News   GLOBAL  |  Apr 02, 2020
A Message to Our Readers
 9.8K     0 
News   GLOBAL  |  Apr 01, 2020
EarthCam Time-Lapse Documents Rafael Viñoly-Designed New Stanford Hospital Construction
 41K     0 
News   GLOBAL  |  Apr 01, 2020
Resort Town
 5.6K     0 

I'm doing a research paper on the impact of Covid 19 on the regional food system (of course as part of the global food system), and I read some interesting proposals about more government investment in our declining rural towns (this phenomenon is happening most markedly in Alberta, Saskatchewan, and the Maritimes). This would be done in order to strengthen the agricultural sector in partially reformatting to create more resilient local, regional, and national food systems in the inevitable event of future perturbations in the global supply chain.

Who knows, maybe someone will listen.
 
For the most part *proposal x* in *area x* due to COVID supported by *group x* which has always supported *proposal x* should be viewed with extreme skepticism. Also, plenty of proposals are thrown around which would be blatantly in violation of trade agreements. In addition, proposals which use government funds to subsidize the consumption patterns of the upper middle and upper classes have huge equity issues.
 
globalnews.ca

Cenovus to buy Husky Energy for $3.8B in shares; company will remain in Alberta | Globalnews.ca

The merged Cenovus Energy Inc. will remain headquartered in Alberta.
globalnews.ca globalnews.ca
This is not good news for jobs in either company. There is also a negative impact on suppliers when something of this magnitude happens.

Most business analysts are expecting more M&A activity in the oil and gas industry which will further kill jobs, reduce tax revenues and empty out more office space in the CBD. For sure, the bleeding has not stopped. We are going to need an awful lot of venture capital investment to make up for these losses.
 
Wasn't Census planning to move to the US anyways? This will keep their assets Canadian-owned at least?
 
Oh Jesus... so this is a real catastrophe then. Wowzers.
 
The Husky/Cenovus merger really lays bare the collapsing strategy that made Canada's oil and gas sector so advantageous: inefficiency. Calgary as the primary benefactor, duplicate head offices of a bunch of mid/large-sized firms works super great when times are good - high commodity prices hide inefficiencies. You don't get one engineer you get two (or many) because the profits are there for everyone to have their slice of the pie regardless, even if they are high cost.

In one sense, Alberta's entire boom is driven by capital being so inefficient here, that the spill over for decades benefitted labour (more jobs, higher pay). Many high-paying jobs are better than fewer high-paying jobs and the tide appeared to be lifting all boats, largely without employing the strategy that poorer places do to achieve the same outcomes (higher progressive taxation, diversification & sales taxes to fund programs that help lift all boats).

I think this is what Alberta is going to painfully have to come to terms with (and our political class hasn't/can't/refuses to come to terms with it). Once you run out of Ottawas, Trudeaus, Notleys, pipelines, Chinas and other bogeymen to blame you still haven't fixed this equation because it's no longer true:
  • energy sector growth = jobs (like the good ol' days) + royalties (like the good ol' days)
The same equation broke decades ago regarding the North American manufacturing sector and many other sectors throughout history as the global economy evolves. Sure there's always stuff you could/should do based on what the sector's pressures are: Ottawa building a pipeline to reduce a differential, bail out a company or two, clean up some orphan wells - all this can help. But that's more of strategy to stop bleeding - doesn't solve broken municipal/provincial finances, doesn't hire back tens of thousands of jobs no longer needed under any future scenario with a big, small or medium oil and gas sector. Will make our GDP numbers great - but won't employ many people.

Without relying on simply getting lucky - one last boom, to swear we won't waste it, but we will - what should we do that we actually have control over as a city, province or individual?
  • Nurturing growth in tech and alternative industries to diversify individual and government incomes. Lean into it with ecosystem investments in universities & incubators.
  • Localize economic spending as much as possible (I don't know how to do this, but turns out rich guys buying houses in Palm Springs doesn't do much for Alberta's economy except WestJet)
  • Stabilize local and provincial finances (spending changes, but also PST and income tax changes so it's not a catastrophe. Don't let the tears of the rich guys with Palm Springs houses get you down - we wouldn't be in this mess if we taxed these guys appropriately all along.)
  • Create a more welcoming and positive image for outsiders to live and invest here (impossible with current regime, but it's good to have a stretch goal)
Will Alberta be as rich as we were ? Probably not. But we at least won't be as insane and irresponsible. Let's start building a new equation that works.
 
You're very much on the button about the over spending and inefficiency from the energy industry over the years. These least 5 years have been a downer, but also something that was going to happen at some point. Many of the huge layoff numbers involved those inefficiencies and what we've seen was probably the classic example of the oft used buzzword, 'right sizing'.

What I'd like to see is the energy industry make enough of a comeback that they can at least sustain jobs, and carry on with some successes. Another boom isn't going to help Calgary, other than to delay the inevitable, so if the energy industry can more or less catch enough of a break to at least be steady, and reasonably prosperous, I'm good with that. It needs to be prosperous enough to keep away from more downtowns, and layoffs and help the CBD stay decently vibrant, but also sedate enough that oil companies don't go crazy with the crazy wages and the poaching of people from other industries, and leaving a high enough office vacancy rate that non energy companies can take advantage.
 
