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After a year that produced an unexpected gusher of oil and gas royalties, you knew that the UCP’s pre-election budget would be filled with voter-friendly goodies. And in what is widely rumoured to be his political swan song, Finance Minister Travis Toews didn’t disappoint. There are billions in new funding for schools, for hospitals, for cities, and for infrastructure projects. After years of cuts and constraints, the purse strings are suddenly open again. The big question now is whether Albertans believe they’ll stay that way.
After all, outside of former premier Jason Kenney’s bungling of the COVID-19 pandemic, the UCP’s first term in government has been defined by its efforts to contain and control spending — belt-tightening that has not been well-received by Alberta’s doctors, nurses, teachers, and paramedics.
The UCP raised the cost of auto insurance, made tuition fees more onerous, removed the NDP’s price cap on utility bills for residential and small business consumers, and introduced new user fees for some of the province’s most popular parks. Now, just as Albertans are about to go to the polls, they’re dumping a bunch of that money back into the system.
They can do this in large part because of the huge oil and gas revenue increases over the last few years. After bottoming out at just $3.1 billion in 2020-21, those revenues have skyrocketed to $27.5 billion in 2022-23, and they’re expected to remain elevated for the foreseeable future. As Calgary Sun columnist Rick Bell wrote, “It’s like winning the lottery on back-to-back weekends.”
As if to underscore the durability of this new windfall, the province has created a new fiscal framework. It’s highlighted by an “Alberta Fund” that will take half of the province’s surpluses in the future and set the money aside for saving or one-off spending. This framework will also include balanced budget legislation (one that will make allowances for sudden drops in government revenue) and a formal limit on spending increases to population growth plus inflation.
Oh, and about all the unpopular ideas the UCP has been floating, from an Alberta pension plan to the corporate welfare on steroids better known as the “RStar” program, which would give millions (and potentially billions) to oil companies to clean up their old wells? Those have all been punted safely down the political field.
"You're not seeing an Alberta pension plan in this budget and you're not seeing a definitive Alberta police force in this budget and you're not seeing an RStar program in this budget because none of those policies have been approved," Toews told reporters. "We are reaching out on all of those things and consulting with Albertans."
If you’re the Opposition NDP, this is a very tough political pill to swallow. Yes, you can point out the hypocrisy in the UCP’s approach here, or the good fortune it has to be electioneering on the back of the biggest increase in oil and gas revenues in the province’s history. As the party’s finance critic Shannon Phillips tweeted, “Budget 2023 is designed to buy votes ahead of the election and then spring the costs on Albertans after the polls have closed. It hides Danielle Smith’s worst ideas and does not fund Albertans’ health-care priorities.”
But this presumes voters don’t want to be bought, or that they won’t support the idea of increasing funding for key priorities like schools, roads, and hospitals. And while the Alberta NDP can (and probably will) continue to say the UCP is actively undermining the health-care system, that’s a tough argument to make when they’re shovelling billions of new dollars into it. Smith even struck a deal with Justin Trudeau for additional health-care funding, one she described as “a productive first step.”
For the NDP, then, there’s really only one card left to play: trust.
Can Albertans trust that Smith’s government will continue funding health care and education after the votes are counted? Can they trust that Smith’s government won’t move forward after the election on unpopular things like an Alberta pension plan or a billion-dollar giveaway to the province’s massively profitable oil and gas companies? And after making a mess of the health-care system by picking a fight with the people they need to staff it, should Smith’s government really be trusted to clean it up?
That’s the ballot question the NDP should try to frame for voters.
Yes, Alberta has won the oil and gas lottery again, and it could continue cashing tickets for some time to come. That’s generally a good sign for an incumbent government, especially one that’s bet so heavily on the lottery in question. But do Albertans trust Smith to spend their winnings on something other than more lottery tickets? That’s the question that needs to be asked — and answered — in May’s election.
Comments
Alberta politics in a nutshell:
When the price of oil is up Alberta conservatives are geniuses. When the price of oil is down a Trudeau did it.
The likelihood of Trudeau winning increases if Smith emerges as the winner. Whenever PP or Smith make efforts to appeal to the far-right, it provides JT with content to criticize.
Unfortunately, this is true.
If Albertans allow themselves to be bought, the next four years will be exactly like the last four. And of course, Danielle will use that time to privatize our police and our government pensions. The Oil and Gas industry is facing increasing scrutiny and criticism, and it needs to get rid of not only the carbon tax, but any discussion of climate change as well.
Public tax dollars will fund the bogus carbon capture schemes Big Oil is pushing...and having Alberta's pensions invested in boondoggles like that will keep the populace quiet about anything so preposterous as a Just Transition.
Alberta prefer to "FEEL THE ENERGY" and double down in a lack of social justice. It's Canada's free enterprise zone don't ya know?
As an observer of Alberta for over 50 years, all this tells me is that economics matter.
High oil prices bring joy to producers and royalty-slurping governments and pain to consumers who actively search for increasingly available alternatives. The reverse is also true, meaning that the world price of oil is not controlled by levers and switches mounted on in Danielle Smith's desk next to the phone. From her perspective the dice were rolled and they landed in her favour purely as a matter of luck and timing, which has nothing to do with financial acumen. Saving for a rainy day? Been there, done that under Peter Lougheed in the 70s and 80s, only to see sovereign wealth fund management credibility erode with the buffoons that came after him.
Renewables are currently outcompeting fossil fuels in electricity production everywhere, but electrification hasn't permeated enough into transportation and building energy yet to dissuade fossil investors. Time to step it up and put the demand for fossil fuels into reverse and let economics do its job.