An extensive look into the first year of the United Conservative Party governing Alberta, with a focus on the promises, actions and results of their administration so far.
The Economy
During the 2019 provincial election, the UCP unveiled several key policy changes that they claimed would revitalize the province's economy. The largest of which was to reduce the corporate tax rate from 12% to 8% by 2023. The UCP claimed that this would kickstart investment in the economy and bring in approximately $4 billion in increased investment and the promise of increased employment for Albertans.
Several economists (who coincidentally also worked on the 2019 Alberta Budget) have gone out in support of the corporate tax cut claiming that the reduction would result in 55,000 new jobs by 2022. However, this is under an assumption of an "all other things equal" scenario, not taking into account possible disruptions such as a global recession or other geopolitical events that would affect future investment, such as COVID-19.
Other economists disagree with another report by economist Hugh Mackenzie (in conjunction with the Alberta Federation of Labour) claimed that this tax cut would result in a net loss of 58,700 jobs over three years.
A civil briefing note released by the Alberta NDP had stated that the UCP had ignored several civil servant notes from the Ministry of Finance regarding the possible effects of the tax cut. The memo notes that due to the high dependency of Alberta on oil and gas, research involving changes in the corporate tax rate and its effect on economic growth in the province are not clear. Trouble getting oil out of Alberta and regulatory hurdles are much larger factors to oil and gas investment rather than the corporate tax.
"Economic factors don’t change in isolation, so it’s hard to attribute any boom or bust to a tax rate alone." - Professor Moshe Lander (Concordia University)
The cancellation of the provincial carbon tax (brought in by the Alberta NDP) was also said to bring in 6,000 jobs, according to Jason Kenney during the election campaign. This claim is not confirmed and most likely is a massive exaggeration. The UCP had also vowed to reduce the minimum wage for youth workers under 18 years old, which they claimed would increase employment opportunities for youth. On June 26, the rollback went into effect dropping the youth minimum wage to $13.
The new priority of the provincial government has also been to increase Alberta's competitiveness and the confidence of the business community. One method that the new provincial government had chosen was to create a Ministry of Red Tape Reduction, designed to remove business regulations along with the creation of several red-tape reduction panels. Grant Hunter, the minister for Red Tape Reduction could not state how much this would affect businesses positively.
On June 12, 2020, several issues on Bill 22 (the Red Tape Reduction Implementation Act), which would affect at least six ministries, were brought into the stage. One large change that this act would bring, which could affect investment, was the removal of the provincial cabinet from the review process for oil sands projects and leaving it solely to the Alberta Energy Regulator.
However, despite the fiery rhetoric, the UCP has not been able to show clear positive results from their business friendly approach. Several examples of this have occurred already. The first was when the province was hit with news of mass layoffs in the corporate sector with Husky laying off several hundred workers in Calgary on December 2019. Encana had also decided on moving their headquarters from Calgary to the United States as well a month later on January 2020.
More than a year after their election, the situation could not be more different from what the UCP had predicted and wanted to show the voting public. Unemployment within the province as of May 2020 has reached a new high of 15.5%. While the COVID-19 crisis has been responsible for recent economic malaise across the country, Alberta's economic indicators had already been poor beforehand due to a number of factors, such as the sluggish growth in the energy sector and lackluster crude oil prices.
As a result, the poor performance of the economy prior to the COVID-19 crisis has led to constant criticism from the Alberta NDP, especially with regards to the abysmal employment figures over the past year.
(Data from the table is from the Labour Market Notes, from the Alberta Treasury Board)
Other measures which the UCP have repealed regarding the economy have been the cancellation of tax credits aimed at economic diversification implemented by the Alberta NDP. These tax credits were primarily aimed at the digital media sector. Some of these tax credits which were removed during their first budget unveiled last year in 2019 including the:
Offers a 30% tax credit for qualified individuals and corporations who invest in eligible small businesses within the research, technology and digital media sector. (Program officially ended March 30, 2020)
Scientific Research and Experimental Development Tax Credit.
Corporations carrying out scientific research and experimental development are eligible for a tax credit up to 10% of $4 million expenditures. (Program ended January 1, 2020)
Interactive Digital Media Tax Credit.
