Rachel Notley on an economy that's 'being held hostage', dealing with Trudeau and the next election - Macleans.ca

Rachel Notley on an economy that’s ‘being held hostage’, dealing with Trudeau and the next election

In a live interview with Paul Wells, the Alberta premier discussed the danger in fighting pipelines, the need to buy trains and the crisis facing the economy

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Alberta Premier Rachel Notley talks to Paul Wells at a Maclean's Live event at the National Arts Centre in Ottawa on Nov. 28, 2018 (Blair Gable)

Rachel Notley doesn’t much like to go around the country complaining that Alberta’s neighbours are treating it unfairly, but she says it helps move public opinion. Alberta’s premier visited Ottawa and Toronto this week to talk about the crisis in her province’s energy industry, with prices collapsing and pipeline projects blocked or abandoned. She said Canada is “wilfully” holding Alberta’s economy hostage, and announced plans to buy trains to get oil moving. On Wednesday evening, she joined Maclean’s senior writer Paul Wells for a live interview at the National Arts Centre in Ottawa to talk about all of this. Here is a transcript of their conversation, which has been lightly edited for length and clarity.

Q: You might as well take a victory lap. Tell me about the Grey Cup.

A: Well, Calgary won in Edmonton, beat Ottawa. Alberta beat Ottawa. You know, it was a good day.

Q: Before we get to the heavy stuff, let’s back up to the major win that put you in the history books, which was the election victory in 2015. I met you on the campaign trail during that campaign. And at that time, you were the leader of the fourth party in the Legislature with how many MLAs?

A: We had three others, so myself and the former leader Brian Mason, and our now Minister of Education David Eggen, and our now Minister of Economic Development Deron Bilous.

Q: Was there a point in that campaign when you thought, ‘That does it, I’m going to be the Premier’?

A: It was somewhere between five and seven days before the election. We’d seen a bunch of polls coming in—internal, external—and I don’t know why it was, but there was just a certain combination and a certain pollster, and I can’t even remember which one it was now, where I looked at it and went, ‘Oh, my goodness, this is actually going to happen.

READ MORE: Rachel Notley in conversation with Paul Wells: Maclean’s Live

Q: Did you feel ready?

A: I remember getting on the phone. We’d had a long day on the campaign trail, and I was out till 9:30, 10:00 at night, going around from campaign office to campaign office. And I got back to my hotel room and I looked at the polls, and I called my husband in a frenzy, and I was like, ‘Oh, my God, we’re going to win, and we have no transition team. This is awful.’ And I completely got all freaked out about it. And he said, ‘Get off the phone with me and call your campaign manager. I cannot help with this.’ And so I did.

At that point we agreed we weren’t doing anymore evening events. We were just going to focus every evening for the remaining five or six days working on transition because we hadn’t assembled a team at that point.

Q: Wow. Not even like a skeletal—

A: Not really, no.

Q: No government in Alberta has only ever been elected just once. Do you feel like that trend is going to help you?

A: It’s an interesting observation for people who like to look at those kinds of things. I think the more critical issues are around what kind of province Alberta is now and whether it’s changed, and what the hopes are of Albertans for the future. And you know, I feel pretty confident that my government, my leadership is still pretty aligned with that.

Q: You’re the second Notley to lead the Alberta NDP. Your dad was the NDP leader for kind of ever, from 1968 to 1984. But I’m given to understand that’s not the only source of your desire to get involved in public life, and that your mum played a role too.

A: Well, that’s true. So my dad, as you say, was an MLA and the Leader of the NDP Opposition and the Official Opposition for a brief period of time in Alberta. My mum was an activist. So I had my dad as an example. I watched him lead, I watched him represent our community as a local MLA. And my mum was an activist, and she was sort of one of those people that, you know, you might say she was sort of pushing from behind, trying to get things done. But in both case, they shared a similar set of values, and they both drew inspiration and meaning from being able to make their community around them and people around them, to make their lives better.

