THE NDP KEEPS PITCHING HOPE TO COLD CROWD
Opposition hurting the province by fuelling its own myths, minister says
NDP ministers sometimes look like they’re tap dancing in the dark, singing a happy song to an audience that’s already left and turned out the lights.
It has become counter-intuitive in Calgary to imagine there can be good economic news. When a friendly shop owner approaches in tears to say it’s all over and “we’re leaving,” it’s hard to believe the city’s feet are touching bottom yet.
But then, along comes the successful IT expert who says that in his world, things have rarely been better. “Lots of people can make money on $50 oil,” he says confidently.
That’s the music Economic Development Minister Deron Bilous wants to hear. Part of his job is to persuade Albertans that the end isn’t so near after all.
On Monday, Bilous rolled out surprising numbers that show Alberta still has Canada’s highest per capita investment.
Last year, the Canadian average was $7,046 per person; in Alberta, the average was $17,855, far above that of any other province.
This year’s survey of intentions shows that even though investment has fallen everywhere except Manitoba, Alberta is still far ahead, at $15,541 per capita.
The most meaningful comparison is with B.C., which has 500,000 more people than Alberta’s 4.1 million, but draws investment of only $5,733 per capita. Last year, B.C. was almost $12,000 per capita behind Alberta.
Saskatchewan trails Alberta by $4,000 per person, even though the province looks good in these rankings because its population is only 1.1 million.
Despite all the war cries from Premier Brad Wall’s self-illuminated beacon of hope, Alberta’s economy remains massive by comparison, and much more diverse.
Bilous isn’t claiming the province hasn’t lost investment; he’s just saying that there has been no general collapse and that the base remains strong.
Alberta’s total investment was $98 billion in 2014. This year it’s expected to be about $66 billion — a massive drop of nearly onethird. That loss is almost entirely due to the collapse in energy spending. It’s shattering not just to lives and careers, but to the morale of the whole province.
And yet, Alberta’s total investment this year is expected to be only $3 billion behind Ontario’s $69 billion. A province of 4.1 million souls is still nearly level with a powerhouse of 13.7 million.
Investment in non-energy sectors, in fact, is actually higher than it’s ever been. That’s partly due to a high level of government spending, but it’s also evidence of resilience in the general economy.
One of the more ludicrous opposition claims is that the government is raiding the $18-billion Heritage Fund in order to prop up Alberta companies.
What the NDP actually did was encourage the Alberta Investment Management Corp. (AIMCo) to invest up to $540 million from the Heritage Fund in worthy Alberta companies, about three per cent of the fund’s value.
So far, AIMCo has directed $98.4 billion to several companies. The NDP cites several reasons for this investment, from diversifying the economy to encouraging green energy. But AIMCo boss Kevin Uebelein says the key criterion is still return on investment.
Uebelein praised the NDP for refusing to tinker with AIMCo’s methods and key mandate, both designed to make as much money as possible. The government said from the start that the investments would be chosen by experts, not through back-door dealings in cabinet.
Fully $8.9 billion of AIMCo’s $90 billion of managed money is now invested in Alberta. That’s up $1 billion from last year, and will probably grow in coming years.
It’s hard to see this as a pillaging of the Heritage Fund or any of the other assets under AIMCo management, including the major pensions. It’s just a sensible, cautious redirection of capital to the home front in a time of dire need.
Bilous didn’t respond when he was asked how it feels to keep throwing positive signals to a disbelieving audience. He did suggest, however, that the opposition is hurting the province by fuelling its own myths.
There’s certainly plenty to be bleak about — the layoffs, the massive public borrowing, the pipeline impasse and the energy prices. But strength remains, and with it some good thinking from a government that gets little credit for showing any.