State of the Province Address: Oct 19, 2016
"We’ve taken some hard economic knocks from the international price of oil — but nobody knocks Alberta down for long. We’re getting back on our feet. We’re working together to build a better future for our families, our children and our grandchildren."
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Thank you, Johann [Zietsman], for that warm welcome. And thank you for hosting us in this beautiful space.
Before I speak about the bright and challenging future of our province, I must speak about the sadness we all feel, on the tragic passing of former Premier Jim Prentice.
My family knows the pain the Prentice family,and the families of the other crash victims,
are going through.
As I said on Friday, words are not adequate to describe that loss.
But there are words to remember the many, many contributions that Jim Prentice made to Alberta and to Canada.
Online, through social media and in print, people everywhere are sharing those words in a heart-felt outpouring of grief and remembrance.
Words like: “generous, compassionate, caring, genuine…and wanting to help…to fix things.”
From personal experience, I can add the words gracious and statesman-like…as he provided me with valuable advice and support during the post-election transition.
From the coal mines of Grande Cache, to his law and business careers, to his volunteer service in Calgary, to Ottawa representing Calgary constituencies, to Premier of Alberta…in a life committed to public service, Jim Prentice made a difference.
He was a friend to Indigenous peoples.
His push for a federal apology for residential schools in 2008 earned the gratitude of Indigenous people.
As Alberta’s Premier, he worked to repair the government’s strained relationship with Indigenous communities, and promised better consultation by repealing Bill 22.
Our government followed through on that promise earlier this year.
He was a visionary advocate for responsible development and the environment.
All Canadians everywhere now enjoy another legacy of Jim Prentice. As Canada’s Environment Minister, he oversaw the largest expansion of Canada’s national parks system since it was founded in 1911.
Alan Latourelle, the former CEO of Parks Canada, called him: "…the best minister I've ever worked for. He was passionate about our country, our nature, but also our stories of Canada."
A tireless leader in government and the honourable calling of politics, he earned the right to enjoy a long career in private life. It is a tragedy that future has been denied.
Alberta is in mourning.
And while we look forward as a province to honouring him in an appropriately public way, we honour him personally, now in our thoughts and hearts, and in our many words of condolence and remembrance.
And let us carry on -- each and every one of us, each in our own way -- to keep faith with Jim Prentice’s love of this province by working together – as he did – to make it a better place.
To that end, let’s talk about Alberta, starting with Calgary.
Friends, Calgary is a city that drives our national economy and doesn’t back down from any challenge.
This is a resilient community, in a resilient province, at a time when we are all facing a very significant economic shock together.
So it is right and proper to come together here in Calgary today, to take stock of how our province of Alberta is doing; to talk about what we’re doing together in the face of our challenges; and to talk about some of our key interests on the national stage.
The Economic Shock
We’ve seen the price of oil go up and go down before, and we will again.
As my predecessors who led the New Democratic Party of Alberta over the last thirty years have always argued, being so heavily dependent on one product -- sold at one price, to one market – leaves us far too vulnerable to the ups and downs of an international oil market over which we have exactly zero control.
Our government came to office in the face of a textbook demonstration of the economic price Alberta pays for failing to diversify.
And everyone in Alberta knows the consequences of that failure.
Much of our economic growth over the past decade has been driven by a massive influx of investment capital, chasing those hundred-dollar barrels of oil.
When that price crashed, so did that investment boom.
That is why Premier Peter Lougheed always argued for a much more considered, prudent and systematic energy development strategy so that we wouldn’t be robbed of the benefits of good times by the pressures and costs of unsustainable booms. And so we wouldn’t pay such a heavy price during the inevitable busts.
Failure to heed that advice brought us to where we are today.
As we are all painfully aware, many areas of our economy have been adversely affected by the current crash in prices and investment capital.
As a result, far too many Alberta families are worrying today about their employment and economic security.
I know that is very much the case here in Calgary.
