But how much has the pan­demic changed the UCP?

Ken­ney says COVID-19 has changed ev­ery­thing. How much will it change his United Con­ser­va­tives?

Calgary Herald - - FRONT PAGE - LISA JOHN­SON

Just over a year ago Ja­son Ken­ney swept to power in Al­berta with a man­date to cut cor­po­rate taxes, kill the car­bon tax, pull back pub­lic spend­ing and cre­ate pri­vate-sec­tor jobs.

That was the easy part. Now, af­ter a sum­mer and fall spent strip­ping the prov­ince of as much of the for­mer NDP govern­ment as he could, Ken­ney said the COVID -19 pan­demic and eco­nomic cri­sis have changed ev­ery­thing.

These are ex­tra­or­di­nary times that forced him to spend money in ways he would rather avoid, he said dur­ing an in­ter­view in his of­fice in the leg­is­la­ture in mid-may. He looks much like he did in March — wear­ing a light but­ton-up shirt with sleeves rolled up and dark slacks — ex­cept when he turns to the side. Tufts of hair are grow­ing over his ears.

“For fis­cal con­ser­va­tives like me we’re go­ing to have to do things we’re not nor­mally com­fort­able with to pro­tect peo­ple’s fi­nan­cial se­cu­rity and their liveli­hoods and the broader Al­berta econ­omy,” he said.

Though, Ken­ney added, the prov­ince can­not go “in­fin­itely into debt.” It does not have the fis­cal ca­pac­ity to save ev­ery busi­ness that might be in jeop­ardy or ev­ery house­hold that’s un­der fi­nan­cial pressure.

“Throw­ing he­li­copter money out the win­dow is not an eco­nomic strat­egy.”

What mat­ters to him most is sav­ing jobs.

“My ob­ses­sion is not that guys wear­ing suits in of­fice tow­ers in Cal­gary can main­tain a perfect bal­ance sheet,” Ken­ney said.

EX­TRA­OR­DI­NARY TIMES

The UCP govern­ment pushed a bud­get — ren­dered in many ways mean­ing­less by the early-march crash in oil prices — through the assem­bly in a three-hour de­bate, along with an ex­tra $500 mil­lion to health ser­vices to deal with the pan­demic. This was March 17, the same day the govern­ment de­clared a pub­lic health emer­gency to fight COVID -19.

Days af­ter pro­pos­als from the NDP, Ken­ney banned evic­tions un­til April 30, and for a lim­ited time doled out re­lief to Al­ber­tans who were miss­ing work be­cause they were self-iso­lat­ing — a pro­gram that cost $108 mil­lion but was crit­i­cized for let­ting thou­sands of Al­ber­tans fall through the gaps of fed­eral in­come sup­port.

By mid-may the govern­ment had com­mit­ted some $13 bil­lion to sup­port em­ploy­ers and fam­i­lies as part of the COVID-19 re­sponse — mostly in the form of loans, bill de­fer­rals and tax ex­ten­sions. That total in­cludes a di­rect $1.5 bil­lion in­vest­ment in the Key­stone XL pipe­line, and a $6-bil­lion credit back­stop for pipe­line com­pany TC En­ergy in 2021, even though Ken­ney has said the deal was six months in the mak­ing.

In a tele­vised ad­dress in early April, Ken­ney warned that the pro­jected bud­get deficit of $6.8 bil­lion could bal­loon to as high as $20 bil­lion.

That grow­ing debt could be seen as a de­par­ture from the man­date on which Ken­ney was elected, but it is widely viewed as nec­es­sary to fight the pan­demic and shel­ter Al­ber­tans from the worst of the eco­nomic down­turn brought on by the or­dered clo­sure of nonessen­tial busi­nesses, the col­lapse in oil prices, and peo­ple stay­ing home and spend­ing less.

Many con­ser­va­tive voices in the prov­ince re­main sym­pa­thetic to the premier’s han­dling of the cri­sis.

Matt Sol­berg, who worked in the of­fice of Al­berta’s op­po­si­tion with the Wil­drose party and is now a di­rec­tor at govern­ment-re­la­tions firm New West Pub­lic Af­fairs, said cracks are in­evitable, since pro­grams are at times be­ing de­signed on the fly.

“Peo­ple ex­pect govern­ments to move quickly but also move per­fectly, and in a pan­demic it’s not pos­si­ble,” Sol­berg said.

