Trudeau declares Alberta ‘crisis,’ does nothing about it
The NDP government had a bucket list of things Ottawa could do to quickly ease the massive oil price differential.
It got a drop in the bucket. Federal Finance Minister Bill Morneau decreed capital cost writedowns of 100 per cent for Canadian manufacturing, including oil and gas.
That will be helpful, over time.
But there was nothing else in Wednesday’s federal fiscal update.
And there was less than nothing when Prime Minister Justin Trudeau came to visit Thursday.
No rail cars, no locomotives, nothing to speed up pipeline construction, no specific industry-targeted measures for a business and province in deep trouble.
I am trying very hard to imagine Trudeau declaring a genuine economic crisis in Ontario or Quebec, and doing nothing about it. Frankly, it’s unimaginable.
On Tuesday I wrote a column saying the Trudeau government is intentionally managing down Alberta’s oil and gas industry, just a bit quicker than they expected because external forces they encouraged have run out of control.
By failing to use this trip to outline or at least promise specific help with the price crisis, Trudeau actually encourages that view.
Alberta Finance Minister Joe Ceci said after Wednesday’s fiscal update came out:
“It’s clear the federal government isn’t speaking the same economic language as Albertans. Ottawa is living on a different economic planet.”
Through the annoyance, Ceci was quite fair: “I’m pleased to see the federal government move to 100 per cent writeoffs for manufacturing industries and the oil and gas sector.
“This improves our competitiveness and is a win for Alberta workers and companies. I am pleased the federal government listened to our advice.”
He’d sent federal Finance Minister Bill Morneau a letter, along with just about every other province spooked by business tax cuts in the U.S.
Ceci’s gripe is that there was no specific measure aimed at the most dangerous economic problem in the country. (On Nov. 20, Hardisty Light oil was priced at a miserable $7.40 per barrel.)
“We have asked for increased rail capacity,” Ceci said. “And while capacity issues are mentioned in the report, no action was taken.
“This is disappointing to Albertans. As owners of the oil and gas, we will continue to be shipping this product out of our province at a deep discount.
“The fiscal update doesn’t take into account what’s going on in our energy industry. I think they need to re-evaluate.”
Also on Thursday morning, Premier Rachel Notley announced an extensive carbon-tax holiday and rebate for drillers, as well as a plan to buy rail cars and engines, perhaps in concert with Ottawa. Don’t count on the last part.
In a CBC interview with Vassy Kapelos, Morneau claimed the capital cost writeoff will help the differential right away.
“By definition it will have an immediate impact,” he said.
“But I don’t want to suggest that we’ve found a solution for that problem.
“That is a really difficult long-term problem and I think it’s something that clearly the sector is working together with the Alberta government on.
“We’re going to continue to be resolute in our goal of assuring that we can get the cleanest resources in the world to international markets. We think that’s important. So we’re on it.
“It’s the reason we stepped forward with the Trans Mountain pipeline purchase. It’s one we’re committed to working through in the right way.”
That way is “to ensure that we actually consider the issues around the West Coast that the court asked us to do, and that we actually have meaningful consultations with Indigenous people.”
He’s alluding to the big failure after the purchase; the Federal Court rejection based largely on the lassitude of federal officials who didn’t really talk to First Nations, just sort of listened and took notes.
Morneau seems to be saying that an eventual pipeline approval is all the province is going to get.
Alberta needs immediate economic EMS. The feds promise to build a hospital.
The expansion wouldn’t be operating for years. The price differential will persist until then, unless the province comes up with magical solutions. There’s no doubt that Morneau’s capital cost break will help businesses hoping to expand. But Morneau constantly stressed that this policy is for the whole country, not just Alberta.
Why this reluctance to offer specific help? The Liberals may calculate that after spending $4.5 billion to buy the pipeline, there’s little national tolerance for more Alberta aid.
But Alberta didn’t screw up that approval. Ottawa did. This province needs the kind of emergency help the federal government routinely spouts for autos or Bombardier airplanes.
Protesters outside an event attended by Prime Minister Justin Trudeau in Calgary, Alta. on Thursday, Nov. 22, 2018.