Canada’s Brat or Economic Engine

It is about 150 days since the federal election that demonstrated that Western Canada’s resource sectors mattered far less than climate change and mudslinging politics.

Immediately after the election, frustration and resentment in Saskatchewan and Alberta boiled over and fresh calls for ‘fair treatment’…. or else…. ‘Wexit’! (western separatism) might become much more fashionable.

Liberals elect only one member of Parliament between Manitoba and the BC lower Mainland

Alberta’s government went on the offensive; spelling out a list of federal actions needed for the energy industry and to head off further alienation in the prairies.  The Liberal government has almost no prairie members of Parliament.  The Alberta government filled the void with specific requests or demands to address a weak economy and growing antipathy towards Ottawa.

But the last few months have been tumultuous and none of it is good news for Canada: 

  • The COVID-19 pandemic disrupted supply chains from China initially and will create economic and social havoc in Canada and the US, for the next three months or more.
  • Russia and Saudi Arabia started an oil price war that saw the prices drop as each tried to gain market share and push US and Canadian producers under.
  • 20 days’ worth of rail blockades when Indigenous activists successfully faced down elected band councils and the federal government over a natural gas pipeline.

But back to that list: What is the progress over the intervening 5 months? Well, the responses are not officially in, but it isn’t difficult to assess the outcomes of the Alberta list.

Alberta’s Top 10 AsksThe Federal Government’s Reply
Remove the federal carbon taxGet real! Two thirds of the population of Canada voted for parties that supported climate change action. 
Kill ‘the no more pipelines’ regulatory body.  Or significantly modify the regulations.Get over it! The Agency is in place now, but regulations are up for discussion.
Kill the tanker ban legislation that blocks only bitumen from the northwest coast of BC.Nope!  There are no current projects proposed, so why worry?
Renegotiate the Equalization program.Not a chance of significant change! The federal Liberals rely on Quebec votes, the major beneficiary of the program. And the Bloc Quebecois votes might be needed to keep the government in power.
Approve Teck Resources Frontier mine. Phew! We don’t have to decide!  The project withdrawn by Teck days ahead of a federal cabinet decision that undoubtedly would have indefinitely delayed the project
Give the energy industry tax breaks consistent with the manufacturing sector.No Chance! Our urban eastern base is dead set against any subsidies to the energy industry.  
Accept Alberta’s heavy emitters and methane regulations.OK! we can accept your plans on heavy emitters.  But No! Not on methane.
Retroactively change the Fiscal Stabilization Program so that Alberta will get $2.2 billion instead of the $250 million. OK, maybe a bit of hush money.  It is a one-time amount and it doesn’t disadvantage other provinces. So perhaps it will be in the COVIDE-19 bailout package.
Let Alberta to opt out of any Pharmacare program with financial compensationDon’t worry! The minority government’s tenure isn’t long enough to implement Pharmacare.
New federal funding and perhaps a “flow through share” program to clean up orphan wells.  No flow throughs but …. A loan to the orphan well organization might be available.

The national emergency of the COVID-19 pandemic will require much attention. Recently, government has been focused on placating demonstrators in blockades. Now with collapsing oil prices bringing more economic distress to Alberta, there will need to be clarity about the federal government’s response.  

University of Calgary Trevor Tombe’s calculations of Alberta’s economic situation

Severely Normal Albertans can draw the conclusion from the list above that the federal government isn’t planning significant policy initiatives. Maybe it views Alberta as a ‘spoiled brat’.  What is offered is soothing words from a few Ministers and minor program tweaks.  

Will all the crisis of the moment cause the federal government to become too distracted to figure out its major exporting province is actually an economic engine not the ‘spoiled brat’?