Eric Denhoff: Why are Albertans so damned angry?

    1 of 5 2 of 5

      By Eric Denhoff

      Where does Albertans' rage come from? Heck of a good question.

      Before launching into my particular theories, it’s best to lay out that I’m originally a Prairie boy. My parents were born and raised and worked in Alberta, and my grandparents, too.

      My family were Calgarians, my mother raised in tony Mount Royal, my dad in working class Bridgeland. They were journalists and knew the province like few others.

      I worked a decade of my early career in Alberta, and the last few years there as well.

      I know Alberta, and I don’t.

      Alberta has a long, populist, and complicated history.

      You’d probably be surprised that its first government was Liberal, but not surprised it had 44 years or so of Conservative provincial governments.

      From Peter Lougheed to Ralph Klein, Alberta has always been at the centre of the national debate, and always felt that nobody even recognized they were there.

      For the past many decades, despite occasional forays into separatist diatribes, Albertans were grumpily content to make fistfuls of money, send a whack of it to Ottawa in taxes, and have Ottawa spread it around the country in various forms. Not much came back to Alberta, it seemed to folks, but Albertans generally shared the nation-building sense of pride Lougheed nurtured, and they were making so much darned money that what went to Ottawa almost seemed like spillage.

      Pierre Trudeau’s National Energy Plan threw a spanner into Albertans’ sense of generosity, and a sense of being benign participants in Confederation, and they got wasp-nest mad.

      Lougheed went full Blue-Eyed Arab (it was a thing, then, honestly) and hammered Pierre Senior, and Albertans were like, “Hurray!”, and things chilled down. Petro-Canada—the federally owned oil company, Red Square in Calgary—was sold off eventually, and Calgarians and Albertans began a slow, inexorable descent into hard-core social conservatism, supereconomic right-wing politics, the era of Reform and Alliance, and Stephen Harper.

      Albertans have always been independent, self-reliant, and stubborn or ornery, depending on your point of view, but they were actually not super right-wing economically.

      They have generally been more populist than necessarily down-home Texas conservatives.

      Telus was originally state-owned Alberta Government Telephones. The government owned a railway, still owns a near-bank chain of Alberta Treasury Branches, financing small businesses and farms across the province that big, evil Eastern banks wouldn’t touch.

      Alberta’s government has put more than $50 billion in state grants and subsidies into businesses in a few decades. Lougheed bought an airline to keep the headquarters in Calgary. The government put billons into oil refineries, the oilsands, forest companies, and more.

      It’s cute to say Alberta is Texas with Medicare (I say it all the time myself), but it isn’t entirely accurate.

      Clearly, the 50,000 or so Americans who moved into Alberta with the oil industry, generally in management jobs, and the influence of the huge U.S. oil industry on what has become almost a petrostate has had an impact on the Alberta psyche.

      But over the past decade, even beginning with Harper and with enormous acceleration under Trudeau, Alberta has lurched into a full emotional  tailspin.

      With more than 150,000 unemployed in a persistent, unbelievably long-running recession, Alberta has faced thousands of bankruptcies, a huge increase in suicides, and a tremendous loss of long-term capital investment that scares the bejesus out of the business community.

      The Trans Mountain pipeline expansion has created rifts between provinces.
      Trans Mountain

      Alberta moved too slowly

      Alberta is not B.C.

      In B.C., you can say big business and big banks, evil—and you get a whack of votes. People here do not identify necessarily that their life and economy and future depend on their employer, or a particular sector even, because B.C. has become so diversified. 

      Not so in Alberta. Attack big oil, you are attacking the truck driver, the rig service company, the office worker, the manager, the investor, the entrepreneur, the inventor, and even the farmer and rancher. The farmer and rancher? Yes, because these days, most farmers have side jobs working in the oil patch, and their land has oil or gas wells on it paying royalties and their ranch—even, incredibly on leased Crown land—gets payments from oil companies.

      As Alberta’s oilsands boomed, and became a much bigger factor in the economy than conventional oil and gas because of huge construction jobs and huge permanent jobs, Harper and oil executives were very slow and flatfooted in building out pipeline infrastructure to tidewater.

      And by the time they got serious, it was too late. Environmental groups in Canada and the U.S. had turned on pipelines and the fossil fuel industry in a big way, yes, partly funded by large U.S. foundations but also mostly funded by citizens worried about climate change.