Doug Horner, a-four term Pro­gres­sive Con­ser­va­tive MLA and for­mer fi­nance min­is­ter, is also skep­ti­cal that Al­ber­tans will come down hard on Ken­ney.

“I think Al­ber­tans un­der­stand this is far be­yond any­thing the premier — or any­body — thought was go­ing to hap­pen to us in 2020,” Horner said. “Un­less you’re sit­ting around that ta­ble it’s very dif­fi­cult to un­der­stand all of the things that you have to take into con­sid­er­a­tion when you’re try­ing to do things.”

Ken­ney’s sup­port­ers might also echo Ken Boessenkoo­l, a past ad­viser to for­mer prime min­is­ter Stephen Harper and other con­ser­va­tive lead­ers, who said that emer­gency spend­ing is nec­es­sary but needs to be eas­ily un­wound. Sup­port for oil and gas is far more im­por­tant be­cause that sec­tor’s cri­sis will con­tinue to dog the prov­ince well af­ter the threat of the virus is gone, he said.

“When (Ken­ney) comes through this, it’s go­ing to be more dif­fi­cult for him, and (Saskatchew­an Premier) Scott Moe, than it is for the pre­miers of On­tario and Que­bec,” Boessenkoo­l said.

WARM­ING UP TO OT­TAWA

One peg of Ken­ney’s ap­peal to con­ser­va­tive vot­ers that might have soft­ened dur­ing the pan­demic is his re­lent­less crit­i­cism of the fed­eral govern­ment’s pol­icy to­ward the oil and gas sec­tor and equal­iza­tion.

Ken­ney con­vened the Fair Deal Panel late last year to gather ammo against a per­ceived po­lit­i­cal im­bal­ance between the West and eastern prov­inces like On­tario and Que­bec. In sur­veys and town halls, the panel looked at the pos­si­bil­i­ties of pulling Al­berta out of the Canada Pen­sion Plan and creat­ing a pro­vin­cial po­lice force in an ef­fort to es­tab­lish more po­lit­i­cal au­ton­omy for Al­berta.

Now, af­ter months of hos­til­ity, ten­sions between Al­berta and the Justin Trudeau Lib­er­als have largely been set aside as the two lev­els of govern­ment have banded to­gether to sup­port peo­ple and busi­nesses dur­ing the COVID-19 and eco­nomic crises.

The Fair Deal panel sub­mit­ted its re­port in early May, but it will not be re­leased pub­licly un­til the worst of the pan­demic is over.

“We’re not giv­ing up on those things, but we should be pre­pared to ac­knowl­edge progress when and where we see it,” Ken­ney said. “They have stepped up in sig­nif­i­cant ways.”

He gave much of the credit to Deputy Prime Min­is­ter Chrys­tia Free­land, who was born and raised in Al­berta, for the newly con­struc­tive re­la­tion­ship with the fed­eral govern­ment.

The ink is yet to dry on a truce over a long-stand­ing meth­ane emis­sions battle and fed­eral cash is com­ing through a large busi­ness loan pro­gram that could help res­cue oil and gas com­pa­nies.

“The na­tional govern­ment has the fis­cal power to con­vene at crit­i­cal times, and that’s what we’ve been seek­ing, to en­sure a fu­ture for Cana­dian oil and gas,” he said.

But even that sup­port for busi­ness be­came a po­lit­i­cal hot potato as many prov­inces waited for the fed­eral govern­ment at the risk of look­ing idle.

For Op­po­si­tion NDP Leader Rachel Notley, wait­ing on Justin Trudeau to do the heavy lift­ing isn’t good enough.

“If you look at ac­tual cash on the bar­rel that comes from this (pro­vin­cial) govern­ment, it’s ac­tu­ally pretty low,” Notley said.

ROCKY ROADS

With the num­ber of daily COVID -19 cases ris­ing through­out March and April, Ken­ney’s polling num­bers, ac­cord­ing to con­ven­tional po­lit­i­cal wis­dom, should have jumped as lead­ers typ­i­cally see a bump in pop­u­lar­ity dur­ing a cri­sis.

A Thinkhq poll, re­leased April 30, showed that Ken­ney had the ap­proval of 59 per cent of Al­ber­tans, com­pared to 37 per cent who dis­ap­proved. That’s above Prime Min­is­ter Trudeau’s 50 per cent ap­proval rat­ing, and it’s com­pa­ra­ble to the premier’s ap­proval rat­ings in late 2019, but be­hind re­cent surges in the pop­u­lar­ity of other pro­vin­cial lead­ers. Que­bec Premier François Le­gault has seen some ap­proval rat­ings crack­ing 90 per cent.

