OPINION | Kenney delivers a stark but necessary message to Albertans

OPINION | Kenney delivers a stark but necessary message to Albertans

It was bitter medicine.

And nary a drop of sugar to help it go down.

Premier Jason Kenney's address to Albertans Tuesday night was perhaps the most sombre and downright bleak speech ever delivered by an Alberta premier, certainly the darkest among the televised "fireside chats" that began with Peter Lougheed in the early 1980s.

The only chat that perhaps comes closest was the 2015 address by then-premier Jim Prentice who warned Albertans that a downturn in the price of oil would cut a $5-billion hole in the provincial budget and lead to "the most serious fiscal circumstances we have faced as a province in a generation."

Prentice's crisis seems positively quaint now.

Kenney's speech Tuesday night warned of a deficit this year that beggars the imagination: "Alberta's budget deficit this year may triple from $7 billion to almost $20 billion. We will face a great fiscal reckoning in the future."

That mega-deficit will be caused by a double whammy: the government losing billions in oil revenue while spending billions to help Albertans.

As Kenney mentioned, the price of Western Canadian Select oil has fallen to $3 a barrel and could actually drop into negative prices in a few weeks, meaning "we will be paying people to take away our resources."

Kenney delivered his address from the government's cabinet room, a spot he chose deliberately because, as he pointed out, "in this room, elected leaders have grappled with great challenges for more than a century."

Three challenges he mentioned were the First World War, the Great Depression and the Spanish Flu pandemic of a century ago. It feels like we've been hit by all three at once.

In fact, Kenney said we're facing a triple threat: a health crisis, a world heading into a deep recession, and a collapse in world oil prices.

Practically everybody, everywhere is in bad shape; we happen to be in worse shape.

"The end of the pandemic will not be the end of the economic downturn," said Kenney. "We expect a global economic recovery from COVID-19 later this year but the crash in energy prices means that Alberta's downturn will be deeper, and our recovery slower."

It is a Gestalt theory of bad news: the whole is much worse than the sum of its parts.

The bad and the less bad

It's actually worse than Kenney let on during his address.

On Tuesday morning, Kenney told an online energy conference that the province's unemployment rate will hit levels not seen since the Great Depression: "Based on some polling that we've done and some analysis, I fully expect unemployment in Alberta to be at least 25 per cent, at least half a million unemployed Albertans."

There was no overt good news in his televised address, just some less-bad news.

The growth rate of COVID-19 infections is lower in Alberta than in many parts of the world. Our per capita number of recorded infections is the second-highest in Canada – after Quebec – but that's encouraging news because it demonstrates Alberta health workers are doing so many tests compared to other jurisdictions.

Alberta Health Services

And the rate of Albertans hospitalized with COVID-19 is much lower than the big three provinces: Ontario, Quebec and British Columbia.

But even then, there's potentially more bad news as Kenney warns, "we might still catch up to their numbers."

The best news of the night: he expects our health-care system will be able to cope.

But it's still not champagne-poppingly good news.

Scenarios

He outlined a "probable" scenario that has the pandemic peaking in mid-May with 800,000 Albertans infected and between 400 and 3,100 deaths. An "elevated" scenario has the peak coming in early May with one-million infections and between 500 and 6,6000 deaths.

And he had a harsh bit of advice for callous or misinformed Albertans who say "just let the virus run its course, let's just get back to normal now."

Letting the virus run rampant, said Kenney, would mean as many as 1.6 million infections, almost a third of the population, and 32,000 deaths: "Our health system would collapse under the weight of that chaos."

Kenney expects the full COVID crackdown will continue until the end of April and physical distancing until the end of May. But that's still a best-guess proposition.

He is planning what he calls a "Relaunch Strategy" to gradually open up the economy while preventing a second viral wave hitting the province.

Kenney's speech was as subtle as a slap in the face. It had to be. Putting forward false optimism might make people feel a bit better but would risk undermining the government's message to stay at home and practice physical distancing.

"We simply cannot risk letting the virus loose in Alberta," said Kenney. "That would create a public health catastrophe, which would force an even more stringent lockdown in the future, leaving our economy even further battered."

Perhaps the most optimistic comment on Tuesday came not from Kenney but from University of Calgary economist Trevor Tombe, who said the shock to the province's economy is in part deliberate. The government is hobbling the economy by shuttering businesses and telling people to stay home to stem the pandemic. That's what makes this crisis different from calamities in the past.

Deliberately slowing the economy down means the government has some control over speeding it back up when the time comes.

But that time won't come for months.

For now, we must swallow some bitter truths about the pandemic and our economic future.

And understandably, Kenney is not giving us much sugar to help it go down.

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