Bill 28: Will it work as intended?

Government of Alberta has made a rational and justifiable U-turn to withdraw the haphazardly drafted earlier version of Bill 28

Government of Alberta has made a rational and justifiable U-turn to withdraw the haphazardly drafted earlier version of Bill 28, the one on the creation of growth management boards by municipalities, and has come up with a new document following consultations with the two major municipal associations of the province AAMDC and AUMA.

The new Bill28, passed in third reading on Wednesday, Dec. 4 has apparently a lot more support from municipalities and their associations mainly because it clearly states that the structures foreseen in the new legislation will be created on a voluntary basis and that if their functioning is faulty, it will be the structures that will be punished rather than individuals working for them.

Yet, the motives for this bill may well be worth a little discussion.

Economic growth is good, planned and managed economic growth is even better because it is likely to have been based on considerations of sustainability.

But why would the provincial government want municipalities take over the responsibility of managing economic growth?

As we all know, Alberta’s economy is based mainly on two pillars: one is agriculture and the other is fossil fuel production. Other sectors are also contributors to the province’s Gross Domestic Product (GDP), but the lion’s share goes to energy and agriculture.

Of the two, fossil fuel sector is at the mercy of market fluctuations, therefore production and exports, and consequently the revenue coming from this sector can change drastically within a matter of months or even weeks. Because of the unforeseen price movements in fossil fuel markets, we are all aware that the provincial government has been trying to tackle budget deficits, amounting to more than $3 billion according to some estimates, by cutting funding to education programs and then restoring some of the funding, a clear indication of poor management and planning. We need to keep in mind that with crude oil production due to increase in both Iraq and Iran on top of rising US domestic production, Alberta’s oil revenues might be even less stable in the months and years ahead.

On the other hand, agriculture is vulnerable to climate conditions. In addition, a healthy rotation of oil seeds, grains and other farm produce responsive to the ongoing changes in market demand would require some expert analysis to assist the farming community to make the right decisions. As for beef and dairy farming, everybody now knows that international marketing efforts are undertaken at government levels rather than by small companies or associations.

This picture tells us that both of the main sectors of Alberta economy require management at strategic levels, not the other way around: The fossil fuel sector should be managed at a larger scale so that a big enough cushion can be created to soften the effects of price movements and the agriculture should be overseen for crop planning and marketing purposes.

Bill 28 appears to be designed as a step in the direction of more central planning rather than devolution of economic decision-making power to local governments.

As such the new legislation is effectively creating a new layer of economic management in the province with Bill 28 describing the regional growth management boards as “corporations”. How these “voluntary” corporations will function, time will tell.

It will be interesting to follow how the implementation of this new piece of legislation will shape the formulation of economic policies in Alberta in the immediate and intermediate future.

Given the speed with which Bill 28 was introduced, withdrawn, revised, reintroduced and passed at the Legislature, Premier Alison Redford and her government must be expecting some quick and positive results out of this particular piece of legislation.

One would very much hope that the expected outcome will serve the interests of all Albertans in a balanced and equitable fashion.