Kenney’s tweet, that the UCP Government will pay $2.9 billion into the 46-year-old Heritage Fund, which has languished for years after being skimmed for interest and neglected by generations of Alberta politicians. 

“We remain focused on using the surplus wisely, to benefit Albertans today and tomorrow,” Finance Minister Jason Nixon told a news conference yesterday. “Paying down debt and reducing the burden of debt each Albertan carries and building up our provincial savings funds.”

Says who? Just as Mr. Kenney won’t be premier much longer, Mr. Nixon isn’t likely to be the finance minister for a long time either. 

Yes, between 1980 and 2014, Alberta frittered away resource revenues not un-adjacent to $200 billion. Some of it, presumably, was spent on useful things. Not all. Meanwhile, health care and education are in chaos and there’s only about $16 billion in the fund. Investment income from the fund goes into general revenues. 

There’s certainly no shortage of Albertans clamouring for some of that money to be used for various pressing needs.

AISH, seniors’ benefits and the child tax benefit won’t be indexed, for example, so they’ll continue to shrink with inflation. “We have a situation in this province right now where we have record revenues coming in, where we have billions in surplus, and this government is allowing children and seniors and disabled Albertans to continue to struggle to pay for food,” NDP Energy Critic Kathleen Ganley said yesterday.

But surely that’s not Mr. Kenney’s call, or Mr. Nixon’s.

Expect updates!

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22 Comments

  1. Mr Kenney sure seems to be clinging to fading power in his last few weeks, much like a man in a raging, flooded river might cling to a piece of wood.

    I suspect there are several good reasons for this. First of all, Kenney is a bit delusional about his situation. According to him the kooks took over his party and forced him out. Well that is only partly true, the majority of the non kooks in Alberta also really wanted him to go too.

    Secondly Kenney has no place else to go and nothing else meaningful to do in his life other than politics. So, yes he will hang in there until the last minute.

    I doubt his successor will over turn things like reindexation, which will be popular, but his successor can easily overturn various other recent Kenney initiatives. The Kenney regime is now deep into caretaker mode, whether he realizes or accepts that.

    Thirdly, I think the reindexation announcement was to tie up a loose end, fix something that might tarnish the legacy Kenney is now trying to spin. Of course, the downside is if Kenney does too many popular or easy things now, or takes too much credit for improving finances, it takes this away from being used by his succesor. Kenney is still trying to hog the spotlight even as his party is dragging him of the stage.

    Lastly, it is not Kenney or his Finance Minister’s great management that account for the vastly improved financial position of the province. It is as, one of Toews challengers shot back in the most recent debate, solely the current higher price of oil. It is fun to ride the resource roller coaster on the way up, but sad and scary on the way down.

    There are signs oil prices may have peaked and they have come down substantially recently. Of course, that difficult part Kenney will leave to his successor to deal with, along with things like whether to increase AISH benefits or not.

    1. I think it’s important to recognize the two different kinds of delusional Kenney displays: one is propounded and propagated in order to delude supporters into continuing; the other is self-delusion.

      The latter probably has more to do with what opportunities —as delusional as they might seem to observers—Kenney sees for himself in the field of politics, often said to be the only perspective and point of view he has. I suspect he found the provincial realm much more limited than he had imagined when he was contemplating the move from the federal arena, and I wonder if some of his ‘Alberta autonomy’ bent was more than mere nose-thumbing at Ottawa—which is nothing genuine—, but rather a kind of prejudice stemming from what he imagined federal-like powers might be if applied at the provincial level—and, furthermore, that his mentorship was such a poor education about federalism, as the HarperCons’ repeated failures at judicial and, ultimately, electoral tests showed, that it rendered Kenney, the ex-federal cabinet minister and now-ex-premier doubly deluded and delusional.

      Socred premier “Bible Bill” Aberhart intruded upon federal jurisdiction in the 1930s, but he hadn’t the federal experiences and lessons that K-Boy had, as bent as they were, and neither did Aberhart contend with constitutional rights because they hadn’t been constituted yet. Kenney, on the other hand, passed legislation that is advisedly unconstitutional in terms of individual rights as if the federated office of premier trumps Canada’s highest and enshrined federal law to which our Sovereign has granted Royal Assent. It recalls that Harper’s interpretation of the Constitution is that parliament, not the Head of State, is sovereign.

      Sovereignty over the Sovereign is not only oxymoronic, it is also intentionally deluding and probably unintentionally self-deluding.

  2. After a couple decades observing the conservative clown show out here on the flats I would say that’s a wager you are likely to lose David.
    There seems to be no evidence of wide-spread knowledge, education, common-sense, understanding, call it what you will in the general population. Adult or otherwise. The dirt-farmers, the wealthy high-school drop-outs who made their fortunes in ‘patch and the general un-washed, torn-undergarment white trash that make up the vast majority will take kkkenny’s and Nixon’s word as gospel.
    That is the safe bet.

