The scandal-ridden government of Jason Kenney in Alberta is hoping that the high price of oil will bring jobs, prosperity, and ultimately conservative political dominance back to the province. But after three years of austerity, budget deficits and political convulsions, Kenney and his party will be hard pressed to make it through the rest of their term as high oil prices do not translate directly into political stability.
The United Conservative Party (UCP) bet their entire political future on higher oil prices and an economic turnaround when they took power in 2019. In a remarkable stroke of luck, crude prices have not only recovered, but skyrocketed. Royalties on bitumen alone hit $9.5 billion in 2021, the highest total on record and more than double what they were in 2019, before crude oil plunged into negative territory. Had crude prices remained sluggish, the UCP were forecasting an $18 billion deficit. Instead, the province ended the year with a small surplus. These facts should have the entire Alberta conservative movement jumping for joy, holding hands, and singing Kumbaya. Instead, they are all gearing up for a war.
After years of attacks and political scandals, the knives are out for Jason Kenney and it is unlikely high oil prices will save him. With right-wing discontent within the UCP and attempts to remove him as leader, Kenney said that “The lunatics are trying to take over the asylum,” which is not too far from the truth. This internal opposition to Kenney is taking the form of a UCP leadership review, the results of which will be revealed May 18. Kenney seems to be panicking and is pulling out all the stops to hold onto power. In early March, staff for the Kenney government were sternly asked to book a Friday off work, and to volunteer the following Saturday to campaign for Jason Kenney’s leadership review. Kenney has also been exercising his talking points by taking up a weekly Saturday morning radio show titled “Your Province. Your Premier”.
Kenney is also attempting to bolster his popularity by canceling gas taxes when crude oil is above $90 per barrel, and offering rebates on utilities while Albertans are dealing with high energy prices. Unfortunately for him these measures are all flash and no fire, as Alberta has no legal way to prevent gasoline retailers from increasing prices, and the vast majority will not qualify for the electricity rebate. Time will tell if these half measures have any effect, but Kenney has a substantial hole to dig out of. Last October a poll showed Kenney had a net favorability of -55 per cent, with only 22 per cent supporting him.
No stability
For decades, high oil prices and economic prosperity formed the basis of a stable Conservative dynasty in Alberta.
As we wrote in 2015:
“Prior to the crisis in 2008-2009, the Tories were able to find relative political and economic stability on the basis of a relatively long and sustained boom in the patch. While oil was booming, there was very little reason for workers to question the capitalist system, as long as it was delivering jobs and decent wages. If the patch was booming, jobs were being created and wages were high, then people were willing to overlook the cuts, the growing poverty and disparity in the province, and were willing to overlook the behavior of the oil barons and corporations. There was a long-term and overwhelming sense of ‘not rocking the boat’. If things kept moving forward, then hopefully things would get better, hopefully there would be a light at the end of the tunnel.”
However, as we have seen, the inverse holds true as well. After the crisis of 2008, Alberta entered into serious political convulsions, and the Progressive Conservative Party split into two. After the oil crash in 2014 ended the long period of prosperity, the 44 year dynasty of the Progressive Conservatives ended, and to the shock and horror of the Tory establishment, an Alberta New Democratic Party (ANDP) government was elected.
Now with the increase in the price of oil, many in the conservative movement are gleefully thinking that this will allow them to reestablish the old stable political situation. They will be gravely disappointed. The relationship between economic prosperity and political stability is not linear or direct but contradictory and dialectical.
While it is true that the UCP government in the past several months have had the state coffers filled with oil royalties, this won’t necessarily save Kenney and this won’t mean a return to lasting class peace. While the UCP has cut deals with public sector unions like AUPE and UNA, both of these deals are bad, with wage increases falling well below inflation. None of the problems posed by the crisis have been solved.
No jobs
One of the reasons that high oil prices won’t lead to political stability is precisely because of the parasitical nature of the oil bosses. Although energy companies are raking in profits right now, the jobs that had historically come with the booms of the past have not materialized. In February, for the second month in a row, Alberta lost full-time jobs despite high energy prices. This is the result of a process we highlighted late in 2021:
“But instead of investing that money and expanding operations, oil companies are holding back. Suncor, the largest oil company in Canada, announced that it would pursue ‘value over volume’ until 2025. Canadian Natural Resources, the second largest, has no plans for any major expansion either. In fact, the entire energy industry is projected to take in record-breaking revenues up 85 per cent from last year, but only plans to reinvest 40 per cent of revenue, the lowest amount in decades.”
