How the Alberta NDP Competes In One of Canada's Most Conservative Provinces

supply side expansion. Everybody likes the idea in theory of like, okay, expanding productive capacity in the economy, and it's very hot right now. You've all kinds of people talk about it. We had as a reclient, for example, on the show, talk about it recently. We also see it in d C. There's real action, and the Inflation Reduction Act is specifically about building out capacity and investing in a new energy and so forth. We sell it with the CHIPSACKED that

was also passed about building up US domestic semiconductor capacity, etcetera. However, that Big said, I still believe that there is this core tension, particularly among left or liberal parties, and you definitely see in Democrats. Clearly, one aspect of building out supply side capacity is energy and oil, gas and so forth, and obviously there's interest in renewables, but in the meantime this is a real constraint inflation, high gas prices, high

electricity prices, etcetera. And while on one hand you have, you know, there's an impulse to expand supply side capacity, there are also climate goals. And so I believe that there is this real tension among sort of left liberal parties in the West, at least specifically between yes, this idea of expanding supply side capacity versus meeting climate goals and not giving boost per how to put it to the fossil fuel industry, And I don't think that parties

have really resolved this tension. That being said, there is a party that has been thinking about this tension and finding a way to resolve it, both in terms of policy and politics, for a long time, and that is the Alberta n DP. Alberta is historically been a very sort of energy Energy is a huge part of the economy,

and it's also seen as a conservative province. And yet the Alberta n DP has had a surprising, a shocking amount of electoral success in the province having been in power from the rough en sort of this meteoric like shocker, and it reminds me personally of the fact that you know, Joe Mansion can win in West Virginia in some respect because you know, there's such a in the US, such a red area. Maybe it would be characterized. I don't know what the color schemes are in Canada, but similar idea.

And so I want to learn more about the Alberta NDP, how they do it politically, and how they think about these potentially competing policy goals. So I'm very thrilled to welcome to the podcast today. I am going to be speaking with Rachel Notley. She is the leader of Alberta's official opposition, the leader of the Alberta NDP, and she

was the provincial chief from the year through nine. An election season is gearing up in Alberta once again, could be uh the spring, it could be sooner, maybe later because of how parliamentary systems work. So we're gonna talk about what what's going to come up in this election season. So, Rachel,

thank you so much for coming on the podcast. Well, it's a pleasure to be here, um, Joe, and it sounds like you've been having some very interesting conversations as we go through a lot of economic growth and evolution.

I really do think this is like a really difficult um challenge, you know, in the US for example, for the Demo Credit Party, and I suspect for the National NDP and Canada as well, though you'll tell me more about that, But it seems like you've kind of correct the code like to some extent, at least electorally, but from a policy standpoint, like just let's start big picture, like how do you think about balancing the importance of the natural resource sector, the importance of energy both from

a sort of employment standpoint and abundant energy perspective with also thinking about climate goals. Well, um, you know, I think probably from the very start one of the things we've tried to do is avoid using terms like balance because it is it implies the notion that they they

run against each other. Uh and and the reality is that, you know, one of the things we have to remember is that you know, um, there are a lot of things that impact economic activity, and given time, one of the things that's impacting that it now is the collective need to grapple with climate change. And and so what you therefore need to do to continue to grow the economy and provide good paying jobs is to also address one of the pressures impacting your economic activity, in this

case climate change. And so addressing climate change is part of good economic policy. It is not a countervailing force to good economic policy. And and so if you start there, then you you know, you flow from that this notion that pinning one against the other means that you will fail on both. And and so that's one thing that's sort of driven a lot of what we've had to

say from the very beginning. As as as you describe us as sort of a left leaning party, there is no question that we start our um journey towards economic growth and end development from the perspective of wanting to ensure that there are good paying jobs for everyone who wants, and that there is a high level of prosperity for all citizens, not just a few. And and so obviously,

uh so so we do that. That aligns very much with my history, which is long years old in the n DP, because I was born into a very political family and have worked in the labor movement before getting into politics, and and so I don't see standing up for working people as being a in any way, shape or form as being in contradiction to my values as