Offers a 25% tax credit for labour costs when it came with interactive digital media activities. (Program ended October 24, 2019).
"As a new business in Alberta, it was a driver for securing investment for us." - Aaryn Flynn, General Manager for Improbable. (in reference to the Digital Tax Media Credit cancellation)
Two policies aimed at diversifying in the energy sector (brought in by the NDP to create new midstream processing facilities in the province) were also cancelled by the UCP including:
Approximately $1 billion in loan guarantees and credits designed to spur partial upgrading in the province which could free up 600,000 barrels per day in pipeline capacity.
Petrochemical Feedstock Infrastructure Program
A program designed to encourage private investment in Alberta's natural gas mid-stream sector valued at $500 million in grants and loan guarantees.
The UCP has however decided to not cancel the Petrochemicals Diversification Program (which gave royalty credits to firms which would turn propane, ethane and others into plastics and other industrial products) yet, but there is little news on which projects have applied since October 2018 and if the provincial government will discontinue the program in the future putting further uncertainty to the long-term viability of these incentives.
In another blow to the pursuit of economic diversification in the province, the provincial government had also cut funding to Alberta Innovates (a provincially funded agency which contributed to investment and innovation in the province) resulting in 125 layoffs.
The UCP's blatant disregard for environmental issues and aggressive rhetoric domestically has also led to some critics stating that this behaviour has become a liability for investors, especially with regards to Moody's recent downgrade of Alberta's credit rating.
"A warlike, aggressive, take-no-prisoners approach domestically could turn out to be a complete disaster when it comes to the international capital markets." - Markham Hislop (Energi Media)
The provincial government has also stated that they would invest $100 million on decommissioning and cleaning up 800-1000 orphan oil wells. The UCP has claimed that this would create around 500 direct and indirect jobs. Critics have stated that the program is another method of subsidizing the energy sector when it came to their shortcomings once again, especially the lack of private sector responsibility regarding orphan oil wells amounting to almost $82 billion.
Despite these actions, the predicted GDP growth rate for 2020 is terrible with a contraction of approximately 11.2%, one of the largest drops of GDP in Albertan history. As a result of this changed economic landscape, the UCP has had to backtrack on several of their cancellations and promises, such as reduced spending in infrastructure.
The provincial government has also had a change of tune forcing several policy changes due to the COVID-19 crisis and the collapse in oil prices in early 2020. These include possible infrastructure spending and borrowing funds for an economic stimulus program. (Similar moves by the formerly governing Alberta NDP were heavily criticized by Jason Kenney and the UCP.) The UCP had also introduced a new film and television tax credit, which could help cover labour and production costs up to $10 million.
In terms of pipelines, the government has originally had some good news with the Line 3 Pipeline, a pipeline from Edmonton to Superior, Wisconsin. (A project that was originally started in 2014, with the Canadian section of the pipeline being finished in December of 2019.) However, some hurdles still do exist with the project as the Public Securities Commission has been asked to consider the pipeline's certification approval in May 2020.
Similar news has occurred for the controversial Transmountain Pipeline. On June 28, 2019, the Federal Government had also given the final approval to the Transmountain Pipeline expansion (after years of delay and issues) and on Jan 12, 2020, BC Premier John Horgan lost his Supreme Court challenge against bitumen transport within the province.
However, the provincial government had also decided to commit almost $1.5 billion in the form of an equity investment on the Keystone XL pipeline along with another $6 billion in loan guarantees. Jason Kenney has also stated that he would consider bringing in a trade complaint against Joe Biden if Keystone XL's permits are cancelled. (Joe Biden has stated that if elected, he would cancel Keystone XL)
On May 29, 2020, a US Appeals Court had rejected requests to revive the pipeline permit process for Keystone XL, throwing another wrench into the success of the pipeline project.
(As of January 2021, President Joe Biden has rescinded the license for Keystone XL, thereby killing the project entirely.)
Summary
The UCP has had a horrible first year when it comes to their economic stewardship of the province. While one year is too short of a period to completely judge a government's economic performance, the results have been disappointing so far.
Multiple economic indicators are showing a tough and sluggish economy despite some positive news regarding pipelines. Many of their promises economically during the election have been broken and some have been outright lies and fabrications. The UCP has opted for a blunt general corporate tax cut rather than targeted tax incentives for both the energy and non-energy sectors in the province.
