Alberta Urban Municipalities Association annual convention address
"You make a critical contribution to our province in your roles. And we’re going to do everything we can at the provincial level to partner with you, to support you, and to work together to get results for your communities."
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Thank you for that kind introduction.
Thanks to all of you for the contribution you make to Alberta in your roles in municipal government.
And thank you for having me here today.
It is a very great privilege to stand before you as Premier of Alberta.
And to introduce your new provincial government. All our Cabinet ministers are here with me; let me tell you who they are.
- Deron Bilous – Municipal Affairs and Service Alberta
- Oneil Carlier – Agriculture & Forestry
- Joe Ceci – Finance and President of Treasury Board
- David Eggen – Education and Culture &Tourism
- Kathleen Ganley – Justice & Solicitor General and Aboriginal Relations
- Sarah Hoffman – Health and Seniors
- Brian Mason – Infrastructure and Transportation
- Margaret McCuaig-Boyd – Energy
- Shannon Phillips – Environment & Parks and Status of Women
- Irfan Sabir – Human Services
- Lori Sigurdson – Innovation & Advanced Education and Jobs, Skills, Training & Labour
As you all know, being in public life is a vocation that brings its share of wonderful moments, and very long nights.
It brings high points and not-so-high points.
I have had my share of all of these since May. Just like you have in your own work as municipal leaders.
But as you know well – it’s all more than worth it.
It’s all more than worth it for the opportunity to serve the people of Alberta, province-wide and in each and every one of your communities.
Municipal leadership is about community-building.
It’s about improving the quality of life of citizens.
You make a critical contribution to our province in your roles. And we’re going to do everything we can at the provincial level to partner with you, to support you, and to work together to get results for your communities.
As I’m shortly going to underline, there’s a lot we need to do together!
We’ll be doing this in interesting times, to be sure.
The challenges that the Government of Alberta and you in municipal government face are not small.
Just look at the numbers.
A year ago today, the WTI price for oil was $94.42 (U.S.). This week it has been trading in the $46 range.
In 2014 our economy grew by 4.4 percent. In 2015 our GDP is projected to shrink by 0.6 percent.
Our economy added 48,400 jobs in 2014. By one estimate we have so far lost some 35,000 jobs in the energy sector alone this year.
Energy sector capital expenditures stood at approximately $70 billion in 2014, and have declined to approximately $45 billion in 2015.
These realities are confronting our province with a tough fiscal challenge.
We ran a $1.1 billion surplus last year.
Our predecessors projected that our province would run more than a $5 billion deficit this year.
Since that estimate, pressure has continued on oil prices, and therefore on provincial finances, and so our deficit will likely grow more.
These are tough challenges to be sure.
Put up against this, we have some significant advantages to build on.
We have world-class universities and colleges, and one of Canada’s youngest and best-educated workforces.
We are also a wonderfully diverse province – including a strong, growing, and dynamic population of Aboriginal peoples who we will be working with in a new spirit of respect and reconciliation.
We still have, by far, the lowest overall provincial taxes in Canada, with no sales tax.
We have, by far, the lowest provincial debt in Canada – zero net debt, all in.
We have an innovative, flexible capital market.
And as much as our energy industry is under pressure, our world-leading energy companies know how to cope with the volatility that is inherent in the energy business these days.
With these challenges and strengths in mind, what I want to do today is give you a survey of some of the economic and fiscal priorities we’ve been working on since our election.
I’ll conclude by talking with you about a very important priority that requires a very close partnership between the Government of Alberta and you.
Let’s begin with some foundational points about our economy, and our energy industry.
Whether you’re an Albertan or a long-time Alberta watcher, change at the top after so long might seem surprising.
We don’t change the government all that often in Alberta.
But we are working hard to make the transition as smooth as possible, and bring as much economic stability as we can, while we implement our plans.