CBBarnett said:
Without relying on simply getting lucky - one last boom, to swear we won't waste it, but we will - what should we do that we actually have control over as a city, province or individual?
  • Nurturing growth in tech and alternative industries to diversify individual and government incomes. Lean into it with ecosystem investments in universities & incubators.
  • Localize economic spending as much as possible (I don't know how to do this, but turns out rich guys buying houses in Palm Springs doesn't do much for Alberta's economy except WestJet)
  • Stabilize local and provincial finances (spending changes, but also PST and income tax changes so it's not a catastrophe. Don't let the tears of the rich guys with Palm Springs houses get you down - we wouldn't be in this mess if we taxed these guys appropriately all along.)
  • Create a more welcoming and positive image for outsiders to live and invest here (impossible with current regime, but it's good to have a stretch goal)
Will Alberta be as rich as we were ? Probably not. But we at least won't be as insane and irresponsible. Let's start building a new equation that works.
Click to expand...

I definitely agree that a lot of the wealth generated in the boom years was basically wasted on decisions that were designed primarily to keep the Conservatives in power for 40+ years (i.e. low taxes, high levels of public services, endless supply of cheap suburban housing, cheap gas and energy costs, etc.). Basically, if you're able to defer tough decisions indefinitely, voters will keep putting you back in charge.

However, we should also not lose sight of the fact that there were a lot of investments made with the oil wealth that we can use to our advantage today:
  • A wonderful system of provincial parks
  • Two of the top research universities in Canada. The University of Calgary was only founded in 1966, meaning that it has had an unprecedented rise to the top. The closest thing is Waterloo which is 10 years older and lacks a med school, law school, etc. Every other top research university in Canada was founded prior to the 1910s.
  • The most used LRT system in North American (maybe excluding Mexico)
  • A huge stock of centrally-located, well-serviced office space in the central business district. Maybe more than any city of comparable size.
  • Two million+ person cities within 3 hours of each other with young and highly educated populations
  • World class hospitals and public health system
  • Two major international airports
I could go on. The point is that we actually did "save" a lot of the wealth that was generated during the boom years. It wasn't in a Norwegian-style SWF. We invested in social and physical infrastructure that will make this city/province far more competitive over other places that don't have this infrastructure. It will help us accomplish those things that @CBBarnett mentions above. This is to say nothing of all the wealth generated by the boom years that are still held by private citizens in pensions, savings accounts etc. which allows them to maintain a certain level of consumer spending. Albertans in general still continue to be wealthy compared to the rest of Canada which has ramifications for a PST.
 
I can find little to quibble about from everyone on here.

As for a PST, I can say with confidence that it is an active issue - we will most likely have a referendum on it, and infrastructure behind the scenes is being built. The question of when - before or concurrent with the next provincial election remains. I have to imagine it will be before.
 
Silence&Motion said:
I definitely agree that a lot of the wealth generated in the boom years was basically wasted on decisions that were designed primarily to keep the Conservatives in power for 40+ years (i.e. low taxes, high levels of public services, endless supply of cheap suburban housing, cheap gas and energy costs, etc.). Basically, if you're able to defer tough decisions indefinitely, voters will keep putting you back in charge.

However, we should also not lose sight of the fact that there were a lot of investments made with the oil wealth that we can use to our advantage today:
  • A wonderful system of provincial parks
  • Two of the top research universities in Canada. The University of Calgary was only founded in 1966, meaning that it has had an unprecedented rise to the top. The closest thing is Waterloo which is 10 years older and lacks a med school, law school, etc. Every other top research university in Canada was founded prior to the 1910s.
  • The most used LRT system in North American (maybe excluding Mexico)
  • A huge stock of centrally-located, well-serviced office space in the central business district. Maybe more than any city of comparable size.
  • Two million+ person cities within 3 hours of each other with young and highly educated populations
  • World class hospitals and public health system
  • Two major international airports
I could go on. The point is that we actually did "save" a lot of the wealth that was generated during the boom years. It wasn't in a Norwegian-style SWF. We invested in social and physical infrastructure that will make this city/province far more competitive over other places that don't have this infrastructure. It will help us accomplish those things that @CBBarnett mentions above. This is to say nothing of all the wealth generated by the boom years that are still held by private citizens in pensions, savings accounts etc. which allows them to maintain a certain level of consumer spending. Albertans in general still continue to be wealthy compared to the rest of Canada which has ramifications for a PST.
Click to expand...
Great points and very true. I like to complain but we shouldn't lose sight on some serious assets we can put to work if we are smart about it.
 
darwink said:
I can find little to quibble about from everyone on here.

As for a PST, I can say with confidence that it is an active issue - we will most likely have a referendum on it, and infrastructure behind the scenes is being built. The question of when - before or concurrent with the next provincial election remains. I have to imagine it will be before.
Click to expand...
On the ballot of the 2021 municipal elections?
 
You must log in or register to post here.

Back
Top