Time will tell if the UCP's approach will result in a revitalized economy for Alberta. So far, that isn't the case.
Fiscal Policy, Budgets and Taxes
One of the largest promises made by the UCP during the election in April 2019 was the repeal of the Carbon Levy, brought on by the Alberta NDP as part of their Climate Leadership Plan. True to their promise, the first bill, Bill 1, also known as the "Carbon Tax Repeal Act", was designed specifically to remove the $30 per tonne carbon levy. However, the same move would also deprive the provincial government of $1.4 billion in revenue.
The UCP claimed that the $1.4 billion in lost revenue would entirely be recouped by Albertans. This claim goes against the fact that for approximately 40% of Albertans, the carbon tax has no overall cost and is actually a net benefit in terms of finances.
However, the removal of the provincial carbon levy led to the imposition of the federal carbon backstop of $20 per tonne on the province with Catherine McKenna, the Federal Minister of the Environment, stating that the federal government would "move as quickly as possible in order to minimize a gap in coverage".The imposition of a federal carbon price (with a full rebate, rather than the mix under the Alberta NDP plan) became reality on January 1, 2020.
In a stark contrast to the Alberta NDP, the UCP also prided themselves on a focus towards austerity as the way forward in terms of provincial fiscal policy and being able to balance the budget while still cutting taxes. One of the biggest hallmarks of the first UCP budget released on October 2019 was the reduction in corporate tax over a four year period from 12% to 8%.
When first announced, Jason Kenney claimed that this would increase Alberta's economy by $12.7 billion and increase provincial revenues by $3 billion. However later estimates by the province stated that the cost of this to the provincial revenue was estimated to be about $2.4 billion in net losses by the UCP. (with a more modest increase of only $700 million in increased revenues) However the NDP had argued that this move could cost as much as $4.7 billion in decreased revenue for the province.
For Budget 2019, the UCP had expected a budget deficit of $8.7 billion ($2 billion higher than the NDP budget of the same period) for the fiscal year. The deficit is also slated to be higher due to the UCP's cancellation of the NDP's crude by rail contract. (costing around $1.5 billion)
Despite their promises of no new taxes, the UCP committed to several tax and fee increases to get more revenue for the province. These include:
An increase in the excise taxes regarding tobacco increased by 10%
Vapes will start to be taxed in the same manner as tobacco.
An increase in the fees for the registration of motor vehicles and land titles and other user fees.
A 4% tax on short term rentals such as Airbnb.
The elimination of education and tuition tax credits.
An increase in student loan interest to prime plus one percent.
One notable change is that the UCP has paused indexing the personal income tax exemptions, effectively increasing personal income taxes for many Albertans. Another pause in inflation indexing has also been made to AISH (Assured Income for the Severely Handicapped) Income Support, slated to save $10 million.
"A tax bracket and credit freeze announced by the province leads to a depreciation of tax credits and subtle push into a higher tax bracket" - Trevor Tombe, in reference to Budget 2019
Under Alberta Budget 2019, a large focus of the new incoming UCP government had been to institute a plan for freezing government expenses. It has been stated that operating expenses for the provincial government will be 2.8% less in 2022, according to the UCP. In order to achieve this, the UCP is slated to cut funding for multiple ministries and agencies.
A few of the ministries and their funding changes are as follows:
Education funding from K-12 for the next four years have been frozen. The Parkland Institute estimates this as a real cut of 18% when taking inflation and population growth into account.
Post-Secondary Education will be cut 11.8% over the next four years.
Healthcare will be increased 1.2% by 2022.
Ministry of Seniors and Housing will have its budget frozen for the next four years.
Ministry of Culture, Women and Multiculturalism will endure a 33% cut over the next four years.
The Summer Temporary Employment Program (also known as STEP) will be eliminated.
Ministry of Justice will have its budget reduced from 2019-2020 by $58 million.
Several governmental departments and agencies, such as Energy Efficiency Alberta, have also been slated to be closed. In order to reduce expenses, the UCP has also promised to cut the size of the public service by 7.7% over its four year mandate. On February 2020, the provincial government was also seeking a 1% wage rollback on the government's unionized employees.
