Two recent reports have escaped the attention of Alberta’s two largest newspapers. Both deserve to be noticed so we’ll look at them here.
The first generated stories in smaller newspapers and on television. It suggests a dangerous deterioration in the way Alberta is governed.
Marguerite Trussler, the provincial ethics commissioner, reported in mid-August on a complaint about the award of a contract to a family-owned Red Deer company for reusable masks for schools. A co-founder of the company donated $2,000 to Education Minister Adriana LaGrange’s 2019 election campaign. A company executive e-mailed the premier’s office in 2020 expressing concern that smaller local firms were being damaged by a government plan to provide millions of masks.
Shortly afterward, the Red Deer company received a government order for masks, at nearly twice the price charged by a much larger supplier, Old Navy. The Red Deer company received about 10% of the total business.
That led to a complaint to Trussler. She investigated. She reported there was “grounds for suspicion.” She reported LaGrange’s office had some involvement in the contract process. She also said two senior officials in the Provincial Operations Centre, which issued the contract, were under the impression there was pressure or direction from LaGrange’s office to buy from the company in her constituency.
But Trussler reported she could come to no firm conclusion because relevant witnesses — LaGrange, her chief of staff, and her deputy minister at the time — all said they could not remember relevant details.
Hazy memory about this case may be plausible, but it’s neither persuasive nor highly probable.
Political interference in what should be a business decision is hardly new, although usually reprehensible.
If senior officials stay out of a controversy by claiming a memory lapse, that is more disturbing. They are supposed to act for citizens, not for elected political leaders. If the provincial cabinet has imposed on senior managers to the point where they would rather keep their heads down and keep quiet about cronyism, that would be a large step toward a government not acting in the public interest.
The other report speaks to Alberta’s economic prospects.
Each year, the Alberta Energy Regulator (AER) publishes its 10-year outlook for the province’s energy industry.
The reports have unfortunately become less readable than they used to be. They require a fair bit of computer manipulation aided by guesswork. However, the main drift tells a simple story.
Alberta’s energy future looks more limited than in the past, increasingly concentrated on the oil sands.
The AER expects oil sands production to rise through the next several years. But initial established reserves of conventional oil have been more than 90% depleted. Natural gas production is expected to remain roughly stable through the next decade but will increasingly go to electricity production rather than export; so, gas revenues will more and more come from Albertans' electricity bills rather than from foreign pockets.
More importantly, the regulator expects only a partial recovery in capital investment. Anyone subscribing to the “please God, let there be one more boom” school of desperate optimism is likely to be disappointed. Capital investment in the oil sands and in conventional oil and gas in Alberta topped out at $60 billion in 2014; the regulator expects total spending of $19.8 billion this year, rising to $27.3 billion by 2030.
That’s not the result of misguided and often hysterical opposition to pipeline construction. It’s the result of economic forces and physical factors of production.
The subdued investment outlook is crucial. The Alberta economy thrived for decades on very high rates of exploration and construction. The government’s lead energy forecaster says those days are gone. There will be strong activity. But Alberta will have to find new ways to fill Calgary office towers and provide high-paying jobs for all its technical experts and former rig hands. That will lead in turn to having to find different ways of managing provincial finances.
Mark Lisac watches the political scene for Alberta Prime Times