It is 2018, and it seems like such a long time ago when oil prices collapsed (2014), we elected the NDP provincially (2015) and then the federal Liberals (2015). I think Albertans all deserve some praise for enduring these hardships over the last several years. Looking ahead, there is good news and there is bad news for 2018.
First, the good news. It appears the Alberta economy is now in a long-awaited recovery. The Conference Board of Canada recently predicted that Alberta’s 2017 growth rate will be 6.7 per cent, and ATB Financial is predicting 3.9 per cent. This would make the Alberta economy the fastest growing amongst the provinces. A lot of this has to do with some stability in oil prices, and the fact that oil is currently flirting with US$60 per barrel. In addition, one of the hottest plays in the energy sector is in the Duvernay Formation, which the National Energy Board estimates to hold more than three billion barrels of marketable crude, six billion barrels of natural gas liquids and more than 75 trillion cubic feet of natural gas. This is low-cost energy and it will bring much-needed investment to the Alberta economy.
So, there is good news on the economic front. However, there is bad news on the political front. Calgary just re-elected a socialist mayor, and we are stuck with a socialist premier and a socialist prime minister. The problem here is that the regimes of these three individuals are driven by the naive belief that the more the government spends, the better off we all will be. The ignored reality here is that you can never get anything for free. It is my opinion that the spending of Ms. Notley and Mr. Trudeau can only be called out of control. It is frightening that, even if the Alberta economy were to continue to boom, we would still be in a deficit position. I am curious to know: if the Alberta economy and the Canadian economy continue to do well, how will Ms. Notley and Mr. Trudeau justify their spending habits? They will no longer be able to say the economy requires stimulus. The year 2019 will be an election year both provincially and federally, so there is the possibility of a change of government and a return to more sane fiscal policy.
There is another bit of bad news on the eco-warrior front. Increased activity in the oilpatch will increase the attacks on Alberta oil. Here is an interesting observation: in late November, the Newfoundland government proudly announced the first oil has started to flow from the Hebron offshore platform. Once this announcement was made, there was no doom-and-gloom environmental predictions from the usual anti-oil groups. It seems to me that the environmentalists are not so much anti-oil as they are anti-Alberta oil.
So, 2018 brings good news and bad news, and the hope that a political regime shift will help to change the bad news.
Frank Atkins is a senior fellow at the Frontier Centre for Public Policy.