Unlike many people who look down their noses—for very good reason, I’m sure, in many cases—at politicians, I actually was raised to think it was a noble profession.

Q: Did you pick up any sort of practical tips, things that help you on the campaign trail?

A: What I learned mostly from was the example of hard work. I mean, that guy just never, ever stopped. And he was everywhere. He crisscrossed the province. The big joke that we have is that there’s nowhere that I can go in the province without running into somebody—you would imagine they would say, ‘Oh, I knew your dad.’ Now, that’s common. But what’s as common is, ‘I knew your dad, he slept on my couch.’ Because the NDP not being a big party, didn’t have a big expense account, and so he literally couch surfed his way across the province for about a decade.

And then he’d get home and then the phone would ring and someone would be angry that the Ministry of Transportation had knocked down their fence while they were working on a road, and all their pigs were out. And so there was Dad back in the car, driving out to help them catch their pigs at whatever ridiculous hour at night.

I don’t know that I would say that I’m that hard working, but it gives me something to shoot for.

Q: You were at the University of Alberta, an undergrad. He came and spoke, and you put a bit of a zinger of a question to him. Do you recall the question?

A: This is actually at Grande Prairie College. I was a student at Grande Prairie College and wasn’t eligible for student loans because he had an income. And the town hall was just wrapping up and the media was still there, and I stood up in the back and said, ‘Mr. Notley, I don’t know what to do. My parents make too much money, I can’t get a student loan, and there’s still two weeks left in the month and I only have crackers in my cupboard. What should I do?’

And he was mortified. Furious. But because he was known to be the cheapest human in the world he then rushed me out and gave me $20. Like, $20, 1983 in Grande Prairie, middle of the oil rush. Let me tell you $20 got you, like, a loaf of bread at that point if you were lucky.

Q: Flash forward to this morning, and you announce that you’re going to buy some rail cars. And you announce it in Ottawa. What has brought us to this pass?

A: This is the result of many, many years and many governments’ inability—federal government’s inability—to get pipelines built, whether we’re talking about Energy East, whether we’re talking about Northern Gateway, whether we’re talking about TMX, whether we’re talking about KXL. There’s been a fundamental failure to get pipelines built. And for a very long time, people have been warning, we’re reaching a critical point here and we’re going to start to have a problem.

We’re seeing that problem right now, where we’ve moved from pipeline economics to rail economics to distressed barrel economics. And that is the last place you want to be.  Suddenly the product coming out of Canada is selling for $10 when the rest of the world is getting $50, which is ridiculous. So we can’t move the product, and the Alberta economy is being held hostage, and, frankly, the Canadian economy is being held hostage.

So what do we do about it? Well, obviously, the long-term solution is pipelines, and we’re continuing to push for that. But we know, as a result of the federal Court of Appeal decision in August, that the TMX pipeline has been delayed by probably about a year. And so, even though Line 3 will hopefully come into effect in about December of 2019 it will only clear the market for a few months until we once again come up against another shortage.

We need to find another way to move this product out. Rail economics is not optimal. It’s less safe and more expensive, but it is significantly better than distressed barrel economics, which is what we’re facing now.

READ MORE: Rachel Notley and the upside down world of Alberta politics

Q: I want to make sure I understand some of the terminology in your speech. You said you’re going to buy two unit trains. Is that sort of two train equivalents?

A: What we want is to have two unit trains running per day to move 120,000 barrels per day.

Q: That’s going to net out to rather more than two actual trains.

A: Absolutely. A lot of trains and a lot of cars.

Q: You say that the current situation is one in which Canada wilfully holds Alberta’s economy and Canada’s economy hostage. I’m struck by the word wilfully. People have actually decided they’re going to tank the Canadian economy?

A: Well, I think some folks have, actually. A small minority of folks have decided that they want to hold hostage or handcuff our energy economy. But a lot of folks don’t really understand the degree to which the Canadian economy is inextricably linked to the energy economy. And so this idea that we’re just going to keep the oil in the ground and we’re just going to carry on in our happy, little world flipping condos and writing Facebook movie reviews in our favourite coffee shop, that’s not a thing.

