Tuesday, December 01, 2020

The Incompetence of Jason Kenney

Jason Kenney is incompetent. He is economically incompetent and now he is demonstrating incompetence in his management of a pandemic. He is arrogant and lacks an understanding of leadership.

His economic strategy is naive, simple, and wrong. He throws money at large corporations in the expectation that they will use the extra cash to create jobs, Forty years of analysis of this strategy shows that what corporations do is: (a) pay dividends to shareholders; (b) increase executive compensation; (c) use the extra cash to invest in technology that will increase outputs with fewer people, and (d) relocate to lower-cost jurisdictions. Before the pandemic, the economic strategy cost some 50,000 jobs. Companies moved to the US and investment shrank. 

Kenney "gave" profitable corporations a $4.5 billion tax break. He invested directly $1.5 billion in Keystone XL and, in addition, use taxpayer money to underwrite an additional $6 billion. It now looks certain that the pipelines will not be built but we will still end up paying for it.

Then there is the $1.5 billion that these fiscal conservatives, so concerned about controlling government spending, "lost" or at least cannot account for according to the Auditor General. 

In a dramatic move - about the first thing he did - was to significantly reduce government revenue. He abolished the Alberta Carbon tax, which netted some $1.4 billion annually.  The tax was soon replaced by a federal tax, as we all knew it would be. Kenney's claim that the court challenges he and his fellow Premier's were mounting would soon put a stop to this do not look to be going anywhere. We still pay but someone in Ottawa decides where the money goes.

Then there are the various boondoggle activities - the $30 million War Room which is about as useful as a bucket of wet snow. The seemingly endless and fruitless inquiry into foreign influences on our energy strategy. Endless Task Forces and Special Inquiries. $4 million to the NHL, a few million here and there.

His advisors happily travel to the US and Europe to attract investors and spend our money on four-star hotels and expensive meals. But there is little to show for it.

He has also made life more expensive for everyone. Higher car insurance, higher local taxes, higher costs of studying, higher loan costs. He is also making rural municipalities eat the unpaid taxes from the oil and gas companies who have not paid for some time. 

His education strategy is another sign of his incompetence. In his drive to "balance the books" (for no real reason that makes sense to any economist), he cuts K-12 budgets and higher education and yet seeks to reskill and upskill the Alberta workforce. As oil and gas decline (they are yet to return to 2014 levels of performance) and the energy transition accelerates, access to skills training and learning is being reduced and made more inaccessible to certain groups due to cost. 

And then there is his handling of the pandemic.

At first, we did well. We had control of the situation (except in Seniors centres and homes) but now - well, we can see. Alberta and Quebec lead Canada in C-19 cases - Alberta will soon surpass Quebec in both cases per capita and our R number. 

He refuses to mandate mask-wearing in rural Alberta, despite the evidence that key rural locations have higher rates of infection than Edmonton and Calgary, showing that he cannot read a data-table or listen to expert advice.

His deal with Restaurants Canada to keep restaurants open with limited seating, his deal with religious groups to permit worship with restricted but large numbers, his willingness to turn a blind eye to Ant-Maskers and Lock-Down protestors, and his unwillingness to accept advice from public health experts all point to a degree of incompetence. He was missing in action for a number of days - how he's back but doing little to stop the spread or flatten the curve.

His defense for his actions - his peculiar understanding of the Charter of Human Rights - also shows that he is not competent to interpret the law.

His tirades against the Government of Canada - now providing Alberta with its second most significant source of revenue and supporting hundreds of thousands of Albertans directly - also suggest incompetence. He claims that the transfer payment system and calculations are hurting Albertan's but did nothing about this twice when he and Stephen Harper introduced the current model. He fails to acknowledge the strong support Trudeau has provided for oil and gas - fixing the legally flawed processes introduced by Harper for environmental approvals and buying a pipeline (now under construction) to get Alberta oil to tidewater and supporting Alberta's innovation infrastructure. 

It is time for some leadership in Alberta. We will not get it from Jason Kenney.

Monday, August 17, 2020

Time for Teacher Leadership



Based on reports from the annual assembly of The Alberta Teachers’ Association held August 13-14, it is apparent that the senior leadership believes that a policy resolution calling for a vote on non- confidence in the Minister of Education could be counter-productive to building an effective working relationship with the government. Rather than simply refusing to acknowledge the long-standing charade of the minister’s so-called consultation with the profession,  ATA officials  are still seeking to have “conversations” and to build a “relationship” with the Minister.


This is the same Minister who did not consult with the ATA when the teachers’ pension funds were to be moved from a dedicated fund manager to AIMCo. The same Minister who rolled back curriculum change without consultation and dismissed the hard work of hundreds of teachers and professors of education who worked to build an innovative new approach to teaching and learning in this province. This is the same Minister whose government cut education budgets that led to school boards scrambling to maintain the positions of 20,000 employees – essential workers who were in the front-lines of supporting Alberta’s students as they faced the uncertainty of the pandemic. The same Minister who just announced a right wing ideologically driven team of advisors to oversee curriculum development, all without consultation with the ATA. Adriana LaGrange is not interested in a genuine and meaningful engagement with the teaching profession, any more than her government is committed to working with Alberta doctors.


