Harper joins Al­berta re­cov­ery panel

Calgary Herald - - FRONT PAGE - CHRIS VAR­COE Chris Var­coe is a Cal­gary Herald colum­nist. cvar­coe@post­media.com

Premier Ja­son Ken­ney calls it the great­est eco­nomic chal­lenge fac­ing Al­berta since the 1930s and there are signs to back up the sober­ing as­sess­ment.

More than 500,000 Cana­di­ans have ap­plied for em­ploy­ment in­sur­ance in the past week, com­pared to 27,000 a year ear­lier.

Of­fi­cials in the prime min­is­ter’s of­fice reached out to con­tact oil­patch lead­ers this week to dis­cuss the short- and longer-term im­pli­ca­tions of the dire sit­u­a­tion fac­ing the en­ergy sec­tor and how to sup­port it.

It could lead to a multi­bil­lion-dol­lar as­sis­tance package for the in­dus­try and its work­ers next week.

The provin­cial govern­ment is as­sem­bling its own fis­cal stim­u­lus package, while DBRS Morn­ingstar down­graded Al­berta’s credit rat­ing on Thurs­day. It cited slump­ing oil prices and the down­turn tied to com­bat­ing the coro­n­avirus as the un­der­ly­ing rea­sons.

Each one of th­ese is­sues is daunt­ing.

Govern­ment at­ten­tion is rightly fo­cused on an im­me­di­ate re­sponse to slow down the spread of the virus and pro­tect the pub­lic, while keep­ing the econ­omy go­ing and en­sur­ing peo­ple have enough money for ne­ces­si­ties.

With so many fires to put out at the same time, it makes sense for Al­berta to an­nounce a sep­a­rate Eco­nomic Re­cov­ery Panel. The group was un­veiled on Fri­day and in­cludes for­mer prime min­is­ter Stephen Harper and an ar­ray of in­dus­try lead­ers.

For­mer West­jet chair­man Clive Bed­doe, ATCO chief ex­ec­u­tive Nancy Southern and Mac Van Wielin­gen, founder of

ARC Fi­nan­cial Corp. are some of the mem­bers of the 12-mem­ber coun­cil, which will be chaired by economist Jack Mintz.

The group isn’t so much fo­cused on the enor­mous dayto-day is­sues fac­ing the provin­cial econ­omy, which has been stopped in its tracks.

In­stead, it will help with the broader is­sues of what needs to oc­cur in the medium- and longer-term, once the im­me­di­ate cri­sis of the pan­demic passes this year.

Then there is the press­ing is­sue of oil prices sink­ing to al­most US$20 a bar­rel this week as Rus­sia and Saudi Ara­bia open the pro­duc­tion taps at the same time as en­ergy de­mand is be­ing de­stroyed.

Bench­mark U.S. oil prices fell more than $3 a bar­rel on Fri­day to close at US$22.63 a bar­rel for May de­liv­ery. It’s un­cer­tain how long th­ese low prices will last.

There are many ques­tions to tackle. What will Canada’s oil and gas sec­tor look like a year from now?

What will hap­pen to the tourism in­dus­try, restau­rants, bars and air­line com­pa­nies that have al­ready been ham­mered, along with many other sec­tors?

How do pol­icy-mak­ers best po­si­tion the prov­ince to come back?

Speak­ing to re­porters on Fri­day, Ken­ney noted govern­ment rev­enues are “fall­ing through the floor with the oil price crash and a global re­ces­sion.”

He noted that if Western Cana­dian Se­lect heavy oil prices fall much more — some bear­ish pro­jec­tions see Brent crude av­er­ag­ing just $5 a bar­rel in the sec­ond quar­ter — that would “prob­a­bly mean we’d be pay­ing peo­ple to take Al­berta oil off our hands.

“Look, I am not say­ing th­ese things to cause peo­ple to have a sense of de­spair, but I think it’s im­por­tant for Al­ber­tans to be psy­cho­log­i­cally and fi­nan­cially pre­pared for what is com­ing at us,” he added.

The premier ex­pects the panel will ex­am­ine and come up with ideas for the longer term, such as what the fu­ture struc­ture of the econ­omy will look like.

Ob­servers agree this is un­charted ter­ri­tory and it will need a broad strat­egy once the cri­sis passes.

Univer­sity of Cal­gary economist Trevor Tombe noted this week’s 500,000 EI claims across the country were the high­est ever, six times larger than at the worst point of the 2008 fi­nan­cial cri­sis.

“We’re so far off the map, it’s re­ally hard to know where to pro­ceed,” he said.

“I don’t think this panel should be fo­cused on the short term. … They can help in terms of an­swer­ing ques­tions around where we go from here, what’s next, and where are we headed af­ter we get through this cri­sis.”

With the oil price col­lapse, Al­berta’s eco­nomic chal­lenges will be greater than in most other ar­eas of the country. But the prov­ince prob­a­bly has the strong­est bal­ance sheet in Canada, noted Mintz.

“There is a path for­ward, but we’re go­ing to see there’s a lot of eco­nomic dam­age,” he said.

“The fact we have the for­mer prime min­is­ter, who went through a ma­jor fi­nan­cial cri­sis (in 2008) and un­der­stood th­ese is­sues, I can’t think of a bet­ter per­son in this country right now to have on the panel.”

At a min­i­mum, the new group can act as a sound­ing board for the govern­ment as it be­gins to make crit­i­cal eco­nomic de­ci­sions in the weeks ahead.

Van Wielin­gen said the is­sues are un­prece­dented and will re­quire sig­nif­i­cant short-term govern­ment mea­sures, such as deal­ing with liq­uid­ity is­sues and tak­ing steps to pro­tect jobs and busi­nesses.

Dur­ing the group’s ini­tial meet­ing this week, he also em­pha­sized the need to think about what the fu­ture should look like for Al­berta’s econ­omy and the need for a strat­egy to get there.

“We need all th­ese short-term mea­sures, but we also need a vi­sion,” he said in an in­ter­view.

“It lay­ers on some in­spi­ra­tion, so it helps peo­ple when you go through some re­ally tough times, to think that not only are we go­ing to get out of this, but we’re ac­tu­ally go­ing to emerge with real strength and ca­pa­bil­ity.”

There’s a lot of work to do. The panel will have its work cut out for it.


For­mer prime min­is­ter Stephen Harper will be one of 12 mem­bers on the newly formed Eco­nomic Re­cov­ery Panel that will look at medium- and long-term is­sues re­lated to the prov­ince’s econ­omy, which has taken an un­prece­dented dou­ble hit.

Nancy Southern

Clive Bed­doe

Jack Mintz

Mac Van Wielin­gen

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