a new Democrat. And I also believe very strongly that respecting and acting on science and reality is also a fundamental part of being a new Democrat and someone who's left leaning and so and and that's why we must

also work to address the issues of climate change. Well, there are those who argue that no, Canada can't simultaneously be a fossil fuel or energy powerhouse and also hit emissions goals or do what's necessary in order to defeat climate change or to reduce emissions enough to bring that

into into appropriate range. Why do you why are they wrong? Well, first of all, because you know, a big part of Canada's economy not just altbirdas I mean a bird of you know, for your viewers, a bird is essentially you know, uh, from an economic point of view, it's it's Canada's Texas, and so it gives you a sense of how much of our economy is driven by the non renewable sector. And and of course we in turn drive considerably more of the Canadian economy than our population or geographic size

would suggest. And and so the reality is is that, but we are also a democracy. So you know, should we, uh, you know, simply act solely on matters of climate change without doing the hard work to maintain strong employment and and strong economic capacity while doing that, then quite honestly, the whole issue would fail because in the next election, those people who were doing that would get thrown out and and uh and and then you know, there'd be

this this swing back to to the other direction. And to be clear, in both cases, not only would we meet our our our climate change goals, we would also mess around with our economy because the uncertainty created by that and the and the stop and go created by

that would of course undermine our economic growth. So that being said, there's no question that that there is the capacity to create jobs out of the investments that are necessary to ensure the oil and gas producers and non renewable resource producers significantly reduce their admissions both in the process of production as well as in um in the

in the application of the product once it's produced. So there is money to be made in that and and that requires creativity in a number of different ways, and that's where you get into issues of carbon pricing, but doing so in a way that that still keeps the day to day experience of those folks who we owe

our job to in mind. Front center. Can you talk a little bit about your experience with carbon pricing and how you think it should be applied because in the US, of course, again I mentioned we recently passed the Inflation Reduction Act, and it feels like the direction here is the sort of like all carrots to no sticks approach, and there's very little that is would curtail any carbon intensive energy. It's mostly about subsidies and accelerating the production

of renewables. What is your view and experience with how carbon pricing can work? Well, I mean, I think, first of all, what carbon pricing does is it I mean, I suppose to a certain degree, as a stick approach, it provides an incentive for producers of emissions to do their homework and and and find the easy wins to reduce their missions. I mean, it just is what it is,

and some of that's easier than others. I mean, you know, methane for instances, that is sort of the you know, commonly referred to low hanging fruit and other stuff is more complicated. So there is a bit of a of a stick there, but it is also a carrot because a good portion of the resources that come in from collecting that carbon tax or that carbon price are then

redevoted to assisting and supporting efforts to reduce emissions. And it's not necessarily redevoted right in directly to the non renewable resource producer, although in some cases it is for sure we actually support technology that is directly focused on

extracting oil and gas. But in other cases it also helped us, for instance, to fund what we referred to as the REP program, which was the renewable Energy program, and what we were able to do there because even though Alberta is a probably the sunniest place in Canada, and it's got a lot of wind in certain parts of the province and blah blah blah, we had a very nascent renewable energy industry here and we used some of the funds from the Climate Leadership Program, which was

what we referred to We referred to it as the c LB when we were charged, and it of course created funds as a result of the attacks, and we used some of those funds to create a create a a reverse auction where we invited renewable energy proponents from across the continent to bid down the cost of renewable

energy products into Alberta. And as a result of doing that, we ultimately we're very excited because we ended up getting much less expensive renewable energy production then had previously been approved in other parts of the continent. We be started to become a real destination for renewable energy investment. We encouraged and succeeded in in partnering with indigenous proponents and uh in some cases they just were leading the whole thing, and we were able to really kick start and industry

that hadn't existed before. And moreover, some of the biggest proponents, some of the biggest people who bought into that were of course non renewable energy producers themselves setting up their own renewable energy production in order to help reduce the energy required for their extraction efforts. You know, you mentioned

sort of working with the indigenous people's interests. Can you talk a little bit more about how you think about that, because of course, again this is another area in which, at least in the US, among liberals and the left.