To be clear, the proposed vote of non-confidence in the minister was not about individuals or personalities. For the past two decades across Canada, policy analysts have lamented the fact key education decisions flow directly from the party operatives within premiers’ offices, often driven by short-term election cycles and ‘dog-whistle’ messaging on social media. We are familiar with the litany this current government has attempted to mobilize:  class size really doesn’t matter, kids can’t do math, the environmental extremists are taking over our schools. Yet, despite enduring all of this, the ATA is banking on being able to build a strong collaborative relationship with the Minister – something they have not really had since Dave Hancock was Minister twelve years ago. Since that time there have been occasional polite meetings with ministers and the odd press joint conference – none of which could be considered meaningful partnerships. The results for Alberta teachers and students have not been good. Despite being consistently ranked in the top 3-5 jurisdictions in the world for the past 20 years, the UCP has chosen to diminish trust in Alberta’s public education system and marginalize the profession while attempting to activate its base with the red-meat sloganeering advancing parent choice and privatization – all policies that have proven to be abject failures elsewhere. 


Now the political leadership of the ATA faces an existential crisis. These emerged at the recent assembly: huge financial challenges and legacy issues such as the cost-overruns on an ill-conceived expansion to its building and growing concerns about the impacts of current programs in terms of actually addressing the material concerns of classroom teachers.  Some teachers want more decisive action, some want a moderate approach and many others are disengaged and powerless - frustrated with no pay increases in the past five years and anxious about the prospect of wage roll-backs. Meanwhile, the ATA has leadership issues – a popular and obviously very competent president, yet the organization continues to flounder with no clear sense of long-term political direction or priorities.


One of the most compelling quotes I fall back on in my strategic foresight consulting and teaching is Margaret Wheatley’s invocation, that “there is nothing more powerful than a community discovering what it cares about.” The same is true for organizations.


If the recent annual assembly of the ATA is any indication, its members need decisive leadership now more than any other time in recent history to decide what it really cares about. Not only are teachers about to be asked to work in unsafe conditions, putting themselves, children and their communities at risk. More importantly in the long-term, they are being asked to go back in time in terms of what they teach and how they teach. Coupled with this are the unfounded assertions that Alberta students, already tested more than any others in the country, need more testing.


Part of the concern of the political leadership of the provincial ATA is that a strike or refusal to work under high risk health and safety conditions would feed into the UCP agenda. The thinking here is that the UCP wants to break unions, break the public trust in unions and professions and to demonstrate that public services like education and health “don’t work” in order to advance their privatization agenda. It’s a risk of course – but the government’s ill-conceived return to school plans are a symptom of a much deeper problem. Individual teachers already have protection under Section 31 of Alberta’s Occupational Health and Safety Act that protects a worker’s right to refuse unsafe work. This law states that workers can refuse work if they believe that worksite conditions are dangerous or that the work constitutes a danger to the worker’s health and safety (or to the health and safety of another worker or person).


There is no question that Adriana LaGrange’s back to school plan (just days away) is a threat to public health, as evidence from around the world makes clear. The real leadership opportunity is not to only to insist on reconsideration of the pandemic planning and to advise its members to refuse to work as is their legal right already. Instead the strategic leadership opportunity for the provincial leaders of the ATA is to work with local presidents and their school representatives to develop a sustained political action plan that stands up for what Alberta students deserve – a quality education for all. The risk is that short-term concessions on the return to school plan offered by this minister and the premier will serve only serve as a distraction from the long-standing issues facing the profession, many of which are shared across the public sector. 


Stop trying to snuggle up to the UCP government. Stand up for public education. Confront them. It’s time.



Tuesday, July 21, 2020

Is Alberta Becoming More Fascist?

The term “fascist” brings to mind Nazi’s, but that was just one manifestation of this political ideology. Mussolini was a fascist and supported Nazi’s, but his version of fascism was different from Hitlers. Sir Oswald Mosley was a British fascist whose version of fascism was different from both Mussolini and Hitlers. So what is fascism?


Fascism is a political ideology and form of government which has been seen to have several key components: (a) opposition to Marxism and socialism; (b) opposition to democracy and a preference for autocracy; (c) a commitment to conservative economic programs which favour the wealthy over the poor and a reduction in the rights of labour and the power of unions; (d) a strong sense of nationalism and a rejection of inter-nationalism; (e) mixture of church and state and the blurring of the separation of these two institutions, which church meaning Christian church; (f) education as being in the service of the state and the development of character; (g) scapegoating – blaming certain groups for the failures of the system; (h) populism coupled with an anti-intellectualism; (h) sexism and misogyny; (i) a disdain of human rights, unless they relate to the wealthy and privileged; and (j) fraudulent election practices to secure and retain power.


We can look at Alberta in the light of these ten features and see that:


1.    The current party in power is subject to investigation over its creation and election practices, with fraud being the key charge. The RCMP continue to investigate and fines have been levied.

2.    The party in power is clearly opposed to any form of socialism or liberalism – just listen to speeches and read statements about their view of “liberals” and “the NDP” and socialist regimes.