But we live in a province that comes together, and works together, in the face of tough challenges.
Fort McMurray showed the whole world what Alberta is made of during the fire there a few months ago.
When, in dark economic times, we need to look for inspiration, we can find it in the incredible heroism and dedication of our first responders, of the volunteers in Fort McMurray and throughout the province, and in the resilience of the people of Fort McMurray themselves.
What an incredible inspiration they are! Just like the people of Calgary were, during the floods here a few years ago.
Albertans are practical people.
We’re community-minded people.
We’re entrepreneurial people.
We’re innovative people.
And we’re tough people when we have to be.
So we’re going to come together.
We’re going to set a new and better course for our province.
We’re going to tackle our challenges with the same hopeful optimism that built Alberta and has seen it through many challenges in the past.
And we are going to build a province our children and grandchildren will be proud of.
Alberta proud and strong – just like we have always been!
Managing the Fiscal Consequences
Now, friends, when we ran for office last year, my government was clear about the course we believe is right for the people of this province.
Firing nurses and teachers won’t make the price of oil go back up.
We reject this obsessive idea, advanced by our colleagues on the opposition benches in the legislature, that in tough times we need to make Alberta’s situation worse through a kneejerk cutback to public services.
This idea that we should deal with the international price of oil by imposing deep cutbacks to our health care and our children’s education.
Those days are over in Alberta.
Health care and education are safe in our hands!
When someone in a family is diagnosed with a serious illness, they don’t want a lecture about the price of oil.
They want to know care will be there when they need it.
So we’re working to make sure that’s true, for example, by starting construction of Calgary’s new world-class cancer care center next year.
Finally and at long last, that is going to get started!
The facility will have 160 in-patient beds. It will have 12 new radiation vaults; a clinical trials unit and 9 major research labs as well as outpatient cancer clinics.
It will be a state-of-the-art facility providing great care for people throughout southern Alberta.
And while it is being constructed, it will provide hundreds of good jobs, and a sorely-needed economic boost for Calgary.
The same considerations apply in education.
When a worker loses their job and is looking for retraining to get a new one, they don’t want to hear they’re out of luck because of the price of oil.
That isn’t good enough in an economy that is going to change and keep changing in the years to come.
That training has to be there.
And a good public education system has to be there.
And world-class universities and institutions too.
I’ll say some more about education in a few minutes.
But my point right now is this: it makes no sense to try to deal with a crisis in the price of oil by creating a second crisis in basic public services like health and education.
That was tried in the past, and it failed.
There are those who want to go back to those days.
But the people of Alberta don’t.
And this government won’t.
And I wish I could leave this discussion of our fiscal realities right there…but I can’t.
Friends, saying what I just said does not mean we don’t face a serious fiscal situation.
Provincial revenues in Alberta have dropped by almost 15%.
The provincial government can serve as an economic “shock absorber”… for a time.
We can say no to proposals to download the provincial deficit onto the family budgets of ordinary Albertans.
We can handle the current dramatic drop in government revenue… for a time.
But as our economy improves in coming years, the provincial budget is going to have to come back into balance too.
That means we can protect health care and education.
But that also means we are very unlikely to have headroom for major new spending proposals until recovery arrives.
That means that people providing public services funded by the provincial government need to find innovative ways to do more with the funding they have now.
That means that municipal leaders need to understand that exciting new proposals will probably need to be paid for by reallocations – starting a new project might mean ending an old project.
So that means stability – but not big increases – in all public budgets, until better times return.
Stability is the watchword.
Asking people to do more with less has been a common refrain in many sectors for years.
But asking people to do that with erratic and volatile funding levels is not right and bound to fail.
That’s been our history in Alberta, but it doesn’t have to be our future.
We will work carefully with our public sector partners to manage the pressures they face within existing funding levels, and in return they can count on certainty in overall commitments from our government.
We know we can do this.
For example, I’m very proud and pleased to be able to salute the spirit and contribution of our province’s doctors.