Municipal grants have also been cut, with the Municipality Sustainability Initiative's budget being reduced by $94 million in 2020-2021. The city charters for Edmonton and Calgary were also cancelled abruptly reducing base spending by $45 million, prompting strong criticism from Edmonton's mayor, Don Iveson.
Despite their rhetoric on fiscal conservatism, the provincial government under the UCP has committed to $30 million on the "energy war room" (also known as the Canadian Energy Centre), along with $2.5 million for an inquiry on foreign funding for opponents of Alberta oil and gas.
On a note of good news, the UCP will continue the process of "inflation-proofing" the Heritage Fund (Alberta's reserve wealth fund) in Budget 2019, with the fund approaching a value of $16.5 billion by 2020.
A few months later, under Budget 2020, which was released on February 2020 seemed to be par on the course, with the same priorities as the 2019 budget.
Several highlights of the 2020 budget include:
An increase in fees regarding public parks and campgrounds.
A predicted budget deficit of $6.8 billion for 2020-2021. (pre-COVID)
Delaying road maintenance expenditures.
Alberta Social Housing Corporation funding will be cut $18 million over 3 years.
Vapes will officially be taxed at 20%.
Offsetting more costs onto school boards and municipalities.
A planned reduction of public sector compensation of 3% by 2022 to $26.474 billion.
The issue of dependence on non-renewable energy royalties such as bitumen and natural gas have once again been a key issue with the two UCP budgets (A similar issue plagued all four years of the NDP budgets). Under Budget 2019, the province had expected an increase of 28.1% in 2021 and 37.2% in bitumen royalties with the construction of the Line 3, Keystone XL and Transmountain pipelines.
Projections for WTI in 2019 seemed to be too optimistic ranging from a price of $57 in 2019 to $63 by 2022-2023. The collapse of oil prices in early 2020 has dealt a huge blow to any optimistic projections regarding bitumen royalties in the province. (WTI and Brent prices plunged deep into single digit territory)
The nature of the UCP budgets and their dependence on a massive increase in the value of bitumen royalties until 2023 has led some to question if a balanced budget can even be achieved by 2022.
"steps need to be taken to increase stable sources of revenue and decrease the reliance on the volatile non-renewable resource revenues." - Mackinnon Report
The refusal to consider implementing a provincial sales tax (which would be tantamount to suicide in Alberta's political landscape) has led to criticism as well, as the province continues to rely on volatile royalty revenue. The current provincial finance minister had even stated that diversifying revenues is a long term luxury for the province.
The imposition of the COVID-19 pandemic had also created a new fiscal cliff for the current provincial government with some estimates that the province this year would face a $20 billion deficit.
In December of 2019, the province was hit by another credit downgrade to Aa2 stable from Aa1 negative. (A strong criticism which the UCP had thrown at the NDP during their four years in power) by Moody's, bringing another blow to Alberta's fiscal record. Several reasons that Moody's gave were the continued reliance on volatile resource revenue, the cut in corporate tax and the repeal of the carbon levy.
Summary
In terms of fiscal matters, the UCP and Jason Kenney had committed for a more fiscally conservative approach with the province's finances. The repeal of the carbon tax along with the cut to corporate taxes has been combined with planned reductions in operational expenses.
Their two budgets so far (for the years of 2019 and 2020) had seen significant decreases in spending affecting the lives of many Albertans, along with increasing user fees and the de-indexing the personal tax exemption. However, the continued reliance on volatile non-renewable resource revenues along with cuts to needed revenue have made the province's fiscal situation more precarious. The effects of COVID-19 and the massive decreases in oil prices in early 2020 had also given the province's finances a double blow.
Alberta's fiscal record under the UCP does not look good so far, and might look far worse over the next three years unless steps are taken to mitigate the issue.
Infrastructure
During the 2019 election, the UCP had promised several key elements that they stated would differentiate themselves when it came to the NDP's approach towards infrastructure spending within the province. Despite their stark criticism of the NDP's funding levels from 2015-2019, the UCP had stated that they would maintain the NDP's planned capital spending plan from 2019 all the way through 2022/2023.