Those plans centre on living up to our promise to grow prosperity and create good jobs and conditions that will be widely and fairly shared – renewed prosperity that will benefit every Albertan.
We know there is only one way to succeed.
And that’s by supporting an open, sustainable and increasingly diversified economy.
We can’t accomplish this by ourselves.
Job creators create jobs in the private sector, not government.
And so we will be honest, thoughtful partners to them.
We will maintain a warm welcome for investors and uphold their right to earn fair returns.
Alberta will continue to be a healthy place for private investment under our government.
This definitely applies to energy.
Our energy industry is at the heart of our economy, and will be for many years to come.
Expanding existing oil sands projects, establishing new opportunities in our energy economy, and pioneering advanced technologies — all this requires investment on a large scale.
So under our leadership, Alberta’s abundant oil and gas reserves will remain wide open to investment.
We will maintain one of the most competitive tax systems in Canada.
Our government will boost exports by seeking out new relationships, strengthening old ones and enhancing Alberta’s environmental record.
And we will be consultative and prudent in how we take the province in a new and better direction.
Friends, as you know well, we don’t control the international price of oil.
And we don’t control the policies of Saudi Arabia or Iran.
We therefore have to manage the hand we have been dealt, while working to diversify our economy and working to reduce our dependence on a single product and a single price.
We can also work on strong, progressive policies that move us forward and position us to build on these resources as prices recover – as, eventually, they will.
For example, this July the Canadian Energy Strategy was endorsed and adopted by every single provincial and territorial government in Canada, at the Council of the Federation meeting held in St. John’s, Newfoundland.
We didn’t go into that meeting with any certainty that we were going to succeed.
The Canadian Energy Strategy is a complex inter-governmental framework, that commits Canadian governments to an environmentally-responsible, sustainable, prudently managed and determined development of Canada’s energy resources and energy potential.
There were some important competing views on these issues.
But ultimately, conducting inter-provincial business respectfully and politely turned out to be Alberta’s best strategy.
And together, provinces and territories were able to resolve our differences over the Canadian Energy Strategy.
We achieved our goal: a basic meeting of the minds that energy is a foundational part of the Canadian economy…
… that developing it responsibly is in the best economic interests of every Canadian and every Canadian government…
… and that we can find common ground across every provincial and territorial border to keep building this industry – the foundation of the Albertan economy.
A key challenge facing our industry is the need to improve our access to new world markets – which, for us, means getting at least one new pipeline built to tidewater.
We are working on this matter through drama-free, ongoing discussions with our key provincial partners in British Columbia, Ontario and Quebec.
And we will do so with the federal government as well – in whatever form it will be in after October 19th.
We are going to pursue these discussions, within the framework of the Canadian Energy Strategy that our province – under four succeeding Premiers! – worked hard to persuade our colleagues to adopt.
Getting this right will help position our energy industry to recover and return to growth as international prices recover – an essential part of economic recovery for the Albertan economy as a whole.
Finally, our province needs to prepare for renewed growth in the energy industry as prices improve, by getting it right on the environment.
We are listening carefully to Albertans about this issue, because Albertans feel strongly – as do many business leaders in the energy industry – that it is long, long past due for Alberta to clean up its environmental act.
The poor air quality in this province is a direct threat to the health of our children and our seniors.
Albertans know well that environmental issues – and specifically, the issue of climate change – is a key global problem that every community and every jurisdiction must help address, especially energy producing jurisdictions like ours.
If we don’t get it right on this issue, a solution is going to be imposed on us – sooner or later – by others. By the federal government, and by our markets, who will increasingly insist that energy products they buy be mined and processed responsibly.
If we want a made-in-Alberta environmental policy that works for Alberta and keeps our capital in Alberta, then the time to act is now.
And finally, we need to act because doing so is increasingly going to be the price of admission to those energy markets.
So, in summary, we need to make sure Alberta gets full benefit from the Canadian Energy Strategy.
