Rachel Notley’s Folly

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Rachel Notley’s approach to diversifying Alberta’s economy.

Let’s look at this last week in the ever-escalating war between the NDP governments of BC and Alberta. On Friday, BC Premier John Horgan asked the federal government to investigate why gas prices in BC are so high. Many premiers over the years have asked for all sorts of investigations into why we pay so much at the pumps. This is not out of the ordinary in any way. It does seem like BC’s gas prices fluctuate greatly and can be higher[1] particularly in the Lower Mainland. In looking at a comparison between the two provinces, BC pays an additional $0.317 per litre over Alberta. I am not an expert on gas prices, however, over the years I have heard that prices can be affected by switching between winter and summer blends, bad weather in the Gulf of Mexico and OPEC.

 

Back to Rachel Notley. In response to John Horgan’s call for a federal investigation she suggested that if BC wants to pay less for gas then Horgan should stop opposing the twinning of the Kinder Morgan Pipeline. This statement is patently ridiculous. It’s almost like Notley is forgetting that it is raw bitumen that will be travelling through those pipelines destined for China where it will be processed into some usable fuel (providing it doesn’t leak and destroy natural habitats between here and there). It’s like she envisions British Columbians lining up at the terminus of the pipeline to fill their vehicles! Will we also get frequent filler points and will it be full serve along with a window clean and a winning smile? Is Notley going to demand that income tax for employees in the new terminus be submitted back to Alberta? That way she can take advantage of all the stoners (probably smoking BC bud) living in their parents’ basements with laundry piles that have their own postal codes. After all, with BC’s unemployment rate being the lowest in the country we may not have the people to pump the raw bitumen.

After that ridiculous statement, Notley went on to call Horgan a hypocrite for agreeing to look at subsidies for an LNG project in northern BC. The big difference between Alberta’s bitumen and BC’s natural gas is that processing will happen here in BC thereby guaranteeing ongoing jobs and selling a value-added product on the market. By processing the gas here we move beyond our resource extraction (hewers of wood and drawers of water) of our past. Make no mistake, much of the Canadian economy relies on the extraction of our natural resources whether it’s bitumen, natural gas, trees or minerals. BC is not perfect in this regard as we send a lot of unprocessed, raw wood out of the province. However, where we can keep processing in the province we stand to gain good paying jobs.

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Adding to the idiocy of Alberta politics , enter Jason Kenney the new leader of the United Conservative Party. Fresh off of destroying the Conservative Party of Canada, along with Stephen Harper, he has now turned his sites back on his home province. Here’s the thing about Kenney he has been bleating negative rhetoric for years. I have yet to hear him come up with an original idea and he is true to form in this debate:

“You can’t make this stuff up. It’s like comedy hour coming out of Victoria. They’re trying to shut down their major source of oil. They are increasing their carbon tax while telling ordinary British Columbians they’re concerned about high gas prices?” he said.

So, let’s have a look at the ‘comedy’ hour coming out of Victoria. The budget introduced by Finance Minister Carole James has new commitments for housing, childcare, a freeze on BC Ferries fares, increases in health care spending and will see the elimination of MSP premiums a year earlier than promised. With all of these new initiatives you would think BC is running a deficit. It’s not. The Horgan Government is hoping this will be the 6th balanced budget in a row (building on the balanced budgets of the BC Liberals). Even though BC is still dependent on natural resources, the economy is diversified enough to ride out the peaks and valleys of resource extraction without resorting to deficit spending.

Notley is wasting her time going after BC. She needs to focus on the wolves at her door: Jason Kenney and the UCP. She also needs to figure out how to diversify Alberta’s economy. If she doesn’t at least take some steps towards that goal her government will be no more than a footnote in history. The oil peaks are over and have been over for quite some time now.

I am no economist. However, it seems like the answer to some of Alberta’s fiscal woes lay in the taxes it charges on gas. Perhaps if Notley raised the gas tax in Alberta she could get closer to a balanced budget. It really is time for Albertans to pay the full cost of the destructive fossil fuel royalties that buttress the economy . Maybe if the tax went up there would be an appetite for alternative energies and economic diversification. BC seems to have good luck with wine and BC bud.

 

[1] In the Lower Mainland for example, we pay  federal and provincial taxes, a carbon tax but we also supplement Translink.

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When is an NDPer not an NDPer?