The UCP would differ on the funding model, increasing the level of public-private partnerships for procurement of capital projects. (which was quite common under previous PC governments, only changing under Notley's NDP) There is criticism on the effectiveness of P3 projects in Alberta, especially as several projects such as the first leg of the Valley Line and the Southeast portion of the Calgary Ring Road have been delayed multiple times.
In Budget 2019, the UCP had claimed that spending for infrastructure had been steady. However there were some side effects in other actions which have affected infrastructure within the province, notably with the cut in municipal grants. Both Naheed Nenshi and Don Iveson have stated that these cuts would heavily affect projects in Edmonton and Calgary, such as the planned widening for Terwillegar Drive in Edmonton.
Uncertainty with several infrastructure projects within Alberta have also occurred. One example is with the UCP's decision to introduce Bill 20 in the legislature. This would allow the provincial cabinet to kill funding for Calgary's Green Line LRT and Edmonton's West Valley Line LRT project within 90 days with no cause needed.
"At first blush, it looks like these provisions will make it more difficult to proceed with the Green Line." - Naheed Nenshi (in reference to Bill 20.)
The UCP had already also cancelled and delayed several projects within the province with Budget 2019 such as:
The delay of a new hospital in Southwest Edmonton, pushing its finish by 2030.
Delay of the proposed Child and Adolescent Mental Health Building at the Royal Alexandra Hospital.
Cutting highway maintenance by 16%
The cancellation of the planned (and already under construction) $595 million Edmonton superlab
However, with a slowing economy and the massive economic impact of the COVID-19 on the province's economy, the provincial government had changed gears and moved forward with a policy shift in terms of infrastructure spending.
Under Budget 2020, a few changes have been slated despite the initial commitment to austerity by the UCP on Budget 2019.
$100 million for improvements on Red Deer's hospital.
Green Line LRT and Valley Line LRT should get their funding, with approximately $3 billion in funding.
The construction of the Gene Zwozdesky Centre in Edmonton and the Peter Lougheed Hospital in Calgary.
Maintenance for affordable housing is decreased by $53 million (Mayor Naheed Nenshi claimed this was a surprise and would negatively affect affordable housing in Calgary.)
On March 2020, the UCP announced that they would be implementing a new infrastructure plan and increasing planned spending on infrastructure totalling $19.4 billion over the next three years. The UCP has predicted that this will create at least 3,000 jobs by 2023.
On April 2020, the provincial government had also decided to double the budget for capital, maintenance and renewal for 2020-21, going from $937 million to $1.9 billion. A major focus of the funding would focus on maintenance and renewal, as it was argued that these projects would be easier to kickstart than the creation of new infrastructure.
Some have pointed out that the UCP, despite their initial rhetoric of fiscal conservatism have committed to greater government spending than the NDP, a decision with the economic fallout of the COVID-19 pandemic. (Notley's NDP estimated infrastructure spending by 2022-23 averaged $5.98 billion, while the UCP's Budget 2020 estimates average spending of $6.4 billion per year).
"Political rhetoric aside, the United Conservative governments Capital Plan reflects a spending increase over the Notley Government." - 2020 Budget Analysis (New West Public Affairs)
Summary
While the UCP had stated that they would follow the NDP's capital plan (for the most part), there were several decisions which led to real consequences regarding the uncertainty of the completion of several projects such as the LRT projects in Edmonton and Calgary.
However, due to a slowing economy and the economic effects of COVID-19, the UCP has had little choice but to reverse on any possible austerity measures regarding this subject.
So far, it seems that the UCP will continue and expand on the NDP's policy of investment in infrastructure, partially as a politically prudent move and as good way to support a weakened economy.
Education
During the UCP had promised to continue (and even increase) education funding. However, with the introduction of the 2019 budget and subsequent decisions, this seems to be a falsehood.
The UCP had also decided to go forward with cancelling a planned curriculum review which was to be conducted in conjunction with the ATA. (Despite a memorandum made by the Alberta Teachers' Association with the former government in 2016) As a result, the UCP had decided to go forward with their own independent review of the curriculum, which critics have stated would have less input from educators and ignores the current classroom realities in schools across the province.
