A large number of Albertans tend to think of themselves as fiscal conservatives. But what exactly does that mean?
Fiscal conservatives believe that governments should avoid spending beyond their means, minimize waste, and respect taxpayer dollars. This means staying away from risky investments and other corporate welfare schemes, and resisting the urge to pick winners and losers in the market. Basically it’s a form of common sense with the added benefit of protecting taxpayers from crazy economic experiments and massive boondoggles.
There has been a lot of media attention regarding Premier Kenney’s decision to invest your tax dollars in the Keystone XL pipeline. This decision will cost at least $1.3 billion. However, that one-time loss pales in comparison to two other recent provincial boondoggles.
Crude by rail
In early 2019, the NDP-led government signed a $3.7 billion deal to ship 120,000 barrels per day by rail for at least three years. The purpose was to reduce the oil price differential that was costing taxpayers billions in lost revenue. It was a bad deal, which most in the oil industry recognized as unnecessary. The UCP rightly campaigned on scrapping it and selling off the shipping contracts. However, selling the contracts proved far more expensive than promised. While Premier Kenney indicated the contracts had been successfully divested in 2020 at a $1.3 billion loss, the actual cost has since ballooned to at least $2.3 billion. It is now clear the government could have minimized millions in losses simply by shipping the oil it had already paid to ship.
Refinery nightmare
Even worse is the Sturgeon Refinery debacle, which has been a disaster for nearly a decade. There’s no way to sugar coat it; the former PC government signed a horrendous financing agreement to get the project started, opening taxpayers up to billions in losses.
As construction costs skyrocketed so did the exposure to taxpayers, to the point where Albertans lost at least $2.7 billion on the refinery just for the 2019-20 fiscal year.
Locked into a contract that is poised to deliver losses for decades to come, Kenney has attempted to minimize the expense by throwing good money after bad. He has now purchased a 50 percent stake in the refinery, which is now valued at a negative $2.5 billion. In a bid to dilute the sea of red ink, he has also extended the government’s current 30-year processing agreement by another decade.
How much will this boondoggle end up costing Albertans? Nobody even knows for sure. If there were ever a project that symbolizes the dangers of government meddling in business, this is it.
He should know better
The worst part about these kinds of boondoggles is that Premier Kenney should know better.
Back in the 1990s, when Kenney worked for the Alberta Taxpayers Association, he regularly attacked such government waste. He went so far as to launch a campaign for a law to prevent government investment in private sector ventures, citing the government’s squandering of more than $2 billion over the span of a decade.
“For too long, politicians in Alberta pretended they were businessmen, investing with other people’s money, and they made an absolute failure of it,” he said.
Yet, as Premier, Kenney has consistently thrown good money after bad, leaving taxpayers on the hook for billions in waste.
With no realistic effort to prevent the government from spending beyond its means, minimize waste, or respect taxpayer dollars, there is only one conclusion that can be reached.
Premier Jason Kenney is no fiscal conservative.
Drew Barnes, MLA for Cypress-Medicine Hat, was ousted from UCP caucus in May.