3.    There is a clear and explicit commitment to demonstrable failing conservative economic policies – trickle down economics (tax cuts), wage reductions for those on the lowest wages; denuding and reducing the public service; privatization of education and health.

4.    Erosion of democracy has already occurred in Acts of the legislature which give hitherto exceptional powers to government Minsters to legislate and regulate without reference to the legislature.

5.    The anti-intellectualism is demonstrated by cuts made to university and college budgets and decisions made about the innovation eco-system in Alberta and the lack of attention to science in policies related to re-opening Alberta in the midst of a pandemic or to the re-opening of schools.

6.    The Alberta nationalism is evident in many statements made by the Premier about Alberta separatism, an Alberta pension, an Alberta police force and the need for Alberta to have a greater role in confederation. The hypocrisy of comments made by the Premier about federal transfer payments which he approved when a member of the federal cabinet is further evidence of the “new” Alberta nationalism he is courting.

7.    The curriculum review, changes to the way schools are funded and the focus from K-PhD on “job ready” skills tells us that education is an instrument of the state and is intended to serve the economy.

8.    The recent changes in labour laws coupled with the treatment of doctors and teachers shows us the disdain the UCP has for organized labour and its preference for “divide and rule” and rule by dictat. The inability to negotiate either contracts of employment in good faith or pension management are further examples of their conservative ideology.

9.    Scapegoating began on day one of the UCP government with the establishment of the “war room” and the pointless pursuit of the enemies of oil and gas through an inquiry into the funding of opposition to the sector (based on the disproven conspiracy theories of a blogger).

10.  The introduction of the choice in education bill shows the beginning of the conflation of church and state, with its intention to enable the creation of more charter schools, many of which will be religious.


So when some say that Alberta is headed down the fascist road they are not wrong. They are not suggesting that Kenney is behaving like Hitler, Mussolini or Sir Oswald Mosley. They are making the simple observation that, when we look at the ten key components of fascism, they are evident in the words and actions of our current Alberta government.

Sunday, May 31, 2020

The End of Higher Education in Alberta as we Know It


As a result of deliberate and specific cuts made by the Government of Alberta, 3,500 jobs have already been cut from Alberta college and university sector in 2019 and 2020, with more to come. These job losses have also led to program closures – Media Studies and Professional Communication Diploma and Acting and Live Entertainment majors within the Bachelor of Applied Arts in Film, Theatre and Live Entertainment at Red Deer College; nursing and rehabilitation programs at the University of Alberta’s Augustana campus in Camrose; carpentry at Keyano just to name a few.


But this is the beginning of the beginning, not the beginning of the end. The government has issued a call for proposals for the transformation of Alberta’s higher education system. The RFP was issued on March 6th 2020 and submissions closed on April 6th.  It calls for:


“… improved outcomes for learners and all Albertan’s, and shape a more affordable and accessible system that is reflective of Alberta’s future economic demands. Through this review and strategy, the Province is looking to respond to recommendations made in the MacKinnon Panel Report on Alberta’s Finances (specifically, Recommendations 7, 8, 9 and 20) as well as aligning with the Government of Alberta Strategic Plan and Fiscal Plan and the Advanced Education Business Plan 2020-2023.


Post-secondary education and training are critical to building an Alberta that is open for business and keeps pace with changing industry needs, with talent and a strong economy that is competitive on the world stage. Education and skill development feeds Alberta’s talent pipeline of entrepreneurs, educators, tradespeople, highly qualified personnel, innovators, job creators and community leaders.”


The RFP then outlines the kinds of “transformations” it seeks to create:


·      Transforming our workforce – to ensure students have the skills and education to solve problems and be resilient in response to emerging demands and opportunities;

·      Transforming learner experience – to create a system, including pathways to learning and skills development, that is more open, accessible and affordable throughout the lifetimes of Alberta’s diverse learners;

·      Transforming funding – to strengthen predictability, sustainability and accountability, empowering institutions to become less reliant on unstable levels of public funding and improving outcomes-based funding;

·      Transforming government engagement – with learners, industry, entrepreneurs and innovators and other key stakeholders, enabling co-creation of strategies and implementation plans going forward;

·      Transforming governance, collaboration, culture and capabilities – in the Ministry and across Post-Secondary System leadership as a condition for success.


Put simply: what the Government is seeking is for colleges and universities to “produce” work-ready workers for the Alberta economy for less money than is currently the case and with less structure and complexity. It is also seeking to decrease public funding and increase student fees and private investment.


Even though the world changed after March 6th, the government is still pursuing the agenda is outlined in October 2019 and reaffirmed in the February 2020 budget and outlined in this RFP in March. For example, while Ontario has postponed the introduction of performance-based funding for higher education as a result of COVID-19, Alberta insists it will implement this scheme in full, even though it makes little sense in the face of a global recession. While other parts of the country are investing in colleges and universities as a way of kick-starting upskilling and reskilling, Alberta continues to cut and claw back funds. You may think the world has changed; Jason Kenney is even more determined to implement his “cunning plan”.


