Premier Jason Kenney said the province is now in a place where it can administer upwards of 300,000 doses of COVID-19 vaccine per week, if supply keeps up. The latest tweets from @JKenney.
Since 2015, Alberta’s economy has been struggling. The drop in global oil prices hit the province hard due to its dependence on the fossil fuel sector. During the 2019 provincial elections, the United Conservative Party (UCP) sold itself as the solution. Jason Kenney would be Alberta’s saviour; he would bring the province back to its glory days as a booming contributor to the Canadian economy.
Central to Kenney’s plans to resuscitate Alberta’s economy was a large tax cut for corporations. Over four years, the UCP plan would take the corporate tax rate from 12% to 8%. The first step was taken in July 2019. The rate was decreased by one percent down to 11%, where it currently stands
These changes have costs. The Alberta government is set to lose billions of dollars in revenues. Jason Kenney contends that these tax cuts will eventually ‘pay for themselves’ by increasing economic activity. So, how effective has this strategy been?
Companies making profits, but not hiring
As expected, the tax cuts have produced sizeable savings for corporations. Especially Alberta’s oil and gas giants. Major producers like Suncor, Cenovus and Husky boosted their profits, with an estimated $2 billion in net incomes due to Kenney’s tax cuts.
However, the tax cuts and resulting profits have not translated into jobs for Albertans. Corporations are taking the handouts from Kenney and choosing to spend their capital elsewhere.
The Alberta government had projected that the corporate tax cuts would produce $12.7 billion in economic activity, bringing in a net increase of $1.2 billion in revenues. However, Kenney has since readjusted his estimates, now forecasting a net revenue loss of $1 billion annually.
Lay-offs and relocations
Worst yet, some of the biggest beneficiaries of Kenney’s tax handouts are winding down their presence in Alberta. Husky Energy, which received a $233 million from the tax breaks, went on to lay off hundreds of workers soon after. Encana, a Canadian fossil fuel giant, took a $55 million cut from Kenney only to relocate to the United States.
Far from invigorating Alberta’s economy, the UCP tax cuts are, at best, doing nothing to stop the decline of the province’s resource sector. Prior to the tax cuts, Alberta had 150,00 people employed in the resource sector. That number as of October 2019, is around 140,000. Moreover, an independent analysis by the Alberta Federation of Labour has estimated that the UCP plan’s net impact will be a 2.5 percent reduction in the province’s GDP.
The Failure of Trickle-Down Economics
Jason Kenney has chosen to wager the future of Albertan families on an economic strategy that has failed again and again. The notion that tax cuts can spur economic growth and employment, known as supply-side economics or trickle-down economics, is an abysmal failure.
Just next door, in British Columbia, this same experiment was played out years earlier. Between 2001 and 2011, the BC Liberals cut the corporate-income tax rate by more than a third. The result? The tax cuts did little to spur increased economic activity. Corporate profits soared, while government revenues shrank and the provincial debt doubled.
A much more alarming case comes from Kansas’ experience. Massive tax cuts were supposed to add 100,000 jobs and eventually balance out revenues. They did neither. The state government now has a huge shortfall in revenues and is scrapping social programs to stay afloat.
A better way forward
Growing inequality, environmental degradation, and a range of modern problems have spurred economists on how to address our contemporary woes. Their prescriptions are dramatically distant from what trickle-down economics advocates.
This year’s Nobel prize winner in economics, Abhijit Banerjee, suggests that higher taxes on the super-rich and corporations will do much more to boost growth. By taking from the rich, who hoard money, and giving to the poor, who spend money, we can drive consumption and grow the economy.
Economists are increasingly accepting of a more central role for the state in fuelling innovation and growth. Mariana Mazzucato once called the “world’s scariest economist,” advocates for just that. Through mission-oriented policies, she believes governments can take up large economic projects. These projects will not only address our most persistent problems but also be designed to create huge amounts of economic activity.
A Green New Deal is precisely the kind of extensive economic project that can inject newfound life into Alberta’s economy. Instead of handing tax revenues to corporations that send it overseas, the province could be undertaking a transformation of the economy. In doing so, the government could produce hundreds of thousands of new jobs, address economic inequality, and tackle the climate crisis.
There is no shortfall of ideas when it comes to economic policy. The Kenney government’s main problem is not a lack of resources, as he claims, but a lack of creativity and a commitment to economic policies that only help the richest 1%.
Sign the Petition: Stop Kenney’s Unconstitutional Law That Outlaws Protests
Bill 1 makes it illegal to protest on essential infrastructure, including highways, railways, oil sites and any roads. The most concerning part? Kenney’s cabinet has the power to decide what is defined as critical infrastructure. Add your name to oppose it.
Alberta Premier Jason Kenney called for “economic sanctions” on the United States during incoming US President Joe Biden’s first day in office.
Speaking with reporters on Inauguration Day, only a few hours after Biden took his oath of office and began implementing his green energy agenda by rejoining the Paris Climate Agreement and cancelling the Keystone XL pipeline, Kenney called for retaliatory “economic sanctions” on the United States.
