Former Canadian Imperial Bank of Commerce Vice Chairman Jim Prentice is vowing to lead the oil-rich province of Alberta into budget surpluses while fixing roads, schools and hospitals if elected premier this weekend.
Home to Canada’s fastest-growing population, Alberta needs to invest C$30 billion ($28 billion) over the next five years to build 100 schools, fix crumbling roads and other infrastructure and services, Prentice said in an interview. He’s pledging to achieve that by better managing the wealth generated by the likes of Suncor Energy Inc. and Royal Dutch Shell Plc in the oil sands, the world’s third-largest crude reserves.
“People expect that we’re the wealthiest jurisdiction in North America, we should be able to balance our books and operate a consolidated surplus,” Prentice, 58, said in the Sept. 2 interview in Calgary. “A balanced budget isn’t sufficient.”
Alberta’s economy is booming as oil close to $100 a barrel and rising oil-sands production lure investment and workers into the energy industry as well as services and retail. The source of its riches is also its Achilles heel as Canada’s only province without a sales tax relies on royalties from oil and natural gas drilling to fund health care and education.
The province is plagued by “mini boom-and-bust cycles” because of swings in fossil fuel prices, and has a culture favoring low taxes and low-debt policies, said Melanie Thomas, a political science professor at the University of Calgary.
Prentice is vowing to push for the construction of stalled pipeline projects including TransCanada Corp.’s Keystone XL and Enbridge Inc.’s Northern Gateway to protect economic growth and prosperity in the province.
Alberta has posted budget deficits for the past six years as the government wrestled with low natural gas and bitumen prices. Bitumen is sold at a discount relative to the West Texas Intermediate crude benchmark in the U.S. partly because the lack of pipeline capacity creates a transportation bottleneck.
The province faces the threat of further discounted oil prices without new pipelines to Asian markets, said Prentice, who vows to work with British Columbia Premier Christy Clark and aboriginals to find a way to build pipelines to the Pacific. The candidate says his federal cabinet experience and his work with Enbridge on its proposed Northern Gateway will be helpful in getting conduits built.
“Alberta is at an inflection point,” Prentice said. “You’d have to go back to the early 1970s to find a time when there have been so many critical issues on the table.”
Prentice, along with candidates Ric McIver and Thomas Lukaszuk, is seeking the leadership of the governing Progressive Conservative party after former Premier Alison Redford stepped down in March following scandals involving spending on air travel.
Of the three candidates, Prentice has the best chance to remake the Progressive Conservatives and extend their 43 years in power, Thomas said.
Progressive Conservative party members vote on Sept. 6 to pick the new leader. If none of the candidates wins a majority, a run-off between the two most voted will be held on Sept. 20.
Prentice, a lawyer, spent four years in Prime Minister Stephen Harper’s federal cabinet, including stints overseeing the environment, industry and aboriginal affairs portfolios.
Fellow leadership candidate McIver was an elected councilor in Calgary’s municipal government for almost a decade while Lukaszuk, a teacher who came to Canada from Poland as a child, has sat as a member of the Alberta legislature since 2001.