Jason Kenney has pleaded with the oil barons to invest, saying, “But they now have cash on hand, many of them have very large reserves of cash on hand, and we urge them to translate a lot of that cash into new capital investment.” Yet no amount of pleading seems to be working. Another indication that oil companies are not looking to expand operations, and especially not staff, is the downward trend in exploration. The number of active drilling rigs has fallen from 459 in 2012, to 297 in 2017, all the way to 119 in the peak season of this year. But while new drilling is slowing to a halt, oil production reached an all-time high in March of this year. This means that current wells are producing and the oil bosses are content to reap the profits off current capacity. At the end of the day, Jason Kenney does not control the energy industry, because he does not own it. The oil barons are in control and they are not eager to invest.
The most farsighted elements of the ruling class do not expect stability or any long-lasting boom and are therefore not willing to sink their capital into an uncertain future. Jackie Forrest of ARC Energy Research Institute said, “Despite the fact that the industry is doing really well, they’re being very cautious with their money and not directing that to new projects or [capital expenditure] and things that would generate a bunch of jobs in the province that way.”
The turnaround in oil prices could result in significant capital expenditures in the oil patch but only if there is a prolonged period of high crude prices, which is not guaranteed. While the world political situation is tenuous, and the economic forecast is unclear, none of the oil barons, as we predicted, are looking to make any big bets.
Scandal plagued government
High oil prices and royalty revenues do not mean a general stabilization in Alberta politics is guaranteed. Kenney has earned his unpopularity, and his opponents, virtually all of society including a portion of the UCP itself, have not forgotten the past three years. Even while oil prices have been high the UCP has been plagued by scandals, controversies, and gaffes; which have only increased political tension as time goes on.
One of Kenney’s most embarrassing gaffes to date happened earlier this year during the “freedom convoy movement” and Coutts border blockade, when Kenney announced the repeal of Alberta’s vaccine passport. Kenney empathized with the unvaccinated, and compared their treatment by the general public with victims of the AIDS crisis in the 1980s. Ultimately Kenney was forced to apologize by the backlash he caused.
That same week, Kenney was asked if “Policy decisions are being pressured by the blockade”. He denied that possibility, stating that it was “not true” and further, “Nobody on behalf of the government of Alberta has been negotiating with anybody engaged in illegal actions.” Later, reports surfaced which showed that the United Conservative Party rural caucus, including rural MLAs with the UCP had “negotiated an agreement to temporarily end the Coutts blockade”. This truce would not last long. After negotiations with police and UCP MLAs who “do not represent the government”, the blockade opened one or two lanes of traffic temporarily.
Many pointed out that the UCP brought in Bill 1, the Critical Infrastructure Defense Act, to counter things like the Coutts blockade. That law carries fines up to $100,000 and ten years in prison for protest on highways, train tracks, etc. The law was enacted in response to the massive movement of demonstrations, occupations, and blockades of ports and railways in solidarity with Wet’suwet’en in early 2020. The UCP feared blockades of economic activity becoming normal and aimed to pre-empt them by stacking legal penalties for future protests. In practice, Bill 1 was revealed to be a farce. It failed to prevent a blockade on critical infrastructure, failed to play a role in dismantling it, and did nothing to prevent a massive disruption in economic activity, which was the whole point.
When the Coutts blockaders called it quits, after the UCP gave them what they wanted, police can be seen on video hugging and shaking hands with blockaders. It should be noted that this was an 18-day siege which featured police raids, firearms seizures, and clashes between police and blockaders. The UCP’s Bill 1 is a carrot and stick approach. The right wing gets the carrot; and the stick is reserved for leftists, workers, and Indigenous people.
When Trudeau invoked the Emergencies Act, the UCP filed a legal challenge against it on behalf of the province, alleging it was disproportionate and unconstitutional. It was later revealed that the provincial government had itself requested help dismantling the Coutts blockade from the federal government. All of these acts of rank hypocrisy have exposed the Kenney government and solidified hatred against it.
Disgraced former UCP Minister of Justice Kaycee Madu was implicated in a controversy when he called the Edmonton police chief about a ticket he had personally received for distracted driving. After a report from a former provincial judge concluded that Madu was in the wrong, Madu was allowed to remain in the UCP caucus and even given the role of Labour and Immigration Minister! From Jason Kenney’s perspective he could not be removed, because they are running out of loyal MLAs after removing a number of detractors.
When the UCP removed provincial mask mandates, city councils set about creating their own. The UCP went on to modify legislation to ensure municipalities could not set their own mask mandates. This is in direct opposition to when the UCP refused to implement a mask mandate and passed that responsibility over to municipalities in 2020. MLA Shane Getson embodies the amateurishness of many representatives of the UCP saying, “Municipalities are children of the province. If the children get not aligned, maybe it’s time for someone to get spanked.”
