Alberta’s dependence on oil and gas is the issue we should really be talking about
Ten days before the election, I travelled home to the familiar country roads of Alberta. As my family and I drove six hours north from Edmonton to my cousin’s house in Peace River, we passed by rows of oil derricks and blue Conservative lawn signs.
Although the election was on everyone’s minds, the folks I talked to didn’t feel the same excitement or tense anticipation like voters in the close ridings around UVic. Instead, there was resignation and tangible frustration.
In the most recent federal election, all of the seats in the province went blue, except Edmonton-Strathcona, which went to the NDP. Although the Conservative party got 97 per cent of the province’s seats, only 69 per cent of Albertans voted for them. Albertans typically vote all or nothing — it is the only province in Canada to never have had a minority government.
As soon as the election results were in and Alberta and Saskatchewan’s blue paint was still drying, calls for Alberta to separate from Canada — or “Wexit” — trended on Twitter. While news sites flocked to report on this sudden surge in separatist sentiments and cited quotes from the founder of the associated Facebook page, I rolled my eyes.
H+K Strategies traced the hashtag’s growth over October 20 and 21, and suggested Twitter activity was started by bots and content aggregators. The reality is that Wexit rallies only attract a few dozen people. So, please, stop talking and tweeting about Wexit. Fuelling this fire gives a greater platform to a fringe movement.
Alberta is like B.C.’s loud, dramatic, populist neighbour. And we have deep, longstanding resentments against the federal government. When Alberta joined Canada in 1905, the federal government decided to retain control over natural resources until Albertan politicians fought for control of them in 1930. In 1980, the Pierre Trudeau government established the National Energy Program, prompting objections in Alberta over the creation of a national oil price, which forced Canadian oil companies to offer a cheaper price to Canadian consumers and was perceived to disproportionately benefit central and eastern Canada. Though the program was discontinued by the next government, resentment in Alberta has remained. Many Albertans also feel unfairly treated by equalization payments, which they claim take money from wealthier provinces such as Alberta and give it to other provinces.
As an Albertan, I get asked about the pipeline and oil a lot. My answer, if I offer one, is always complicated.
Oil impacts every sector. I grew up knowing that the price of oil would affect how many kids were in my elementary school classes. The price of oil is part of many conversations about hospitals and schools because of the government’s high level of dependence on it as a source of revenue.
Here’s a massively simplified version of how oil relates to government spending in Alberta: the government gives companies money to help with the huge start-up costs for big capital projects that mine for oil and receives part of their revenue from oil and gas companies through royalties. The government uses this money to fund public services instead of raising taxes — we are the only province without a provincial sales tax. But when the price of oil goes down, the government is left with significantly reduced revenue and the same costs for public services. Since 2014, the price of oil has been low.
In 2006, the Alberta government made over $14 billion from resources. In 2016, that same figure was reduced to $2 billion.
These downturns disproportionately affect young men. While women saw a net gain in employment, unemployment among men aged 15 to 24 went from 11.3 per cent in September 2014 to 19.9 per cent last month.
People in Alberta get hit with a one-two punch. First, they lose private sector jobs because of the economic downturn. Then, public sector jobs soon follow as the government loses oil revenue. On October 24, the United Conservative Party tabled their first budget — which included a 7.7 per cent cut to public services over four years and a projected debt of $93.3 billion by 2022-2023. In contrast, the B.C. government expects to post a $585 million surplus by 2021.
In some places in Alberta, the transition away from oil and gas is already forcibly taking place. I was born in Medicine Hat — a small city in Southern Alberta with the slogan “the Gas City.” The city-owned natural gas wells have generated revenues for decades, helping to build schools and parks. Recently, the city has decided to shut down nearly all of the wells. The Gas City has begun to invest in renewables, with three windmills just north of the town.
There are other significant examples of renewable energy investments in the province: Canada’s second-largest wind farm is in Blackspring Ridge, near Lethbridge and a firm associated with Warren Buffett is set to open Canada’s largest wind farm just south of Medicine Hat next year.
This is a much bigger and more complex issue than just pipeline politics, and the concept of an Albertan environmentalist is not an oxymoron. In fact, being an Albertan made me more of an environmentalist.
We all need to start getting uncomfortable about how dependent we are on fossil fuels. I’ve lived through the boom and the bust, and know well that both the price of oil and the anger of the province fluctuate in dramatic waves. With time, Wexit will be just another separatist blip in our province’s political history. But Albertans will really struggle in coming years if the province fails to take intentional steps to transition the economy away from fossil fuels and diversify its sources of revenue. Our long term future is not in oil and gas, and we need to stop feeding pipe dreams — that a nonrenewable resource will create long-term prosperity.