      Harper and his ministers, like Jason Kenney and Joe Oliver, went ballistic as environment groups and Indigenous leaders started tying up pipeline projects through the assessment processes and the courts.

      Harper, typically, reacted by trying to gut environmental assessment legislation and by rushed and incomplete Indigenous consultation. He lost big time in court, and in the court of public opinion. 

      Much as they deny it now, then Harper ministers like Kenney would almost run and hide when Enbridge’s Northern Gateway pipeline—hugely controversial and potentially threatening many Vancouver-area Tory seats—was raised on Parliament Hill, Kenney going so far as to tell media that “no one pipeline is a national priority”.

      Harper was whupped by Trudeau. Trudeau killed the Northern Gateway project and approved what seemed an easier bet on TMX, which was mostly on an existing right of way, unlike NG. 

      At the same time, however, market access for Alberta oil was becoming a crisis. Barack Obama refused to sign off on another major pipeline, Keystone XL, and another, Line 3, became mired in red tape. 

      As premier, Rachel Notley proved to be a tough negotiator.

      Notley pushed hard on Bill C-69

      Trudeau, under huge pressure from environmentalists furious about Harper’s gutting of the EA law, then set about to redo the legislation, with Bill C-69, a new assessment process for large projects.

      This new legislation, which even Alberta NDP premier Rachel Notley came to oppose, became a lightning rod for Alberta industry and government anger at Ottawa.

      Ottawa’s political and mandarin class seemed both slow to gauge the anger in Alberta, even after Notley first raised concerns about the bill.

      With TransCanada giving up on the Energy East pipeline, partly because of never-ending changes to approval requirements, Alberta’s very Tory and very political industry associations started to light their hair on fire. 

      Bill C-69 spooked investors, because they came to believe new projects would never be approved.

      And spooked investors started telling major oil companies to quit building big new projects in the oilsands and elsewhere until a solution for market access was found.

      Kinder Morgan walked on TMX, telling Ottawa it was pulling out. Notley spent days and weeks convincing an extremely reluctant Ottawa that it had to buy out Kinder Morgan or face devastating consequences for Confederation.

      Frankly, even those in the Alberta government and industry who thought Ottawa would see the light on market access, Kinder Morgan’s TMX dilemma, and Bill C-69 were stunned at the resistance in Ottawa to their pleas.

      It took Notley threatening to walk on the climate change accord—bringing Ottawa’s climate change plan to an end—to get Ottawa to pay real attention. 

      So, Ottawa, which was sending  hundreds of millions in extra unemployment payments to out of work Albertans and a few billion in technology and rapid transit commitments, ponied up $4.5 billion to buy the existing TMX pipeline and take on the building of the new TMX twinned line.

      After huge lobbying, Ottawa made dozens and dozens of changes to Bill C-69, but left in place clauses that industry and Alberta officials still truly believe will cripple investor confidence. Some of this is posturing, some of this is accurate.

      And for Canadians, they kind went, well that was nice of us, Alberta should be happy. We bought them their stupid pipeline they’ve been complaining about and sent them some money.

      But they’re not happy. There’s no Energy East, no Northern Gateway, no Keystone (Trump unable to get it moving, either), no Line 3, and no TMX built yet. So no new market access to tidewater, either. 

      Unemployment is still achingly high. Major new Investment is still achingly low, although there are billions in new petrochemical plant construction, $40 billion in the LNG Canada project and pipeline in B.C. that helps Alberta, and many other significant investments. But not the big oilsands megaprojects that create tens of thousands of jobs and huge wealth.

      Kenney, now premier, aided and abetted by ultra-right-wing former Saskatchewan energy minister Tim McMillan, now head of the Canadian Association of Petroleum Producers, and wing-nut twitter fiends like Brett Wilson began fanning the light-your-hair-on-fire flames even higher.

      Alberta is doomed. Alberta may separate. Alberta is finished economically.

      None of them accepts that the major cause of Alberta’s dilemma is oil falling from over $100 to $50ish a barrel, less for Alberta’s oilsands oil.

      None of them accepts that Harper and his government, as even the late Harper deputy Jim Prentice pointed out, had been unable in their tenure to get a single pipeline to tidewater. 

      Kenney sat around the Harper cabinet table and approved the last change to the equalization formula, which gave Quebec 50 percent more dollars. He now demands an equalization referendum to tell those Ottawa Liberal bastards what a bad deal equalization is.

      When then premier Klein complained to Harper about the new formula, Harper told him to take off.

