Good morning! It’s James Keller in Calgary.
Alberta Premier Jason Kenney had been foreshadowing this since before he was elected: his government’s first budget would be a tough one.
During the spring election campaign, Mr. Kenney said a United Conservative government would freeze operating spending for several years as it worked toward a balanced budget – no new spending but no significant cuts, either.
As it turns out, this week’s provincial budget ended up being even tougher. Rather than a spending freeze, the budget includes $1.3-billion in cuts to operating spending and more than 2,000 job cuts. Mr. Kenney used an unusual televised address the night before the budget was released to warn Albertans to brace for what he described as challenging times.
At universities, tuition will increase sharply and hundreds of positions across the province will be eliminated. The education and health budgets will remain frozen at a time when enrolment is up and the population is aging (and that’s before taking into account inflation). Some social-services benefits will no longer be tied to inflation, which means increases recipients were expecting won’t happen.
The Alberta Energy Regulator’s budget will be cut by 58 per cent in four years. Cities that were depending on provincial money for projects such as Calgary’s Green Line LRT expansion will have to wait longer for that funding, which has enraged that city’s mayor, Naheed Nenshi.
The goal is to get back to a balanced budget and ease the rapid increase to the debt (which will nonetheless is projected to hit $93.2-billion by 2022-23). All while cutting corporate taxes.
The plan requires a lot to go right. The government is projecting a modest recovery in the oil sector, which will depend on several new pipelines coming online (including the beleaguered Trans Mountain expansion), increased production and a steady rise in crude prices. And the government is forecasting that the 30-per-cent cut to corporate taxes will spur enough economic growth that the policy will start making money in a couple of years.
Finance Minister Travis Toews warns that even if those all line up, it won’t mean a return to a time when the province was flush with cash: “This is not a boom-time scenario.”
Gary Mason writes that Albertans should have seen this coming: “The fact is, the cost-cutting measures introduced by the UCP on Thursday – $1.3-billion in cuts and the elimination of more than 2,000 public-sector jobs – were long overdue. They were the consequence of years of mostly conservative administrations, rich with oil revenues, failing to institute any kind of fiscal rigour when it came to public spending.”
We’ll be covering the fallout from the budget for a while so keep reading The Globe and this newsletter as we break down what this all means.
For now, read our quick explainer to find out what’s being cut, and why.
This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief James Keller. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here. This is a new project and we’ll be experimenting as we go, so let us know what you think.
Around the West:
UNDRIP: British Columbia will conduct a sweeping review of provincial laws to protect human rights for Indigenous people, seeking reconciliation by providing greater influence to First Nations over lawmaking – including resource development. The province introduced legislation on Thursday to ensure all provincial laws and policies align with internationally recognized human rights of Indigenous people, the start of a process that is expected to take decades.
ENERGY REGULATOR: Alberta’s energy regulator faces deep budget and staff cuts as it goes about overseeing the province’s dominant industry after damning reports by investigators about its previous leadership’s conduct. In its first provincial budget, Premier Jason Kenney’s United Conservative Party government has targeted reductions in the Alberta Energy Regulator’s (AER) budget of $147-million, or 58 per cent, over the next four years
FOREIGN BUYERS TAX: A British Columbia Supreme Court judge has dismissed a lawsuit claiming the province’s foreign buyers tax is unconstitutional and discriminates against people from Asia. A previous B.C. Liberal government introduced a 15-per-cent tax in an effort to quell Metro Vancouver’s overheated real estate market in 2016, and the NDP raised it to 20 per cent in 2018 after coming into power.
In a ruling posted online on Friday, Justice Gregory Bowden says the main purpose of the tax is to increase housing affordability in Metro Vancouver and generate provincial revenue, which he says falls within provincial jurisdiction. The ruling says that although the majority of foreign property owners were from Asia, especially China, that doesn’t mean the tax adversely affected Asians “in particular.”
INDIGENOUS DEVELOPMENT: The Tsleil-Waututh Nation is asking the federal government to approve its request to expand its reserve land to include a sprawling area in the District of North Vancouver in hopes of building a new residential and commercial neighbourhood. Nearby residents opposed to the project say that even after scaled-back designs were introduced, the development plans still have too much density, don’t fit with the existing neighbourhood and would extend traffic jams in the congested Maplewood area.
MEDICAL EXPERTS: B.C.’s top judge has thrown out the provincial auto insurer’s cap on the number of experts paid for in insurance trials, ruling that such limits are unconstitutional because they encroach on the court’s ability to control its process. Christopher Hinkson, Chief Justice of the Supreme Court of British Columbia, ruled against the medical-specialist restriction, which B.C. Attorney-General David Eby imposed this year after a Globe and Mail investigation into the lucrative, little-known growth industry that generates “independent medical evaluations.”
CLIMATE PROTEST: Swedish activist Greta Thunberg says those in power need to realize what they are doing to future generations through climate change because if adults really loved children, they would ensure they have a safe future. “But they are not doing that,” she told thousands of people attending a climate rally in Vancouver on Friday. “As it is now, it feels like they are doing the exact opposite, that they are desperately trying to change the subject every time the climate crisis comes up.
CHINESE ASSIGNMENT: A teacher at a Vancouver-area high school has cancelled an assignment asking students to discuss trailers for a film dedicated to the founding of the People’s Republic of China after complaints that the movie was “pro-China propaganda.” In several Mandarin classes at Steveston-London Secondary School in Richmond, B.C., a teacher showed grade 10 to 12 students trailers for My People, My Country, a film celebrating the 70th anniversary of the PRC.
CLIMATE LAWSUIT: A group of youths from across Canada is suing the federal government for failing to adequately take action on the climate crisis and putting future generations at risk. The 15 youths, who range in age from 11 to 18 and hail from eight provinces and the Northwest Territories, say the Canadian government’s contribution to high levels of greenhouse-gas emissions and climate change violate their rights to life, liberty and security of the person under Section 7 of the Charter, and fail to protect essential public-trust resources.
MANITOBA SNOWSTORM: Electricity is back on in all communities that lost power two weeks ago, when Manitoba was hit by a major snowstorm that brought down power poles and transmission towers.
Max Fawcett on a solution for Jason Kenney’s problem: “Just as Richard Nixon was the only U.S. president who could go to China, so too is Mr. Kenney the only Alberta premier who might be able to overcome the province’s hostility towards a sales tax. If he does, he’d leave a more durable and defining legacy than any Alberta premier since Peter Lougheed.”
Chad Norman Day and Kendra Johnston on the UN Declaration of the Rights of Indigenous Peoples: “Many companies investing in B.C. already understand that collaborative relationships with First Nations governments are creating improved investment certainty. This legislation will support further collaborative opportunities and enable successful partnerships between First Nations governments and industry.”
Bob Plamondon on Andrew Scheer: “While Mr. Scheer may never become charismatic, he might succeed if he can rebuild bridges across the conservative universe, adopts mainstream policies that don’t reek of ideology and are relevant in all parts of Canada, addresses climate change with substantive policies and somehow reconciles his social-conservative views in a way Canadians can accept. If he can’t do these things, he should step aside.”