Not so long ago the Alberta Advantage was the moniker that proudly proclaimed Alberta’s economic strengths. Over the past decade that phrase has lost its sheen. If you are not severely anxious – consider these 10 distressing points:
- The US intends to play hardball in the renegotiation of NAFTA and is likely impervious to the logic that Canada and the US trade is fairly balanced. The tariffs on softwood lumber and the complaints about dairy supply management, ill founded as they may be are part of a negotiation strategy.
- International trade is performing poorly, even with the lower Canadian dollar non-energy exports are weak.
- Canada had a good first quarter in 2017. But global economic protectionism and trade policy uncertainty lurk in Canada’s markets.
- According to the World Economic Forum, Canada competitive position is 15th of 138 countries and we have less than 1.5% of the world’s GDP. Our weaknesses are; access to capital, poor innovation, inefficient government and uncompetitive taxes.
And in Alberta we struggle too:
- Abundant shale gas and oil in the US along with low oil and gas prices put the Alberta economy in the tank.
- Pipeline development is held hostage to the tactics of BC, Quebec and Indian anti-oilsands activism.
- In 2014, Alberta had the lowest all-in tax rate of 60 provinces and US states. Today we are 46th. The flat personal tax rate has been replaced with a graduated system.
- The Alberta government has installed a carbon tax, and aims to eliminate coal fired electricity in favor of more expensive green alternatives. All this while our competitors across the border are working on creating a business friendly environment built on cheap energy and a business friendly de-regulation.
- Major international companies are leaving the oilsands. International oil companies have sold $22.5 billion worth of oilsands assets, mostly to other incumbent producers.
- The Alberta government is acquiring a truly staggering level of debt to finance its operations and infrastructure plans. Debt will be $45 billion by the end of the 2017 and over $70 billion by 2020.
So what should a severely normal Albertan do? Well you should be anxious. And you should let our political leaders and anti-oilsands activists know that the current trajectory isn’t going to cut it.
And severely normal Albertan should listen carefully to the political debate in Alberta over the next while. In the big picture, of our economic competitiveness will matter more than the ideological debate abut uniting the right or how to uplift the downtrodden. We need to park our ideologies and have an adult conversation about getting out of this pickle.