There are a variety of speculations:


·      Merging NAIT and SAIT into a single Alberta Polytechnic, as Saskatchewan did many years ago.

·      Merging all the Colleges into a single entity – The Colleges of Alberta – based on the recent merger of all of the New Zealand polytechnics (colleges) into a single entity – something that also happened in New South Wales.

·      Privatizing Athabasca University, which is already funded at less than 35% of its operating budget by Alberta.

·      Cancelling the transition of both Red Deer and Grande Prairie Colleges into universities, something that has been in the works for many years.

·      Creating two Universities (North based around the UofA and South based around the UofC) so as to simplify governance – perhaps with a single governing body.


But we don’t know.


What is interesting is that there is almost no public debate and conversation about this. Such a major change being “plotted” yet no real consultation or engagement.

Wednesday, May 20, 2020

Groundhog Day for the Pioneers of Online Learning

In 1993 I led a team that created the world’s first fully online MBA at Athabasca University. We launched in 1994 at the same time Jeff Bezos launched Amazon and it was hugely successful. What we did not do was try to replicate what professors did in classrooms and “move” teaching online. We chose the path of creating a community of inquiry  for our learners focused on engaged and involved learning.

We were ahead of our time. We partnered with our students on design and development. We learned that content is less important than understanding and authentic learning – students have content and can find it, what they seek is understanding of what it means and how to apply meaning to the real world. We learned that learning from each other – what we now refer to as peer to peer learning – is as important as a presentation from faculty. We learned that working anytime, anywhere rather than having to log into a real-time class was seen as more desirable: we had no lectures or zoom-like activities.

We challenged our students to work in groups to solve cases, including cases from their own workplaces. We challenged our students to solve “live” challenges – using information supplied by corporations or non-profit organizations eager for the “free” consulting advice our students would provide. We used project-based learning to engage students in applying their knowledge, skills and understanding to problems in their place of work.

Now they benefit from virtual co-operatives powered by artificial intelligence and supported by quality teachers able to coach for improved performance. They co-create new knowledge through small teams challenged to solve components of wicked problems. They work in partnership with others on issues that matter: mental health in the workplace, food security, community safety, loneliness.

Around the world in the period since 1994 some remarkable innovations in online learning have occurred, which show themselves in high levels of student engagement and outstanding courses which push students to connect to communities around the world.

Yet here we are in 2020 hearing that faculty are struggling to “move their courses from the classroom online” and that students are experiencing everything from outstanding learning to simply being given a list of readings and dates for handing in assignments. As Professor Martin Weller  from the Open University (UK) has observed, it is like groundhog day for those of us who pioneered online learning. The concerns raised in 1994-1999 are being repeated again, as if no research and evaluation or innovations had occurred since.

What the current move to online shows us how little many faculty members know about how adults learn, about the nature of instructional design, about the power of collaboration and student engaged learning. It is exposing the myth that a Masters of PhD degree is a sound preparation for teaching in a college or university. It is exposing the consequences of not requiring all who teach in higher education to possess a teaching qualification, however minimal.

It is also exposing the soft underbelly of “academic freedom” which, for students, means the right of faculty to teach what they want to teach in the way they want to teach it on the platform they prefer, no matter where their students are and what access to technology they possess. The lack of pedagogical leadership aimed at ensuring that students in a program all use the same platform for learning, share an understanding of equitable access to learning resources, materials and activity and have a quality experience is noticeable.

Faculty especially struggle with re-imagining assessment – moving from mid-term and end of term examinations to more authentic and engaged forms of assessment based on knowledge, capabilities and competencies. Concerns over plagiarism and cheating – as if these were new concerns  (the poet Milton was rusticated for cheating in an exam at Cambridge in 1626 as was the poet John Betjeman in 1928) – inhibit thinking about creative and challenging assessment, peer assessment and project-based evaluations.

We will soon hear voices that “we tried online learning and it didn’t work”. One article compared student reaction to face-to-face lectures versus the same lectures streamed online and showed students prefer the real thing. Who wouldn’t. But streaming a lecture is about as far away from the effective design of online learning as one can imagine. At least, that is what we realized as a team in 1994.

Thursday, April 23, 2020

Can Jason Kenney Become the Premier Alberta Now Needs?

As Premier Kenney surveys the province at the end of his first year as Premier, he must be wondering whether moving back to Alberta from Ottawa was a good idea.

Alberta now has a cancelled future: (a) COVID-19 has broken the economic strategy the UCP was pursing – reduce public spending and balance the budget on the back of a restored focus on oil and gas; (b) stimulate economic growth through lowering taxes for corporations; (c) privatize where they could, so as to permanently create markets for public goods and services and transfer public assets to private hands; (d) reward the already wealthy, ignore the poor – they will soon get the message.It is a classic neo-liberal strategy for a Petrostate.

Instead, we face: (a) a collapse in demand, price and interest in Alberta oil – investors are abandoning the sector; (b) $20 billion deficit and an even bigger debt than anyone imagined; (c) a complete lack of return on the $4.7 billion tax give away to profitable corporations – they spent the extra cash on share buy-backs, increased executive pay, investments in technology that lower labour costs, reductions in employment and, in some cases, leaving Alberta; (d) a loss of $4 billion by AIMCo on risky investments made worse by the observation that management underestimated the level of risk; (e) global oil price collapse; (f) the collapse of the tax base, both in terms of oil and gas but also in terms of taxes on employment; and (h) the prospect of 25-30% unemployment in Alberta for some time. On top of which, we also have COVID-19.