      Stephen Harper spurned former premier Ralph Klein's attempt to redo equalization.

      Province has outstanding public services

      Alberta still has a median family income of over $100,000 a year. Unemployment is 6 to 7 percent, not 20 percent, as you would think from some headlines. Terrible, but not worse than all Maritime provinces generally or Quebec usually, until recently. 

      Huge new projects in Edmonton, in petrochemicals in places like Grande Prairie and even in southern Alberta, are all keeping the province afloat in construction jobs and new investment, albeit at a dramatically lower level than the boom.

      But Albertans grew used to living very, very high on the hog. Provincial spending is 20 percent to 30 percent higher per capita than in B.C. Walk-in clinics have short wait times. Doctors in Edmonton advertise for new patients.

      Roads are paved to a farm with two cows. Every village has a rec centre with a swimming pool. We are talking another planet in terms of public infrastructure.

      Alberta’s Tories ran deficits even at $100 oil! Alberta is just addicted to spending more than they take in, blowing not only all the tax revenues that are taken in, but virtually all of the oil and gas revenues since the beginning of time.

      It’s a staggering example of spending excess that even Albertans, alone over coffee, will admit, looking at their shoes and shuffling around like the wayward son who’s spent all of their parents’ fortune on fast cars and gambling.

      But adjusting to a new economic reality is hard. Keep in mind, that even if oil returned to $70 a barrel and pipelines were built, there is little likelihood of a return to the greatest days of the economy. Investors remain nervous about 40-year timeline oilsands investments for which they will be pilloried by shareholders.

      Automation and artificial intelligence are hammering the job profile. Texas, with no Trudeau and no NDP and no market access issues, had a full oil industry recovery but left 30,000 to 40,000 jobs behind due to automation and cost cutting.

      So, every crisis demands an enemy, and there is no more convenient one than Rest of Canada, particularly Easterners and Quebecers and British Columbians. 

      Despite the fact that 58 percent of Canadians support the TMX pipeline, that it’s actually under construction now, and that Canadians don’t and never have hated Albertans. 

      Stoking these flames, though, is very convenient for Premier Kenney. A social conservative, he personally hates Trudeau and has yet to show he is keen for nation-building and statesmanship. However, his early reaction to the Trudeau reelection was more measured than anticipated and his letter to Trudeau shrewdly didn't zero in on his demand that the carbon tax be dumped, leaving that to page three, and instead emphasized on Bill C-69 and equalization.

      Unlike Premier Scott Moe next door in Saskatchewan, who mostly stood out of this week’s federal election, Kenney criss-crossed the country stumping for Andrew Scheer’s Tories, earning the never-ending animosity of Trudeau’s team.

      Now, Alberta faces a new Liberal minority with no cabinet ministers or even MPs in government, all defeated by the groundswell of anti-Trudeau anger.

      Trudeau and his Ottawa team are mystified that having factually delivered much more cash to Alberta in four years than Harper in nine-plus, buying a pipeline at considerable political expense, they face this level of hostility.

      And some Albertans are back to Twitter threatening separation.

      Bill C-69 does, in fact, rightly or wrongly, create a chill on investment in Alberta, as does the lack of a new pipeline, even though the bill does not apply to Keystone, TMX, Energy East, the $20-billion proposed Teck oilsands project, conventional oil and gas, or any other current major project contemplated.

      A greater chill, though, and even more complex, is the rapidly increasing worldwide angst developing over the effect of fossil fuel use on the climate, and increasing pressure on bankers and investors to pull out of oilsands investments.

      An investor recently noted he used to get a call from a shareholder once or twice a year opposing, then once or twice every six months, then it moved to a few a quarter, and now he gets calls every month. Big lenders like banks, big Wall Street Investors, and big insurance companies are all starting to sour on politically charged investments that have 40-year payback horizons.

      So, between a government they hate—not dislike, but hate—a slump in oil prices, real challenges attracting investment, and a sense that Quebec, Ontario and B.C. are happy to take redistributed Alberta tax money but not allow access for pipelines that enable the wealth, Albertans are frustrated and at wit’s end.

      There have been waves, over time, of separatist sentiment in Alberta, whipped by ever willing politicians. None has ever resulted in a single separatist elected to Ottawa, and only one ever elected even to the provincial legislature. The last separatist party disintegrated at its annual meeting.

