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David Staples: Kenney on Alberta's finances: 'We're going to need to go further in finding savings'

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Alberta Premier Jason Kenney has promised two “great reckonings,” one reckoning for Alberta’s provincial finances and a second one for the Communist leaders of China who lied to the world about the dangers of the coronavirus.

In an interview, I dug into what those great reckonings might entail for Alberta.

The Alberta government has said its deficit will balloon to a record $20 billion from $6 billion this year.

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“That’s the largest by far in Alberta’s history and I’ve said that means there is a fiscal reckoning in the future,” Kenney said.

I asked if the public sector would see cuts or wage rollbacks.

The government is still focused on getting through the pandemic, he said, and expects tough decisions will be made no sooner than the 2020-21 budget in February. “We’ve not made decisions about things like public sector compensation. Our intention (before the pandemic) was not to reduce public sector compensation, even though we had the highest level of public sector compensation in Canada. We were hoping to be able to keep things at zero for a while.”

Kenney added the pre-pandemic plan was to reduce program spending by 2.8 per cent over four years. “But clearly we’re going to need to be more ambitious, we’re going to need to go further in finding savings, operating more efficiently and potentially other measures. These are huge, huge challenges that obviously we’ve not yet gotten our head around, and I just invite Albertans to start thinking about that in the months to come.”

It’s still too early to know what will be cut. But for a government determined to balance the budget it’s no great leap to expect that huge cuts are on the way.

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Kenney’s progressive opponents will push for higher taxes to maintain government spending, but that won’t fly with Kenney’s base of private sector workers and business. They’ve already faced massive economic pain. Businesses have gone under. Others fear they will do so, too. Workers have lost jobs, found less work or taken pay cuts.

The conservative base will look for a “share the pain” approach and I’ll be astonished if that’s not how things play out.

As for the second great reckoning, Alberta will play a small part in the international response to the Chinese dictatorship’s devious handling of the COVID-19 outbreak, though Kenney is certainly leading the way when it comes to Canadian leaders calling out the fiasco.

He’s already said Canada should start making its own personal protective equipment and no longer count on Chinese imports. He continues to point out where the Chinese leadership went wrong, muzzling health-care workers who first warned of the outbreak, pushing to keep international air traffic open even as the disease spread out from Wuhan, denying the fact of person-to-person transmission, and pressuring the World Health Organization to play down the significance of the outbreak. “This is their Chernobyl, but imagine Chernobyl without the containment measures. This is the result of a regime whose existence is predicated on lying on an industrial scale and they must be held to account for this,” Kenney said.

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There are major trade and economic connections between China and Alberta, with companies such as the China National Offshore Oil Corp. (CNOOC), PetroChina Co. Ltd. and Sinopec having major stakes in the Alberta oilsands.

I asked if there will be any trade repercussions between Alberta and China.

“My comments were focused on the gross irresponsibility of the Chinese Communist Party leadership. While I’ve always been deeply skeptical about the conduct of that leadership, I’m also in favour of conventional commercial and trade relations.”

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Kenney put one caveat on his stance. “I do not believe as a democratic market economy we should allow state-owned enterprises that are effectively controlled by the Chinese Communist Party to take a controlling interest in strategically important assets, like the Canadian oilsands.”

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This great reckoning against China could well blow up big in other places, starting with Trump’s U.S., but for all of Kenney’s rhetoric I don’t see that happening in Alberta. The Harper Conservatives already limited the ability of Chinese companies to buy into the oilsands after CNOOC’s $15-billion purchase of Nexen in 2012.

That prohibition will remain in place, but so will that existing Chinese ownership. At the same time Alberta needs markets for its natural resources and crops. China needs those goods. Trade will continue.

Alberta’s own reckoning against China will fizzle out.

But the reckoning over the government’s finances will only get more explosive. Those cuts are surely coming but, just as surely, doctors, nurses, teachers and other government workers will fiercely oppose them.

dstaples@postmedia.com

twitter.com/davidstaplesYEG

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