The fall and winter of 1980-81 was a very unsettling time for provincial politicians. The Alberta public, politicians, and senior public servants were furious at the indifference of federal politicians’ plans to redirect oil revenues from producers and the provincial government. Unemployment insurance claims rose from about 10,000 in September 1980 to over 17,000 in January 1981. Alberta’s unemployment rate increased from 3.4 per cent in September to 4.5 per cent in January, further causing concern in a province which had recorded rapid economic growth since the early 1970s.
In this climate of uncertainty, Treasurer Lou Hyndman had requested his cabinet colleagues to provide suggestions on how to get idle human and physical capital to work again. In these two memoranda from the Hyndman papers, Public Works Minister, Tom Chambers proposed a range of projects proposed by program departments while Transportation Minister Henry Kroeger proposed a major initiative for roadbuilding. The latter proposal was specifically targeted at smaller construction contractors whose equipment and staff would be idled by the slowdown in the oilpatch.
Much of the response of the Kenney government, and the Notley government from 2016, comes from the 1981 playbook- keep Alberta’s construction industry busy by building or rehabilitating more roads, museums, provincial buildings, training facilities, and nursing and rehabilitation facilities. In the 2020 reprise, emphasis seems to be focused on traditional pubic infrastructure waste water, roads, irrigation systems, fish hatcheries, “recovery communities”, and schools.
Standard boilerplate is applied to these near-daily announcements:
Alberta’s Recovery Plan is a bold, ambitious long-term strategy to build, diversify, and create tens of thousands of jobs now. By building schools, roads and other core infrastructure we are benefiting our communities. By diversifying our economy and attracting investment with Canada’s most competitive tax environment, we are putting Alberta on a path for a generation of growth.
Will these expenditures prove to be a long-term boost to ALberta’s economy or simply a bandaid? TIme will tell.
Public Works
ALBERTA HOUSING AND PUBLIC WORKS
FROM: Tom Chambers, P.Eng. FILE REFERENCE: 5-5
Minister
TO: Hon. Lou Hyndman
Provincial Treasurer DATE: January 20, 1981
SUBJECT: ECONOMIC DOWNTURN AND ACCELERATING PROJECTS
In response to your request of January 12, 1981, attached is a list of projects which could be implemented to take advantage of the ”window” in economic activity which may result from the postponement of construction of major oil sands plants. This list consists of projects with the construction value of over $1,000,000 each, and represents our department’s perception of needs expressed during the budget process by program departments. It should be noted that many of these projects were developed with limited input from the program department. Operating costs are not included in the estimated cost of these facilities.
In addition to the attached, our department has provided Priorities Committee with recommendations on three levels of funding ($65.0 million, $90.0 million and $115.0 million) new capital construction projects requested by program departments during the 1981/82 budget process. However, a fourth level of funding could be considered (i.e., approve all new projects requested by program departments for 1981/82). The 1981/82 budgetary requirement of this alternative would be $178.8 million. The advantages of approving all projects requested rather than initiating the supplementary projects on the attached list are:
- all projects requested during the budgetary process have been developed in conjunction with program departments,
- they are consistent with program needs, and
- they would require time for program planning.
A fifth consideration would be a combination of some of the projects requested by the program departments for 1981/82, and some of the projects as listed in the attached. Depending on the additional funds that would be available the department, in conjunction with the program departments, could establish priorities for the implementation of new projects.
On the housing side there are likely some initiatives which could be taken which would also be stimulative to the economy. We will evaluate these in the months ahead.
Tom Chambers, P. Eng.
Attach.
The attachment was 6 pages listing projects by department with particular emphasis on social services and community health.
Source: Provincial Archives of Alberta PR1986, FIle # 160-5-1,- Volume 14, Social Planning Committee (Hyndman Papers).
Road Building
ALBERTA TRANSPORTATION
FROM: Henry Kroeger, FILE REFERENCE:
Minister
TO: Hon. Lou Hyndman
Provincial Treasurer DATE:February 3, 1981 BF 24 Feb.
SUBJECT: EFFECTS OF THE NATIONAL ENERGY POLICY
ON THE OILFIELD CONSTRUCTION INDUSTRY
My department has undertaken a detailed study of the effects of the National Energy Program on the oilfield heavy construction industry. This study identifies the amount of heavy road construction equipment actively employed in oil field work and the locations of this equipment, as well as an assessment of the percentage of equipment that will be out of work during the 1981 road construction season, because of the slowdown in oilfield activity.
At the present time there are approximately 400 contractors operating approximately 2,500 machines in oilfield construction throughout the province. Over 80% of these contractors own less than 10 machines each, and do not have sufficient equipment to bid on major highway contract projects.
The results of our study indicates approximately 30% of these 2,500 heavy construction machines will be out of work by April 1, 1981. Each machine requires a minimum of 1,000 hours in the summer construction season to remain a viable operation and the average department rental rate in 1981 would be $55 per hour.
The total funding required to cover the estimated shortfall would be:
2,500 Machines x 30/100 x 1,000 hours x $55.00= $40,000,000
(approximately)
The impact of the oilfield slowdown on these heavy construction equipment owners could be reduced by implementing special funding programs for the construction of local roads in municipal districts, counties, improvement districts and special areas.
The following proposal is put forth for your consideration prior to the March 5, 1981 meeting with my department and Priorities Committee.
- Allocate $15,000,000 in special grants to municipal districts, counties and special areas on a formula basis for the construction of specific local road projects. The grants would be conditional on the local authorities hiring either by hourly rental or small contract, privately owned construction equipment.
- Allocate $15,000,000 in special construction funds for local and secondary road construction in improvement districts, conditional upon the hiring of privately owned construction equipment on an hourly rental base.
Marginal notes of Hyndman on points 1 and 2 say “try 8/8=16”
These proposals would effectively utilize the major portion of surplus oil field heavy construction equipment, particularly the small equipment owner. A large contractors that are capable of bidding major highway contract projects should have ample opportunity forward if our”A” and “B” budget proposals are approved.
Details of the amount and location of equipment and the assessment of the slowdown are covered more fully in the attached report
Henry Kroeger
Minister of Transportation
Source: Provincial Archives of Alberta PR1986.0245, Box #45, FIle # 640 (Hyndman papers).
Italics reflects underlining on original by Lou Hyndman.