There's an increasing weight on this and we do know that around the world, and we you know, even if you look at say the recent attempt at a referendum in Chile, for example, this tension of extractive industries with the consideration of indigenous populations, how you think about how that works? No, Burn, Well, you know, I think the first thing to to to do is to understand that, you know, the interests and the desired paths of First

Nations communities across the country are not homogeneous. There is a difference between many of them, so that's first thing.

But with respect to but where there is an interest in participating in economic development in partnership with programs that are are being considered by provincial and federal governments as well as municipal then I think it's really important for provincial governments in our case, we're provincial government, to do everything we can to offer up opportunities to to partner

with indigenous groups. Honestly, this is one of the few things that that we've agreed with our political opponents over when they created the Indigenous Opportunities Corporation, because they put aside funding to help provide financing that some Indigenous groups wouldn't otherwise get access to to help them partner in some of these projects. Now that being said, when even notwithstanding that, we were successful in working with groups too. You know, in in Fort Mackay we got a community

off of diesel. We've been working anyway, We've we've been able to do a number of different projects. But really in the spirit of reconciliation, it's all about offering up opportunities where they are desired, but certainly working with them where they are not. And we know there's not consistency across the board, and and there's a lot of work

to be done. It's very complex, you know, relationship between Indigenous people, different communities within those indigenous communities, as well as the courts and the evolving constitutional law on it. So it's very complicated. But for sure, where possible, we absolutely want to work with First Nations communities to give them the kind of economic agency and independence and opportunity

that that they're seeking. Let's talk more about just sort of the Alberta energy industry would you like to see or the Canadian and energy industry depending on the framing, would you like to see Canada become a natural gas export powerhouse, because obviously that's a major focus here in the US, and the entire world is sort of clearly thirsty for any molecule of natural gas that can be produced,

you know, in the US and Canada. And my understanding is that the ellergy export capacity in Canada is not as big and not growing as fast as it is in the US. Would you like to see that grow? Well?

I think absolutely. Ellen Gy provides a lot of potential opportunities, not only for US as out Burtons in terms of exporting a product we have a heck of a lot up, but also uh in a larger picture because you know, obviously there are energy security issues, which you know just and and we know that energy security continues to be a front of a front and center issue, and so lergy is is an answer to that, and and we

have a lot of good products. But there is no question that our regulatory schemes here in Canada have presented a bit of a challenge as well as some of the you know, court determined processes that we're compelled to go through. But I think in the long term it does provide an opportunity. It is you know, obviously much

lower emissions, it's cleaner, it's non renewable, it's cleaner. It may not be you know, our long term, permanent, permanent solution, but it is absolutely an improvement over a lot of

different other forms of non renewable energy. It also forms the basis for hydrogen, which has incredible opportunities and and we're our party is doing doing work with a lot of stakeholders about our opportunities and hydrogen here in a Berta again, trying to create and keep jobs here for skilled trades people in that industry or in the one gas industry as a whole. So so yeah, it definitely

provides opportunities. It's not the bet, it's not everything, but it is absolutely something that we need to be uh, taking advantage of for sure. So you mentioned and let's talk politics for a second, because you characterized Alberta as Canada's Texas, and that seems apt to me. I've never been to Alberta, but you know, I've seen pictures of the Calgary Stampede and I'm like, yeah, that sounds right. I used to I used to live in Texas myself, so you know when I've seen those photos, like, yeah,

that sounds like an apt analogy. And yet you know here you are you you won and you you you are the premier of the province. From now you're in the opposition. You may regain power in the forthcoming elections. Like what is it? Is it just in your view? Is it just the sort of the energy standpoint? Like how do you break through in a region? I mean, like the Democrats can't figure out figure it out here outside of West Virginia, Like what do you think it is?