  3. I know it’s cynical, but are these the same Seniors that blindly voted Conservative their whole lives? Now, they want to be part of a civilized society?

  4. I wonder if oilmen are right. The latest oil wealth isn’t anywhere near what it would have been if Lougheed was collecting it. It’s likely about a third, screwing Albertans out of billions more. I wonder what Trevor Tombe thinks, maybe we should ask him. He has proven that he’s a lot smarter than any of these reformers.

    1. Alan K. Spiller: It was around two years ago, in August of 2020, that Trever Tombe commented on Alberta’s oil royalty rate system. He mentioned that Alberta was out of an extremely large amount of money – $575 billion, in fact, because Peter Lougheed’s very good oil royalty rates were no longer gotten. Ralph Klein is responsible for this. The UCP also refused to change the oil royalty rate structure in Alberta, letting oil companies get bigger windfalls, while Alberta gets shafted. Looking at how Norway and Alaska managed their oil wealth, we see there is a big difference. If Ralph Klein did this to Alberta’s oil wealth, which the UCP have continued to do, what did he do with natural gas royalties in Alberta? How much revenue from natural gas are we out of in Alberta?Then the excuse is given that Alberta sent the money out east, which is false. Ralph Klein started that myth, and the UCP go right along with it.

      1. Anonymous As a Royal bank manager oilmen, lawyers, accountants, fellow bankers, and former MLAs were constantly pointing out that Albertans were being screwed and the figures in Alaska and Norway proved it was true. In 2012 I was selling my boat and an oilman came to look at it. We ended up discussing how badly the situation was. I told him I thought we had lost $400 billion at that time. He said I think that it’s a lot more than that and Trevor Tombe has proven it. Oilmen tell me his figures are wrong they don’t include natural gas royalties lost and don’t include taxes , $800 billion is likely more realistic. When you compare it to Alaska and Norway they are likely right. Lougheed set us up to be rich and these fools destroyed it along with out children’s future.

  5. Agreed that considerable more austerity is required to reduce AB’s dependence on non-renewable resource revenues. Royalties brought in about $28B while the surplus is around $13B, meaning that a $15B gap still needs to be closed. The Kenney government may not have lived up to its austerity promises, possibly due to COVID, but unquestionably spent less than would have the NDP alternative.

    Also agree that health (and education) are in disarray, but that is completely unrelated to funding. Over-regulated government monopolies with unionized staff are where innovation goes to tie. The only solutions are competition (through privatization), outsourcing, reduced union leverage and more focus on results rather than inputs. No government is up to this challenge.

    1. So salary or job cuts?

      When Calgary high school class sizes sit at 40+? Where teachers haven’t had even a cost-of-living raise in years? When schools have millions in unfunded repairs? When students go without EAs? When emergency rooms are overwhelmed? When nurses are in high demand? When doctors are leaving?

      When admin costs at both the school boards and in health are 1) regulated by the gov and 2) around 5% (national average or less)?

      When US examples of your kinds of thinking has lead to significant educational failures and healthcare-induced bankruptcies?

      Dude, conservative austerity and gaslighting do not a working society make.

      1. Despite years of no raises, AB teachers are among the highest paid in the world. Are they more productive or effective than teachers elsewhere?

        Class size stats are a joke. Numerous AB government initiatives have hired more teachers to reduce class sizes, yet class sizes did not go down. Where has this headcount been deployed (more sabbaticals, more sick days, more disability)?

        Larger class sizes could be mitigated through increased instructional hours: lengthening the school day by 45 mins to add another period, and fewer professional development days.

    2. Doug: More cuts, such as what Ralph Klein was doing, isn’t the answer. The reason why Ralph Klein did these cuts, was because he was doing very pricey shenanigans, which lost Alberta hundreds of billions of dollars. He also cost people their lives. The UCP also has done very pricey shenanigans, which cost Alberta billions of dollars, and like their hero, Ralph Klein, they endorse cuts to the core public services which we all rely on. The UCP, much like Ralph Klein, are intent on privatizing public healthcare in Alberta. Had the proper oil royalty rates, and corporate tax rates, like Peter Lougheed was getting, remained, and these very pricey shenanigans not happened, we wouldn’t be in this horrific mess. Pretend conservatives and Reformers know nothing else. It’s quite appalling and pathetic what damage they inflicted on Alberta.

      1. Yes please. I was in my late tens to late 20’s during the Klein years, including stints at U of A for my first 3 degrees and U of C for the fourth. Services got better.

        Klein’s biggest failing was drawing ire for suggesting right to work legislation and healthcare outsourcing, without clear plans to follow through.

