The best Alberta as a Canadian Province can hope for is a Canadian “solution” that will not solve anything.
This was what I took away from the Rebel Media’s Calgary “Rally for Alberta.” While I applaud Ezra Levant and the Rebel for organizing the rally, I felt that underscoring the whole event was a misplaced faith in the Canadian political process as a mechanism towards solving Alberta’s problems.
Alberta’s problem is that it is a Canadian Province and the only real solution is for Alberta to lead the rest of the West to exit Canadian Confederation.
I have written in the past “why” Canada will break up but “when” is a whole other issue. No one can predict an exact date, but here are some facts that may shed some insight on it’s eventual timing.
Alberta is in the midst of one of the largest economic busts it has ever experienced. In my opinion this is just the beginning. Our oil industry is facing the dilemma that high world prices are essential to keep our industry viable.
At the same time a high oil prices also encourage American shale producers to ramp up drilling – significantly cutting into our market share.
Even worse, the more the Americans frack, the greater supply of oil available, the lower the ceiling price and the greater the challenges for the Alberta oil sands.
For the foreseeable future, American shale oil will be one of the biggest obstacles Alberta faces.
Unfortunately for Canada, American shale will simultaneously cripple the only other source of Canadian unity: Ontario manufacturing.
With political developments such as the Presidential election of Donald Trump, (who campaigned extensively on restoring American industries and reducing American dependence on foreign oil), Canadian energy and manufacturing are facing existential headwinds.
In very short order, electricity prices in American states with shale basins will begin to fall rapidly. Owing to government green-energy initiatives, Ontario already has some of the highest electricity rates in North America. Alberta will follow suit with the obviously ill-conceived provincial NDP environmental policies and the federal carbon tax.
Electricity prices are critical for industrial processes. This is why both Alberta oil and Ontario manufacturing, the two industries that have held the Canadian house of cards together over the past 20 years, may not exist sometime in the next 20.
They simply will not be able to compete against their American competitors.
Without the excess revenues from both industries, the Federal equalization system that held Canada together cannot function.
Across the country, funding for health care, education, infrastructure, defence and other government services will simply cease.
Public sector layoffs will have to be made.
Municipal and provincial governments will go into default. Federal bailouts will eventually be made, bankrupting the nation.
The economy nationwide will stagnate even worse than it already is.
Compounding this problem is an aging population that will NEVER generate:
- consumer demand to attract foreign investment,
- savings for domestic capital needed to finance capital intensive industry (like energy and manufacturing)
- income to generate tax revenues,
- unskilled labor to lower business operating costs, or
- enough fit young people to field any meaningful military.
As was most evident from the Rebel Media rally, the only thing keeping Alberta in Confederation today is hope.
Hope that a different hand of politicians can somehow change our provincial fortunes and bring back the high times of the mid-2000’s. A time when US oil and gas production was bottoming out to 40 year lows, demand was peaking, and domestic capital and labour were abundant.
The Americans are set to post new oil production highs for the next 50 years. Their population, though still younger, is still aging, reducing demand for both manufactured goods and energy. Canada’s even worse aging population means there will neither be capital or labour necessary to expand the oil sands. Environmental policy from people and governments across the country are hypocritically obstructionist.
Alberta will know nothing but stagnation and decline, no matter what set of politicians are in Edmonton or Ottawa.
Within Canada, there is no hope.
As unlikely it seems now, were British Columbia (or more specifically, the Vancouver Area) to become less antagonistic towards our oil and partner with us to quadruple our existing pipeline capacity, we might never know good times again in this province. Even the recently approved expansion of the Kinder Morgan pipeline (thanks to Donald Trump) may be too little, too late.
Ontario might be able to keep it’s manufacturing industry alive a while longer by importing hundreds of thousands of unskilled immigrants to work in their factories and then sell their overpriced goods to Western Canada. Unfortunately, Western Canada’s problems, and Alberta’s especially, are not solved by legions of unskilled migrants who cannot speak the same language and probably cannot hack the winter.
On the onset, Canada has no more than 20 – 30 years to left.
If you have small children now would be the time to start teaching them not to identify as Canadian.