Calgary·Analysis

Oil matters until it doesn't, says Ottawa. That's not Alberta's view

So why is Ottawa delaying its budget when Alberta isn't, Kathleen Petty asks. Is it perhaps because Alberta is finally ready to have that election talk about constantly having to rely on unreliable oil revenues?

Alberta's not delaying its budget, so why is Ottawa?

This man, Alberta Premier Jim Prentice, is not delaying his budget. (Jason Franson/The Canadian Press)

Oil matters  until it doesn't. It mattered a lot in June of last year, a short seven months ago.

Joe Oliver, the federal finance minister stood at a podium in Montreal and issued an ominous warning, admonishing those gathered not to kid themselves about the importance of getting Alberta's oil to tidewater.

"So the choice is stark," he stated. "Head down the path of economic decline, higher unemployment, limited funds for social programs like health care, continuing deficits and growing debt, or achieve prosperity and security now and for future generations through the responsible development of our resources."

Contrast that with "the oil industry isn't remotely the entire Canadian economy," the message from Prime Minister Stephen Harper just last week.

The prime minister did acknowledge that the contribution of the energy industry to the national economy is "significant," but his emphasis was clear. Plummeting oil revenues are a much bigger problem for Alberta.

Yet the federal finance minister is delaying his budget, saying he needs more time to let the situation stabilize. And we're seeing nothing of that timidity here in Alberta.

The new federal timing is imprecise at best. Oliver says it won't be "earlier than April." That of course doesn't mean April. It only means it won't be February or March, the usual time (current fiscal year) for a federal budget.

Beyond that, it's anyone's guess.

This man, federal Finance Minister Joe Oliver, isn't going to unveil a budget until April at the earliest. (The Canadian Press)

Another question worth asking: why is Jim Prentice not delaying Alberta's provincial budget for the same reasons?

The Alberta government certainly isn't in any hurry, but it has committed to finalizing a budget before the end of the fiscal year.

The premier is musing about raising taxes, cutting spending and running a deficit.

Predicting the price of oil is a mug's game, but the province has managed to quantify the many billions that have evaporated for this year, next year and the year after that. So why can't the feds?

In Ottawa's case, it apparently understands enough about the impact of plunging oil on the national economy to know that increased taxes, spending cuts and deficits aren't necessary, according to an assortment of federal ministers.

But it doesn't know enough to detail a spending plan during the usual time-frame.

Oil and gas, along with mining, is roughly eight per cent of Canada's gross domestic product. But that doesn't really capture the true economic impact.

The energy industry also touches on so many other sectors of the economy like manufacturing, construction and transportation.

In Alberta, the conversation is about ending the madness of living beyond our means — of constantly trying to rely on unreliable revenue.

In fact, how we go about doing that will likely be the ballot box question in the next provincial election (an election many expect in late April — despite Alberta's fixed election date legislation).

Conventional wisdom seems to be that a similar inclination to debate the relative value of the oil industry is not gripping Ottawa.

Although the common mantra is that "markets don't like uncertainty," the other reality is that politicians like it even less.

In other words, the economy could get a whole lot worse and the federal Conservatives might also well want to pull the plug before that happens.

Oil does matter. How much depends not just on who is talking — but when.

ABOUT THE AUTHOR

Kathleen Petty

CBC Calgary's Executive Producer

Kathleen Petty is the one of the founding producers of what is now called CBC News Network. Petty created and produced several shows for the network while also hosting for more than 17 years. In 2006, she moved to radio and hosted the national political affairs program, The House on CBC radio along with national election coverage as well as hosting the local #1 morning show in Ottawa. Since then, Petty has written political analysis for cbc.ca and is now executive producer of CBC News in Calgary.

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Member

Join the conversationCreate account

Already have an account?

now