Specifically, we need to work in the same spirit of good neighborliness, respect, and a certain Albertan-style amiable persistence to open up those export opportunities.
And we need to get it right on the environment – for the health of our children, because it’s the right thing to do, because doing it now allows us to set the terms and because getting it right on the environment is part of getting it right on the economy.
Just before I leave the energy industry, let me say a few words about Alberta’s current royalty review.
Our review panel is led by Alberta Treasury Branch CEO Dave Mowat.
He is helping us with a process I hope to complete before the end of the year.
This is an important review that is about modernizing and updating our royalty system, so that it fits our future energy industry instead of its past.
This review is about considering whether there are ways to better manage our royalties so that they better support processing, diversification and value-added development – with the associated jobs and growth – here in Alberta.
And this review is about ensuring that as prices recover, we collect and begin to save an appropriate share of our own resource wealth in the Alberta Heritage Fund, for the future of our children and our grandchildren.
The time is past due – long past due – for the Government of Alberta to return to a responsible, long-term approach to collecting and investing our royalty wealth, so that we stop being the farmer who pays for the groceries by selling the farm’s topsoil.
Now let’s speak about Alberta’s broader fiscal challenges – and about a topic I know is very near and dear to your hearts – the future of infrastructure investment in our province.
Friends, we have seen drops in the price of oil many times before in this province.
And we’ll see price cycles many times in the future.
But that doesn’t make it any easier to deal with the kind of revenue shocks we are witnessing as I speak.
We’ll be setting out the details of how we intend to manage this situation in the provincial budget we will present to the legislature during the week of October 26th.
And so, sadly, I won’t be telling you all the numbers in detail today.
But I do want to speak about the priorities we are working on, and give you a sense of the direction we’re going.
First, we are going to stabilize public services, and we are going to correct some mistakes that in our view the previous government made in managing public finances.
Like a $1.1 billion cut to health care.
And deep cuts to our schools and post-secondary institutions.
And the idea that the wealthiest among us can't afford to pay a single additional penny to protect public services -- but that average families can.
The people in Alberta elected us to office to make better choices.
Stable public services help build and maintain your communities.
So, we took some first steps in that direction during the spring session of the legislature.
And this question of how we can stabilize key public services like health care and education and make sure they are there for those who need them – in the context of a prudent, responsible and sustainable budget – is very much on our minds as we do this work.
Public services are the backbone of so many Alberta cities and towns.
They are the glue that holds communities together and the jobs they offer give young people a reason to come home after they finish their education.
Hospitals in towns across Alberta are the first point of contact for parents when their children get sick.
Teachers in local schools get to know the families of their students and form relationships with those young people that last long after graduation.
The local library becomes more than a place to find a good book, it is a community gathering space and an after school hang-out.
Second, we will present a plan to return to fiscal balance.
During price shocks like the one we’re seeing now, the provincial budget plays an important role as one of our province’s principle economic shock absorbers.
That role comes with a certain responsibility.
Specifically, it makes no sense to respond to layoffs and job loss in the economy by making things worse through more layoffs and more job loss.
This is a basic disagreement I have with both of the province’s conservative parties.
They continue to make their case, which is about immediately laying off thousands of teachers and nurses.
Trying to persuade you that what you need in your community right now is hundreds of layoffs, and a significant erosion of your health services and your schools.
I make my case, which is about the kind of prudent, stable approach most Albertans support.
At least until 2019, the Government of Alberta will be acting on the stability option.
But as the economy recovers, we have to make sure the provincial government’s bottom line recovers too.
That will require the Government of Alberta to very carefully and prudently manage the growth of public expenditure, and to look for opportunities to reallocate funds from lower priority areas to higher ones.
The circumstances we find ourselves in require us to follow a disciplined and clear plan that allows the government to play its “shock absorber” role in the short term, while returning to balance as quickly as is reasonable and possible.
And that’s what we’re going to do.