“…It is clear that the Government of Canada must impose meaningful trade and economic sanctions in response to defend our country’s vital economic interests.”
Here’s Premier Kenney calling for trade sanctions against the United States if the new Biden administration won’t re-engage Canada in meaningful discussions over Keystone. #yeg#yyc#ableg#cdnpolipic.twitter.com/tj71phtNXo
— Courtney Theriault (@cspotweet) January 21, 2021
Construction already started: According to TC Energy (previously TransCanada), some 200 kilometres of pipe has already been laid since construction in Alberta started in July 2020.
Kenney bet $7.5 billion on Trump’s re-election: Critics charge Kenney started the project knowing full well it was likely to be cancelled, sinking $7.5 billion in taxpayers’ money into the project in March 2020, a month after Kenney publicly acknowledged US Democrats might cancel the project. Kenney steamed ahead with the project over the summer of 2020 even after then-Democratic nominee Biden had publicly pledged to cancel Keystone XL.
With the opposition labelling it as Kenney’s $7.5 billion “pipeline to nowhere,” opposition leader Rachel Notley raised questions about Kenney’s multibillion dollar deal with TC Energy, despite knowing the project would likely never be completed.
Albertans deserve to know the truth about the deal Jason Kenney made with TC Energy regarding the KXL Pipeline. This is taxpayers’ money that the Premier gambled with and lost. What is Alberta’s final bill for his risky investment?
— Rachel Notley (@RachelNotley) January 21, 2021
“Crazy talk”: Kenney’s call for sanctions against the US was widely greeted with criticism and mockery from political commentators and policy experts across the political spectrum.
I didn’t have “Jason Kenney proposes threatening US trade sanctions” on any of my bingo cards.
— Jason Markusoff (@markusoff) January 21, 2021
I supported KXL and I believed that Ottawa should have been given an opportunity to discuss with Biden before he signed the EO. But launching a trade war over a partially completed pipeline is a really bad idea.
— Duane Bratt (@DuaneBratt) January 21, 2021
LOL at Jason Kenney wanting to impose economic sanctions against the United States for cancelling Keystone
Jason Kenny Twitter
— Jesse Hawken (@jessehawken) January 21, 2021
same for jason kenney demanding trade sanctions against america. the haters are gonna say that they’re using any pretext to distract from their mismanagement of the pandemic but i understand. like, after nearly a year of this, i’m going to dye my hair gray. it’s helping!
— vicky mochama (@vmochama) January 21, 2021
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Kenney is facing extinction. He rolled the dice and he lost big time. https://t.co/4Ye7SHQNar
— Susan Reisler (@susanreisler) January 21, 2021
Some people credit @jkenney for being a formidable politician. He couldn’t possibly have read the room any worse than he did today. (Not to rub salt in the wound, Alberta, but between Premier’s staff and his War Room, we’re shelling out $33M/year for this circus.) #ableg#cdnpolihttps://t.co/QtxZ5XiknW
— Ryan Jespersen (@ryanjespersen) January 21, 2021
‘Kenney said he was calling on Prime Minister Justin Trudeau to sit down with the new administration, suggesting that the federal government impose trade and economic sanctions should those efforts be refused.’ I’m sure the Biden administration is quivering. https://t.co/nLZ34EA87O
— Ravi Mattu (@ravmattu) January 21, 2021
Jodee Kenney Twitter
This is another gear of dumb https://t.co/tliX5lERnG
When is the us 12 garage sale 2020. — Bruce Anderson (@bruceanderson) January 21, 2021
Help me out here…
How can Kenney call for a “respectful dialogue” with President Biden, while simultaneously braying for biting retaliatory economic sanctions? ?
— David Khan (@Dave_Khan) January 21, 2021
So on the first day of the new administration, @jkenney is threatening sanctions against the United States. Smoooth. And what a strategist! We are truly blessed!
— Brian Mason (@bmasonNDP) January 21, 2021
Still laughing at this idea. Obviously Kenney has to float it so it looks like he’s doing something and can blame Trudeau when he doesn’t take the bait. But it’s sad. Pathetic. Transparent. And useless.
— David Moscrop (@David_Moscrop) January 21, 2021
My latest blog on Kenney’s crazy talk: Into a world of Biden euphoria comes Canadian talk of sanctions against the U.S. https://t.co/vEZm8mbU9R
— Don Martin (@DonMartinCTV) January 21, 2021
War Room MIA: Jason Kenney’s energy “war room,” created as part of Kenney’s “fight back” strategy to defend the interests of Alberta’s oil industry, has so far remained silent on Biden’s decision to scrap Keystone. In fact, the $30 million operation has not tweeted since New Year’s Day.
Happy New Year! pic.twitter.com/kXvdlfOE79
— Canadian Energy Centre (@CDNEnergyCentre) January 1, 2021
[Edmonton Journal]
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