The provincial government had also decided to introduce Bill 15 (the Choice in Education Act), which would remove the limit on charter schools and allow the increase of unsupervised and unfunded homeschooling options. The changes involving charter school applications would include removing the need for charter school applicants to go through their local school boards, instead going straight to the provincial minister of education for approval.
Critics of the bill have already stated that the move towards a larger amount of unsupervised home school options could sacrifice the quality of education that students in the province would receive.
The bill has also shown that the UCP is much more comfortable with increasing the role of private schools within the province. Under Bill 15, there would be no changes to the funding scheme for private schools in Alberta. (Currently, private schools in the province receive around 60-70 percent of per pupil operating grants given to public schools, effectively subsidizing private schools). A phrase within the bill even states that are "important in providing parents and students with choice in education"
One of the more controversial decisions regarding education that the UCP moved forward with was the introduction of Bill 8 in the legislature. According to the Alberta NDP, Bill 8 (also known as the Education Amendment Act) will roll back protections for youth regarding GSA's (Gay Straight Alliances) in schools, and claiming that these changes would result in reduced protections for vulnerable LGBT students threatening their safety.
While public, private and charter schools still have to write policies that would guarantee a safe and secure environment for students and staff, the provincial government would no longer dictate those policies, and schools could keep it secret as well.
The effects of Bill 8 on LGBT students are significant.
The bill will not guarantee the use of words "gay" or "queer" when it comes to establishing a club in school.
Allows the school and teachers to contact parents when students join a GSA (Formerly, under the NDP, there were strict privacy guidelines preventing this from occurring)
Eliminating a clause which states that school principals may only tell parents if the school has a GSA, and no other information about the club.
There will be no time limit for principals to grant a student’s request to start a GSA.
Bill 8 passed in July 2019, despite an effort by the opposition NDP to debate the bill for 40 hours straight.
In terms of K-12 education, the effects of the UCP's decisions have also been described to be quite damaging to the future effectiveness of public education in the province.
Under Budget 2019, the UCP resolved to freeze funding levels for the next three years, at $8.2 billion. The UCP had however promised to increase funding for instructional spending, from $6.3 to $6.4 billion. Other areas would suffer, such as transportation funding and program support services, which would be cut. One program which was not cut (despite initial uncertainty) was the school nutrition program, which feeds around 30,000 students year round.
"School boards will receive about $200 less per student than they received in the last school year." - Jason Schilling (President of the Alberta Teachers' Association)
Funding issues and conflicts have already led to tension between the UCP and local school boards, notably the Calgary Board of Education. The situation between the provincial government and the CBE had deteriorated to a point that the current Minister for Education, Adriana LaGrange, had called for an audit of the board just two years after the last one, claiming that the CBE was guilty of "reckless spending" over claims that the CBE's cut of 300 teachers was a result of the UCP's funding reductions.
On April 2020, the audit however found no evidence of reckless spending by the board. Despite this, the minister has still threatened to fire CBE trustees in November if they do not follow a ministerial order aimed at finding efficiencies.
One particular effect of the funding cuts have included the cancellation of the School Grant Fee Reduction program. As a result, school bus fees have been increased all across the province with examples such as
St. Albert residents will be charged a minimum of $470 per student or a family fee of $1410 for school bus service.
The Calgary Board of Education will also charge families increased rates for students who use school buses.
Families within 1.6 to 2.4 km of the school will be charged $800 annually.
Families more than 2.4 km will be charged $465 annually.
The Edmonton Public School Board will now charge families of students who live further than 2.4 km from their schools.
$260 annually (K-6)
$515 annually (7-12)
As of Feb 1, 2020, the Edmonton Public School Board has also raised fees for students living within 2.4 km to $33 per month for this school year.
Other effects of the funding cuts on K-12 education in the province have led to funding increases to other programs. A few examples include the imposition of new fees for non-base programs in schools. For example, bilingual and immersion programs for Edmonton schools would increase from 0 to $33 per month until the end of the current school year.
The reduction in funding in the provincial budgets had also led to layoffs of educational staff within the K-12 framework. A few examples of these include:
Edmonton Public Schools will cut around 178 full time teachers along with 434 support staff positions.
Elk Island Public School Board will cut 87.5 positions for 2020-21.