This week, the Alberta Medical Association announced that Alberta’s doctors had voted by 74% to endorse a new agreement with the Government of Alberta.
We negotiated this agreement over the past year -- with a minimum of drama, and a lot of joint problem-solving.
The stakes were not small.
That AMA agreement is the single largest expense in the provincial budget – $5 billion a year, 10% of the total.
Costs related to this agreement have increased by an average of 9.7 per cent per year, for the last ten years.
With the deal negotiated by the previous PC government slated to continue for another two years
Projections showed costs could have continued to grow by 8% a year.
So, we asked our doctors to help us protect the health care system, by getting those increases under control.
And they answered the call.
The re-negotiated AMA agreement is designed to hold spending increases to about 2 per cent through 2018.
I want to sincerely thank AMA past-President Carl Nohr and his successor, Dr. Padraic Carr, and the whole team at the AMA for the public spirit Alberta’s doctors have demonstrated in coming to this agreement.
That’s why I know we can do this.
We can continue to bring quality public services to the people of Alberta while being careful and responsible with our public finances
And as we do this work, we remain focused on the jobs and economic diversification that will help us emerge from this downturn stronger than ever.
Alberta’s Jobs Plan
Friends, we’re not going to diversify our economy and make it more resilient overnight.
But if we want to get there, we have to start.
Every Albertan will have a role to play in building that more diversified and resilient economy – an economy whose benefits should and must be much more widely and fairly shared.
We will get there by diversifying our energy markets.
We will get there by moving up the value chain in our energy economy.
We will get there by diversifying the type of energy we produce.
But just as importantly, we will get there by building new opportunities and new jobs in sectors like agri-food; the creative industries; tourism; technology; manufacturing; and among small businesses.
The provincial government can’t do it all.
But we can do our share, and we can play our part.
That’s what Alberta’s jobs plan is all about.
On the advice of former Bank of Canada Governor David Dodge, we have commenced the work of our significant new investment in Alberta’s infrastructure – a $34-billion investment over five years.
This program isn’t just about creating jobs – although it is creating tens of thousands of good, mortgage-paying jobs directly and indirectly.
This program is about building the infrastructure we need to support a stronger, more diversified modern economy.
It’s about making sure we have the schools, hospitals, roads, housing, water and power we need for the increasingly diversified economy we want.
Our jobs plan is also premised on the strategy of partnering with the entrepreneurs and companies who will directly drive diversification.
For instance, we want to move up the value chain in the energy economy, and we are taking decisive action to help make that happen.
As a first step, we’ve introduced a 500 million dollar program to promote value-added production in Alberta's petro-chemical sector.
We’re looking at a number of interesting opportunities to invest this money, and we’ll have more to say about results in the months to come.
We increased Alberta Treasury Branch’s borrowing limits by $1.5 billion with clear direction to support small and medium sized businesses throughout Alberta. ATB is doing a good job at what it does well – which is supporting jobs and growth in this province, for our people.
In part on the advice of the Calgary Chamber of Commerce, we introduced two important new tax credits to help entrepreneurs get access to capital.
The legislation supporting these measures will be introduced this fall.
The Alberta Innovates voucher program for small- and medium-sized businesses has helped create over 400 jobs, 250 new prototypes, and 140 new patents.
This forward-thinking program has helped technology companies like the Nanalysis Corp, Renoworks and Oral4D Systems grow and prosper right here in Alberta.
Through $75 million in government support, the Alberta Enterprise Corporation supported investment of over $310 million in 30 Alberta tech companies resulting in approximately 1,500 good paying jobs.
And in support of our small businesses across Alberta, we cut the provincial small business tax by one-third.
Alberta’s jobs plan is going to get results.
Like the southwest Calgary ring road, which will support 8,500 person years of employment over five years.
Like the Summer Temporary Employment program, which helped employ 2,700 people this summer in non-profit organizations, libraries, small businesses and in indigenous communities.