The reality is that the Canadian economy relies significantly on the investment that’s attracted to this country through our energy industry. Twenty percent of our capital investment is from the energy industry.

There are fundamental elements to not only our economy but to our community that all Canadians rely on: the ability to fund our health care system, to fund our public education system, to fund our roads, our highways, our ports—which, to be clear, are our ports. These are things that rely in great part on a successful and a healthy energy industry.

Now, the flipside is that in Alberta we’ve taken great steps to make sure that that industry meets very high standards of environmental responsibility. We’ve put in an emissions cap. We have moved from last to first, leading the continent in major initiatives to reduce greenhouse gas emissions.

But that doesn’t come for free. And to make that transition, to make it justly, where we still keep people working, where they’re paying their taxes and supporting our schools and our hospitals, and at the same time putting a roof over their heads and taking care of their families, that’s where we need to find that coexistence between a healthy economy and worthwhile action and effective action on the environment. And they’re not at odds. They must be seen as going together.

Q: I want to go back to that striking sentence one more time. Canada wilfully holds Alberta’s economy and Canada’s economy hostage. Is it accurate for me to read that as the Government of Canada wilfully holds Alberta’s economy and Canada’s economy hostage?

A: Well, I think it’s our regulatory regime. I think it’s the collection of mechanisms through which we make decisions. We had decades of failure to get pipelines to tidewater before this current federal government was in place. And because there was a failure to acknowledge the obligation to consult meaningfully, to acknowledge the concern around the environment, to acknowledge community concern and the need for engagement, that caused a problem.

On top of it, we’re also now seeing a high level of regulatory uncertainty being brought to bear by the proposed changes that the current government is bringing in. Then we have the politics between provinces. It’s a number of things that are coming together to inhibit our ability to act as a strategic, thoughtful, sophisticated economic player on the international stage.

Q: Another sentence that I want to throw back at you. You say that building a new pipeline is just about the most progressive thing we can do.

A: The starting point is this: Our government has adopted a very ambitious and, I would suggest, country-leading approach to combating climate change. We are pricing carbon, we’re bringing in renewable energy. By 2030, 30 per cent of our electricity will be driven by the most efficiently and affordably incented renewable energy regime in the country. We’re phasing out coal by 2030. Many people don’t know right now Alberta burns more coal than the rest of the country put together, so our decision to phase out coal by 2030 is a big move.

The key thing is that we’ve put a cap on greenhouse gas emissions from the oil sands, which is a fundamentally important thing. So that big move, in and of itself, is progressive. But it can’t be done for free. We have to be able to manage a  just transition towards those objectives.

Q: You’ve suggested that, for lack of progress on these files, you could end up with a society that is angry and more polarized than ever.

A: Well, I think that that is true. We need to move away from polarization. And what we have to do is take direct aim at growing inequality because I think that inequality, ignored for too long, hurts community. It hurts civil society. It drives the breakdown of civil society, however you define it. Obviously, it is much easier to promote and grow equality and equity in a prosperous economic environment. And so it’s very critical that we always do that.

This is why I get frustrated when I hear environmentalists, with whom I have great common cause and I have great sympathy, but when they talk about things and they  choose to ignore the consequences of their decisions on their neighbour or the person that lives across the back alley, who is working in the energy industry and who needs to be able to also pay their bills and pay their way in the same society and the same community. We have to stop thinking about it in a polarized way. We need to see that one must go with the other, otherwise we will fail on both.

Q: Your job has estranged you from so many Canadian progressives. I’m given to understand you’re not really buddies with John Horgan, the Premier of British Columbia, that you’re not really in constant contact with the NDP caucus here in town. And earlier you talked about people who sit in cafés writing movie reviews on Facebook, but those are your people, surely.

A: [Laughs.] They’re my family members, to be clear. In fact, I was thinking about my brother as I was thinking about what they do.