The Parkland School Division has cut their early education classes shedding 10 positions and several classes.
14 Calgary preschools for special needs children have been closed.
As a result of the COVID-19 lockdowns, the provincial government had also decided to cut funding once again leading to 20,000 expected temporary job losses for part time and support staff across Alberta, as schools transition to an online learning model. Two examples include:
Several pundits (including usual Conservative partisans) voiced their disapproval regarding some of the decisions made by the provincial government, especially with regards to the mass layoffs of educational support staff across Alberta.
"I don’t really see the need for the UCP provincial government to layoff up to 20,000 teaching assistants, school bus drivers, substitute teachers, school secretaries and maintenance staff." - Lorne Gunter (Edmonton Sun)
For post-secondary education, the situation is much worse. In both Budget 2019 and 2020, the UCP had committed to extensive cuts in post-secondary education. For 2020, Advanced Education was cut 6.3%. The University of Alberta and Calgary had already faced a cut of 6.9% in terms of their provincial grant funding.
One notable change that the UCP government did was to lift the post-secondary tuition freeze (which was implemented by the NDP in 2015). Post-secondary institutions have been allowed to hike tuition rates by 7%, and several universities have already indicated that they will follow suit with these increases.
Another hit to post-secondary students was the increase in student loan interest rates from prime to prime plus one percent. Education and tuition tax credits have also been eliminated in the 2019 budget leading to increased financial burdens on post-secondary students. The tuition tax credit was estimated to save $500 for students paying $5,000 in tuition.
"Instead of encouraging the open exchange of ideas in higher education, the government has mischaracterized research-based thinking as extremist and left-wing." - Jennifer Garrison (CBC News)
The situation for universities in the province hit a new low, especially with the effects leading to cuts in personnel and programs. Several examples include:
The possible loss of 55% of the programs for Campus St. Jean
Around 2/3 of the Red Deer's College administrative staff has been cut.
The University of Alberta will not participate in some student athletics due to budget cuts
Norquest College will close its Drayton Valley and Whitecourt campuses.
On top of these changes, the provincial government has also decided to move forward with moving with a performance based funding system, where the level of funding for post secondaries will be tied to the performance of their institutions on a number of factors. (approximately 15% of institutions' funding will be tied to this new approach) A few of the possible indicators which could be included are:
Graduation and completion rates
Post-graduate employment
Enrollment
Post-secondary institutions which reach all thee targets will receive 100% of their funding, while institutions that do not meet it will have their funding changed accordingly.
Due to the COVID-19 pandemic, the moves toward this new funding system will be postponed indefinitely, with no indications so far for when funding changes will be applied.
Summary
For K-12 education, the UCP have instituted a funding freeze for the next four years, throwing difficulties on Alberta's educators. Hundreds of positions have already been cut, with no indications that this will stop.
The UCP's decisions regarding post-secondary education can also be considered a strong attack on the province's educational institutions and university students as well, with acts such as large funding cuts and losses of tuition credits and student loan interest rate increases.
As a result, the effectiveness of education in Alberta will be severely affected in the future, as the number of students increase and funding is strained for both K-12 and post secondary institutions.
Environment and Carbon Pricing
The UCP during its election campaign had made several key promises when it came to the environment. Two of its most notable election promises were to cancel the carbon levy (which was aimed at reducing emissions and putting a portion of the funds towards activities and efficiencies which would further lower emissions) and the introduction of the Technology Innovation and Emissions Reduction Fund (TIER) in order to replace the programs introduced by the NDP as part of the Climate Leadership Plan.
The UCP in its election platform had also promised to work with the federal government and the Alberta Energy Regulator with the issues of abandoned oil wells across the province, which constitute an environmental and financial ticking time bomb if left unchecked.
One of its first acts of the UCP was the cancellation of the carbon levy, a key plank of the NDP's "Climate Leadership Plan". However, despite their avowed public opposition to carbon pricing and their efforts at cancelling the carbon levy, it has been stated that the UCP will continue to have carbon pricing in place but only for the industrial sector. According to Trevor Tombe, a University of Calgary economist, the removal of the carbon levy and the new TIER regulations
In comparison to the Carbon Competitiveness Incentive Regulation (CCIR) put in place at 2018, TIER would reduce the carbon price from $30 per tonne to $20 per tonne. TIER would also not affect any of the federal carbon pricing programs, such as the federal consumer carbon tax that was imposed on Alberta on January 1, 2020.
