#1: Rachel Notley
Premier, Province of Alberta
Why she matters: Has all of Canada waiting for answers
@RachelNotley 47,800 followers
On Oct. 9, Alberta Premier Rachel Notley delivered the keynote address at a Calgary Chamber of Commerce luncheon. In the room were some 1,500 energy sector executives, most of them in a tetchy mood, given that oil was south of US$50 a barrel and over 35,000 Albertans had lost oilpatch jobs up to that point in 2015. It was the NDP leader’s first major speech to the industry since winning the provincial election in May; although prior to Oct. 9 she had consulted with individuals and small groups, she’d yet to speak directly to the sector as one entity. Now was the time, her time, her chance to win them over with policy clarity married to economic strategy.
It didn’t quite turn out that way.
During the speech, Notley spoke in generalities that left, at best, mixed impressions. Numerous outlets characterized the audience’s response as “tepid,” highlighting the dead hush that followed her attempts at humour. Questioned afterwards, Notley chose to interpret the silent treatment as “an indication that people were listening intently.” Adam Legge, the director of the city’s chamber of commerce, noted in an interview later that the Calgary business community perhaps were not feeling the grip of the sure hand they were hoping Notley would possess. “I think people came away thinking that we have a very friendly, a very outgoing and a very true Albertan in our premier,” said Legge, “but I don’t think business came away with any solid answers that the situation, the environment, is going to be any better.”
It was, in short, a chilly reception for the most powerful person in Canadian business today. Prime Minister Justin Trudeau’s infrastructure investment program is all well and good, but Canada’s immediate economic stability still depends on Alberta getting its hydrocarbons out of the ground and into existing and new pipelines. Notley is the traffic cop at the intersection of Oil St. and Climate Ave., but she’s not exactly blowing her whistle and waving people through. She’s waiting to see what creates the most congestion first. Oil prices are stagnant, industry has halted capital investment and climate change is worsening. Her first budget, delivered Oct. 27, is a Keynesian gamble, using historic amounts of debt (provincially) to create growth in a mild recession. Everyone in the world of Canadian business, and in Canada generally, is waiting to see how Notley will manage things at the crossroads. Avoiding a pileup will depend on how she handles three things: oil and gas royalties, pipeline development and climate change action. The only problem is that she can’t have all three proceed, or succeed, at the same time. On Oct. 28, post-budget, it’s not hard to imagine her waking up and looking at her to-do list: (1) Fulfill life and campaign pledges to rein in growth in energy industry and take dramatic action on climate change. (2) Find ways to spur growth in energy industry so Albertan and Canadian economies don’t wither and die.
Welcome to the job.
When Notley was a teenager watching her father, highly respected NDP leader Grant Notley, rail against the Peter Lougheed–led Progressive Conservative machine of the 1970s, it’s doubtful she ever imagined her future would involve pipelines, tidal waters, carbon taxes and climate change. But what we need to know about Notley and her style of leadership is that she’s not much different now than when she first entered electoral politics in October 2006. She has always been direct, open, blunt and personable. She’s taken a few decisive actions since becoming premier, even if they aren’t the big-ticket items. She has slashed the cabinet in half, raised the minimum wage and announced plans to double the province’s carbon tax over the next two years, the first such change in nearly a decade. Notley launched a royalty review panel to assess whether oil companies are giving Albertans a fair shake, and the results might alter the industry’s economics. Her diversification panel on the economy, formed in October to determine a future beyond oil and gas, could bear fruit in a year or two.
It’s made for a busy first half-year as premier, and whether you consider her successful or not so far likely depends on where you sit on the political spectrum. Some business leaders, such as Atco CEO Nancy Southern and Suncor CEO Steve Williams, have supported her to varying degrees (with Williams even endorsing a carbon tax hike). Others are somewhat less enthusiastic. “She is going to need to come clean on the extreme nature of her campaign promises,” says Rafi Tahmazian, the senior portfolio manager at Calgary’s influential Canoe Financial. “She has to stop biting the hand that feeds her spending. Alberta is heavy oil and gas country. We need her to step up and support the entire hydrocarbon industry, and tell us, and the world, that we’re going to get our product to tidal waters for export.”
Notley isn’t prepared to do that yet. So what will she do over the next three years? One school of thought says she should just plow ahead with her environmental agenda; history will be on her side in the end, since no one today (outside of maybe a few U.S. Republicans) doubts that the question of phasing out fossil fuels is not a matter of if but when. Another line of thinking, however, suggests extensive environmental action trained on the energy sector will kill the economy, and that Notley should instead pay close attention to the Scandinavian oil-producing market-based social democracies. Those countries are making environmental inroads by weakening demand through energy consumption taxes rather than strangling supply through production interventionism. She may not even be quite sure yet herself, and may choose to wait on oil prices, the Paris climate summit in December and the Saudi mood to help dictate her play.
Many have noted—Notley’s government not least among them—that the unwillingness to stake out bold lines of action on key files might not be entirely or even partially the NDP’s fault. The “poisoned chalice” has been a political trope since the day it was uttered on stage in 1606 during the first run of Shakespeare’s Macbeth, and a bitter aftertaste was pretty much the only thing the PC party left behind for Notley. She is following a succession of fiscally impaired, torn-mainsail governments (Stelmach, Redford, Prentice) under a PC party that had become nearly as fossilized as the resource that kept it in power for over four decades. Notley achieved one of the most surprising electoral wins in Canadian history and one of the most profound for the progressive movement, but it came just as oil was reaching terminal price-drop velocity, shoaling the Alberta revenue tanker. (The province expects to collect $2.8 billion in resource royalties this year, down from $9 billion in 2014.)
There is also the newly elected Trudeau government to consider in relation to Notley’s actions over the next few years. She campaigned loudly for Thomas Mulcair’s federal NDP (doing so at the aforementioned Calgary luncheon, which is roughly equivalent to dining at Vladimir Putin’s house and telling him how much you love Pussy Riot). She is more simpatico with Trudeau’s Liberals than any provincial or federal Conservative party is, but the federal Liberals have governed more by public-mood windsock than ideological purity. History suggests Trudeau will welcome Notley onto the bus or throw her under it, on a case-by-case basis.
Whether you like her politics or not, Notley is smart, ethical and determined. But right now, so soon after such a historic electoral victory and despite her centrality to Canada’s most pressing issues, she has not yet presented a viable energy sector alternative—only answers with varying degrees of compromise and alienation. Her base wants significant, immediate and decisive environmental action. They are going to be disappointed. The energy sector wants tangible incentives and tax relief–based support that recognizes it as the spine of the Albertan and Canadian economies. They too are going to be disappointed. Notley will have a considerable impact on the complicated futures of Alberta and Canada, but the bottom line is simple—her actions are important to all of us, because we’re all at this crossroads together.