Pop Quiz! What do you call a government that runs up record deficits, intervenes in the marketplace, restricts people’s movements and pays workers to stay home?
a. Socialist
b. Communist
c. New Democratic
d. Liberal
In Alberta, the answer is “none of the above.” Or, put another way: United Conservative. In one of the great ironies of the COVID-19 pandemic, Alberta’s free-market, free-enterprise, red-tape-cutting, stand-on-your-own-two-feet government is on track to become the biggest borrowing, largest spending, most interventionist government in our province’s history.
Since the pandemic hit, Premier Jason Kenney has ordered the deferral of taxes and utility payments, pumped money into homeless shelters and charities, increased financial support for mental health and allowed students to delay paying back loans. He has spent more than $90-million paying Albertans to stay home and self-isolate. He has passed laws giving his government more powers to intervene in people’s lives, whether that’s ordering them to stay home or issuing fines if they go out. The list goes on.
Just as there are no atheists in foxholes, it would seem there are no fiscal conservatives in pandemics.
The province’s deficit is on track to hit $20-billion this year and the accumulated debt is on a trajectory to shoot past $100-billion.
In a move that’s a mixture of desperation and optimism, Kenney is spending $1.5-billion on the troubled Keystone XL pipeline project this year and putting up $6-billion in loan guarantees next year. “This investment in Keystone XL is a bold move to retake control of our province’s economic destiny and put it firmly back in the hands of the owners of our natural resources, the people of Alberta,” said Kenney in an April televised speech as he tried to make the multi-billion-dollar gamble seem more like a no-brainer. “The government of Alberta is confident that this is a wise investment,” he added, which sounded more like a plea than a prediction.
I want to avoid wading into the rhetorical swamp of what exactly constitutes “socialism,” so let’s just say the 2020 version of the UCP is less conservative blue and more “nanny-state” red.
Pre-pandemic Kenney must be rolling in his grave. Not that he’s alone. Governments everywhere are turning more socially conscious if not outright socialist. Canada’s federal government is pandemic-spending in the tens of billions to keep people and companies afloat. The US is spending trillions.
Just as there are no atheists in foxholes, it would seem there are no fiscal conservatives in pandemics.
But, truth be told, Alberta’s UCP government was beginning to wobble from its free-market principles last summer. Long before COVID-19 began planning its world tour, Kenney was in negotiations to invest in the Keystone pipeline project.
That’s not to say this government is driving along the political highway with its left-turn indicator on. Kenney is not just a conservative but arguably the most ideological Alberta premier in the last 40 years. That’s why he began picking a fight with public sector workers and doctors late last year to undermine their power while putting a lid on spending. When the pandemic hit, he managed to make a temporary truce with nurses but couldn’t change direction with doctors. When he tried, it was too little too late, and the Alberta Medical Association launched a $250-million lawsuit against his government in April.
Kenney, like politicians everywhere, is facing a test of his leadership during this pandemic. But the real test will come after. Kenney has acknowledged that Alberta’s oil-dependent economy will be slow to recover. If he was eager to cut spending and slash public sector jobs when the deficit was $7-billion, what will he do after the deficit hits $20-billion? What kinds of cuts and rollbacks can we expect post-pandemic?
The premier likes to say we’re in uncharted territory. Well, yes and no. We’ve never been hit by a pandemic and an oil price catastrophe simultaneously. But we know from past experience how our economy is too reliant on the vagaries of energy prices. Might this crisis convince Kenney he has to take even more drastic action, such as, gulp, introducing a provincial sales tax? He says he won’t consider that—but at one time he would never have considered running a $20-billion deficit either.
Kenney knows how Albertans react to premiers during crises. Just look at Don Getty, Ed Stelmach and Rachel Notley, all victims of economic downturns and all subsequently forced out of office by their parties or voters. Kenney has proven to be a resilient and resourceful politician. He still has three years until the next election to figure out what life will look like in a post-pandemic province—and whether Albertans will want their rigidly right-wing premier to show some flexibility and permanently shift a little.
Graham Thomson is a political analyst, member of the Legislature Press Gallery and former Edmonton Journal political columnist.
