Media’s slant on Alberta economy helped Kenney’s cause

The fact it was predictable didn’t make the election result in Alberta any easier to take. Despite distant echoes of homophobia and misogyny, current allegations of electoral corruption and a clutch of dodgy candidates, Jason Kenney and his United Conservative Party won in a landslide. Albertans threw out Rachel Notley, a leader widely admired, and replaced her with someone many people, for good reason, can’t abide.

A reason for this, we were told repeatedly, is the dreadful state of the Alberta economy. As many would have it, since world oil prices started to fall in 2014, Alberta’s been in an economic death spiral, a downward trajectory Notley’s NDP government failed to reverse.

The dire narrative began years before the election and continued afterward, with reporters and pundits explaining the outcome as the result of a “battered economy,” “stuttering economic growth,” “a recession that left looming shadows” and “years of economic pain.” All of that hyperbole was in just the first few paragraphs of the Globe and Mail’s morning-after report. For its part, the National Post informed readers that Alberta has been a recession since 2016 while columnist and oil fan Rex Murphy, blaming that on Trudeau, referred to “massive losses “ of jobs ”during the full three years of his government.”

The fact that this sad tale told by the national media relies on gross exaggeration of some facts and disregard of others will not be news to my readers. The tendency of the media to magnify Alberta’s economic problems in general and those of oil and gas workers in particular is a theme I’ve been writing about for a while, all the way back to January 2016.

At that time a story on the front page of the Globe, relying only upon employment numbers for the month of December, claimed that 2015 was the worst year for employment losses in Alberta “since the dark days of the national energy program.” The fact was, employment actually increased in 2015. There was a significant drop in 2016, but as I noted at the time “any job losses that take place will be to employment totals that have increased by about 130,000 since 2012.”

Distorted as it was, that Globe story was a harbinger of the media’s propensity to ignore longer-term trends while cherry-picking short-term dips in employment or oil prices to support their bleak recital of Alberta’s economic situation.

Employment grew

Alberta’s economy has indeed  come down from the heady days of a decade ago when real GDP was growing at close to four per cent a year and Atlantic Canadians were moving to Alberta in droves to work. But the economy has rebounded since 2016, something the media and Conservatives in Alberta and Ottawa overlook. I wrote again about that tendency last December, when Stats Canada put a damper on daily cries of doom and gloom in the House of Commons with its monthly jobs report showing a big increase in Alberta jobs in November. The agency later revised those numbers downward, but the fact remains that average monthly employment in Alberta for 2018 was higher than it was in 2014, before the oil price drop, as Table 1 shows.

(The table – compiled from CANSIM 14-10-0090-01 – shows that despite the increase in employment, unemployment was significantly higher in 2018 than it was in 2014. That was due to an increase of more than 100,000 in the labour force, a problem that provinces like Nova Scotia would no doubt like to have).

The percentage increase in jobs in Alberta between 2014 and 2018 was 2.47 per cent. Table 2 (from CANSIM 14-10-0018-01) shows that’s about  half the national average. But it’s much better than oil-producing Saskatchewan and Newfoundland and Labrador, not to mention New Brunswick and Nova Scotia. By far the largest increase is in British Columbia, burdened with the “job-killing” carbon tax.

Another media staple has been to focus on oil’s capital, Calgary, with its double-digit commercial office vacancy rate presented as a surrogate for economic despair, pain and what have you. But according to Stats Canada Table 14-10-0090-01, average monthly employment in the Calgary region in 2018 was 892,500, up 4.12 per cent from 2014. Edmonton was up by 4.47 per cent over the same period. Even the beleaguered Wood Buffalo area, directly hit by the oil sands price slump and the devastating Fort McMurray forest fires, has seen a small increase in employment since 2016.

