A promising economic outlook for Alberta was forecast by public policy expert Jack Mintz — despite “unfair” federal policies and uncertainty around the oil industry.
While this province has been slammed by both a pandemic and recessed economy, Alberta’s prospects beyond 2021 “could be very good because I’ve always felt Alberta’s strength is not oil but people,” said Mintz.
He spoke on “Building Back, Better in a webinar Thursday to members of the Red Deer Chamber of Commerce.
Mintz, who chairs the Alberta Premier’s Economic Recovery Council 2020, credited this province’s innovative workforce for being very capable of strengthening Alberta’s agriculture, mining, forestry, transportation and tourism industries in future.
And he did not rule out the oil and gas sector — which he believes could be thriving again in the latter part of the decade.
While the demand for oil has fallen during the pandemic, it will rebound once the bulk of the world’s population gets vaccinated and car and air travel make a comeback, he said. Meanwhile, Mintz has noticed new investment in energy projects is not keeping pace with depletion of the existing wells — so he believes this could drive up the price of oil in a few years.
Oil prices are already doing better than Mintz expected, pushing $40 a barrel instead of $30, largely because Saudi Arabia and Russia have held back on some supply.
Mintz, a public policy academic, who has consulted with the World Bank, the International Monetary Fund, governments and private industry, isn’t sure whether incoming U.S. president Joe Biden’s environmental initiatives will hinder Canadian energy imports.
There could be new tariffs and a halt on some pipeline projects, but he noted many members of the Democratic Party are moderates who could object to the high expense of energy transition.
Biden is also looking to cement friendly trade alliances to curb the rising power of its rival, China, so “the goal would be to set some exemptions for Canada from U.S. rules,” he added.
Mintz believes environmentalism could create unintentional benefits for Alberta. He said this province has many of the minerals needed for the creation of electric cars batteries, so should expand its mining industry, which has historically taken a back seat to oil and gas.
Alberta would benefit from taking more control of its fiscal future, as Ottawa “unfairly” prefers to directly invest in other parts of the country, said Mintz, even though Alberta contributes $20 billion a year to the federal budget, “which is more than we get back in federal spending.”
Mintz suggested the Alberta government look at creating a provincial pension plan as well as a sales tax — which, although unpopular, would raise needed provincial revenues.
He said the impact of a sales tax on consumers could be mitigated by reductions in personal income taxes. But he admitted a sales tax shouldn’t happen for a few years to allow for some economic recovery after the pandemic.