Q: I mean, it’s actually possible to imagine an alternative universe in which you had moved to British Columbia and were today the NDP Premier of B.C., and you were trying to stop another Premier of Alberta from doing what you’re trying to do. That sort of cognitive dissonance has got to be a sort of prominent feature of your daily psychic life.

A: Well, yes and no. Let me just say that in Alberta my riding …is a very progressive neighbourhood, and folks there get it. And the folks that are on their Facebook, blogging about movie reviews when I walk into the coffee shop, they look up and they say, ‘Great job, keep up the fight, we need this pipeline.’ So it’s a bit of a light touch when I say that. I love people who blog movie reviews on Facebooks, just to be clear; I’m just not entirely sure it’s going to make us a lot of money.

Frankly, I don’t really feel that incredibly disconnected from many, many progressives in Canada, to be quite honest. A fundamental principle of being a New Democrat is keeping your eye on regular working people and making sure that their rights are protected and that their livelihood is protected. And if you keep your focus there, you’re going to be a progressive. And that’s where my focus is.

And, quite frankly, I think that our government has a record on a number of other issues that many other progressives could only wish for in terms of what we’ve done in education, in terms of the work that our government’s done on LGBTQ rights. I’m confident that our record keeps us aligned with many, many progressives.

Q: A half hour ago we were in the green room, and you were giving me the gears about the November cover of Maclean’s—

A: Which you kind of invited me to do.

Q: Yes. No, absolutely. ‘Would you like to give me the gears about the November issue of Maclean’s,’ I believe was the question.

A: Which I was happy to do.

Q: It depicted five male Conservative leaders—Andrew Scheer and Doug Ford and Jason Kenney and Scott Moe and Brian Pallister, who was very reluctant to be in that photo, I should point out, but finally came around. And it called them the Resistance. And quite casually, you said those of us who are actually in the resistance—

A: [Laughs]

Q: I can’t get over the paradox that there are some people in the progressive movement in Canada who would have been quite comfortable seeing you on that cover with those gentlemen because you’re—they would say—you’re getting the dirtiest oil in the world out to the richest market it can find.

A: Well, I would say that it is not the dirtiest oil in the world, is what I would say, quite definitively. In fact, we’re transitioning to having it be some of the cleanest and most reliable in the world. And let me be clear. Alberta is not Saudi Arabia. We promote and in fact enhance, as I was just referring to, human rights in our province. We are promoting and enhancing work to reduce greenhouse gas emissions.

Saudi Arabia, which is actually providing probably more oil and gas to eastern Canada than Alberta is, does not have that record.

I feel very confident in our environmental record, I feel confident in the way we have aligned that with the need to support the energy industry in the work that it’s doing and support the workers that it employs while still moving forward on key rights-based issues, environmental-based issues, and general pocketbook issues, which are fundamentally to regular working folk.

Q: Another of the irritants that you want to discuss with federal counterparts is Bill C-69, which essentially implements a new environmental assessment regime for major projects. And it’s caused real consternation in the oil patch, and yet it seems to me that all it would do would be to bring into the formal review process the environmental considerations and the Indigenous consent considerations that wind up getting settled in court anyway. So doesn’t this simplify a proponent’s life, rather than complicating it?

A: No. I agree that we need to clean up the system and we need to have a process in place that earns public trust. Communities, Indigenous communities, environmentalists, scientists, all those folks need to know that the matter has been fully considered, fully weighed, evidence-based decision making has occurred, and in a transparent way. So I agree with the object. The difficulty is that, in the way it’s been drafted, it creates more uncertainty because there’s not clarity there. That’s the overarching problem with it.

As well, there is tremendous investor uncertainty in the oil patch right now. And so if you layer on top of it the investment uncertainty that is created by Bill C-69 it becomes a critical mass issue. And that’s why we’re saying we need to start pulling some of these layers of stuff that we are piling on top of Alberta and the job creators in our province, and help them get just a little bit of air here.

