By Lethbridge Herald Opinon on September 9, 2020.
Trevor W. Harrison
University of Lethbridge
Echoing Biblical prophecy, Premier Jason Kenney has repeatedly said Alberta is headed for a “fiscal reckoning.” Finance Minister Travis Toews’ recent grim account of Alberta’s financial plight – a deficit of $24.2 billion and a provincial debt climbing to $99.6 billion – sets the stage for the UCP’s budgetary punishment this fall.
Whether the fall budget will see an honest reckoning or merely a further wrecking of the Alberta economy remains to be seen, but the signs are not hopeful. According to Toews, until the dastardly Covid-19 virus came along, Alberta’s economy was humming towards a return to pre-2015 prosperity; i.e., the time before the NDP were elected. It’s a comforting story for the government.
But facts are stubborn things and, in this case, they don’t support the government’s narrative. True, COVID-19 has negatively impacted Alberta’s economy. A lot of businesses have been permanently shuttered and unemployment has skyrocketed, from 7.2 per cent at the end of February to 15.5 per cent in the spring and around 12 per cent today.
But Alberta’s unemployment rate was already increasing before the pandemic struck. In fact, job growth during the UCP’s first year in office was the lowest (at .5 per cent) since the economy collapsed in 2015-2017. More generally, Alberta’s energy sector is still sputtering: non-renewable resource revenues are down $3.9 billion. No amount of mythologizing, or blame-seeking, will rescue the energy sector from the long-term effects of world over-supply, shifting consumer demand and technological changes.
Like a general fighting the last war, Toews valiantly repeated over and over the UCP’s battle strategy from 2019. The government’s plan follows the same failed formula: cut essential public services, privatize, give corporate tax breaks and subsidies, and make targeted investments in infrastructure.
With a couple of exceptions, the assembled media appeared unimpressed. Toews’ own numbers showed that, in his words, “the increase in the deficit is all attributable to a decline in revenue.” Yet, in the face of this admission, he steadfastly refused to address the issue of revenue reform. At one point, a skeptical journalist turned on its head Toews’ repeated (and erroneous) assertion that per-capita public spending in Alberta makes it an “outlier” to comparable Canadian provinces. He asked Toews whether, in fact, the government might consider measures to raise revenues, given that Alberta is a conspicuous “outlier” on revenue generation. (The Alberta Treasury notes the province would have over $14 billion more in revenues were it to tax at the level of the next highest taxing province, Ontario.) Toews opined only that it might be an “important discussion for future.”
Trapped by ideology, the UCP government’s vision for Alberta remains narrowly focused on the oil sector and construction industries. As important as these sectors are, Alberta’s economic future relies on a coherent and comprehensive strategy that includes all sectors, workers, families and communities.
The paucity of the UCP’s approach to Alberta’s economy comes into sharp relief if one examines its failure to recognize the economic role of women and the specific hardships visited by the pandemic upon female-dominant sectors of employment. >In the midst of the 2015 oil price crash, female front-line workers in health care, education, public service and hospitality/retail services kept Alberta’s economic engine from stalling, and kept many households afloat as their partners or family members faced job losses in the oil and gas industry.
These same sectors are now struggling, but the Kenney government has offered women little, save the promise of future wage cuts and layoffs. Several economists argue that Alberta’s economy cannot be rebuilt absent affordable, accessible child care. Without this, women are unable to re-enter – or remain – in the workforce; they cannot indefinitely juggle their caring responsibilities with the demands of paid work.
This is only one example. There are other policy approaches the government could implement that would support the people of Alberta through this difficult time. To date, however, the UCP’s focus remains more punitive than helpful, more ideological than practical. Unless Albertans demand a commitment to an economy and policies that support all people, Alberta’s future will be the wreckage of what might have been.
Trevor W. Harrison is a political sociologist at the University of Lethbridge and director of Parkland Institute.