Like the $80 million Gaetz/QEII interchange project in Red Deer, which will support 300 jobs.
Like the $248 million University of Lethbridge Destination project, which will support almost 2,000 person years of employment.
And like Blush Lane Organics, a market that was able to open a third location here in Calgary thanks to that increased funding made available through ATB Financial.
With some important help from this Budget 2016 initiative, ATB made more than 750 million dollars in loans to small and mid-sized businesses in the first quarter of this fiscal year alone.
Hundreds of projects like these, big and small, over the next five years will make a difference, and move us forward.
But Albertans don’t JUST want a return to growth.
Albertans also want to make sure that the benefits of a return to growth are widely shared.
Our friends on the other side of the Legislature believe that if you give tax cuts to the rich and cut everyone else’s public services, somehow everyone will benefit.
The lie that looking after only the most fortunate helps everyone else has been proved wrong everywhere in the industrialized world – after being given a very good run.
Socialism for the rich and austerity for everyone else is a completely discredited ideology.
But there are those who keep proposing it. Because they don’t have any new and better ideas.
Well our government does have new and better ideas.
Like our new and better idea that if you work hard, you should be able to afford to house your family, and to feed them, and to live a decent and dignified life.
Which is why we’re increasing the minimum wage in Alberta to $15 an hour.
So that better times will be widely shared, and no one will be left behind.
This is Alberta.
The economy is going to recover.
And in this province, we’re going to pay people fairly.
Education: a Key Investment in Building the Economy
Friends, there is more the provincial government can do.
Here is a very important example.
We can make sure Albertans have access to the education and skills training they need, for the new diversified economy we are going to build.
Making sure Albertans have access to good public education is arguably the single most important investment the Government of Alberta can make, in the cause of building a better, more diversified, more value-added and more resilient economy.
We have been thinking about this carefully.
We proudly launched the Future Ready program, including the online curriculum survey yesterday.
And we’ll have a lot to say in coming months about how the government, parents, educators, students and stakeholders can work together to improve education and skills training in Alberta.
This needs to be a very careful and respectful conversation.
There are few things I take more seriously in my own family life than the education of my two children. I know all parents feel the same.
The education system doesn’t need more rounds of provincially-initiated organizational chaos.
There has been more than enough of that throughout the Government of Alberta over the past ten years and more.
What we do need is careful, focused attention on building on our strengths in the education system, and doing a better job.
We got down to work on this immediately after getting elected. One of our first acts as government was to fully restore funding for K to 12 education.
And then we carried that forward into budget 2016, by fully funding enrollment growth.
That commitment allowed school boards to hire 1,100 new teachers, and protect more than 800 teaching assistant jobs that would otherwise have been lost.
There’s a lot more that needs to be done.
So, for example, at a time of economic shock, we need to make sure Alberta is doing a world-class job of providing workforce training for people throughout their careers.
We also need to be continuously improving the curriculum taught in our schools, so that we know our children will be graduating into a very different economy with the skills they need.
We also need to make sure that education and training are accessible. The best education in the world does no good if the people who need it most can’t afford it.
Earlier today, my government announced that we are extending the tuition freeze for Alberta students for a third year, to the end of the 2017-2018 academic year.
This is a decision that impacts the future of Alberta, because affordable education is the cornerstone of a healthy economy, and we all benefit from well-educated citizens contributing to our communities and our economy.
The Climate Leadership Plan
Friends, let me speak about another issue we need to tackle, to turn our economy around and to build a better future.
That is this: As one of the world’s major energy producers, we need to take control of the climate change issue, before it takes control of us.
On few files was our province more poorly served than by elected officials, from this province, who claimed – with a straight face – that there was no need to act decisively or effectively on climate change.
This failure to attend to the fundamental strategic interests of Alberta is a key reason why we remain landlocked today, despite ten years of promises that the issue was going to be addressed effectively.
