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| A pumpjack works on an oil and gas installation near Cremona, Alta., in this file photo from Oct. 29, 2016. In the months ahead, Alberta will need Canada’s help, writes John Ibbitson. JEFF MCINTOSH/THE CANADIAN PRESS |
This is the very best that we are: Because COVID-19 infections are below forecast levels in Alberta, the provincial government is donating ventilators and personal protective equipment to Ontario, Quebec and British Columbia.
“I, for one, as an Albertan and as a Canadian, could not in conscience watch us stockpile massive amounts of surplus equipment while we see many of our fellow Canadians, some provinces, within days of running out of some of these supplies,” Premier Jason Kenney said.
I, for one, as an Ontarian and as a Canadian, am deeply grateful.
All of us should keep this generosity in mind. We should remember as well that the wealth of the Alberta oil economy helped pull Canada out of the 2008–09 recession.
Because in the months ahead, it’s Alberta that will need Canada’s help.
The national unemployment rate in March, according to Statistics Canada, was 7.8 per cent. (April will be far worse.) In Alberta, the level was 8.7 per cent, higher than the national average and higher than Ontario (7.6), Quebec (8.1) or British Columbia (7.2).
Falling demand and overproduction by Saudi Arabia and Russia have collapsed oil prices, leaving businesses and jobs at risk, even as the province still struggles to recover from the 2014–16 fall in prices.
“The crash in energy prices means that Alberta’s downturn will be deeper, and our recovery slower,” Mr. Kenney told Albertans in a televised address last week.
“I cannot overstate how grave the implications of this will be for jobs, our economy and the financial security of Albertans.”
In some ways, the situation resembles the Dirty Thirties. On the eve of the Depression, Ontario and Quebec relied on manufacturing to power their economies; Alberta and Saskatchewan relied on agriculture (the big oil finds came in the 1940s).
While the Depression savaged all economies, the Prairies suffered the most, because of a severe drought that became known as the Dust Bowl. High tariffs curtailed whatever agriculture exports there might have been, while protecting factory jobs in Central Canada. In 1936, the Alberta government partly defaulted on its debt; Ottawa ultimately came to the rescue.
Alberta is in no danger of defaulting again. It has a low debt-to-GDP ratio, compared with other provinces, and no sales tax. But the oil and gas sector is in desperate shape.
On Friday, federal Natural Resources Minister Seamus O’Regan promised an aid package would be arriving “soon,” with a focus on providing the sector with financial liquidity. But there are divisions within the Liberal government and among Canadians generally over what form any aid should take.
Promoters of green energy advocate helping workers retrain as the province transitions from its dependence on oil and gas. Pragmatists understand that no such transition is possible, at least in the short term, and that oil and gas industries will need financial support now and expanded pipeline capacity for the future.
Source: John Ibbitson | The Globe and Mail
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