And other lessons for the broader NDP that you think they could take from looking at the success of the Alberta and paid well, I think I will say, I mean, it's interesting. I was listening to a different podcast a few days ago that was noting that, you know, Alberta is a lot more complicated and a lot more multicultural, a lot more diverse than than some of it's the more traditional characterizations of it. Um so I think that

that is so is Texas. So is Texas to be fair, and you know that's probably so again, Yeah, sorry, we go on, But it is true also that people have some conception of Texas. But then you know, go to the Houston suburbs or something like that. And it's probably not what many people have in mind, but sorry, keep going. Yeah, no, and that that's absolutely so, because I was going to say, I mean, we are in part because of the number of people who have flocked to the prosperity historically provided

by oil and gas. In in Alberta, we we have the benefit of having now the youngest, best educated, and I think second most diverse population in the country. So so that that is a little bit about who we are, but we're also I mean, you know, even in the industry, it's there. There are groups, like in the oil and gas that are focused on you know, they understand what the international markets are looking to and they are focused

on getting to significantly reducing their emissions. You know, the oil Sands Pathway groups is zero emissions target, you know, I mean there are groups that are very genuinely working on it. And I think as well in Alberta. One of the things about our provinces, you know, there's a bumper sticker here that's very common among and it's been around for generations. I'm you know, um fifty eight, and I think this this bumper sticker has been around since

I was in high school. In one way, or another, and it's like, please God give me another boom, and I promised not to piscital way they had that. They had that in Silicon Valley after the tech bubble, they had their own creatures like please, Please, God give us one more bubble or something like that exactly. So, so we're on a we're on boom number nine or something

right now here. Maybe not quite that much, but we we've had some pretty profound bus which created a lot of of of real suffering for a bird of families. You know, since since we sort of first took off in the in the I would argue probably the late sixties is where it really sort of took over our

economy in a huge way. And over that time, more and more people are taking very seriously the need to diversify our economy, both within the wil and gas sector for sure, but within the energy sector as a whole. And that's why I was talking so much about renewable and different forms of renewable and low emissions energy as well as outside of energy altogether. And so al Burton's are interested in the government that is prepared to talk

about diversification, that understands that Albird as a whole. Even though we have a lot of capital in this province, we are relatively small player in an international market. And if we are going to establish a foothold in a strong foothold hold in other industries, we're gonna have to

work together strategically. And that's the kind of thing and the kind of thinking you get from you know, governments that that believe in the value of government while at the same time believing in the value of job creation, inflation protection, strong public services like health care, which is very important to people in this province, very very important, like public education, like access to a good, strong post

secondary system. These are all values that we also have come to care about and and to expect delivery on from government in this province. And so it's those kinds of things that we've been six we've been able to connect with folks about when when we're talking to them about what they want to see from the provincial government. What should be done on inflation? And I've seen you tweet about this and you know, talking about food inflation in Alberta and so forth, what should be done, but

what should be done about that? Well, you know, listen, I mean, I appreciate you you're speaking to a broader group, and we do all understand that that that that inflation is. You know, it's a it's a very uh complicated problem to solve. But here's the thing within the world of things that Alberta's can the Alberta government can do without you know, contributing to the problem. And I think there's a lot is you need to have a government that is going to start by not making the problem worse.

So in in this province, since the last election, we have seen a cap on utilities removed, We've seen a cap on car insurance removed, We've seen a cap on tuition removed. We've seen school fees go up. We've seen personal income taxes go up, we've seen property taxes go up. We've seen a tremendous reach into the pockets of regular families. And so those kinds of things are all things that can be reversed. We can we can keep money in folks pockets and we can do that without contributing to

the overall inflationary challenges that we are experiencing. So, you know, there's just been a lot of extra costs piled onto our Burton's even before we entered into the last you know, a few months and years so of massive inflationary pressures. You know, I just speaking of Twitter looking through your feet right now. Right before you came on the show, you pointed out record electricity rates on the way and

you say, the u CP government has done nothing. What would you do had you been empowered to address the surge and electricity prices? Well, to be clear, when we were in power, we did actually redesign the electricity process, and we were in the process of doing it. We Alberta shares the Texas energy only market model, which means that we are highly subject to variations in the price, and so we had moved off of that to a different model where we were in the process of doing it.