      Talk-show host Danielle Smith took Trudeau's interruption of Scheer as an insult to Alberta.
      Danielle Smith

      Trudeau faces several foes

      Within hours of the election results being in, Harperite Tories were on TV declaring Alberta was now “at war” with Ottawa.

      Trudeau starting his speech while Scheer was speaking (when Scheer had started while Singh was speaking) was immediately pounced upon by failed former Alberta Wildrose leader and hotline maven Danielle Smith as somehow a personal insult to Albertans, even though Scheer is from Saskatchewan.

      Clearly, with no Liberals in Alberta or Saskatchewan, and a significant level of anger, the Trudeau government will have an almost insurmountable challenge. Trudeau will have Kenney bashing Ottawa, putting on a referendum on equalization or the constitution, and pushing at him in concert with other premiers.

      In reality, TMX probably will get built, and likely Keystone will go ahead, if started while Trump is in office, and that’s all Alberta needs for decades of market access.

      Trudeau needs to look hard at further amendments to C-69. He needs to find a way to address some of Alberta’s real concerns, but he has to realize, by now, that even with Alberta at $100 oil and full employment, they'll hate him. They just do. He represents everything Albertans don’t like—the silver spoon, the cappuccino-sucking, Eastern-born, Ottawa-dwelling, private-school snob appearance. And they just can’t stand it.

      Despite the fact that Alberta's current premier was born in Toronto, attended two private schools and has never had an actual private sector job, always political jobs. Kenney may not be loved at a personal level like Ralph Klein, but he’s loved domestically for taking the attack to the “enemies” of Alberta, environmentalists, and outsiders.

      When I was young, my parents moved to Saskatchewan to buy a newspaper, but insisted that for some summers I return to their family friends farm near Okotoks, then a long drive south from Calgary, now almost a suburb.

      This was the real Alberta, complex and nuanced. The farmer was tough as nails after coming back from the war determined to build a future for his family, fiscally conservative and socially progressive.

      He married an Irish war bride, and she made us all—their boys and my brother and I—take French lessons from her every day after hours of weeding, haying, feeding pigs, and fixing broken equipment. French, in Alberta!! 

      Farmers were, and are, worldly. They weren’t really Ottawa haters, but they were skeptical, practical, and felt—then and now—that Ottawa was oblivious to their needs. Which is why Alberta has had such a high degree of state intervention in the economy, despite outward appearances as far-right fiscal conservatives.

      Over time, Alberta has become much, much more polarized and much more emotional about the relationship with Canada. Fixing that relationship will be very, very difficult.

      Albertans’ world views, in rural areas particularly, are so dramatically different now than much of Canada’s that it is very hard to see them reconciled.

      Alberta’s economic prospects are changing for good, whether oil prices come back or not, whether pipelines are built or not.

      Getting a more diversified economy—which Alberta has failed at for generations—is a key to Alberta success and integration. But it isn’t easy, and isn’t short-term.

      It is very unlikely Trudeau will be the one to mend fences with Alberta. They’d rather wait him out, and hope for a Conservative government in a few years. 

      He can make real progress with an early offer for an equalization formula conference and taking a “second look” (really or third or fourth look) at Bill C-69. It would help.

      In the meantime, hundreds of thousands of Albertans will continue to make a living in forestry, agriculture, high tech, and other industries unrelated to the oil and gas business. And hundreds of thousands of energy workers will continue to make a good living, too. More than most Canadians.

      But they will almost all still be mad at Ottawa, Quebec, and B.C.

      Think of your angry uncle. Did anything every make him happy? Didn’t think so, but he’s still in the family, still coming to Thanksgiving dinner and still grumpy.

      That’s probably the best Canada and Alberta can hope for in the next few years.

      A Tory federal government might help placate Alberta for a while, but it frankly won’t be able to solve Alberta’s key problems, because Tories need votes in Toronto, Quebec, and B.C., as Harper discovered.

      And politicians find it easy to trade in a province with a median family income 25 percent or so higher than the rest of the country, with no sales tax, lower income and corporate taxes, and services Ontarians could only dream about.

      So, the battle will continue. Just like between Quebec and Canada, with ups and downs, a relationship to be managed, not fixed once and for all.

      And when you wake up tomorrow, Alberta will still be in Confederation, but the battles will be more intense than ever.

      Ottawa will have to give, and Alberta will have to adjust. As in any relationship.

      Eric Denhoff is a former deputy minister in B.C. and Alberta and former chief federal negotiator. He served under Liberal, NDP, Conservative, and Social Credit governments.