Q: Some people have suggested that Canada’s starting to look like a place where everyone’s really nice but big things can’t happen. Is that a broader concern of yours?

A: I think that it is. Canadians as a whole need to understand that, at a certain point, as much as we all like to think locally, if we only think locally, nationally what’s going to happen is we’re going to find that there’s a lot less in the pot to share.

Q: How would you characterize your working relationship with Justin Trudeau?

A: I think generally speaking it’s been productive. I mean, I think on a lot of matters we share similar values. At the end of the day, my job is to stand up for Alberta and to stand up for Albertans and to stand up for their jobs and making sure that their issues are heard. And so that means sometimes we’re not going to agree, and sometimes that disagreement will be aired publicly, and sometimes, even while that’s happening, we’ll be having conversations to try and work our way through it.

Q: You had a meeting with him, and on the way out of it you were asked how it went, and you said, ‘It was a meeting.’ How did the meeting go?

A: In that meeting I outlined what we were looking to see the federal government do as a result of the federal Court of Appeal decision. And they didn’t do a good portion of what we asked for them to do. So obviously, I think it’s fair to say it didn’t go as well as I would have liked. Part of it was honestly a disagreement on tactics, not outcomes. I think it’s fair to say we both very much share the understanding for the outcome that needs to happen, which is that TMX get completed and built.

We were disagreeing somewhat on the way to get there. My husband would be amazed to hear me say this: I hope that someone else is right and I’m wrong. Because I almost never say that.

 Q: Do you think he bet too heavily on TMX? He had lukewarm support for Keystone down to the States. He was clearly not a huge fan of Energy East. He – there was a second pipeline to the Pacific that he outright nixed. Then he said everything will be fine, we’ll get this fourth one.

A: What I would say is that it is: I think all of us were surprised by the federal Court of Appeal decision with TMX, to be fair, everybody, including many people in the environmental movement.

The previous Northern Gateway project was rife with problems. But the decision of the federal government to then follow that with Bill C-48 to ban essentially any products from Alberta from ever leaving a northern-western port, that, in my view, has gone too far because that now is assuming that TMX is going to get done and that’s all we’re ever going to need.

Q: Bill C-48, which you just described, is the tanker traffic ban. And you say it’s a double standard. How come?

A: Well, because it’s not a tanker traffic ban because it facilitates LNG tankers. It bans not only bitumen; it bans upgraded bitumen, it bans a number of products coming from Alberta. It doesn’t even allow for proponents to consider projects where they would potentially engage in more refining, which, quite frankly, is another object of our government.

Q: Premier Horgan would say it’s because LNG is a relatively benign substance if it happens to leak out, whereas dilbit, diluted bitumen, sinks to the bottom of the ocean and you can’t get it out, it covers all the fish, it’s horrible.

A: He would say that, that is true. I would say, again, that I’m talking about things, separate and apart from that issue, I would say we’re talking about things that go beyond just that product. The distinction has not been made in Bill C-48.

The fact of the matter is that we’re in a situation now where a product that comes out of the end of a pipe is subjected all this kind of consideration. But if we put that product in a train or in a truck, it just gets off-roaded onto a boat, regardless. So there’s a great deal of product coming in and out of ports each and every day that actually present bigger safety risks than what would be coming in and out in a double-hulled tanker filled with bitumen or some more refined product.

People are grasping at every argument to stop the pipeline in order to stop the energy industry, not understanding that even in a place like B.C.—there are at least 40,000 people in B.C who live in B.C., and pay taxes in B.C., who fly in and out of Fort McMurray and earn their income in Fort Murray and fly back to their lovely, picturesque mountain town, and then buy stuff on Main Street in that lovely, picturesque mountain town, and contribute to their community league charity fund, and take their kids to hockey, and do all those things in B.C. based on the income they earn from flying in and out of Fort McMurray. That picture needs to be painted more clearly, even for the folks in B.C., let alone for the folks in the rest of Canada.

