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Canada's Parliament Returns This Week; Provincial Legislatures Gearing Up: How Will the Plunge in Oil Prices Impact Canadian Lawmaking?

Canada's Parliament returns to work this week as falling oil prices focus attention on the huge energy component of Canada's economy.

The issue will be front and center as well in several provincial legislatures, Alberta's most significantly; most provincial lawmaking bodies have busy calendars in the coming weeks.

Alberta produces most of Canada's oil. The province has the largest reserves of oil and natural gas in the massive Western Canadian Sedimentary Basin, which spreads from northeastern British Columbia to southwestern Manitoba.

When the Bank of Canada announced lower interest rates on Jan. 21, BOC Governor Stephen Poloz stated that the drop in oil prices is "unambiguously negative for the Canadian economy." 1/

In remarks the next day, Canadian Prime Minister Stephen Harper conceded that lower oil prices are "obviously significant for the government's finances. It's not as significant (as it is for) Alberta, but it's significant."

However Canada's elected leaders react to the energy markets, it will impact the massive number of businesses and institutions with a presence on both sides of the U.S.-Canadian border.

President Barack Obama has stated that "perhaps no two nations match up more closely together, or are woven together more deeply, economically, culturally, than the United States and Canada." 2/

Indeed, U.S. and Canada bilateral trade amounts to more than $2 billion per day, which is summed up by U.S. Secretary of Commerce Penny Pritzker as "the largest trading relationship on the planet." 3/

This is not surprising given the historic strength of the two economies and the length of the common border -- even excluding Alaska, it is nearly 4,000 miles, more than twice the length of the U.S.-Mexican border. 4/

But Harper vowed to stay the course in his government's economic program of aiming to balance the budget while maintaining tax cuts, promoting small business growth and increased employment (he cited a 1.2 million net increase in jobs), developments in the manufacturing sector and new markets for trade.

"You know, we live in a world of volatility," he said. "These things are creating some shocks that will impact us but they're not going to throw us off our fundamental growth path or undermine the very strong fundamentals of the Canadian economy." 5/

Harper mentioned Alberta because with the changing energy market, the resource-rich province now faces a $7 billion budget deficit.

Alberta Premier Jim Prentice said the province must reign in its spending on public services. The province is "living beyond our means," he said, and in the public sector, "wages are at unsustainable levels."

He added that to avoid a recession, economists have advised him to run deficits in the near term, despite his earlier aim to balance the budget. In addition, he said that he is open to hearing the view of Albertans on the idea of adding a sales tax, even though the province is currently the only one without a provincial sales tax. 6/

Even if business interests acquiesce to this, they will continue to oppose increased regulations. The Canadian Federation of Independent Business reported recently that businesses spend 12 percent more time now complying with government rules than they did just two years ago. 7/

Prentice became leader of the Progressive Conservative Party and Premier of Alberta last September. The Globe and Mail has speculated that Prentice would call a snap election for the spring, but his office stated that "no decision has been made," the newspaper reported. The Progressive Conservative position would be strengthened going into a spring contest, as a block of Members of the Legislative Assembly (MLAs) from the official opposition party, the Wildrose Party (named after Alberta's official flower), has defected to the Progressive Conservatives. 8/

The Legislative Assembly of Alberta is schedule to meet on March 10, which would be a continuation of the Third Session, 28th Legislature. 9/

Another province where the drop in oil prices is having an immediate tangible impact is Newfoundland and Labrador. There Progressive Conservatives and Liberals, in a cost-cutting move, met in an all-night session to pass a bill on Jan. 23 to cut the number of seats in the House of Assembly from 48 to 40. 10/

In British Columbia, Premier Christy Clark had been promoting growth in the liquefied natural gas industry before the drop in oil prices became an issue. Plans are moving forward, but now investors are hesitant. 11/ The Legislative Assembly of British Columbia resumes on Feb. 10.

That date also marks the return of the National Assembly of Quebec and the Legislative Assembly of New Brunswick.

In Manitoba, Premier Greg Selinger faces a leadership contest within his own New Democratic Party (NDP). With poll numbers sliding and following the resignation of five members of his cabinet, Selinger requested the contest, with a vote scheduled March 8. Two former ministers, Theresa Oswald and Steve Ashton, are vying for the leadership position; the winner would assume the premiership.

The Canadian Press reported that if either Oswald or Ashton become premier, the NDP once again will break a promise to balance the budget. 12/

The Legislative Assembly of Saskatchewan is scheduled to meet on March 2. And on Prince Edward Island, Wade MacLauchlan is slated to replace Robert Ghiz as premier after he becomes leader of the ruling Liberal Party at their leadership convention Feb. 20-21 in Charlottetown. 13/

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1/ http://www.bankofcanada.ca/multimedia/monetary-policy-report-press-conference-video-january-2015/

2/ http://www.whitehouse.gov/the-press-office/2011/12/07/statements-president-barack-obama-and-prime-minister-canada-stephen-harp

3/ http://www.commerce.gov/news/secretary-speeches/2014/10/30/us-secretary-commerce-penny-pritzker-discusses-us-canada-trade-an

4/ https://www.fas.org/sgp/crs/misc/RS21729.pdf

5/ http://www.cbc.ca/news/politics/stephen-harper-says-falling-oil-prices-won-t-throw-government-off-course-1.2928227

6/ http://www.cbc.ca/news/canada/calgary/jim-prentice-eyes-public-sector-wages-in-budget-crunch-1.2921705

7/ http://calgaryherald.com/business/local-business/red-tape-costing-alberta-businesses-4-6-billion-a-year

8/ http://www.theglobeandmail.com/news/alberta/alberta-premier-prentice-hints-at-snap-election-for-spring/article22616537/

9/ https://www.assembly.ab.ca/pro/SessionalCalendar.pdf

10/ http://www.cbc.ca/news/canada/newfoundland-labrador/all-nighter-leads-to-deal-to-cut-house-of-assembly-seats-to-40-1.2929134

11/ see, e.g. http://www.theglobeandmail.com/news/alberta/bc-looks-to-lure-workers-back-home-from-alberta-oil-patch/article22598091/

12/ http://www.timescolonist.com/two-people-trying-to-oust-manitoba-premier-greg-selinger-talk-budget-1.1698387

13/ http://www.theguardian.pe.ca/News/Local/2015-01-25/article-4020058/Wade-MacLauchlan,-next-premier-of-Prince-Edward-Island,-coy-on-election-timing/1

 


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