Alberta’s Conservative Catastrophe

How Alberta Is Misreading The Room

A few things have happened on the Alberta-Laurentia Relations front since the last time I covered it. Preston Manning wrote the worst op-ed to run in the Globe this decade, dethroning the anonymous Foreign Interference leaker garbage, Mark Carney is being attacked for making some jokes at Danielle Smith’s expense at a rally in Victoria and Conservatives online are mad, and WTI is trading around $60, which means right now they’re getting to a precarious state where Alberta’s budget could be in trouble soon.

I am open to being corrected here - Max Fawcett, feel free to roast me on Twitter if I’m wrong - but if I understand oil economics properly Alberta budgeted for $68/barrel WTI and a $17 differential to WCS. That differential is currently $9.50, which is good for the budget, even as WTI comes in under. If this holds as is, I’m pretty sure the damage is minimal, but if this slips further - either in the form of WTI falling to the mid or even low 50s, or the WCS differential widening again - Alberta might be in trouble. (Rare note of approval from me - forecasting a $17 differential is conservative in a good way and a smart fiscal move.)

The problem for the Alberta Exceptionalists is that they’ve come to believe that the large amount of corporate taxes the oil boom and the on fire Alberta economy of the late ‘00s and early ‘10s generated has essentially bought Alberta a reservoir of goodwill that means they’re entitled to niceties from the rest of the country. They see no problem with Danielle Smith attacking Justin Trudeau relentlessly, but Mark Carney dare make some jokes about her, and it’s unacceptable. It’s incumbent on the Liberals to take the threat of western separation seriously and lower the temperature, when it’s Danielle Smith and Preston Manning fanning the flames instead of telling the right in Alberta to sit down and shut up and stand with Canada.

To them, the economics of the last decade don’t matter, because what they did for the decade before means we should be grateful to Alberta and therefore do what they want as some sort of implicit or explicit repayment for the boom years. But the obligation is always on Central Canada to come to the table for Alberta’s needs, that we need to take seriously the unity crisis that Alberta will inflict, as opposed to putting ideological blinders aside for the good of the country. Alberta doesn’t think it owes the rest of the country anything anymore, because it’s paid its bill. The problem is, that’s not really true if Trump keeps destroying the global economy.

The oil price stuff at the top matters here for another reason - we’re not that far off the point at which the oil sector gets really hammered hard. If Trump keeps these tariffs in place for a while - which is not at all priced in by the markets right now - there will be more slack in the economy and oil will continue to go down. We’re looking at a situation where even without tariffs directly on the sector, the oil industry in Alberta is up to the hardest hit of any in the country. And if that happens Alberta will need us, and they’ll need a hell of a lot more than merely a pipeline that might not even pencil out at projected prices.

The issue for the Albertan Government, certainly, and the Albertan Conservative intellectual class, is that they might be right and it still doesn’t matter. Maybe Central Canada should be nicer to you. Maybe you do deserve that treatment for how you kept the books somewhat close to balanced in lean years elsewhere. Maybe. But we don’t. We have a situation where Canadians, far from hearing Alberta’s demands as some sort of fair ask for years of sacrifice, hear them as the whines of entitled brats.

Preston Manning’s op-ed was a classic of the genre, the idea that if Alberta doesn’t get what it wants in this election it’s somehow our problem being so far removed from how we feel as to be on Mars. The idea of being held to ransom by Alberta politicians and intellectuals - for whatever Manning still counts as one - is as ludicrous as it is offensive. There’s no constituency of “well, I was going to vote Liberal, but since Danielle Smith made her threats and Preston Manning wrote that op-ed I’m going to vote Conservative”, but there is a constituency who are now more energized, more enthused, and more willing to donate and volunteer because Danielle Smith tried to blackmail the rest of the country.

Is it a good thing that I am so ambivalent on the future of a Canadian province? No, it’s horrifying. It’s just not gonna change anytime soon. Alberta’s own decisions over the last decades have left it in a state where it has almost no goodwill with the rest of the country, and they’re acting like they are loved. Alberta’s conservative intelligencia have tragically misread the situation, because it hasn’t even crossed their minds to give a shit what the rest of us think. They are a landlocked province that needs tidewater access to boost their export capacity and they’ve spent basically no effort or energy building relationships.

The funny thing is, Alberta might be right. Maybe they are entitled to act this way. But I don’t give a fuck, and neither does the rest of the country. You need us, and you’re acting like it’s a fucking courtesy that you grace us with your presence. If Alberta wants to find a more cooperative relationship with the rest of Canada it won’t be by threatening and cajoling the rest of Canada, but by building goodwill organically and smartly. Do that well, you’ll be fine. Keep doing this? Enjoy hoping that Carney’s goodwill towards his home province is enough to get you some policy concessions, because Liberal voters certainly won’t be pushing the government to be nice to you.