Not great. To make matters worse, his strategy of cancelling the Alberta tax on carbon and fighting the federal carbon tax (now imposed on Alberta) in the courts will backfire when the Supreme Court agrees with the general position of other courts and says that the Federal government is within its rights to protect the environment and levy a tax.

To make matters even worse, Kenney has angered doctors and nurses, education workers of all kinds (including many school trustees) and many others in the public sector. He oversaw (and told untruths about) the lay-off of 20,000 teaching assistants and others in education – the largest single layoff in Canadian labour history.

Even worse than worse, he has abused his role as leader of the majority party to abrogate the role of parliament (our legislature) by the passing of Bill 10 – giving him and his Ministerial colleagues the right to enact legislation (and retroactive legislation) without recourse to the house. When Trudeau suggested something similar (but more limited), the Federal conservatives stopped him on the grounds of abuse of process and the rights of parliament. No such voices, other than from the NDP and lawyers, have been heard here.

Kenney has done something right. He has taken the advice of health researchers and scientists in handling the COVID-19 pandemic. Alberta, in comparison to many other jurisdictions, has done well – flattening the demands on the health care system, maintaining the lock-down, testing extensively and looking at fast action to manage outbreaks. Kenney has not done so well in his support for health care workers – we now have a great many rural communities (the UCP electoral base) without GP’s and some rural hospitals have lost their medical staff due to poor policy making with respect to doctor pay and conditions. He also compounded employment opportunities through mass layoffs of public sector workers, short-changing support for business and people and continuing not only to cut higher education budgets, but to claw back money they anticipate “may not be needed”.

The key challenge for Kenney is not the present time – that is a big challenge, but not the most critical. The key challenge is simple: how fast can he pivot to being a leader - the one Alberta needs right now?

A good government at this time would:

  •          Introduce a completely new fiscal framework based on progressive taxation, especially taxing those with most money and using a sales tax to create real sustainable revenue.
  •           Accept deficit and debt as key instruments of sound strategy (especially with very low interest rates). While government should always be efficient and seek to evaluate return on investment and social and economic impact, debts are fine.
  •           Expand public spending, especially on future-focused investments in schools, colleges, universities, training and infrastructure. A particular focus should be on dramatic improvements in literacy and numeracy.
  •           Strengthen health care and attract and retain high quality health care talent and invest especially in prevention and public health.
  •           Work to diversify the economy – invest in future-focused bio-economy, technology, creative industries and design and new manufacturing systems.
  •           Leverage ATB, AIMCo and tax credits to stimulate investments in Alberta companies across all sectors which show potential for growth through sound leadership, business planning and marketing. Support a strong innovation eco-system.
  •           Rekindle and re-energize the fight against poverty, homelessness and unemployment through real support for both for-profit and non-profit social enterprise.
  •            Give support to municipal governments for future-focused investments in safe and compassionate communities.

Ironically, these are almost the exact opposite of the actions taken by Kenney in his first year of government. It is time to be humble, challenge Alberta to be a different place and invest in the a future-focused strategy to rebuild Alberta.

Friday, April 10, 2020

Alberta's Cancelled Future

The triple shock of the oil price collapse, the COVID-19 lockdown and the abandonment of democratic government by the UCP government in power in Alberta (Bill 10) all make clear that any sense of the future for Alberta is off the table. Alberta’s future is yet to be determined. What is clear is that the future some thought we had will not be that future.

That future will need to take account of a very different reality.

·      A world-wide recession, with only China and India anticipating any economic growth in 2020 and modest return to growth in 2021 for some other countries.
·      Depressed markets for Canadian and Alberta goods, as the world shifts from a trading global economy to a more local and regional models of trade.
·      Disrupted supply chains which will take time to reconfigure as some key components of those supply chains will no longer operate.
·      High levels of corporate debt – some too high for some corporations to service – linked to lowered levels of consumer demand, requiring new business models.
·      High levels of unemployment, with Canadian and Alberta growth collapsing leading to 20-25% unemployment.
·      A complete reconfiguration of some industries, especially hospitality and tourism, retail, restaurants, small and medium sized oil and gas producers and service businesses which account for 78% of the Canadian economy.
·      Continuing battles between oil producers (especially Saudi Arabia, Russia, US) with Alberta captured between the players unable to really influence either production levels, price or markets. This also will impact the willingness of investors to invest in heavy oil. There will be  a real big shakeout here.
·      Significant levels of Alberta government debt – way beyond the $43.5 billion in net debt already known before COVID-19 and increasing daily as revenue streams (oil and gas royalties, tax revenues) collapse and bankruptcies grow. The deficit will balloon in Alberta, even though we were spending less than any other province on government programs relative to GDP (14.4% versus a cross Canada provincial average of 21.7%).
·      Significant disruptions to communities, with municipalities, school boards, community based organizations being pushed to engage and rethink what they do, how they do it and how they fund it.
·      Growing concerns about the displacement of people, social unrest and the impact of inequality on the way individuals, families and communities respond to the post COVID-19 world.
·      There are new relationships between Federal and provincial governments – interdependencies that matter. Those who favoured Wexit and separation should by now have realized the mutuality of these levels of government. Notice how quickly Alberta closed access to benefits for the laid-off and unemployed and pushed them instead towards Federal programs. Notice how quickly Alberta sought Federal help on a variety of issues.