Finally, the Government of Alberta has an important role to play as a good partner to this province’s job creators, entrepreneurs, good ideas people, and visionaries – including the public entrepreneurs, good ideas people and visionaries who serve the public as leaders in municipal government.
People like you.
It is never more important to get that role right than when we are managing an oil price shock.
There are a number of things the Government of Alberta should do, and will do, in the face of the kind of challenges we find before us today.
Alberta has always been a great place to live, and to launch a new enterprise and explore a new idea.
We need to become an insanely great place to start a new business, to build on a new innovation, to get a new idea off the ground.
Which isn’t about a race to the bottom on taxes.
Albertans want and will pay for well-managed, prudently budgeted health care, education and public services like the ones you provide.
These are foundations of both a good society, and a good climate for growth and investment – in each and every one of your communities.
Becoming Canada’s best place to start and grow a business – competing at the high end, with Alberta-owned businesses that provide our people with good, high-skill, mortgage-paying jobs -- is about much more.
It is about operating a province with a modern, efficient infrastructure.
It is about access to capital.
It is about supporting innovation.
It is about being determined about trade development, and single-minded in attracting inward investment throughout our economy.
It is about reforming the way we structure government, so that we are easy to work with – one-stop shopping for government business services.
We are considering all of this carefully, and will have a lot more to say in and around the budget.
So, for example, we’re taking a careful look at the timing, pace, and priorities of Alberta’s capital plan.
This is a time when there may be some capacity available in our construction industry, and when capital is relatively inexpensive – in moderation!
And this is a time when managing the timing of our investments in essential infrastructure can help maintain jobs in the short term, while building a more efficient and competitive economy in the longer term.
This summer the AUMA submitted an important set of ideas for us to consider in your document, “Budget 2015 and Capital Plan”.
In the very first sentence of this document, you argue and I quote that: “municipal infrastructure is a core requirement for supporting Alberta’s economy as it ensures market access, advances environmental stewardship, enables public safety, and provides quality of life for our citizens.”
That is precisely right.
Your arguments about at-risk water and waste water infrastructure, particularly in smaller municipalities, are quite compelling.
As is the need to address flood control, public transit, and road and highways.
In your roles as elected leaders in your communities, I need you to make these points loudly, clearly and with committed enthusiasm – to reassure the people of Alberta that the time is right for a significant additional reinvestment in infrastructure in this province.
Because a significant additional reinvestment in infrastructure is exactly what we are considering as we prepare the provincial budget.
There are some important strategic investments we need to get moving on, related to our province’s health, flood, transit and other infrastructure.
And we are looking carefully for useful, well-thought-out “shovel ready” initiatives that make sense to green light this fall in the light of economic circumstances.
That’s for this fall.
There will then be a substantial additional sum we intend to invest into our province’s infrastructure over the course of a five-year capital budget.
You make a number of other important points in your submission.
Our Municipal Affairs Minister Deron Bilous, our Minister for Infrastructure and Transportation Brian Mason, and our whole Cabinet team will be working closely with you to consider these issues in the months to come.
We will also be working closely with municipal leaders to get the job done on the issue of big city charters – making sure the final result is going to work for you.
We'll also be working on moving forward with the MGA, under the leadership of our Minister of Municipal Affairs, Deron Bilous.
If we are going to do all of this, we need to work together in the closest possible partnership between our two levels of government, to ensure we make the right choices, and to make sure we get the best possible value for the citizens of this province.
I’m looking forward to working with you on getting all of this right – and so is every Minister in our government.
So there you have it.
- We are considering plans to stabilize key public services like health and education.
- We are considering a prudent, sensible and responsible plan to return to fiscal balance.
- And we are considering how we can best promote jobs and prosperity – a task that requires everyone in this room, from both levels of government, to team up to do a much better job addressing Alberta’s infrastructure challenges.
I’m looking forward to getting to work on all of this with you.
Let’s get at it!