An Alberta deficit of
. Total debt of nearly $100 billion. Unemployment at 12 per cent.
The numbers are “incredibly sobering,” says Finance Minister Travis Toews. He unveiled the bleakest financial picture Alberta has faced since the Great Depression, when there were times the government couldn’t even write a paycheque for employees.
The question is no longer when Alberta gets out of this, but whether the province even can get out of it.
There will surely be a post-pandemic recovery. But will we emerge once again as a national economic engine, or as a middle-of-the-road economy at the level of, say, Manitoba?
Premier Jason Kenney’s UCP means to fight such a bleak view that could feed on itself and spiral downward.
Doug Schweitzer, the new minister of jobs, economy and innovation, said in an interview: “When you take a look at where this province is today, there are people who want to write off Alberta; they want to say you don’t have a future anymore.
“Just watch us. Just watch what this government is going to do in the next little while as we develop our sector strategies to compete for the future.
“Coming out of this, people are going to see a very different Alberta.”
He’s talking into powerful headwinds. Besides all the bleak numbers in
, Alberta’s main industry, the source of prosperity for generations, is under constant assault. The struggle over oil and gas will ignite again as COVID-19 fades.
The province has many advantages still. It’s amazing to see all the private construction projects, both residential and commercial, still going on in Calgary. Amid the economic slide, some businesses open and others expand.
But there are dangerous signs. Alberta mortgage deferrals are now at 26 per cent, second highest in the country after Quebec.
This smacks of the 1980s Alberta recession driven by the Liberals’ National Energy Program. People handed their keys to the banks in the face of mass layoffs and insanely high interest rates.
And it’s starting to happen now, when interest rates are exactly the reverse — insanely low.
The UCP government’s job isn’t just to foster economic growth and create jobs, although that’s absolutely crucial. The challenge is also to convince voters that theirs is the road back to real prosperity.
It’s no coincidence that only two days before the fiscal results came out, Kenney created the
He pulled Schweitzer out of Justice to run this mega-ministry, which absorbs the entire Economic Development and Tourism Ministry that had been run by Calgary MLA Tanya Fir.
In one of the most unceremonious demotions in recent memory, Fir was simply sent to the UCP backbenches. She didn’t even get a committee. And she loses the $60,000 per year ministerial stipend.
Economic Development had an odd history as a ministry with a big job but middling status. Now, Kenney has elevated Schweitzer to standing roughly equal to the finance minister.
Toews’s key role is to cut costs. Schweitzer’s is to make Alberta so business-friendly that investment will flood in.
Toews made it clear Thursday that spending on government operations will drop much lower than the $1.8 billion over four years outlined in the 2019 budget.
“We will look for every opportunity to make sure we are delivering services most cost-effectively,” he said.
The UCP seems to think people will see the pandemic-driven recession as a reason to be much tougher on spending. The NDP Opposition claims they’ve got that exactly wrong — voters will want more and better support for health, education and personal well-being.
The real road to salvation for the UCP is rapid economic growth, with the attendant flood of jobs for individuals and revenues for government.
Schweitzer said: “What we’re going to do during this fall is develop sector strategies that will give Alberta the long-term competitive advantage that we need. There will be a positive advantage over every other jurisdiction …. ”
Some observers thought the deep recession would force the UCP away from its cost-cutting goals. But the government actually sees the conditions as further reason to create the Alberta of its dreams, with government costs at or below the Canadian average and a wide-open environment for business.
Rachel Notley’s NDP railed bitterly against this formula on Thursday. They note, with some credibility, that past efforts at economic growth have often failed, and the UCP has already tried much of what they now promise.
To this, the UCP pays absolutely no attention. For the next three years, the province is theirs to raise up, or see slide toward an economic future most Albertans find incomprehensible.
Don Braid’s column appears regularly in the Calgary Herald.
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