Prime Minister Justin Trudeau was in Alberta last week doing what he does best – rallying support, acknowledging problems and making positive public statements. But bolder action will be required, and soon.
After meeting with Premier Rachel Notley, Trudeau announced that upwards of $700 million in infrastructure funding would be fast-tracked to help struggling Albertans.
Regrettably, the problems facing Alberta – and Canada in general – are much greater than the federal government assumes. Building or rebuilding the nation’s infrastructure is fine, but much more is needed if Albertans are to maintain any kind of forward progress.
Alberta is on the whip-end of a highly volatile resource economy. When times are good, as they have been for most of the past decade, our biggest problems are a lack of skilled workers and stubborn capital cost inflation.
When the market goes south, as it has recently, our over-dependency on oil is exposed brutally. The Alberta economy, once the investment and jobs powerhouse of the nation, is floundering. Capital investment and major projects are vanishing while the jobless rate soars.
This roller-coaster-like economy is bad for investors, chaotic for corporate planners and disastrous for governments and citizens.
How do we overcome these damaging cycles?
Alberta is blessed with abundant natural resources, but we also need an economy that’s able to maintain growth in all periods of the resource cycle. Clearly, it would benefit Alberta to be part of a national economy that’s broader in scope, more knowledge-driven and more deeply integrated into secondary and tertiary manufacturing.
Where to start? How about an Economic Strategy for Canada, rooted in a vision that recognizes a new future and suits the extraordinary creativity of our time and place?
Apart from setting a few stretch goals, a national strategy would create a sense of mission and help break the economic inertia gripping the country. Having real targets in place would improve the investment climate in Canada so that capital could once again flow aggressively into all sectors of the national economy.
A national strategy would also help overcome regional bickering such as we’ve seen in the pipeline debate. If the national strategy included energy self-sufficiency – for instance – it would help contain the negativity around building pipelines, particularly the all-Canadian Energy East oil pipeline.
For the record, the prime minister is in favour of pipelines. In 2014 at a conference in Calgary, he criticized then-Prime Minister Stephen Harper for dragging his heals on pipelines, suggesting: “… he’s been all hat and no cattle on pipelines.” At the same meeting, Trudeau maintained: “We are no closer to getting the two main pipelines that he’s been pushing – Keystone XL and Northern Gateway – passed than we were on the very first day he was in office. Indeed, we’re further (away).”
This does not sound like a politician who’s neutral on pipelines.
Now in office, however, the prime minister, is a little more cautious. He is emphasizing environmental concerns: “… as we saw in Paris, people recognized we need to take concrete action on diversifying our energy sources and moving forward in responsible ways.”
Of course, nationally important pipelines and responsible energy development are not irreconcilable. But before concrete action can take place, the national government needs to lead. Otherwise, another decade will pass and Canada will still be waiting for something – anything – to happen.
Nations are no different than individuals or corporations — they need to know where they’re going. A national strategy would establish a set of goals that focuses our energies and helps overcome resistance. In the absence of clarity of purpose and solid values, petty regionalism in Canada will simply bring all progress to a halt.
The honeymoon for Trudeau is coming to a close. It’s been an exciting few months for this young politician but now he and his government will be tested to the limit, in very trying circumstances.
Civilizations don’t happen by accident. Leaving our destiny to the market or coasting aimlessly would leave another prime minister open to being described as “all hat and no cattle” on the national dream.
Robert McGarvey is an economic historian and former managing director of Merlin Consulting, a London, U.K.-based consulting firm. Robert’s most recent book is Futuromics: A Guide to Thriving in Capitalism’s Third Wave.