Last week, when demanding action on the oil price differential, Alberta's finance minister, Joe Ceci stated that the federal government was on "another planet," that if it was the auto sector or Bombardier facing problems, "there wold be all-hands-on-deck trying to address this as quickly as possible," and felt that Alberta's oil sector wasn't getting the same treatment.  Just days later, GM announced that they were planning to halt production in their Oshawa plant in 2019, and there was an immediate sense that Ceci's words might be put to the test.

While I get that there is frustration in Alberta (speaking as an Albertan myself with family who works in the oil patch), I also have to roll my eyes a little at Ceci's rhetoric, because the federal government has taken plenty of action to help Alberta's oil sector, up to and including outright buying the existing Trans Mountain pipeline in order to ensure that its expansion can be built.  Measures in the fall economic update around accelerated capital cost depreciation and tax credits for investments in companies will benefit the oil sector, and had in fact been demanded by them.  It's hard to square the government's actions with the narrative from the usual suspects in Alberta that the federal government is stymying new pipeline development.  It doesn't fit the actual facts on the ground, never mind the list of lies being told about the decisions relating to Northern Gateway, Energy East, and Keystone XL.

And it's not like there are any actual budgetary measures that can help the situation that the oil patch finds itself in a temporary supply-and-demand situation brought on by a supply glut at a time of constrained demand because of refineries in the U.S. are being shut down for maintenance and retooling.  The price differential problem is one that was decades in the making, owing to changing economics in the oil markets, and it's one that can't be fixed overnight.  Ceci has been demanding immediate action from the federal government in terms of increasing the amount of oil that travels by rail in other words, that the federal government buy oil tankers to use until pipeline capacity comes online (and there is the Enbridge Line 3 replacement that will come online next year that will help with the capacity issues), but there's just one small problem with Ceci's demand it's also one that will take time.

You can't just go to a dealership and buy new railcars, whether you're talking grain hoppers or tanker cars.  Why do you think it's taking the industry to long to phase out the older oil tanker cars that were responsible for the disaster at Lac Mégantic?  They take time to build, and the federal finance minister has told Ceci as much.  To get the numbers of railcars he wants could take a full year by which point Line 3 will be in operation.

And it's not just Ceci making demands Conservatives and their provincial counterparts are making all manner of demands that they say would have immediate effect, but they haven't yet actually given any convincing arguments declaratory legislation around the Trans Mountain pipeline would be useless because it's already federal jurisdiction (seriously, look at a map it crosses a provincial boundary); appealing the Federal Court of Appeal decision on Trans Mountain will take well over a year while they have yet to point to the error in law that they would be appealing; and nobody can conclusively point to any section in the new environmental assessment legislation, Bill C-69, that is an actual hindrance to new pipeline projects.  Worse yet, industry boosters keep making comparisons about how Canada built railways and we should be able to build pipelines ignoring of course that railways were built with virtual slave-labour from China, and forcibly displaced the Indigenous people on the prairies in order to get it through their lands.  I'm not sure that's an argument they want to keep repeating too loudly.

Let's compare Alberta's woes to those of Bombardier or the auto sector.  With Bombardier, they were asking for loans in order to ensure liquidity something that the oil sector isn't having a problem with.  Likewise, with the auto sector they needed money to keep afloat while they restructured during the economic downturn, and again, they did simply ensuring that money flows was something the government was able to do in fairly short order (though the fact that the Conservatives wrote the Chrysler loans in such a way that made them impossible to get repayment for after they restructured into Fiat Chrysler was clearly a problem, and the fact that they sold the GM shares they bought at a loss in order to create their paper balance on the budget was also arguably poor judgment).  These aren't the problems the oil sector is having, so trying to make the comparison is clearly a bit of a straw man, and Ceci and the Conservative agitators know it.  Clearly, they think that fomenting anger against the federal government is a winning strategy, even though it's built on a foundation of sand.

This having been said, we should also acknowledge that the woes of both the manufacturing sector in Ontario, and the oil patch in Alberta, are not wholly dissimilar, in that they're both the signs of a changing economy.  The manufacturing sector is transforming from one where the low-skill work has been replaced either by automation or by going off-shore, and what is replacing it domestically much more high-tech and high-skilled.  For the oil patch, both the availability of shale oil and gas, plus the demands for greener alternatives, means that it too will be facing a future where may not be any pipelines post Trans Mountain because of changing environment around social licence, and climate obligations mean that hard caps on emissions will curtail growth in the future.  Both sectors will need to adapt, and the current challenges they face are indicative of problems on the horizon.  Government bail outs may postpone the inevitable, but as the GM situation has shown, a changing marketplace will mean hardships for both industries going forward.

Photo Credit: Huffington Post