Q: Justin Trudeau is getting closer and closer to a federal election next year in which he might hope for a dozen seats in British Columbia, and he’s crazy if he’s thinks he’s going to hang onto the four seats in Alberta that he’s got now. Have you noticed that that consideration is tending to distract him as time goes on?

A: I’m not going to hypothesize or speculate over what drives the Prime Minister’s actions on any given day. What I would say, and, I suspect, what he knows, is that that would be a very short-sighted way to look at things. Because at the end of the day, if you are running to be the leader of the country, you need to be able to speak to everybody in that country about your record on the economy, and your record on job creation, and your record on attracting investment.

And the fact of the matter is that whether there are two government seats in Alberta or 30 government seats in Alberta, that doesn’t really matter. Alberta still contributes significantly to the health of the Canadian economy. And with the current headwinds that are facing the international economy and the Canadian economy, we cannot afford to let the Alberta economy struggle and sell our oil for $10 a barrel while everyone else is getting 50.

As far as I’m concerned, there is no path to victory for any politician seeking to lead this country who thinks that they can do so by shutting down the energy industry.

Q: How do you think the next Alberta election plays out? There’s an awful lot of people in Alberta who say Rachel Notley’s really nice, and Jason Kenney’s tougher, so we’ll take him.

A: I don’t know that that’s exactly the way we hear it. I’m actually quite focused on leading the province through this current challenge that we are facing. But you know, when we get to an election, it’s going to be pretty simple. There’s going to be a very clear choice for Albertans to make. Do you cut and fire your way to prosperity, or do you build and hire your way to prosperity? We are a build-and-hire government. We’ve invested, we have protected our public health care and made sure that it’s slowly and prudently improved. We have protected and grown and supported our public education system significantly. We have worked very hard to promote inclusivity and to celebrate diversity, whether we’re talking about LGBTQ rights or anti-racism. We generally speaking have a very progressive, forward-looking view of Alberta’s future that depends upon significant investment in diversification, not only of our energy industry but of our economy as a whole, and repositioning ourselves for the future. That’s our vision.

The other vision is one that is really very much focused on looking backwards by admission of the opposition caucus members themselves, adopting a plan that is designed primarily to enable a tax cut of about a billion dollars to the top one per cent of the population. So two very different visions. And then of course also a very, very socially conservative political party that struggles mightily on issues as it relates to diversity and LGBTQ rights as well as women’s rights.

People out here have a view of what Alberta is, but let me tell you it is the youngest, most diverse, best educated population in the country. It’s not your grandpa’s Alberta anymore.

Q: For 50 years people wondered whether all the people moving to Alberta because of the economic advantage that it offered were going to change the nature of Alberta. Has that happened?

A: I would say that that is in the process of happening, and I would say that our election in 2015 is one example of that.

Q: Your opponent is probably going to say, ‘Well, I’m going to stick with the old—the real Alberta, the rooted Alberta.’ There are an awful lot of people in any place who worry that newcomers are going to change the nature of that place, and that might tend to see you as the ally of that newer, stranger Alberta.

A: I would say that the view of most Albertans is that they welcome that newer, stranger Alberta, and that in fact Albertans embrace change and diversity and opportunities. I’ve lived in Vancouver for eight or nine years, I lived in Toronto for three years. My husband’s from the east coast. I’ve seen a lot of this country. And one of the things that I’ve always been so struck by about my home is that it is one of the friendliest, most optimistic group of humans you’re ever going to come across. And I think it is that same view that drives what I think will be ultimately a positive response to the question you just asked.

Q: When you go to your computer and you see the President of the United States congratulating the Saudis for driving the price of oil down and asking them to do more of that, how big a wrench does that throw into your day?

A: One of the things we did do is we suggested to the opposition, who just elected an MLA who dined out on the fact that he helped elect that President, that maybe that wasn’t the best move. But nonetheless, you know, that’s a challenge.

At the end of the day, if Albertans can get full value for their resources we can sustain increasing and decreasing values for the barrel. We just can’t sustain $10 a barrel.

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