As always, I hope this email finds you well.
This past week centered more around plans to open the economy rather than any major new announcements of financial assistance from the government. As such, this email offers a bit more commentary for industry implications, and the reopening strategy, and a bit less practical information about applying for the various programs available. I recognize that not all constituents will agree with all of my views, and I accept that. It is my hope however that my comments will generate discussion and as always I appreciate your responses.
It is now approaching 50 days since Finance Minister Bill Morneau told the Senate that assistance for the hard-hit oil and gas sector “would be coming in hours, possibly days.” While a billion dollars in assistance was announced a couple of weeks ago for oil well remediation, the industry requires closer to $30 billion in liquidity so companies can stay afloat. The Prime Minister also announced today that there are no plans in the works for immediate assistance. Instead, a joint industry/government task force is being struck to take a “deeper dive” into specific programs for industry sectors. While we wait for this task force’s report, we are now starting to see quarterly earnings losses like no time in history. These losses are significant for people’s livelihoods, government revenue, and significant in that many retired Canadians depend on energy dividends or stocks as part of their portfolio. This will be a lasting legacy of the virus.
If the series of events that have walloped the energy industry haven’t been bad enough, this week saw two of the most stupid comments ever to emanate from the lips of two of Canada’s political leaders. Green Party leader Elizabeth May, who is becoming more and more irrelevant by the day, and Bloc Québécois leader Yves-François Blanchet, who is becoming more and more irritating by the day, both held news conferences to declare “oil is dead” and they won’t support federal assistance to the industry. Normally, rational thinking Albertans would just ignore such drivel from two far left ideologues but we must remember it is a Liberal minority government being propped up by these two parties and the NDP. Government decisions are being highly influenced by the minority parties whose support they need.
Canada’s agriculture and agri-food industries are also facing unprecedented challenges. A lot of discussion has centered around the necessity of keeping grocery store shelves stocked but many Canadians don’t realize the impact of how goods got there. We are constantly reminded about the impact the virus is having on meat processing plants and the backlog of cattle waiting to be slaughtered. What we don’t hear as much about are dairy farmers pouring millions of gallons of milk daily into sewers, hogs being euthanized and potato farmers in southern Alberta faced with spreading $8 million worth of product onto fields as fertilizer. Who knew Canadians ate so many French Fries annually?
In an announcement to assist these industries the federal government committed a quarter of a billion dollars this week to agriculture and agri-food, one day after a Parliamentary committee was told by the Federation of Agriculture that ten times that amount would be required. This means the agriculture sector is receiving about 30 times less than students are being paid not to go to work this summer. While I am not suggesting students are not a group deserving of assistance, indeed they are, it is very obvious the Liberal government feels there are more votes with Canada’s youth than in areas where people put food on grocery shelves.
The Prime Minister also announced today that the Canada Emergency Wage Subsidy program (CEWS) will be extended beyond June. Like so many of the other announcements Mr. Trudeau says details will come later but, in the meantime, he wants us all to know “the government is in our corner and has our back.” This announcement, like so many others, is not yet reflected anywhere we could find on the Government of Canada website. The government also announced this week that agreement has been reached with the provinces to top up wages for front line workers. Again, no details other than it will cost $4 billion.
There are many media stories this week regarding Alberta’s decision to relaunch the economy. Golf courses were given the go ahead this past weekend, some health-related practices were allowed to open on Monday, and the primary launch of stage one of the Alberta Relaunch Strategy is next Thursday. The number of Albertans recovered from the virus has now exceeded active cases. Hundreds of hospital beds sit empty and outside of the hot spots such as long-term care facilities and meat packing plants the curve in Alberta has been flattened. Albertans have heeded the advice of senior medical officials and now need to be trusted to adjust slowly to a new working environment.
While most Albertans and businesses appear pleased to see some light at the end of the tunnel Calgary’s mayor can’t resist the temptation to be in the spotlight speaking negatively toward the strategy. The Mayor has used every opportunity during this crisis to promote his own self-interest and this appears to be carrying over to the “getting back to normal stage.” Fortunately, we have a government in Alberta that sees both sides of the situation and recognizes that in small steps Albertans want to get back to normal.
Speaking of normal I enjoy the game of golf. Judging by how many people were advocating for courses to be open, so do many Albertans. I end today by suggesting if you like to golf (even if you aren’t a golfer) read Robert Tychkowski’s column here for a little chuckle.
Thank you and take care,