        1. Doug: Ralph Klein’s bad policies have also cost people their lives, and has also done damage that is still felt decades later. If you are advocating for these strong cuts, then you take them. Those in ridings where UCP MLAs are should also take the cuts. We don’t need anymore pretend conservatives and Reformers making a horrific mess of things, because of their lack of fiscal knowledge.

    3. OK. While you’re dreaming your Conservative Utopia, is it any less feasible that had the funding for health (and Education) been consistent and sufficient that maybe it wouldn’t be in such disarray? Since we’re tossing anecdotes around, I’ll argue that over the years the prepoderance of Conservative “Innovation” has doomed Healthcare to a giant money grab by said Conservatives. I’ll also argue that most innovation is gov’t funded, and privatized once it is deemed profitable by venture capitalists; again conservative ideology dooming it to a giant money grab.

  6. “We have a situation in this province right now where we have record revenues coming in, where we have billions in surplus, and this government is allowing children and seniors and disabled Albertans to continue to struggle to pay for food,” NDP Energy Critic Kathleen Ganley said yesterday.

    Well, yeah. They’re Conservatives. Are we supposed to be surprised by this? Hell, this is at least honest Conservatism at play, I could see it being done by any real Conservative government that has existed in my lifetime. In Canada, the rich eat everyone else, but they eat the poor first, and Conservatives are the maitre d in this weird metaphor.

    1. No Neil they are Reformers and nothing like the true conservatives we proudly supported under Lougheed and Getty. The MLAs I got to know called reformers their worse enemy. Spreading lies , destroying jobs, helping the rich steal our oil and tax wealth, in an effort to buy votes, while blaming others for the horrific mess they created is all they know and don’t ever trust them and boy were they right. If they were true conservatives they would be collecting proper royalties and taxes and running Alberta properly like Lougheed did and Norway and Alaska are doing.

  7. To K-Boy, politics is illusion, and the fact that he indulges in more conjuring at the dusky hour of his short premiership suggests he foresees a political future for himself. One thing about provincial politics, though, is that there is no federal cabinet position like, say, Foreign Affairs, that keeps potential rivals or grudge-holders out of domestic party squabbles. As far as we know, MLA Kenney is keeping his Calgary seat in the Assembly, but it’s hard to imagine a new UCP leader extending a conciliatory, cabinet-post olive branch to the Prince of Peeve, especially if rolling back some of his less-popular polices seems politic —and that probably also disqualifies him from managing the new premier’s general election campaign, even though campaigning is Kenney’s strongest suit, one by which he chalked up far more successes than failures.

    But if ever there was need for a political magician , Danielle Smith’s Alberta Sovereignty Act must be it. What would K-Boy have to lose if he accepted Smith’s entreaties to join in her effort—if of course she wins the UCP leadership?

    Personally, I think it would very likely disqualify him from federal politics—except, perhaps, as a member of an overtly separatist party like Bloc Québécois MPs are.

    There’s always the (Mag)ver(ic)k Party…

  8. These guys are such shameless pricks, strutting around and taking credit where it isn’t due but never giving it when it is. It’s truly pathological how many people in this province slavishly and stupidly keep voting for them when they don’t even PRETEND to give a rip about people generally.
    Conservatism here truly is more of an irrational religious cult like the Catholic Church than a mere political party. So does the fact that Alberta is the “bible belt” come into it I wonder? But it’s a real mismatch, these “believers” and the “Proud Boys” and “Boogaloo Boys” and “The Base” and “Soldiers of Odin” etc. Talk about a “basket of deplorables.”

  9. Well, what does it all matter?

    Jason Nixon will be swiftly kicked from the cabinet the moment Danielle Straitjacket becomes premier. He’s a Kenney loyalist and he cannot be trusted.

    All this is meant to save Mr. Toes’ languishing leadership bid. Maybe there’s the faint hope that Ginger Kenney’s supporters will float over to Towes and save his (and Kenney’s) hides.

    Mo popcorn.

  10. The only way this government could genuinely take credit for the rise of global oil and gas prices, and the resulting boost of government revenues, would be if it was responsible for Vladimir Putin’s decision to invade Ukraine. They may have delusions of grandeur at times, but I think even the most deluded of them would be hesitant to make such a claim. (I doubt Putin could find Alberta on a map).

    Just as it s unfair to blame the Trudeau Liberals for the global inflation crisis we are all facing, it is also unfair to credit the UCP government for the Alberta government’s balance sheet.

  11. Perhaps it means Kenney is confident he will get one of his fellow sky palace diners into the premier’s chair? He has managed to protect a few high profile allies in recent nominations, who knows maybe there is a plan for the leadership vote. If that is the case he will still be in charge just lacking the title.

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