There is no real sign of COVID-19 going away as an issue or factor in all our activities anytime soon. Until a vaccine is found, tested, approved and is available and all are required to receive it, then working will be problematic. Face masks, now optional, will likely be compulsory and new measures will be in place to limit risk and exposure. The world will not return to the pre-COVID-19 state any time soon.

Options for Alberta

There are several challenges and opportunities Alberta has to respond to. In doing so we should adopt the mantra Peter Drucker was fond of using: “never let a good crisis go to waste”.

There is an opportunity for Alberta to seize the present time and change the future trajectory. Give up the 1970’s thinking that was driving the provincial strategy – low tax, oil and gas, competitiveness, governments as debt free – and build a new frame for understanding what Alberta can become.

1.    Enabling wellbeing and health.
2.    Rebuilding communities and ensuring safe communities.
3.    Reskilling and upskilling the workforce.
4.    Stimulating the economy.
5.    Rebuilding the economy around emerging industries.
6.    Doing what we can for the small and medium oil and gas producers.
7.    Strengthening education and refocus apprenticeship.
8.    Restoring trust and accountability in our government.
9.    Rethinking provincial and municipal financing.
10. Invest in young people.

Enabling Well Being and Health

Community and personal health and wellness will be a challenge for sometime. Rather than cutting health care and privatizing it, now is the time to ensure that we are ready for the second wave of COVID-19 and the pandemic after this one. We know more now about the capacity of our health system and it is time to strengthen these capacities. We also know more about the importance of public health investments – making vaccination mandatory, ensuring health check-ups in schools, tightening regulations for seniors care are all now measures that need to be taken.

Until a proven vaccine is available for COVID-19, face-masks should be compulsory in public places and restrictions on large gatherings should be mandatory.

Health is not just about health care systems and hospitals, it is about each us. A renewed focus on teaching about health, wellbeing and diet needs to be a part of the school curriculum.

Rebuilding Communities

Many communities demonstrated real and deep compassion, especially for the most vulnerable.  But this was not universally the case. There will be real emerging issues around food security, safety in the community, crime and social justice.

Cities need a renewed focus on community, compassion and social justice. There is a need to drive a relentless focus on enabling social action through community organizations with the aim of ending poverty and homelessness and making all communities safe.

Reskilling and Upskilling the Workforce

Unemployment will be high, especially in the service sector. Every citizen of Alberta between the ages of 16 and 65 needs the opportunity to upgrade their skills and develop their competencies and capabilities. A training allowance, similar tp that available in Singapore, a new model for apprenticeship based on competency assessment not time served, the expansion of short skills programs and micro-credentials should be urgent priorities for colleges, polytechnics and universities. Put back the $400 million taken out of the higher education system in Alberta, but demand significant changes to make more courses available more often to more people.

Focus the system on future skills – the skills needed for the next economy and the skills needed to rebuild communities.

Stimulating the Economy

Invest in infrastructure projects that Alberta needs. Increase intended capital spending from $6 billion a year to $10 and support fast-tracking municipal spending on light rail transit and the transport infrastructure. Partner with the federal government on a 3 – 5 year plan to break the back of Alberta’s orphan wells problem. Make good on promises made to end homelessness by building affordable housing. Alberta should have no homeless persons by 2030 – all should be housed in small homes or residential facilities.

Rebuild The Economy Around Emerging Industries

Our next economy is not one focused on oil and gas extraction. It is about technology innovation, green energy, bio-economy and agriculture. Stop provincial subsidies to oil and gas estimated at over $1.3 billion a year, restore tax credits for technology companies, focus new investments in Alberta’s innovation eco-system and leverage the potential of ATB and AIMCo not as oil and has “proper uppers” but as engines for the next economy. Create shareholder tax credits for investments in new Alberta companies or existing ones.

Doing What we Can for the Small and Medium Oil and Gas Producers

There is no such thing as the “energy industry”. There are firms of varying sizes providing a range of services and production for oil and gas. The large companies have assets which they can use to borrow against at a time when interest rates are the lowest they have been in two generations. The small and medium firms, however, are in trouble. Invest in regional networks to convert many of these operations to green energy.  Help lubricate mergers and acquisitions so as to move small firms into co-operate or larger entities to streamline costs and improve productivity. Stop seeing the task of government to bank roll firms which the private sector does not want to invest in.

Strengthening Education and Refocusing Apprenticeship
Education is the key to a different future. As Nelson Mandela observed: “education is the most powerful weapon we can use to change the world”. Rather than cut school, college, polytechnic and university budgets, we should expand them but rationalize the system. Merge the polytechnics, create a single college system by merging all of the colleges, invest in our universities but stop them competing – demand collaboration and co-operation, especially in relation to research and development.

