Weekly Roundup - Jan 6, 2022
While COVID-19 and rising cases continue to dominate the news and provincial politics in Alberta, we wanted to start off the year with a look ahead to some of the other key stories and themes you can expect in 2022. Below you’ll find three key items to watch this year. We’ll be back next week with our regular Roundup, and until then stay warm and safe
1. Rebounding oil prices
According to the government’s mid-year fiscal update released in November, the West Texas Intermediate (WTI) price forecast was updated to US$70.50 per barrel for 2021-22, $24.50 more than estimated Budget 2021. Similarly, the federal government’s fiscal update released in December saw the outlook for WTI crude oil prices revised up to US$68 per barrel for 2021 and to US$73 per barrel for 2022. That’s good news for Alberta’s bottom line, as each $1 per barrel change in oil prices sustained over the period of a year is roughly equivalent to a quarter of billion dollars in additional revenue.
2. Budget 2022
In addition to the aforementioned rising oil prices that help Alberta’s bottom line, other key categories will paint a rosier picture of the province’s coffers come Budget 2022. Other non-renewable resource revenue is significantly higher than forecasted, as is stronger than anticipated tax revenue in both the personal and corporate categories.
The UCP government will have to make a decision on how to forge ahead given this unexpected windfall; revert back to their fall of 2019 messaging about systemic overspending that came shortly after the MacKinnon report on Alberta’s finances, or continue down their recently chosen path of reaching agreements with public sector employees that have locked in job security and wage increases. Either path is likely to set the stage for messaging as we get closer to a 2023 election, which the UCP is surely hoping to run on economic recovery, creating jobs in the province and supporting the energy sector rather than recent turmoil with healthcare and education.
3. Fort McMurray byelection and UCP Leadership review
The spring will be busy with two direct challenges to Premier Jason Kenney’s leadership. First will come the byelection to be held in Fort McMurray - Lac La Biche with the UCP candidate being former Wildrose Leader and open Kenney critic Brian Jean.
The Order in Council for Fort McMurray – Lac La Biche must be issued by February 15, 2022. Once the Writ of Election is issued, the by-election will be held 28 days later.
Should Jean be elected to the UCP caucus (which is very likely to be the case), it could open the floodgates to other members of the caucus joining him in publicly critiquing Kenney’s leadership from within.
On April 9, a special one day general meeting will be held in Red Deer to have UCP members vote on whether Jason Kenney should remain as leader. The results of the vote will determine whether Kenney has the mandate to continue on as leader heading into 2023.
While according to the UCP’s Governance Manual a “Yes” vote of less than fifty percent of the total valid votes cast would automatically trigger a Leadership Election, it is likely that Kenney will require much higher than that to continue on with confidence as leader.