Hey, Al­berta: This oil cri­sis is not our do­ing

The Globe and Mail (BC Edition) - - REPORT ON BUSINESS | OPINION & ANALYSIS - BARRIE McKENNA

The rest of Canada is not out to get you. We feel your pain, but it’s time you got over the vic­tim com­plex

Dear Rachel Notley, It has come to our at­ten­tion that you – and many Al­ber­tans – are in­censed at how other Cana­di­ans are treat­ing your prov­ince amid the oil price col­lapse.

You don’t think we un­der­stand what you’re go­ing through. Worse, many of you think we are ac­tively con­spir­ing to make Al­berta fail. On a re­cent trip to Toronto, you com­plained that Canada “will­fully holds Al­berta’s econ­omy hostage” by block­ing oil from get­ting to mar­ket.

That is ludicrous.

First of all, if Al­berta is be­ing held against its will, we are sorry and you are free to go. Not as in, quit Con­fed­er­a­tion, of course. But you are free to ful­fill your en­ergy des­tiny.

In­deed, we are glad to see you are tak­ing steps to do just that – by an­nounc­ing a provincewide oil pro­duc­tion cut and or­der­ing thou­sands of oil tanker rail­way cars to re­lieve pipe­line bot­tle­necks.

God­speed. We all hope these ef­forts will help get you a fair price for your oil.

But the vic­tim com­plex is get­ting tired. It’s non­sense to sug­gest that the fed­eral gov­ern­ment some­how wants Al­berta to crash, as politi­cians and pun­dits in your prov­ince have been hol­ler­ing for weeks.

If we’re out to get you, we’re do­ing a poor job of it. Ot­tawa has forked out $4.5-bil­lion to buy the Trans Moun­tain oil pipe­line link­ing Ed­mon­ton and Van­cou­ver, and will even­tu­ally spend bil­lions more to ex­pand it. The gov­ern­ment is also ready to ex­empt some oil sands projects from new en­vi­ron­men­tal as­sess­ment reg­u­la­tions. And last month, Fi­nance Minister Bill Morneau an­nounced tax in­cen­tives worth nearly $15bil­lion over six years to en­cour­age busi­nesses to in­vest in new ma­chin­ery and equip­ment – changes your gov­ern­ment de­manded – with a large share of the ben­e­fits likely to flow to the cap­i­tal-in­ten­sive oil patch.

And, yes, we feel your pain, ev­ery time we look at our shrink­ing RRSPs and other sav­ings, which are be­ing dragged down by the per­for­mance of Cana­dian en­ergy com­pa­nies and their lenders. We’re hit again when we price out a win­ter va­ca­tion in Florida or Hawaii with our shrink­ing Cana­dian petro-dol­lars.

When crude prices tanked in 2014-15, the Bank of Canada slashed in­ter­est rates – not be­cause we needed it, but be­cause you did. This rate re­lief poured gaso­line on al­ready flam­ing real es­tate mar­kets in Van­cou­ver and Toronto, putting the dream of home own­er­ship out of reach for many young Cana­di­ans.

We en­dure all this for you, Al­berta.

You seem to think that Ot­tawa takes the plight of a few thou­sand Gen­eral Mo­tors work­ers more se­ri­ously than the tens of thou­sands of peo­ple who have lost jobs in your en­ergy sec­tor. Well guess what? The fed­eral gov­ern­ment is of­fer­ing both sets of work­ers ex­actly the same things: em­pa­thy and un­em­ploy­ment in­sur­ance ben­e­fits.

So what do you want? Pipe­lines, now. We get that. But how? Surely, no rea­son­able per­son wants Ot­tawa to cir­cum­vent the courts, which re­cently or­dered a more thor­ough re­view of the Trans Moun­tain ex­pan­sion pro­ject. And you’re liv­ing in the wrong coun­try if you think Ot­tawa should de­clare martial law, over­throw the B.C. gov­ern­ment and de­ploy the armed forces to sti­fle pipe­line op­po­nents.

Of course, mis­takes were made by this and pre­vi­ous fed­eral gov- ern­ments to ex­pe­dite pipe­line ap­provals. That’s all in the past, and Ot­tawa now shares your ur­gency in get­ting the Trans Moun­tain ex­pan­sion built.

Harp­ing on the past won’t make that hap­pen any sooner. Ot­tawa is not re­spon­si­ble for fierce pipe­line op­po­si­tion in Que­bec, which doomed the En­ergy East pro­ject. Nor is the fed­eral gov­ern­ment to blame for the many le­gal and reg­u­la­tory hur­dles thrown at the Key­stone XL pipe­line in the United States. Quite the op­po­site. It lob­bied hard to get it built.

But as long as we’re dredg­ing up the past, it’s worth re­mem­ber­ing the many things Al­berta has not done to head off this cri­sis. You have not done enough to di­ver­sify your econ­omy, your tax base and your oil sec­tor. Your econ­omy is still too re­liant on oil and gas. Why no pro­vin­cial sales tax to off­set the ob­vi­ous boom­bust de­pen­dence on in­come taxes and en­ergy roy­al­ties? Let’s not for­get oil pro­duc­ers, who for years have in­vested too lit­tle of their prof­its in down­stream re­fin­ing, leav­ing them vul­ner­a­ble to price dis­count­ing. And per­haps your pre­de­ces­sors in the premier’s chair should have moved ear­lier to deal with global cli­mate change pres­sures by phas­ing out the use of coal to gen­er­ate elec­tric­ity. None of that is our fault. Yours Re­spect­fully,

The (New) Rest of Canada

Your econ­omy is still too re­liant on oil and gas. Why no pro­vin­cial sales tax to off­set the ob­vi­ous boom-bust de­pen­dence on in­come taxes and en­ergy roy­al­ties?

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