And when doing that, we also had put in place a cap on electricity prices to shelter consumers during that transition. That has been reversed and the cap was removed. If the cap were still in place, we'd be at about a third of the expected electricity prices that we expect families to be hit with in the month of October. So just last week we called on the government to put on a temporary electricity cap because they've put forward

a minuscule little rebate. But when your electricity goes from five hundred to a thousand and a month, fifty dollars is not going to cut it. And it's that unpredictability which is which is creating a huge amount of anxiety for our bird of families. And so we're saying that until we can get the price of electricity under control, the cap should come in place, and until we can

get to other measures of inflation back under control. But as they say, as they say in the in Game of Thrones, you know, winter is coming and these folks need to pay attention to the experience of uppertive families. You know. I want to go back to something you said, actually again the bumper sticker, and you mentioned that you know, Berta has probably had at least nine distinct booms and bus which is of course to be expected. Sure, I

think I think the exaggerate. I think I find a bota. Well, whatever the number is, though, like that is part and parcel of having a resource dependent economy. That's every every right, every country or every state that is heavily exposed to natural resources has these boom bust cycles. And so one answer is sure, diversification, but it's a difficult process, it's

a long term process, etcetera. How do you think about provisioning and funding public goods in a sustainable way such that they can survive and last through both parts of the cycle. Well, I mean I think that, I mean, I think, uh, it really does go to diversification, because what we need is a stable source of revenue that comes from taxation that's built off of a more diverse economy.

And so yes, right now the government is flesh with royalties and that is great, but that you know that really to a large degree, cannot be built into our operating expenditures. It needs we need instead to be you know, moving that money into the kind of investments that creates long term diversification, to smooth out those peaks and valleys, and and to create a more consistent and stable revenue source.

And so so yeah, I mean, and and to be fair, I mean, Alberta's economy is making progress in that diversification effort, even as oil prices are are you know, uh, it's going way up right now, and our royalties are huge. You know, Interestingly, folks are not getting hired back into the industry at the same rate that they once were and and so there is some some diversification going on, and now when you have the resources to do it

is the time to strategically invest to encourage it. One example is um you know, the very investment that goes along with getting to net zero by two thousand fifty is estimated to be capable of creating a hundred and seventy five thou new jobs and from that one finds a more stable income source. Can you tell a little bit more about pipeline politics? And I know there was

a dispute and challenges with the Trans Mountain pipeline. I think going back several years, what is the status of that and how do you negotiate with leaders in other provinces who have different attitudes? And my understanding is that there was some tension with the British Columbia. They were leaders, they weren't as into it. What's happening with that now?

There there was tension, There's no question about it. It was you know, I'd like to think about it in hindsight as a sort of expression of some some respective

democratic wills. But I mean, ultimately what we did was we made we campaigned essentially as the government of Alberta instead of fighting with everybody and demonizing everybody and demonizing the federal government and demonizing environmentalists and all that kind of thing, which is and this is, you know, which which is certainly something that we see happening with our

provincial government. Now, we went across the country, include into British Columbia, where a lot of the opposition was based, and we talked to them about first of all, what we were doing to actually protect the environment and to reduce emissions and to be part of a long term path to two reasonable and attainable emissions targets, while at the same time also talking to them about the real life economic value that their communities experienced as a result

of the oil and gas and on renewable industry in Alberta. And we went into rooms that weren't necessarily friendly to us, and we did that all across the country in order to build support and to build the kind of political support that would also help the federal government take the steps and make the decisions that they made in order to support the pipeline. And then, of course, you know, even with that, there were still about I don't know,

and now I'm not exaggerating. At least nine different legal forums within which the debate was was held, and and and it wasn't until after we lost government that the that the courts finally came down once and for all on the fact that all the issues had been addressed and that it was appropriate for the pipeline to go ahead. So is it completed yet, No, It's scheduled to be completed next fall. There is a tremendous amount of construction going on now, so we are optimistic when it's completed.

What will that enable? What will what will change when that's open? Well, what it does is it enhances our market flexibility. But because it goes to Tidewater, it allows for our product to be not just beholden to going to the US, but also potentially to look at eastern market destinations. So that's one thing. So it increases our market flexibility. It also just increases our pipeline capacity. Periodically.