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Rachel Notley

When is an NDPer not really an NDPer: when they are in power in Alberta. The rise of Rachel Notley and her party to majority government status was such a shock to most Canadians given that the Progressive Conservative party had run the province since most people alive could remember. However, the rise of the Wild Rose Party split the conservative vote in the province and allowed Notley’s NDP to come up the middle. I am beginning to wonder about Notley’s NDP credentials. Seriously. What NDP premier prioritizes pipelines, carrying dirty, polluting bitumen over the environmental concerns of another province? It’s not her province it’s going through. What is even more galling is that BC assumes all the risk of oil spills while the usual suspects continue to get rich and the province goes through another boom/bust cycle that detroys lives.

 

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This what is wrong with brokerage politics. She is doing this no doubt so that she will get re-elected. What Canada (and Alberta) needs is a LEADER who will diversify the economy and get Alberta off the oil and gas teat that has done nothing but provide boom and bust cycles for the average Albertan while making a very few rich beyond their wildest dreams. BC used to be a primarily resource extracting province (mining and logging, mostly). However, given the often wild fluctuations in the world’s demand and therefore price for commodities, BC has had to diversify. There are still pockets of the province that are reliant on resource extraction but as time goes on diversification has helped to stabilize some of these regions.

The BC NDP does not report to Notley or Justin Trudeau – they are accountable to the Green Party, who are providing the necessary support for a majority position in the legislature and they are accountable to the electorate. The NDP have seen what has happened to the BC Liberals when they break promises. The introduction of the HST in 2010, three months after the election promise where they said they wouldn’t, was an education in BC politics. Led by former premier Bill Vander Zalm, the ‘axe the tax’ was ultimately successful. We have been the only jurisdiction in the world to ever successfully repeal a tax because of a grassroots movement. John Horgan knows this. He has already had to backpedal on the Site C Damn. (Although I think they did the responsible thing. If they hadn’t, we would have had several billion dollars of debt either at BC Hydro or the provincial government with no asset to show for it. The BC  Liberals made it so that the project could not be stopped).

I am guessing that neither Notley or Trudeau know their BC politics well. Justin Trudeau, standing in Nanaimo yesterday at a downhill meeting, saying that the pipeline will be built is wrong. These kinds of proclamations are only going to inflame the situation more. There will be massive protests should shovels go into the ground on this project. Right now we have Burnaby Mayor Derrick Corrigan who has made a science out of opposing and obstructing Kinder Morgan. Burnaby residents have not forgotten about a 2007 spill that saw several companies charged and Kinder Morgan fined. Oh and this was crude oil, not bitumen – which is way worse. Imagine what it would be like to clean up bitumen from our pristine coastline? It would be a disaster.

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The geyser of crude oil when the pipeline was accidentally hit
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Burnaby after the spill

I am a proud transplanted British Columbian (it’s a long story, I should have been born here, but that’s a story for another day) by way of Alberta. I live through the National Energy Program (which Albertans seem to forget being forced to sell their oil at lower prices to the rest of Canada). Alberta was certainly strong on provincial rights and opposing what was seen as an ‘out of touch’ federal government that was robbing Alberta to power the rest of the country. In those days, saying you were a Liberal supporter in Alberta was almost grounds for murder. I am not exaggerating.

So, Alberta, don’t buy our electricity or our wine. We will find other markets. We are economically resilient in BC. I am pretty sure that California likes our power. Your threats will only serve to escalate this situation and force us to dig in our heels. And Justin, you better be prepared to not vacation in BC for a very long time (he lived her for god’s sake! He should understand the province). I hope you can find good surfing and caves in Atlantic Canada. Oh and if you are going to force the pipeline issue, I would send in the Canadian Armed Forces. Anything less will be a fool’s errand.

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I am guessing we are not going to see Justin in BC vacationing for a while

 

Canada and Iran – an oily standoff

Last Friday, the Canadian government severed all diplomatic ties with Iran. Usually when countries take this step there have been increasing tensions and perhaps a series of escalating incidents. One might fairly ask what precipitated this event. The answer is, well, nothing. To be fair, diplomatic relations between Canada and Iran have not been great since the revolution in 1979. Iran has always been a little pissed that Canada smuggled 6 Americans out during the hostage crisis. Factor in the death of Zahra Kazemi and relations have been strained. So the question is why now? Why would we take such a drastic step in the absence of any kind of simmering diplomatic feud?