For the next five years, lower the cost of tuition dramatically for key skills in demand. Rethink apprenticeship around e-portfolios of demonstrable competencies and remove the focus on time-served as the basis for journeyman status. Introduce degreed apprenticeships for advanced apprentice skills. Lead North America in re-imagining this work.

Restoring trust and accountability in our government.

Citizens responded well to evidence based and science based decisions during COVID-19 lock-down. Learn from this. Learn that sharing the evidence on which decisions are being made, trusting science and evidence and those who work to ensure validity are all part of effective government. Restore democratic functioning and public accountability. Stop dismantling institutions and processes intended to hold government and its officers to account. Strengthen ethical and judicial oversight. Build a government driven by focused, evidence decision making and a commitment to social justice. Focus on trust-building. Stop the “smoke and mirrors” of politics as usual and develop the spirit of “politics as unusual” – truth telling, evidence sharing, option sharing, transparency and accountability should now be the norm.

Rethinking provincial and municipal financing.

Municipalities are the front-line in the work of community building and development. Yet their budgets are broken even if their spirit is not. They need assurance that agreements made in good faith will be honoured. All municipalities need additional powers to raise funds. Give them these powers but hold them accountable for outcomes.

Invest in young people.

We need young people to want to live,  work and play in Alberta. They need to see Alberta as place that values youth and provides for them. Strengthen education, cultural organizations and the community networks young people value. Provide support for their entrepreneurship and innovation. Enable their talents to be developed to the full and they will stay.  Make apprenticeship or a college / university education affordable. See learning and innovation investments as the new Alberta advantage.

Funding the Future

All governments fund the future through revenues and debt. Alberta needs a sales tax that stimulates economic growth, replaces oil and gas royalties as revenue sources for government and creates an economic playing field that makes sense. Jack Mintz has suggested in the past (2013) that a 13% harmonized sales tax and a raising of personal allowances would be more than sufficient to enable the work Alberta needs to do – 8% PST and 5% GST with the rise in personal allowances being significant enough to offset some of the impact of raised taxes. Do it now. Alberta is ready.

Borrow what you need to borrow to enable the next economy and the next level of social justice to be achieved in Alberta. Interest rates are low and the province has a low deb to: GDP ratio. Limit such borrowing so that net debt is no more than 40% of Alberta’s GDP. Increase oil and gas royalties so that we can rebuild the Heritage Savings Fund – all royalties go to it and stay there until the fund reaches a target of $500 billion.

Challenge ATB to become Alberta’s lender of choice for emerging industries and reduce their exposure to oil and gas. Do the same for AIM Co.

This is also the time to undertake a major rethink of all government activity. Do not focus on savings, focus on rethinking and re-imagining what government can do – focus on outcome and impact based budgeting, not just comparative costs.

Pulling Alberta Together

We need to stop the nonsense talk of Wexit and separation, especially given the clear co-dependency of all in Canada on each other. Now is the time to reimagine Alberta. It’s the big reboot. Make the most of it.

Friday, March 20, 2020

Let Us Not Bailout Airlines and Energy Companies - Focus on People

The Premier of Alberta is concerned about the price of oil and gas since it affects both Albertan’s and the Government’s ability to fund operations. He is asking Ottawa to “bailout” oil and gas, despite: (a) significant subsidies which the industry receives from Ottawa – app. $3.3 billion a year; (b) subsidies from Alberta of app. $1.3 billion a year in royalty forgiveness; (c) having one the lowest royalty rates in the world; and (d) having given $4.7 billion in tax giveaway’s from the Alberta budget to profitable companies, including oil and gas.

In addition, oil companies were bailed out by the Federal government when it agreed to purchase a pipeline under construction so as to ensure Alberta oil could get to tidewater. The Government initially spent $4.5 billion buying the pipelines and are now on the hook for construction – app. another $5 billion or more. Oil and gas have also largely walked away from their legal obligation for well restoration once a well has reached its end-of-life or is abandoned. There are over 3,400 of these abandoned wells in Alberta which will cost some $30 billion or more to clean up and the available funds to do so are just $227 million.

In 2019 some of the larger oil and gas companies had a terrific year. CNLR, for example, achieved record production totaling 1,098,957 BOE/d, delivering 2% production growth over 2018 levels in a curtailed market environment. Net earnings were $5.416 billion. In 2020 the company planned to spend $2.4 billion on share buy-backs – a common theme in the industry. At the same time, CNLR hired fewer people to drive its performance as it is now, and has been for some time, an early adopter of key innovative technologies aimed at increasing production with fewer people.

We should not bail them out. They can use their asset base to borrow funds at the most competitive interest rates seen in a generation.  We also should not bail out airlines or cruise ship companies for the same reason.

What we should do instead is pay citizens a guaranteed income for the next 12-18 months (all citizens) so that we can all cope with the challenges of mortgages, rents, food costs (which will rise significantly). Oil company executives and shareholders can sort themselves out.