Ken­ney’s ap­proval num­bers could have been higher but were held back by the govern­ment’s han­dling of the health port­fo­lio, Thinkhq’s poll­sters con­cluded. The govern­ment got a poor per­for­mance re­view for “en­sur­ing a qual­ity health-care sys­tem over­all” — even though 72 per cent of those in­ter­viewed said they ap­proved of how the pro­vin­cial govern­ment has han­dled the COVID-19 cri­sis.

Ch­eryl Oates, once press sec­re­tary to for­mer premier Notley, said peo­ple ex­pect govern­ments to put their agenda aside and put acute needs first.

“Politi­cians are so deeply de­fined by how they deal with cri­sis, both dur­ing the event and af­ter the event, and this has been the case in Al­berta for years,” Oates said.

In early April, the Al­berta Med­i­cal As­so­ci­a­tion filed a $250-mil­lion law­suit against the pro­vin­cial govern­ment for im­pos­ing a new fund­ing frame­work in Fe­bru­ary — parts of which have been walked back, in some cases tem­po­rar­ily, dur­ing the pan­demic. For ex­am­ple, the govern­ment ex­tended an $81-mil­lion olive branch to ru­ral doctors, some of whom said they were forced to with­draw ob­stet­rics or emer­gency room ser­vices with fund­ing changes. But that’s com­pared to the $2 bil­lion over three years the govern­ment hoped to save.

Changes to doctors’ pay was part of the goal out­lined in the fall and win­ter bud­gets to cut over­all govern­ment spend­ing by 2.8 per cent over four years. The UCP govern­ment also planned to re­duce the pub­lic-sec­tor work­force by 7.7 per cent.

The fall­out from those bud­gets was al­ready prompt­ing school boards to spend emer­gency re­serves and con­tem­plate lay­offs well be­fore schools were tem­po­rar­ily closed. Then in March, $128 mil­lion in fund­ing for ed­u­ca­tional as­sis­tants and sup­port staff for schools was cut, and the govern­ment said it was redi­rect­ing it to fight the pan­demic.

Zain Velji, a po­lit­i­cal strate­gist who has worked on left-wing po­lit­i­cal cam­paigns in­clud­ing for the pro­vin­cial NDP, said while Ken­ney has been in rel­a­tive lock-step with other prov­inces on his pan­demic re­sponse, he has lost some points for lead­er­ship.

Stick­ing to the goals of re­strain­ing ed­u­ca­tion and health fund­ing while the pub­lic’s at­ten­tion is on the COVID-19 cri­sis is one way Ken­ney has lever­aged this mo­ment for his own po­lit­i­cal agenda, Velji said.

“Has he used COVID-19 as cloud-cover to do other things as part of his agenda? Yes,” he said.

Af­ter the UCP passed its 2020 bud­get in March, with min­i­mal de­bate, it also passed a bill, which is now be­ing chal­lenged in court, that gave min­is­ters ex­tra power to in­sti­tute leg­is­la­tion dur­ing the pub­lic health emer­gency.

Back in De­cem­ber, with a slump­ing econ­omy, some poll­sters de­clared Al­ber­tan’s “hon­ey­moon” with Ken­ney over, but he still claimed a ma­jor­ity ap­proval rat­ing.

“The rug was al­ready start­ing to slip out from un­der Ja­son Ken­ney be­fore the pan­demic. … The grow­ing job losses, the fail­ure to cre­ate jobs, the dis­in­ter­est in di­ver­si­fi­ca­tion — all those things were al­ready start­ing to pile up,” Notley said.

Ken­ney might make some re­ver­sals, but he’s still de­voted to small-govern­ment con­ser­vatism, she said.

“Even though it ap­pears as though they are ca­pit­u­lat­ing, it turns out they’re just try­ing to get money from an­other pot,” Notley said. “If that means pulling money away from autis­tic kids in schools — so be it,” the Op­po­si­tion leader said, re­fer­ring to fund­ing cuts for ed­u­ca­tional as­sis­tants. “If it means re­duc­ing (health care) ser­vices in ru­ral com­mu­ni­ties — so be it.”

