Alberta's economy isn't as bad as what you might have heard.
by Ricardo Acuña
Don't let the provincial government's talk of bitumen bubbles, belt-tightening and revenue shortfalls fool you. Alberta's economy is not hurting. It is also not in a holding pattern. In fact, according to a report released last week by the Parkland Institute, we are in a growth pattern and heading full-speed into another bitumen-fuelled boom.
The numbers are actually pretty clear. Investment, production and total expenditures in Alberta's bituminous sands are all higher today than at any point in Alberta's history, including during the 2008 peak of our last bitumen boom. Energy economists and industry groups alike are projecting that the current levels of investment will at least double over the course of the next five years, bringing Alberta's bitumen production up to a level of some 3.7 million barrels per day by 2021 — a number more than double what even the most optimistic of folks were predicting just 15 years ago.
So there is no question we are on our way to another boom. The question is, do we want it?
While a small number of Albertans did very well during the out-of-control boom period, the majority of us faced higher living expenses, reduced access to public services and paycheques that seemed to cover less with every passing month, as well as environmental degradation.
Local businesses had to reduce hours of operation or shut down entirely because they could not find or afford staff. Crime, poverty, illegal drug use and homelessness sky-rocketed. High school completion and post-secondary participation rates plummeted. Economic inequality in the province reached unprecedented levels and Albertans found themselves working the longest hours in the country just to make ends meet.
Yes, a small number of Albertans did very well for themselves during the out-of-control boom period, but the majority of us faced higher living expenses, reduced access to public services and paycheques that seemed to cover less with every passing month. At the same time, we saw extreme growth in the pace of environmental degradation in the province, and workplace injuries and deaths also reached new levels.
What Albertans learned during our last boom was that there is a big difference between healthy economic growth in the public interest and an out-of-control resource rush. Even right-wing economists and former Conservative politicians have spoken out about the need for the government to step in and moderate the pace of bitumen development and economic expansion. The problem is that the provincial government does not appear to have learned the same lesson.
Even right-wing economists and former Conservative politicians have spoken out about the need for the government to step in and moderate the pace of bitumen development and economic expansion.
In fact, Redford's moves to streamline project approval — even though no project application has ever been rejected — and soften environmental regulations make her blind encouragement of out-of-control growth even worse than Stelmach's. Her government also continues to spend millions of dollars in advertisements and junkets to Washington to court even more industry to develop our bitumen and get it to more markets more quickly than ever before.
Alberta does not need another out-of-control oil boom. In fact, that's the last thing we need. Our infrastructure and public services are already stretched and being suffering from cutbacks, we already have the highest inequality in the country, and our land, air and water cannot even handle the current rates of production. We still haven't recovered from our last boom and our government is trying to drive us full-speed ahead into another one.
One of the primary responsibilities of government is to ensure that our resources and our economy are developed in a way that meet our interests over the long term. That responsibility requires actually governing, regulating, saying "no" once in a while and charging a fair price.
The Redford Conservatives, however, have abandoned this responsibility completely, and opted instead to give largely foreign-owned oil corporations full control over how and when our resources are developed. The result, just like last time, will be another out-of-control boom that yields huge profits for huge corporations and leaves nothing good behind for the rest of us: the ones for whom the government is supposed to be working. Albertans deserve better.
About Ricardo Acuña
Ricardo Acuña is Executive Director of the Parkland Institute, a non-partisan public policy research institute housed at the University of Alberta.
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