Running in the centre a tightrope walk for Liberals

The political strategies of the three main parties are starting to emerge from the electoral fog.

The political strategies of the three main parties are starting to emerge from the electoral fog.

The NDP seems to be running a classic progressive campaign, combined with some appeals to centrist voters. Their announcements of, for example, free Yukon College tuition for first-year students and a $50-million green energy investment fund were well-packaged and broadly appealing.

The Yukon Party also seems to be running a classic centre-right campaign, with the addition of the carbon tax as a wedge issue to differentiate themselves from the Liberals and NDP. Many of their announcements are clearly targeting centrist voters, such as funding to implement the Truth and Reconciliation Commission’s recommendations, new daycare spaces in Whitehorse and the communities, greenhouse-gas reducing retrofits for schools and the outdoor sports complex (this time on Yukon government land so Whitehorse City Council can’t block it).

The question for these two parties is if they can add enough centrist voters to their base to win the election. The Liberals will criticize them for being too far to the left or right.

The Liberals, meanwhile, appear to be taking a riskier strategy by attempting to repeat the “double outflanking” strategy that their federal cousins executed so successfully at a national level. If you’ll recall, the federal Liberals poached Tory voters with tax cuts and infrastructure investment while simultaneously pulling progressive votes with promises on climate change and running a budget deficit.

Yukon Liberal Leader Sandy Silver tried to emulate Justin Trudeau with announcements on both the business and environmental sides. The Liberals’ push into blue territory included tax cuts for businesses and reinvigorating the Tony Penikett-era Yukon Development Corporation (YDC), giving it $10 million and charging it with investing in non-resource sector businesses. They broke in the green direction by talking about their carbon tax policy, emphasizing their opposition to fracked oil and gas projects (though the NDP argues the Liberal promise of a moratorium on fracking doesn’t go far enough), and promising to change the Yukon’s independent power production policy to exclude electricity generated by natural gas.

When it works, the double outflanking strategy can be devastatingly effective. But it’s not easy. Your policies need to be carefully crafted, and you need to weave between any contradictions in them with the flair of Wayne Gretzky dancing through the Maple Leafs’ defence.

Gretzky always made this look easy on the highlight reels. But most people who tried it ended up squashed between big blue jerseys.

The Liberals’ policy choices for the double outflank leave a couple of flanks exposed, which I expect the other parties will attack in the coming days.

The first is the carbon tax, which everybody in the Yukon seems to have heard about. I’m sure opposition-research analysts in the other parties are busy calculating how much extra gas, food or plane tickets to Vancouver will be if a carbon tax is implemented.

The second is YDC. Shakir Alwarid, the original YDC president back when Tony Penikett was premier, told the News the corporation needs to be cautious about making bad investments. Younger voters may not remember Yukon government investing fiascos such as the Watson Lake sawmill, the loan to Totem Oil to purchase a fuel terminal in Haines and other incidents involving loans to golf courses and hotels. Expect the other parties to jump on this, and raise the issue of whether you want government officials negotiating business deals with your money instead of sticking to their knitting on highways, schools and hospitals.

Compared to YDC’s early days, there is also a new complication to YDC having an investment mandate. Today, First Nations development corporations have tens of millions in investible assets. Several First Nations business executives have told me they have more money to invest than good Yukon business ideas to invest in. Now they would be, in effect, competing with YDC on quality investment opportunities.

But perhaps the Liberals’ biggest exposure is banning natural gas from the independent power production policy. This may seem obscure, but has already provoked a lot of chatter in the mining industry.

The independent power production policy allows you to raise some money, build an electricity generating plant of some kind, and sell power to the grid. It’s meant to be a way to attract investment in electricity generation, while also reducing Yukon Energy’s near-monopoly position and creating local jobs and business opportunities.

The Liberals’ ban on natural gas seems to include Yukon natural gas too, even non-fracked or so-called conventional gas. The Yukon oil and gas industry is already struggling, and banning independent Yukon electricity producers from using conventional Yukon natural gas will be criticized as throwing an anvil to a drowning man.

Furthermore, this could have big unforeseen effects on the mining industry. Large mines require large electricity plants. Often these would have surplus backup capacity or the power plant is expected to last longer than the mine. The opportunity to sell this extra power to the grid would be a multi-million dollar part of the business case, which could be a lot less viable if the Liberals’ plan is implemented.

Then there’s the problem that natural gas, although widely loathed, may be the cheapest way to generate electricity even after a modest carbon tax goes in. So if banned from the independent power production sector, we may be locked into a future where new sources of power added to the grid are costly. This will push up electricity prices, a phenomenon we’ve seen from the green energy plans in places like Ontario.

You should expect the other parties to tell you the Liberal plan will result in fewer mines, fewer oil and gas jobs, fewer business investment opportunities for First Nations development corporations and higher electricity prices. The Liberals, on the other hand, will counter that they are acting on climate change and supporting business with lower taxes.

The parties have made their plays. We’ll see who ends up in the highlight reel.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He won last year’s Ma Murray award for best columnist. You can watch his election interviews with all four party leaders on the Northwestel Community Channel website. Full disclosure: Keith is a member of the Yukon Liberal Party. He is not involved in their campaign.

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