What will happen is if we run out of pipeline capacity because we're so far from many of our markets, ends up going on rail or in some really horrible cases, and two trucks that both of those, of course, are much more emissions creating methods of transportation. But also what it means is that the price that al Burton's get for the product that we all own is severely discounted. And then if we lose out on that, then frankly,

taxpayers all across the country lose out on that. And and so as shipping our products in a cost effective way, we maximize the return for all Burtons and for all Canadians. And so that's that's the impact of it there. But you know it also I like to sort of look at that whole campaign as a good example of you know, grown up government working with multiple stakeholders, multiple levels of government in partnership, hearing their concerns, honoring to as much

as possible those concerns, and and negotiating. You know, we we currently have a government that has done nothing but pick fights with everybody for their own polity called gamesmanship,

with really no interest in a positive outcome. And quite frankly, the most likely next premier is going to take that and dial it up another pent which will ultimately undermine the kind of investment stability that we need not only for strong economic performance in oil and gas, but even more importantly for making real progress on emissions reductions and meeting our climate goals. Because let me just go back

to this. As a new Democrat, I do believe we must do everything we can to meet our climate goals. So actually that seems like a good I'm glad you went there, because that's exactly what I wanted to sort of wrap up on. But like, what does that look like to you when you say, okay, meet climate goals while also building pipelines, what what is your vision for getting there? Well, as I said, I mean like even the oil sounds themselves. The Pathways Group has set as

as a net zero goal. Whether that's ambitious or not, I mean, we'll keep an eye on it, but for sure, we need to be reducing emissions. We have a policy target of reducing emissions in our electricity sector to zero by and we know that there's a number of different things that can be done in the oil and gas sector to reduce emissions and so and we know that we can actually create jobs in the course of doing it.

So that's what it looks like, you know, I think that we it looks like government pushing for sure, it's not just setting out carrots and then and then hoping that the market follows. It's a combination. A government does have to push, but we will always do so with those working folks, you know, front and center and in in terms of the interests that we're pursuing and ensuring that we maintain a viable oil and gas sector because the world is still going to need our oil and

gas for some time to come. And and if we listen to what international markets are telling us in terms of the responsibility with which need to produce it, then I think that we have a strong future ahead of us. But that requires strong leadership and a commitment to climate goals, and that's where we want to level. Rachel Notley, a head of the Alberta m DP, thank you so much for coming on the podcast. I've wanted to speak for a long time and really appreciate you taking the time.

All right, well, thank you, pleasure chappsing Well, I really enjoyed getting the chance to speak to Rachel. You know, I do think this is like one of the big tensions, and I don't know the way it's going to resolve, but clearly, look, there's a lot of political and economic interest in finding sort of ways to deal with inflation. Ways to deal with high costs on the supply side. And I really think, look, energy is in literally everything, and our governments do that. How the private sector does

that is absolutely core. And so everyone likes the idea of supply side expansion except an energy and then you get this like real tension, right or many people perceive there to be attention between economic goals or sort of like supply side and climate, although as our guest Rachel Notley said, she doesn't view them intention So I was

very excited about having that conversation. And uh, I think also it's very interesting politically because look, there are some parties in the West that find success in deeply conservative areas with this type of message where it's sort of like a more optimistic stance towards the resource sector with a more liberal left agenda elsewhere and finding a success. So I think this is a very interesting political story to be tracking, and uh will be very interesting to

see the results of the next election. So I'll leave it there. This has been another episode of the Odd Lots podcast. I'm Joe Wisn'thal. You can follow me on Twitter at the Stalwart. Follow my co host Tracy Alloway on Twitter at Tracy Alloway, follow our guests on Twitter at Rachel not Ley, and of course follow our producer

Carmen Rodriguez at Carmen Armand. And before we go, you know, we were talking about this net zero endeavors that every all these governments and companies and industries are going forward. I'd like to for you to check out a new podcast recently launched by Bloomberg. It's actually called Zero and it's about this efforts. It's hosted by our colleague Shot Rody, and it's about the tactics and technologies that could get

us to a world of net zero emissions. They have a new episode with Canadian Prime Minister Justin Trudeau, so check it out on all the major podcast listening platforms, and of course you can follow all of our podcasts at Bloomberg onto the handle at podcasts. Thanks for listening year to