Such inconvenient facts don’t seem to matter. Last week, under the headline “Albertans prepare to elect a government in a climate of deep anxiety,” the CBC reported “job losses have been staggering. Alberta lost almost 17,000 jobs in January alone.” The CBC report not only ignored the immediate past – that is a 44,000-job increase in 2018 – but also failed to mention that there have been several positive developments just since January. Those included an 18,000 increase in full-time employment and a 10,000 drop in unemployment in March. Those facts were part of the monthly Labour Force Survey released on April 5, but not fitting the media frame, were ignored in the CBC report.

Oil workers

Of course, the overall improvement in jobs would be cold comfort to oil industry workers who have lost their jobs. However, the number of individuals directly affected has also been exaggerated in the media and by Kenney and his Conservative allies in Parliament The latter frequently claim the loss of 100,000 oil industry jobs, and a front page article in the Globe and Mail last week went even further, claiming that “the collapse in oil prices wiped out 133,000 jobs.”

If the latter reference is to overall employment, then, as Table I showed, those jobs have come back, and then some. As for oil and gas industry employment, specific numbers for Alberta are not easily available. Stats Canada’s reports combine oil and gas industry employment with mining and quarrying, showing a decrease in payroll employment in that sector from 133,053 in 2014 to 104,458 in 2018. That’s a big loss, but a far cry from the numbers being tossed around in the media.

Another source on line is PetroLMI which focuses strictly on the oil and gas industry. The company predicts that nationally the oil and gas workforce will decrease by 12,000 in 2019, dropping to 173,300 from 226,500 in 2014, with Alberta accounting for 80 per cent of the projected job loss.

Applying that same 80 per cent factor to overall oil and gas industry reduction would suggest that if the predicted job losses do occur, the total loss in Alberta would be about 43,000 from 2014 levels – still well below the doom-and-gloom estimates. And the notion that those jobs will magically return with the rise of a more industry-friendly government is highly questionable in an environment in which operators are striving to increase efficiency by reducing  jobs. Bob Weber of the Canadian Press, departing from media group think, reported the observations of economist Marc Jaccard, who pointed out that the job losses between 2014 and 2016 occurred despite a 10 per cent increase in oil sands production.

Price gap

The media have also been complicit in hyping the notion that pipeline capacity is the major cause of troubles in the oil patch. I’ve challenged that argument a number of times, including here. Pipeline proponents went ballistic in the fall when temporary pipeline bottlenecks and refinery shutdowns contributed to a huge increase in the differential between oil sands bitumen and the North American benchmark price. Although the discount has lessened significantly since last December and sat below $10 U.S. last week, the media frequently harked back to the two-month period last fall when the differential averaged around $40-$50.

The differential began to narrow sharply after the NDP government ordered a production cut to ease the glut that caused the differential to jump temporarily from the $10-$12 range that had prevailed prior to 2018. In a different world, Rachel Notley would have won plaudits for taking action to slash the discount. Her government might also have been given credit for the increased employment that took place despite the sharp drop in world oil prices. Or she could have been hailed for what she rightly describes as her proudest achievement – a nation-leading reduction in child poverty from 10.0 per cent in 2015 to 5.0 per cent in 2017.

Those are economic achievements, but in Alberta’s Petrostate, economic stewardship means such achievements are not good enough. The great failing of the Notley government was that it was deemed insufficiently devoted  to the great god of fossil fuels. Notley campaigned energetically (and somewhat disingenuously) in support of the Trans-Mountain pipeline and promised to spend $3.7 billion to buy rail cars to move oil sands bitumen to market. And she convinced Ottawa and the other provinces to buy into a carbon emissions plan that essentially handed oil sands operators a license to dump into the air another 35 megatonnes of GHG emissions (more than produced by all three Maritime provinces)

But that wasn’t enough to appease the oil fanatics with their yellow vests, truck convoys, “build that pipe” chants and their media enablers whose sloppy reporting magnified the economic challenges, thereby fanning popular fear and anger to the great benefit of Jason Kenney and his dangerous crowd.

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