Notley’s hungry NDP regime has gorged itself on the productive parts of Alberta’s economy, raising corporate and personal taxes and imposing a new carbon tax, while tens of thousands of private sector Albertans have already lost their jobs.
The energy industry is barely afloat. Alberta NDP policies are the financial equivalent of tossing an anvil to a drowning swimmer, while those fortunate civil servants on Notley’s good ship Government sail blissfully onward, enjoying the buffet that never closes.
The NDP won’t reduce public sector spending, partly for ideological reasons and partly because so many who voted NDP, work in the public sector. Notley will certainly not reduce taxes or royalties to boost the economy, as O’Leary suggests she should. That would be anathema to the NDP, as it was to many of Alberta’s previous, drunken sailor PC governments.
Despite plummeting government revenues, Notley’s NDP is blithely spending more than ever, even borrowing to fund its own operations. Her regime’s solution to every problem is to raise Albertans’ cost of living and of doing business by imposing higher taxes to fund their profligacy.
Meanwhile, uncertainty from Notley’s thrice-delayed review of energy royalties has frozen two streams of capital that Alberta desperately needs: equity (stock market) financings, which are the lifeblood of the oilpatch because they feed the second stream, drilling expenditures.
Without drilling, there’s no fracking, no seismic shot, no bids at land sales, and energy production declines. Thus, there’s less royalty money for the government, but also less demand for rig hands, tradespeople, clerks, technicians, pipe and tool salespeople, geologists, accountants and engineers, not to mention the lawyers and bankers who help raise money for the industry when times are good.
All those unemployed, nervous Albertans spend less on restaurant meals, clothing, appliances, renovations, holidays, houses, new cars, etc., which drags down the whole economy.
Kevin O’Leary correctly notes that Notley’s royalty-uncertainty-based-freeze on capital spending by energy companies will continue, until investors know what the new rules are.
Alberta already has a royalty regime that adjusts the government’s take as commodity prices change. Leave it alone, Rachel.
As O’Leary points out, energy is Canada’s largest export and a huge contributor to the equalization payments our province sends elsewhere. It’s all very well to talk about diversification, but energy is the source of Alberta’s wealth today.
Strangling the golden goose that pays for almost everything, in order to impress green activists who see oil and gas as evil, is not going to get any more export pipelines built. It’s just bad policy.
Beyond energy, Notley’s newly imposed higher minimum wage ensures that less profitable industries like hospitality and food services will hire fewer people and that more vulnerable, lower-paid Albertans will be thrown out of work.
Rachel Notley didn’t cause Alberta’s recession, but her government’s disastrous policies will certainly prolong it, by delaying the day when Albertans will see the benefit of eventually higher commodity prices.
And Kevin O’Leary may be a blowhard, but he’s absolutely right that Notley’s NDP government is not competently managing Alberta’s economy, making the difficult situation they inherited immeasurably worse.