‘Ottawa’ Rachel Notley’s Annus Horribilis: The One-Year Anniversary of Alberta’s NDP Government
Rachel Notley’s one-year anniversary since leading the NDP to victory in Alberta came and went without much notice this week, the occasion stolen by the catastrophic fire raging in the oilsands.
True to the NDP base, inside and outside the province, Notley came from nowhere to rise to power May 5, 2015, with an agenda packed with promises to re-engineer Alberta’s economy away from its dependence on oil, boost green energy, toughen climate change policy, dial down pipeline lobbying, and revamp energy regulation. She even imposed a hefty carbon tax for which she received no mandate. Industry feared for its future.
Then reality took the wheel.
The past year has been rough and unlucky for Notley, an annus horribilis with its own demands. Oil prices tanked faster, lower and for longer than anyone anticipated, ravaging government budgets, killing jobs and scaring investment. Diversification remains a long game. Climate change policy is progressing slowly, marred by many difficulties, such as who will pay for shutting down coal power plants and build wind energy. Pipelines have become more urgent because Alberta needs new customers and higher oil prices.
Notley fell from the frying pan into the fire with this week’s disaster. It’s further harming Alberta’s biggest source of wealth, the oilsands. With a large portion of production suspended, oilsands hub Fort McMurray partially destroyed, and uncertainty about how long it will take to rebuild, the next year will be consumed by restoring infrastructure and supporting industry growth. If government finances were hurting from the oil downturn, imagine what they’ll look like with so much production offline, so many more people out of work, so much assistance required.
The anti-oil agenda was derailed early in her mandate. Her only significant initiative was to raise corporate taxes by 20 per cent last summer, which hurt oil companies.
Then a royalty review to ensure the government collected its fair share of oilpatch revenue, while causing uncertainty over much of last year, ended up leaving royalties largely unchanged. The review did highlight that Alberta’s enemy isn’t its oilpatch, but its loss of competitiveness versus the United States, which has grown into such a formidable producer it is stealing away Alberta’s customers.
Rich Kruger, CEO of Imperial Oil Ltd., Exxon Mobil Corp.’s Canadian affiliate, praised Notley’s handling of the review, such as appointing experts to lead it and “their willingness to listen and to understand.”
“When the results came out … there were tweaks to modernize it, but not a lot of material changes,” Kruger said. “Now it takes away uncertainty.”
Climate change policy, announced last November just ahead of the Paris summit, initially fomented industry division over a cap on greenhouse gas emissions recommended by a group of companies and environmental organizations. The whole industry is now involved in determining how it will be divided up and implemented. Steve Laut, president of Canadian Natural Resources Ltd., said the sector is working well with Notley’s government.
Notley knows Albertans will judge her based on whether she gets a pipeline built.
“The industry and the government have come a long way,” Laut said. “We understand each other a lot better and there is a lot collaboration. We both want the same thing: to create jobs for Alberta.”
With the big policy initiatives, like royalties and climate policy, off the agenda, the two sides are working together to gain market access, Laut said.
Notley didn’t care much for proposed bitumen pipelines a year ago. She was opposed to Enbridge Inc.’s Northern Gateway and didn’t want to lobby for TransCanada Corp.’s Keystone XL pipeline in the U.S.
She is now a champion. “We can’t continue to support Canada’s economy, unless Canada supports us,” she said last month. “That means one thing: building a modern and carefully regulated pipeline to tidewater,” she said. “I can promise you this: I won’t let up. We must get to ‘yes’ on a pipeline.”
Notley knows Albertans will judge her based on whether she gets a pipeline built. Anything short of that will be seen as too much pain for no gain.
Her pipeline stand led to a rift with a faction of the federal NDP that supports the Leap Manifesto, which calls for no more pipelines and a quick transition away from fossil fuels.
“These ideas will never form any part of our policy,” Notley said in response. “They are naive, they are ill-informed, and they are tone-deaf.”
Truth is they are pretty close to Notley’s aspirations before she formed government.
To her credit, she consulted generously and she moderated. As the leader of Alberta in a time of crisis, she did what had to be done and did it with maturity and competence. Give or take, her energy priorities today aren’t much different from those the Tories would have had.