I have a theory. Stephen Harper is from Calgary. I have blogged before about how American Calgary is in its view of the world. Although born in Toronto, Harper’s education was at the University of Calgary. Particularly in the 1990s, the University of Calgary was a hotbed of a pro-American brand of conservatism.[1] Both the economics and political science departments were rife with these politically motivated students and faculty.[2] Who knows how or why this started; did Calgary create them or did they impact Calgary? Regardless, this is the school of thought that informs our prime minister’s policies.

Now, what does all of this have to do with us severing diplomatic ties with Iran? If you were to listen to Vic Toews[3] you would have heard him say that Iran is the biggest threat to global security.[4] Iran’s threat to global security was no different last Friday than it was the Friday before or the year before that, so why now?

As an historian, I have been trained to look for broad conceptual contexts in which to situate events. When an event does not make sense, historians are trained to tease out what may actually be going on. Given how American Calgary is, I began to think about why Americans might take this kind of action. Pretty much all American foreign policy has to do with money, and it’s compatriot, oil. Iran is a major oil producer and a competitor to Canada. As we all know, Harper and Alberta have been trying to find a way to move Alberta’s bitumen to China. Harper has his eye set on China and moving bitumen there as a means to diversify our exports and take advantage of China’s huge economy. What does all this have to do with Iran? Well, if Harper can isolate Iran even more than it already is or provoke some time of military strike, Iran will be further isolated in the international community. UN sanctions will follow and China will be looking for a new source of oil.

I don’t think my theory is wrong. The drums to war have been beating for quite a while with regard to Iran. While I believe the Iranian regime and Mahmoud Ahmadinejad are reprehensible, the rights of sovereign nations are still paramount. Invading Iran because they supposedly have nuclear weapons sounds a whole lot like Iraq having ‘weapons of mass destruction.’  Any action that impacts Iran’s ability to sell its oil on the open market benefits Canada.

As a British Columbian all of this really concerns me. It seems that Harper is willing to squander our hard earned, though somewhat tarnished now, international reputation to sell Alberta’s bitumen. He is also willing to put our province at risk to do it. The Gateway pipeline is almost universally opposed in BC. I fear this pipeline is going to be shoved down our throats whether we want it or not.

The pipeline is not good for Canada. It will ship unprocessed bitumen out of the country leaving us in our familiar ‘hewer of wood, drawer of water’ role. Like lumber, why would we ship this stuff out of the country without processing it and creating more jobs in Canada? I wonder if we might feel better about the pipeline if there was to be a refinery in BC that would process the bitumen before it shipped out to China? The reason we are not doing this is because it would make it more expensive and the Chinese would rather process it there for cheaper. So Harper is willing to sell out Canada to benefit is buddies in the tar sands.[5] Now there’s a surprise.


[1] I was at the U of C at this time as well. Some TAs in the political science department were caught trying to sell Reform Party memberships to undergrads.

[2] Tom Flanagan comes to mind.

[3] Who listens to him anyway?

[4] Clearly if we were to believe Vic we should be severing diplomatic ties with the US, but I digress.

[5] Make no mistake it is the tar sands. It has been called the tar sand for decades. Only recently did some PR schmuk come up with ‘oil sands’ to try to convince people it is not dirty oil. One is not against the tar sands by calling it the tar sands; one is simply being precise.

Dispatches from the Swamp – the ‘viral’ edition

  • I am now on Day 5 of this nasty virus. I think my fever finally broke this morning. I don’t often get these things but when I do they make me really sick. I seem to get more fevers, which makes it difficult to function. The fevers can also carry on after the other symptoms are gone.
  • We watched Morgan Spurlock’s new documentary ‘The Greatest Movie Ever Sold’ the other day. We were both very disappointed. The entire movie was about him trying to get sponsorships for the movie. Instead of exploring the increasing integration of product placement, the entire show was basically a series of meetings with Spurlock negotiating. He talks to some experts like Noam Chomsky and Ralph Nader to get their opinions on the subject. However the documentary missed a really good opportunity. Plus, I hate meetings and watching someone else be in meetings for 90 minutes was pretty boring.
  • Alberta is looking pretty progressive these days with the Progressive Conservative Party of Alberta electing Alison Redford. Apparently she represents the left-wing flank of the party. She is going to immediately restore funding to education and health care. The Progressive Conservative Party of Alberta is literally the definition of the old boys club. I wish her well!
  • I have decided I am going to brine our Thanksgiving turkey. We are having a lot of people over for dinner so I hope it goes well!