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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