GRIT LOGIC CONFUSES

For a federal budget that was expected to be more about policy than big spending, there’s a lot of red ink amid the mixed messages sent to Alberta in the document released Wednesday.

The Liberals talked about a few years of modest deficits when they campaigned in the 2015 election. The mention of shortfalls in the $10-billion range were jaw-dropping at the time, but nothing like the deficits the Justin Trudeau Liberals are running up now.

The federal government will end this fiscal year with a $23-billion deficit. The red ink will be even greater in the year to come — $25.5 billion — with no hope of bringing the books into balance for years to come. That’s not to say there isn’t some good news for Calgary and Alberta — but even as Ottawa gives, it also takes from our already-hurting energy industry.

Mayor Naheed Nenshi points to the confirmation of a $1.15-billion commitment to the Green Line LRT project. He says the city has also been assured Ottawa will contribute up to an additional $450 million to the venture.

The city has committed a similar amount to the Green Line, leaving only the provincial government to pledge its one-third of the project.

There is further good news in a $30-million, one-time payment to Alberta that will be used for the remediation of abandoned oil and gas wells. Alberta has more than 82,000 inactive wells, which industry groups argue could be cleaned up by laid-off resource workers.

There’s some bad news in the budget. Particularly worrying are changes to the tax laws that govern exploration of new wells. Companies will face reduced deductions for their exploration work in a move expected to raise $145 million between 2019 and 2022.

“I think it sends a bad signal and further puts us at a disadvantage in terms of the capital we are trying to attract from global markets, compared to the U.S., which is our biggest competitor for that capital,” says Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers.

There’s a disconnect here: The Liberals are giving Alberta $30 million to “support provincial actions that will stimulate economic activity and employment in Alberta’s resource sector.” The Liberals are also changing the rules to put Canadian resource exploration at a disadvantage to its competitors.

The government’s logic doesn’t add up — unless you believe orphaned wells need cleaning up but the search for new wells should be discouraged.

The budget suggests the Liberals still don’t have a firm understanding of Alberta’s economy and its contribution to Canadian prosperity.