As for the Government of Alberta, they should heed the suggestion: “never let a good crisis go to waste”. Introduce a sales tax now (exempting food and medicine) and scale it to replace oil and gas royalty revenues used for operations. In addition, rethink the royalty regime to extract more from oil and gas so as to strengthen the Heritage fund and strengthen the orphaned well funds. This may look counter-intuitive at a time when oil prices are so low, but it is a time to decide what is important for all Albertans not just a few.

The Alberta government should abandon its budget so shoddily rushed through the legislature and start to focus on creating the next Alberta around policies of equity, compassion, and service. Bold new thinking not old recycled thinking from Ayn Rand. Rather than focusing on the oil and gas economy, Alberta’s strategy (like that in New Zealand) should focus on the wellbeing of all of its citizens. It is time for a wellbeing budget.

Thursday, February 20, 2020

An Open Letter to Premier Kenney, Premier of Alberta

Dear Premier Kenney:

I acknowledge that, in your understanding, Alberta’s economy is challenged and that action is  needed by government to do three things:

·      Stimulate economic growth through investment in productive enterprises that create wealth.
·      Ensure that government expenditure both meets social and health needs of citizens in effective and efficient ways.
·      Secure Alberta’s infrastructure so that Alberta is a great place to live, work and play.

Your diagnosis of what the issues are, however, seems to me to flawed. The McKinnon panel pointed to the need to do two things: (a) to manage spending in such a way as to deliver outcomes better aligned with the best in other jurisdictions at a lower unit cost than at present; and (b) to increase revenues. You always give emphasis to the first of these, but neglect the second completely. The McKinnon team said this:

”steps need to be taken to increase stable sources of revenue and decrease the reliance on the volatile non-renewable resource revenues” (page 16)

This statement is clear and explicit. Yet your own actions have been to reduce Government revenues through lowering tax rates on profitable corporations and cancelling the levy on CO2. In addition, you have made the fiscal situation worse by unnecessary spending – for example, allocating $30 million a year for four years to the Canadian Energy Centre.

You also appear to ignore the mounting evidence that tax breaks for profitable corporations and reducing taxes on wealthy individuals – so called “trickle down” economics – is generally seen as a failure.  This is evidenced by a variety of research studies and through the work of the IMF. There is no current evidence that this strategy is working in Alberta. Indeed, the evidence seems to point in the other direction.

You also ignore the significant wage differences between Alberta public and private sector employees versus wages of those in similar positions in other provinces. GDP per capita in Alberta, as you well know, is much higher than any other province – indeed, it is amongst the highest in the world.

Your relentless focus has and remains on the reduction of the deficit within the lifetime of the present government. You seem to see deficits as bad, no matter how they come about and ignore the role of government to support the needs of its people, including through the use of debt instruments.

The 2019-2020 deficit looks to be around $8 billion – app. 2.4% of GDP. The primary reason for this is that we have a growing population and have a very low revenue level in comparison to other provinces. Our revenues are just 13.9% of GDP in comparison to others whose numbers are higher – 19% in BC, 22% in Manitoba and 18% in Ontario. Your argument is that our spending on government services are far too high and need to be reduced – yet the evidence shows that Alberta’s spending is the lowest in Canada at just 15.7% of GDP. You always refer to government spending per capita as the key indicator - $12,915 which is certainly higher than that in some other jurisdictions, but so too are wages in Alberta in both the private and public sector.

We can always be more efficient and a focus on controlling spending growth is not a bad thing, but cutting spending on health and education which you are clearly doing (despite denials) is damaging services.

The more serious concern you continually express is with the level of debt. Alberta’s debt. Current net debt is $36 billion – app. 10.2% of GDP. This is amongst the lowest level of net debt for any jurisdiction anywhere in the world. It is sustainable, if revenues for the government increase and effective management of spending is maintained. Reducing it is not always desirable – debt is a useful instrument which all organizations use. Some of the most successful companies in the world get there by the smart use of debt instruments. This you well know.

What is worrying me is that your current strategy does not seem to doing what you indicated it would do. 69,000 jobs have been lost since your government took office and there are no compelling indicators of turnaround in the economy. Indeed, some of the actions taken by government look to me to be creating recessionary conditions – reducing public spending and head-count in the public service, reducing services and increases the costs of public services through privatization are all likely to worsen the situation.

In short, Alberta needs a better economic strategy that the one you are pursuing. It also needs to focus on the revenue challenge – a sales tax is the elegant solution. While I accept that effectiveness and efficiency in public services is a key requirement of your government (as it should be for all governments), what I do not see is coherence in a strategy for ensuring that the very real needs of people for health, education, social services and eldercare are to be met in the short and medium term. 

Your Ministers will put the final touches to the Provincial budget in the next few days. I must share with you that my concern is that, given your current strategy is not working, your Ministers will conclude that the strategy needs to be reinforced and doubled-down upon rather than changed.

The first rule of holes is clear. When what you are doing gets you deeper into the hole, stop doing what you are doing and change. It is time for you to recognize that the bold, brash strategy you have been pursuing is not working and to change.

With good wishes

Stephen Murgatroyd, PhD