Whether the on­go­ing row with doctors will trans­late into a real shift in po­lit­i­cal sup­port for frontline health-care work­ers dur­ing and af­ter the COVID -19 pan­demic de­pends on how well vot­ers choose to un­tan­gle the two is­sues.

Velji said that for many vot­ers, it is pos­si­ble.

“You can be sym­pa­thetic and ex­tremely grate­ful to have ded­i­cated front-line work­ers. You can also si­mul­ta­ne­ously think that doctors get paid too much,” he said.

Boessenkoo­l agreed. “I think peo­ple will put those in sep­a­rate buck­ets,” he said.

While there is a tremen­dous amount of sym­pa­thy and ap­pre­ci­a­tion for front-line health-care work­ers, the loom­ing re­ces­sion will hit the ser­vice sec­tor hard­est, and lay­offs, job losses and per­sonal fi­nan­cial worry might eclipse those health is­sues.

“We’re thank­ful to the doctors and nurses, ob­vi­ously — but a lot of peo­ple are hurt­ing fi­nan­cially, and doctors are not,” Boessenkoo­l said.

It may not move the po­lit­i­cal nee­dle, and Al­ber­tans might be­come even more fo­cused with their own bot­tom lines, but the fight with the doctors will just be am­pli­fied the longer the pan­demic con­tin­ues, Oates said.

“What (front-line health care work­ers) are telling me is that ‘to­day we are an es­sen­tial ser­vice, but when this is all over, we’re the fat to trim in the eyes of the UCP,’ ” Oates said.

While Ken­ney con­tin­ues to face fire for his han­dling of health pol­icy, he seems will­ing to spend the po­lit­i­cal cap­i­tal now to rein in spend­ing in the long term.

If you look at ac­tual cash on the bar­rel that comes from this (pro­vin­cial) govern­ment, it’s ac­tu­ally pretty low.

RACHEL NOTLEY

‘TOUGH CHOICES AHEAD’

In a speech in the leg­is­la­ture on March 18, Ken­ney warned that the prov­ince was fac­ing “a pe­riod of pro­found ad­ver­sity un­like any we have since the 1930s.”

Re­straint now could pay off later, said Horner, the for­mer fi­nance min­is­ter. “It’s not a bad thing to keep your pow­der a lit­tle bit dry at this point in time to be able to kick-start the econ­omy when the time is right to do that,” he said.

With the dev­as­tat­ing drop in oil prices, low global de­mand for Al­berta’s bedrock ex­port, and ex­tra pressure from COVID-19, warn­ing about a “great fis­cal reck­on­ing ” has be­come a com­mon re­frain for Ken­ney.

When asked what ex­actly that means, Ken­ney said: “Well, it means we are rack­ing up a whack of debt.” The prov­ince needs to get through the cri­sis, but when that’s over, it’s go­ing to have to have a de­bate over how to deal with it. “I’m not su­gar-coat­ing it, I’m just say­ing this so Al­ber­tans are aware there’s some tough choices ahead.”

The prov­ince’s eco­nomic re­cov­ery plan is still in the works un­der a spe­cial coun­cil led by econ­o­mist Jack Mintz, and the plan is to re­lease it in June, Ken­ney said.

“It’s a big, bold plan to re­ally put the pedal to the metal on eco­nomic di­ver­si­fi­ca­tion, while do­ing ev­ery­thing we can to en­sure a strong fu­ture for our en­ergy in­dus­try,” he said.

Ken­ney was asked di­rectly by Global News in early May if a sales tax was pos­si­ble, long a taboo sub­ject in Al­berta, and he sug­gested it would be part of the de­bate to get fi­nances un­der con­trol. Other op­tions could be deeper cuts or a com­bi­na­tion of new taxes and cuts.

And while much of the con­ser­va­tive move­ment isn’t clam­our­ing for a bal­anced bud­get any time soon, jobs will still be front-and­cen­tre.

“The fact is, right now peo­ple care about their jobs, their liveli­hoods, their abil­ity to work safely, and some of those things cost a lot of money,” Sol­berg said.

THREAT ON THE RIGHT

While the govern­ment is get­ting high ap­proval on its pan­demic re­sponse, at­tacks on Ken­ney’s lead­er­ship are com­ing not just from the left. He may have merged the old es­tab­lish­ment Pro­gres­sive Con­ser­va­tives with the Wil­drose party, but the premier still has to watch his right flank.

