H+K Canada president and CEO Goldy Hyder, together with Torys LLP Competition & Foreign Investment Group co-chair Dany Assaf, contributed the following piece to the National Post and the Calgary Herald.The two Albertans discuss challenges new Premier-designate Rachel Notely and her party will face as they assume majority government. This article ran in the National Post on May 8, 2015 and the Calgary Herald on May 9, 2015.
Assaf & Hyder: The next four years in Alberta don’t necessarily have to be bad for business
Looking at the chaos in the world today, one could be forgiven for thinking revolutions only happen at the barrel of a gun. The beauty of our democracy is that we can revolt at the ballot box and that’s exactly what happened in Alberta on Tuesday.
Even with the most dramatic revolutions, however, there are things that must remain constant for any government: jobs and economic prosperity. All of us, of every political stripe, need to provide for our families and ensure opportunities for our children.
As the election rhetoric gives way to the election results, the new NDP government in Alberta is going to have to deal pragmatically with the same hard reality as their predecessors. They will need to promote and encourage Alberta’s biggest industry, the energy industry, to provide the growth and jobs Albertans need to secure their future and the province’s finances. This reality should give even the most conservative companies comfort.
From a practical standpoint, therefore, Alberta’s new government and its established energy sector must find a way to play together in the oil sand box — after all, unlike Ontario’s auto sector or Quebec’s aerospace industry, Alberta’s energy sector is not a flight risk. The assets are in the ground.
Based on her first moves, it seems clear Rachel Notley understands this important dynamic. Within hours of winning, Alberta’s new premier had extended an olive branch to the oil patch. It would appear that Albertans have elected a leader who recognizes the need to minimize the uncertainty that inevitably results from any seismic shift in the political forces governing a province. Indeed, on closer examination, the NDP election platform does not read like a radical manifesto on questions related to energy and the environment — it instead underscores the need for consultation and engagement.
The added challenge for Notley, unfortunately, is that she does not have the luxury of time in the current economic climate. Even before oil and gas prices began to plummet last fall, investment in the oil sands was in sharp decline. To reverse that trend, she must act swiftly and decisively to bolster investor confidence. Notley and her corporate counterparts in Calgary must work together to create the conditions needed to attract much-needed foreign investment. This, in turn, means working with Ottawa.
There can be little doubt that foreign investors have soured on Canada’s energy sector following the CNOOC acquisition of Nexen. The new Notley government must enshrine as its key priority a commitment to actively pursue foreign investment in the energy sector. There is no way the Alberta economy can thrive without a strong energy sector and that requires access to capital — especially if the NDP plan is to build refineries.
A second priority should be to reiterate the new government’s position on pipelines. During the campaign Notley made it clear that her party recognized the need for market access; as Premier it is her duty to advocate for Alberta interests unabashedly. For its part, industry should recognize that a project endorsed by an NDP government goes a long way towards gaining social acceptability.
In this respect, Notley should seek to emulate Canada’s ambassador to the United States, Gary Doer—himself a successful former NDP Premier — who has become one of the most effective international champions for Canada’s energy during his time in Washington.
There is a long tradition of New Democratic governments in the Prairies working closely with business communities and being responsible stewards of their provincial economies. Notley inherits that legacy.
The common message is that governments of all stripes and at all levels need to focus on the economy. No one has the luxury of taking their eye off that ball. As such, we must all recognize that the NDP has won fair and square. Jim Prentice is not Bobby Ewing and this was not a dream. Alberta isn’t Dallas and the next four years don’t necessarily have to be bad for business.
Dany Assaf is co-chair of the Competition & Foreign Investment Group of Torys LLP, and an Albertan. Goldy Hyder is president & CEO of Hill+Knowlton Strategies and has called Alberta home for 25 years.