And finally, Kenney has taken to using the invasion of the Ukraine to advocate for the Albertan oil barons. Again and again, Kenney has called for an embargo on all Russian oil and gas, arguing that the world can have dictatorial oil from Russia; or peaceful, green, compassionate Alberta oil.
While Kenney extols the virtue of freedom loving Alberta oil, the oil is soaked in Russian money. For example, Igor Makarov controls the largest share of Spartan Delta Corp. at 21 per cent. Spartan Delta Corp. produces more than 60,000 barrels of Albertan oil a day. Fortunately for the optics of the provincial government, Spartan Delta Corp. released a statement condemning the Russian invasion. More egregious might be the connection between Albertan oil and Evraz PLC, which is the main steel supplier for the Coastal GasLink pipeline and the Trans Mountain pipeline expansion. Despite Evraz PLC being a British-based company, the controlling shares are held by three Russians: Roman Abramovich at 31 per cent, Aleksander Abramov at 21.5 per cent, and Aleksandr Frolov at 11 per cent. In 2018, the U.S. Department of the Treasury put all three men on their “Putin list”: a list of politicians and businessmen who have benefited from their relationship with Russian President Putin.
While Canada has placed sanctions on 58 different Russian companies and individuals, all these men had been initially spared. Only recently has Abramovich been sanctioned, after the Canadian government made sure that it would not interrupt steel shipments to the pipelines. These facts expose the sheer scale of moral bankruptcy of everyone involved.
All of this is without mentioning the internationally-mocked UCP K-6 curriculum, the travel scandal, the UCP removal of caps on insurance rate hikes, or the UCP push for private surgeries and private healthcare generally. None of these facts, quotes, or actions are indicative of a healthy, stable regime.
Ferment on the right
With a leadership challenge looming, Kenney’s wing of the conservative party now has an opposition. On the Ides of March, Brian Jean was elected in the Fort McMurray by-election, having openly stated his goal was to remove Caesar (Kenney) from his throne. Brian Jean is the natural leader of the right wing of the conservative movement in Alberta. He led the Wildrose party after his predecessor, the disgraced Danielle Smith, crossed the floor to the ruling Progressive Conservatives in 2014.
He also led the Wild Rose party into the merger with the PCs in 2017, which formed the UCP. That merger, and specifically the leadership election, was fraught with fraud. Leaked documents showed that Kenney funded and collaborated with a “Kamikaze” candidate Jeff Calloway to attack Brian Jean, Kenney’s main rival. Calloway dropped out of the race, and Kenney won handily. For this, the election commissioner levied over $200 thousand in fines to Kenney’s accomplices. The RCMP are still investigating the race for voter fraud as well.
Jean and Kenney represented two different wings of the conservative movement in that merger. Jean represented the homegrown, brash, vulgar, right-wing capitalists, who would have made up the Wildrose party; while Kenney, when he was more popular, represented the more sophisticated capitalists and large corporations.
Jean and a group around him have been campaigning on the right of the party under a group called “Take Back Alberta”. Vitor Marciano, an adviser to Jean, said, “People don’t view the good things that are happening right now as having anything to do with Jason Kenney. They’re just kind of… luck of circumstances.” And Jean has been warning “If there isn’t change, Rachel Notley will win an overwhelming majority and her second term will be much worse for Alberta than her first term,” openly proclaiming his desire to take Kenney’s job.
Historically leadership reviews and conservative parties in Alberta have required a high approval for the leader to stay on. Ralph Klein resigned after getting just 55 per cent in 2005. Alison Redford resigned after getting a higher vote. But the tension in the UCP right now has pushed Kenney to lower the bar. Kenney has argued that a positive outcome for him in the review would require only a 50-per-cent-plus-one margin of victory. A poll of UCP members prior to the switch to mail in ballot showed 31 per cent believe Kenney should resign while 43 per cent say he should remain.
Initially the review was scheduled to take place Apr. 9, in person, in Red Deer, but after fifteen thousand people registered for the conference, the UCP brass decided to change it into a mail-in ballot. Immediately outcries of voter fraud and rigging came out. This is reminiscent of the initial UCP leadership review in 2017, which Kenney won using the same voting methods. The UCP is still under investigation by the RCMP for allegations of elections fraud, including slush funds and illegal campaign money, as well as rigged ballots from people who did not know they were UCP members. To further complicate matters, in a contentious debate last year the UCP changed election laws to allow people to buy memberships for political parties in the name of other people without their consent or knowledge. This allows for a crowdsourcing of the fraud, as a Kenney supporter could buy UCP memberships for all of their friends and family and vote for them as an individual. Ballots will come in until May 11, and results will be released May 18.