Derek Filde­brandt, a for­mer Wil­drose MLA, UCP mem­ber, Free­dom Con­ser­va­tive Party founder and now pub­lisher of the right-lean­ing on­line mag­a­zine the Western Stan­dard, said while there is al­ways a threat on the right, “it’s al­ways a man­age­able threat if the main­stream Tory party of the day is will­ing to tack in that di­rec­tion.”

A big part of con­tain­ing that threat to­day will de­pend on what rec­om­men­da­tions come out of the Fair Deal Panel. The govern­ment’s re­sponse will be a big in­di­ca­tor of how far Ken­ney is will­ing to go to keep those fac­tions an­i­mated by western alien­ation on his side, Filde­brandt said.

“I think of it as a con­trolled fire.

They can be use­ful, but they can get out of your con­trol very quickly if the wind blows the wrong way,” he said.

Filde­brandt said the govern­ment’s rev­enue pro­jec­tions in Fe­bru­ary were al­ready un­re­al­is­tic, and plans to save money were just an ex­er­cise in shuf­fling funds around in hopes it would be spent more ef­fi­ciently.

“I think COVID-19 will be a bless­ing in dis­guise for po­lit­i­cal lead­ers across the spec­trum to have some kind of cover for struc­tural deficits that were there to be­gin with,” he said.

Back in the premier’s of­fice, talk­ing about the now-im­pos­si­ble goal of bal­anc­ing the bud­get by 2023 with a re­duc­tion in spend­ing of 2.8 per cent, Ken­ney re­leased a big sigh.

“That’s what we were try­ing to do in our ini­tial fis­cal plan,” he said. “It’s rea­son­able for us to ex­pect that the govern­ment sec­tor should be able to find more ef­fi­cient ways of op­er­at­ing.”

And while the NDP con­tin­ues to call for more sup­port for busi­nesses strug­gling with re­open­ing costs, the de­ci­sion to keep busi­nesses like restau­rants and bar­bers closed for an ex­tra 11 days in hard-hit Cal­gary and Brooks an­gered lib­er­tar­i­ans.

For Cory Mor­gan, a found­ing mem­ber of the Wil­drose Party, and an early sup­porter of its merger with the Pro­gres­sive Con­ser­va­tives, it was the de­ci­sion that pushed him out of the UCP tent.

“I am po­lit­i­cally home­less,” he wrote in a blog post the day Ken­ney an­nounced that Al­berta’s re­launch would be stag­gered based on re­gional case num­bers and hos­pi­tal­iza­tions.

“That was a pro­foundly tonedeaf move of get­ting all those own­ers ready — they were hold­ing staff meet­ings, they were buy­ing stock, they were putting up bar­ri­ers, they were danc­ing to the tune of those slowly re­leased reg­u­la­tions,” he said in an in­ter­view.

Ken­ney said he hears that anger, and he’s not dis­miss­ing it, but he’d rather be cau­tious when it comes to the re­launch.

“I’m not mak­ing ar­bi­trary po­lit­i­cal de­ci­sions,” he said.

The UCP has three years to win back Mor­gan’s sup­port, but he said he would be look­ing at de­vel­op­ing a pro-busi­ness cen­tre-right po­lit­i­cal al­ter­na­tive to the party.

Like Filde­brandt, he had mis­giv­ings about Ken­ney’s man­age­ment of the deficit be­fore COVID -19 en­tered the po­lit­i­cal picture — and he reads the fight over doctor pay as a clumsy mis­han­dling, an il­lus­tra­tion of Ken­ney’s lack of con­vic­tion in fol­low­ing through.

“We’re go­ing to be go­ing into aus­ter­ity like we’ve never seen be­fore. I want to see a strong, con­fi­dent and com­pe­tent govern­ment,” Mor­gan said.

DAVID BLOOM

The COVID-19 cri­sis is test­ing Ja­son Ken­ney. “For fis­cal con­ser­va­tives like me we’re go­ing to have to do things we’re not nor­mally com­fort­able with,” he says.

GAVIN YOUNG

A sign on the front door of the James Joyce Ir­ish Pub on Stephen Av­enue Mall let cus­tomers know it was ready for re­open­ing. The prov­ince’s eco­nomic-re­cov­ery plan is still in the works un­der a spe­cial coun­cil led by econ­o­mist Jack Mintz, and the plan is to re­lease it in June, says Premier Ja­son Ken­ney.

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