So let there be no doubt.
If we want a better economic future, we need to lead on climate change.
The Government of Alberta now knows that.
The people of Alberta know it.
And the leaders of Alberta’s energy industry here in Calgary know it.
And so, leading on climate change is exactly what we are doing.
We are going to price carbon. Exactly as most credible economists – many of them conservative – argue will create the right incentives to reduce emissions at the least economic cost.
We’re going to make sure that low and middle income families in Alberta aren’t hurt by a carbon price, by providing them with a rebate.
We are going to put a cap on emissions in the oil sands.
We are going to bring in an energy efficiency program.
We are implementing a world-leading methane reduction program.
And we are going to replace coal-generated electricity with cleaner-burning natural gas and with a growing, modern, clean, renewable energy industry.
In the process we will create thousands of new jobs in industries that are here in Alberta to stay – the modern, clean industries of the future.
Renewing and modernizing our electricity system is an important part of Alberta’s Climate Leadership Plan.
Today we depend on burning coal for 60% of our power. Our province is by far the biggest coal pollution emitter in Canada. That is going to end.
And to that end, we will be spelling out the framework for this conversion this fall.
As part of our plan, we will set out a program to provide coal emitters with some of the capital they need to close their plants, and to invest in cleaner power production, as coal is phased out in Alberta.
We will set out how proponents will be able to bid into Alberta’s market to help replace that coal power generation.
And we will set out more detail on how we will promote the construction of clean renewable energy – wind, solar, thermal and hydro power -- efficiently, economically, and without undue subsidy.
In all of this, we will be creating jobs with a future, and helping to build a more resilient, diversified, and clean economy. That is the future of Alberta.
Those who argue that we don’t need to do any of this are proposing to lead this province into the 20th century.
Instead, our government will help to lead Alberta and Canada into the 21st!
Ending Alberta’s Landlock
I referred earlier to Alberta’s landlock. Let’s return to that issue.
Diversifying our economy means a lot of things – including diversifying our markets.
Right now Alberta is locked into energy infrastructure that allows us to sell to a single customer – the United States.
The US will always be a critical market for Alberta.
They are good friends and partners and always will be.
But if you only have one customer, that customer dictates your price and dictates your future.
The world is a global market, and we need to be able to sell to that global market – to anyone who wants to be our partner.
That means we have to break Alberta’s landlock.
We need access to tidewater, so that we can have access to more customers, more markets.
Between now and the end of the year, the federal government in Ottawa will be making some important decisions about the economic future of Alberta – decisions that will shape our future for many years to come.
We have shown that we are a responsible energy producer.
We are leading on climate change.
Our Climate Leadership Plan is potentially completely compatible with the federal framework proposed by Prime Minister Justin Trudeau in a statement to Parliament earlier this fall.
But we are not going to be able to afford to take part in that federal initiative, if we aren’t allowed to get back on our feet economically.
And that requires an end to Alberta’s landlock.
We need to end Alberta’s landlock, so that we can stand on our own feet, and make our full contribution to building a cleaner, fairer, more prosperous Canada.
My Government has been speaking out clearly on this issue since we were elected. And here too, as on all of the issues I’ve been talking about today, we will be working with focus and determination to get the job done.
That is what the people of Alberta are looking for from their provincial government.
They want a government that keeps its promises, and works in the public interest with focus and determination to get the job done.
Together, we are addressing the real issues that lie before Alberta.
The need to diversify this economy.
The need to do a better job on education.
The need to act decisively on climate change.
The need to break our province’s landlock, in order to diversify our markets and our opportunities.
We’ve taken some hard economic knocks from the international price of oil.
But nobody knocks Alberta down for long.
We’re getting back on our feet.
We’re working together to build a better future for our families, our children and our grandchildren.
Building on the legacy of those who came before.
We all share a love and pride of Alberta.
A cornerstone of Canada.
A province that has led before…
… And will lead again.