The cherry on top is that Kenney’s leadership review will be officially overseen by the recently appointed active UCP lobbyist and known Kenney supporter Rick Orman, who endorsed Kenney’s leadership bid in 2017. If it was unclear, he also happens to be the CEO of an energy company.
A provincial election poll which ran from Mar. 18-20 showed the ANDP well in the lead with 44 per cent support against the UCP’s 35. Even in Calgary, the centre of Canadian conservatism, the ANDP has 47 per cent support while the UCP trails behind at 36. That poll also showed a tie of 31 per cent for each party if Brian Jean was the leader. There is a serious amount of pressure from within the UCP from top to bottom, for Jason Kenney to be the fall-guy and allow a new, less disgraced leader to take control. This is Brian Jean’s line of argument: that because Kenney is so unpopular, the UCP has a better shot if he steps out of the way. In that very same poll, 58 per cent of all Albertans thought that Kenney should resign.
No matter the outcome of the review, the United Conservative Party is in no way united. A split, a snap election, or a leadership coup of the right wing led by Brian Jean are all distinct possibilities.
Only the working class can bring down the UCP and beat back the attacks
Kenney’s government is circling the drain. It is the least popular provincial government in the country, and has been teetering on the edge for a prolonged period of time. While there have been a few small conflicts, the mass anger against the UCP government and the rapacious oil bosses has unfortunately not transpired into a mass movement against the government. With an election just over a year away, a sector of the UCP is now attempting to carry out a palace coup and scapegoat Kenney for all of the problems of the last three years.
We cannot let this happen. But what is to be done?
The perspective of the trade union leadership and the NDP has been seemingly to wait for the next provincial election. While it is true that the Alberta NDP is miles ahead in the polls, it would be an error to think that the defeat of the UCP in the May 2023 election is inevitable. If the UCP turf Kenney and successfully scapegoat him for all of the hated policies, the UCP could regain lost territory and win the election. This is especially the case with the economic recovery, which will allow the UCP with a new leader some much-needed breathing space.
But this is beside the fact. The UCP needs to be stopped now. The “wait until the election” strategy has come at the cost of thousands of jobs, privatizations, and even people’s lives during the deadly COVID-19 waves. Waiting for the next election means accepting another year of disastrous UCP rule.
Even if the polls are correct and the NDP defeats the UCP at the polls next year, this won’t necessarily mean that an NDP government will be friendly to the workers. We only need to remember the last NDP government, which saw the party stuck between a rock and a hard place. Being unwilling to go beyond capitalism and unwilling to attack the oil barons, their main focus was attempting to manage capitalism in crisis. While they resisted pressure from the capitalists for a brief period of time, eventually they gave in, and the ANDP implemented public sector wage freezes and gave handouts to the oil barons. Should the ANDP take power, all indications point to the fact that they would govern with the same approach as their first term. Although this is obviously not as bad as a UCP government, there is no guarantee that an NDP government would reverse past budget cuts, let alone implement new reforms benefiting working class people. Without a mass working class movement, the experience of the NDP in power shows us that they tend to capitulate to the pressure of the capitalists.
Whether or not the UCP is defeated in the next election, we need a mass working class movement against the attacks of the government now. The most important factor in Albertan politics is the working class, and there is a clear willingness to fight. This mood in the ranks of the unions is reflected by the Alberta Federation of Labour’s “Stand up to Kenney”, and CUPE’s “Fire Kenney” campaigns; as well as the virtually unanimous votes of non-confidence in UCP ministers by doctors, teachers, and now even crown prosecutors. We also saw the wildcat strike of healthcare workers on Oct. 26, 2020, and more recently the Lethbridge faculty strike.
In addition, on Mar. 28 students at the University of Calgary held a one-day strike against massive tuition increases while donning red square patches, a symbol of the Quebec student strike. One of the strike representatives stated, “Ultimately, the school, the university system cannot function if students withhold their participation.” This is true, and the sentiment can be generalized. Not a wheel turns, not one barrel of oil is pumped without the kind permission of the Albertan working class.
In a democratic society, the majority would decide. But in Alberta the UCP, who have no moral authority left to govern, are still commanding the ship. The fate of the vast majority should not be in the hands of Jason Kenney or Brian Jean. But this can only happen if the anger of the working class has an outlet to express itself against the government.
The working class is the only force that can stop the attacks from the UCP and their capitalist backers. The working class is the only force that can bring pressure to bear on the NDP and force them to reverse the UCP cuts. We need to build a mass movement with demonstrations and strikes. Right now, the trade union leaders should take the example of the students and call meetings to discuss the need for a one-day general strike to bring down the UCP.