"But the UCP isn’t killing Alberta’s carbon tax – it’s only shrinking it, changing it, then hiding it from view." - Trevor Tombe (Globe and Mail)
Revenues from TIER would not be used to lower other taxes or result in financial rebates, but be invested in technological subsidies and the UCP's infamous Canadian Energy Centre. (also commonly known as the War Room)
The technological subsidies which TIER would fund were also estimated to prevent an emissions by around 25 megatonnes, according to the provincial government.
TIER, according to computer models cited by the provincial government, would also result in approximately 32 to 57 megatonnes cut from emissions by large emitters in the province by 2030.
Under the new UCP plan, the largest 127 emitters that emit more than 100,000 tonnes of carbon dioxide a year will be put under an individual carbon emissions benchmark based on their past performance. 34,000 smaller emitters would also be allowed into this program in order to escape federal regulations.
However, the carbon price is not immediately in effect, with the largest emitters having a chance to avoid paying the $30 per tonne price, since enterprises are expected to reduce their emissions by 10 percent in the first year and one percent every year after. For enterprises who fail to reach this benchmark, they are allowed to buy emissions credits or pay the fee of $30 per tonne of greenhouse gas emission released.
Critics of the UCP plan have stated that the environmental regulations and policies are a step backwards, especially as it removes the consumer market out of the climate policies. Former Premier and current Alberta NDP leader Rachel Notley has pointed out that the estimates (in the low) of 32 megatonnes was less effective in tackling emissions , in comparison to the former Climate Leadership Plan which was slated to lower greenhouse gas emissions by at least 50 megatonnes.
Some critics have even stated that TIER was just a revival of the PC era's SGER (Specified Gas Emitters Regulation), which was stated to be less effective at pushing industry to shift towards lower levels of emissions.
This system created an incentive for only marginal improvement at individual facilities, and neither motivated nor rewarded the best performers. - Jan Gorski (Pembina Institute)
Energy Efficiency Alberta, an agency created by the Alberta NDP in 2017 to support environmental retrofitting efforts, has had its fair share of issues with the new provincial government under the UCP.
At first, several of its rebate programs were slashed and removed along with a large $147 million cut in the 2019 budget. However on June 11, 2020, the provincial government has decided to move forward with a decision to disband Energy Efficiency Alberta, thereby halting its operations by the end of the summer.
The UCP had also decided to close off several parks and campgrounds, with around 20 provincial parks and campsites slated to be closed and 164 outsourced to third party managers. This move would have led to the loss of around 16,000 hectares of provincial park lands, comprising approximately one-third of all lands managed by the province.
However, due to COVID-19, and possibly a large public outcry regarding these decisions, moves to completely or partially sell off 20 such facilities along with the hand over to third party have been quietly halted.
As a result of the issues revolving around the COVID-19 pandemic, the provincial government had also decided to suspend a large amount of rules and regulations regarding the energy industry, in response to the public health concerns brought about by the imposition of COVID-19 in late March of 2020. However, on June 23, 2020, environmental monitoring of Alberta industries had been reinstated.
Summary
The UCP's environmental record has been abysmal one year into its tenure as the governing party of the province. While the existence of an environmental policy, especially with regards to greenhouse gas emissions has been kept, its move to revamp the Climate Leadership Plan will effectively lead to weaker results.
Their moves at attempted privatization of several park lands had also led to public outrage, harming support for the party both in urban and rural areas.
There are still two and a half more years before the end of Kenney's term in office, and a massive switch could still occur regarding Alberta's environmental policies. That commitment to change remains to be seen, even after almost a year since this article was first written.
On the next part I will try to focus more on the missing aspects of the UCP's policy decisions, notably in healthcare, social issues and the issue of unethical behaviour within the UCP caucus.
(Most of the information on these events and policies only lead up towards July of 2020, anything beyond that along with COVID related decisions in the latter half of 2020 made by the UCP will be looked at in a different post unfortunately. This article is too big as it is)
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