Despite oil riches, Alberta government still running deficits
By Jerry Garvis
There’s nothing like travel to broaden one’s pespectives. You go forth into the world, and to whatever degree, you experience things in a different frame of reference. When you come home, it’s with an expanded sense of context, a greater understanding of your significance in the great scheme of things.
If you want a friend to catch a trend that maybe isn’t to your advantage… you’re acquiring a paunch, say, or looking haggard from too many late work-nights… the best ones to consult are the ones you only see from time to time. Those who constantly hang with you become inured to your subtle changes, and the gradual transformations might well pass without comment. For an honest appraisal, it takes someone who hasn’t seen you for awhile to give you some perspective.
I played host to friends from Europe in June of this year. Michel, the gentleman, is French-born but for many years built a highly-regarded physiotherapy practice here in Edmonton, commuting from an acreage near Hasse Lake. He wanted to show his wife Blandine, who had never visited North America, why he held Canada in such high regard.
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Michel adores and romanticizes Canada as much as I adore and romanticize France, which I’ve seen thanks to his great generosity and willingness to play host. We’ve both been guilty of blind spots in our reverence for one another’s turf, but that changed on Michel and Blandine’s spring visit. Here’s why.
In the 80s, Michel had come to Canada, studied physiotherapy in Toronto, learned flawless English and had become certified as a physio by the Canadian regulatory board. By 1993, Michel’s physiotherapy practice was about 89% paid off. He was putting in twelve-hour days and his clientele loved him. I didn’t know him from a hole in the ground until my GP referred me to him for some nagging soft-tissue problems.
We discovered we were the same age, were both avid aircraft and history enthusiasts, and liked guitars and many of the same recording artists. I’d go in for treatment and the conversation would go all over the place. He was professional and unfailingly polite (resisting my request for him to just call me Gerry, he said “It’s Mr. Jarvis until our families get together socially”).
His two chldren were the same ages as my two, and eventually we all met up at a barbecue he and his family hosted. The deferential wall came down, and we were relating as friends. His treatment plan worked, and I was no longer hobbled by aches and pains.
Then Ralph Klein arbitrarily whacked teachers and health-care workers with a five per cent pay clawback. It was claimed that it was the necessary medicine for an inflated, overextended economy. With little daughter Marianne just hitting school age, Michel was devastated. As he said at the time: “The two things that most define the quality of life somewhere are education and health care, and the government is kicking the knees out from under both.”
He told me this summer: “I’d have had no problem sacrificing for a system if the leadership seemed to be trustworthy and to be doing it all for the right reasons. But there was something arbitrary and mean-spirited about it.”
He’d put in those long hours trying to build a reputation, credibility, equity… all those good things. And the practice was very nearly paid off, soon leaving him debt-free and with a reputation as a conscientious physio. But Michel had lost faith in a populist premier who was more interested in scoring public-approval ratings than rewarding the very values he trumpeted at photo-ops. Michel was the sort of economic contributor and citizen that any jurisdiction wants to attract and retain, and he knew it. To be summarily blown off by a government fixated on ideological rather than practical considerations devastated Michel, and he decided to return to France to regroup. It wasn’t a happy time, nor a smooth transition.
Michel went back to Provence with Marianne to get settled for her first year of public school, leaving his wife Marie-Jo and toddler son Alex to tough out a cold, snowy winter on the acreage. Marie-Jo was responsible for packing a shipping container. She remembered it was white, and how she organized it. The container that eventually arrived overseas was red, and was a shambles… someone had ransacked it in transit and stolen electronics and heirloom furniture.
There is little point in such cases in trying to investigate, given the jurisdictional hassles of police and shipper responsibility. The disillusionment and depression led to trouble in the marriage, which dissolved soon after the family’s return to France. It seemed that this was an example of no act of virtue going unpunished; Michel and his family had played by the rules, and had only hardship to show for it.
With family in Lyon, Michel relocated in Bagnols-sur-Ceze in the Languedoc district, a short drive from the Mediterranean. He rebounded, establishing a practice in the center of town. He still remembered and romanticized Canada and Alberta, and says that his clients would often ask him about the health of the economy here.
He reasoned: “Well, when I left Canada in 1995, oil was at $18 a barrel. Considering that since then, it’s spiked at $140 a barrel before stabilizing, I’d imagine Alberta is absolutely rolling in it.” After all, austerity and expense-cutting had led to the draconian Klein moves that had so dispirited him. Surely that same frugality must still be in effect. And Alberta would certainly see to it that royalties on its resource would keep the provincial coffers full for generations.
Imagine Michel’s bewilderment when he comes back and finds that provincial debt is still a concern, the Heritage Savings Trust Fund has not grown appreciably (why isn’t it being invested more aggressively?) and there is still dissatisfaction with health-care services in the province! Wait times are unacceptably long, and there are occasional pokes by private for-profit health care providers testing the resolve of the provincial and federal governments to enforce the Canada Health Act. Ideologically the Tories approve of two-tier health care, so how far off can it be?
It all looks depressingly familiar.
Michel posed the question: “What has the government been doing with its oil revenues for all these years? I certainly can’t see much of a difference. And it seems the guy in the street doesn’t give a damn that his resource isn’t benefiting him more. The government couldn’t ask for a better revenue stream, and they’re bungling it. You’ve all become complacent.” There was no comeback I could make.
It takes a friend visiting after having been away awhile to point out what, through day-to-day familiarity, we might not be examining closely enough. Michel and Blandine flew home in early July but their questions have continued to resonate, and to rankle.
Why indeed has the Heritage Savings Grust Fund not been invested more energetically, so as to generate a better return? Why indeed do we lack testicular fortitude in setting royalty rates for our resource (we’re looking at you, Ed Stelmach)? And with the price per barrel of oil being astronomical by the standards of the mid-’90s, why indeed are we not “rolling in it”?
I’m not a student of the economics of the oilpatch, nor of government, but these are very legitimate questions. And it seems that we have been too complacent, too eager to keep the Tory machine in power, just so that we don’t have to think about it all too much.
Thank God for friends from afar with keen eyesight.