Politics
Naheed Nenshi on his vote for the 2023 Alberta election
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If you are a hyper-partisan on either side of the Alberta election, you may not want to read this column. But I thought I would share my thought process on how I’m going to vote this Monday.
It may be helpful to read two previous columns as well: one where I discuss Danielle Smith’s somewhat unique approach to politics and life, and one where I discuss what people who have always voted Conservative are facing in this election.
And a whole bunch of caveats. I’ve never done this before. , and I take it very seriously. It’s not because it brings out the colour of my eyes – well not just because it brings out the colour of my eyes. Purple is a combination of red and blue and I wear it to remind myself and others that we are not defined by our political tribe but by our common humanity.
For me, this means not only being in the political centre, but also that I need to engage with politics and elections fluidly and based on the context of the moment, as well as who is running. I have voted for at least four different parties provincially and federally, and for municipal candidates all over the ideological map. And this time, I’m voting NDP.
I’m very cheap, and I hate debt. (I’m proud that Calgary had the lowest residential property taxes in Canada in my tenure as mayor and that we ran a surplus every year). But I also believe in the need to invest in the things that give people a hand up, and that help everyone live a decent, dignified, prosperous life. Chief amongst these are an excellent public education system, access to great health care, and strong and effective anti-poverty and mental health strategies.
Like almost all Albertans, I also believe that climate change is a critical problem, and that many solutions lie in the Canadian energy sector. I am very proud of our resource industry, and I believe that access to clean, safe, and affordable energy is one of the most powerful poverty-fighting tools we have. Canada can make huge contributions to reducing global emissions by displacing coal with liquified natural gas around the world and we need to be much better at building export infrastructure including pipelines.
In all of this, I don’t think the United Conservative Party and the New Democratic Party would disagree with much of what I wrote here (though it’s not clear if the UCP rank-and-file have heard Smith say climate change is real and she would just go a bit slower than Notley). Indeed, their stated policy on most of these items is similar, with a few differences: the NDP would raise taxes on big business from the lowest in Canada to … the lowest in Canada. The UCP would cut personal income taxes and increase the reliance in the budget on oil and gas revenues.
UCP Leader Danielle Smith has spoken favourably of the disastrous school curriculum her predecessor, Jason Kenney, attempted to introduce, and hasn’t said a word about it in the election. She has promised to continue her government’s use of private surgical delivery, despite ample evidence that it doesn’t actually work to lower costs or surgical wait times.
‘ALBERTANS HAVE A RARE OPPORTUNITY’
Notley, for her part, has run a cautious campaign, shying away from major policy pronouncements, and saying that her top characteristic is that she is honest and will stop the endless drama of the UCP government.
Albertans also have a rare opportunity. For the first time in modern history, two people who have both already been premier are running for the job. Truth be told, from my perspective, neither was particularly great at the job.
I struggled with Notley’s government over many issues, from its amateurish stumbling on the electricity file to their massive fumble that cost Calgary the 2026 Olympics. While I must take some blame for that, and the federal government massively mishandled it, the Notley government wavered between disinterest and disdain, ultimately dooming the project.
Now Calgary must find the money to revamp our winter sports facilities, without an Olympics at the end. (Ironically, this was mainly a result of how much Notley and Prime Minister Justin Trudeau couldn’t stand each other, and their staff could not abide giving the other a victory. I was in the room for some of this, and I always smile when I hear conservatives talk about the Notley-Trudeau alliance, having seen the truth).
Mostly though. I saw the Notley years as ones of lost opportunity. For an NDP government, they were remarkably cautious. They inherited a massive global recession and were likely too scared (or just too poor) to make major changes in housing or mental health or empowering cities. They did make major strides on child poverty, cutting it in half, but this had much to do with the federal government and the Child Tax Benefit.
I must give Notley credit for one big thing, though. Conservative governments over a half century have failed to build even one mile of new oil pipeline to tidewater. The Trans Mountain Expansion would not have happened if not for Notley’s ferocious advocacy over a skeptical Trudeau and the ridiculous antics of BC NDP Premier John Horgan, who was intent on scaring away investment, even if he had no power to stop the pipeline. Do I wish TMX had been built with private capital instead of by the federal government? Absolutely. But after Horgan successfully ran off the private owner, this was the only path forward and it would not have happened without Notley.
However, despite all her faults, Notley has nothing on the UCP government that followed. Jason Kenney and Danielle Smith have never really had jobs outside of government, lobbying and media, and neither had really run anything. And it showed. From defunding the police to betting on a Trump victory by giving a giant corporation $1.4 billion with no risk protection for the taxpayer, from attempting to implement a right-wing American curriculum that appeared to have evidence of plagiarism to breaking the ambulance system. From picking a fight with Netflix over a Bigfoot cartoon to opening up way too soon during the pandemic (the Best Summer Ever was not so much), the UCP government stumbled and bumbled from one error to another. What other government would have two successive justice ministers both in trouble with the law society?
Enter Danielle Smith. She has been even more profligate in her spending, with no sign of fiscal discipline. She tabled the highest-spending budget in Alberta history, with nothing special to show for it, and reversed a decades-long policy of reducing our reliance on oil and gas revenues. At today’s oil prices, that means the budget will come in at a deficit unless there are massive cuts to services.
‘A QUESTION OF VALUES’
So for many Albertans, this election comes down to two issues: competence and trust. Notley wins cleanly on both.
Perhaps even more important is a question of values.
Smith has been found guilty by the Ethics Commissioner of violating the Conflict of Interest Act after only seven months on the job, and she says and does bizarre things seemingly every day. (I detail much of this here). According to the Ethics Commissioner, she attempted to help a man well-known for his vile comments (including that the 2013 Alberta floods were caused by gay people) escape charges of incitement, even while he was leading a political party opposed to her. Either she didn’t know who she was talking to (showing a shocking ignorance) or didn’t care (a shocking indifference). In either case, she displayed a shocking lack of judgment.
She tells us not to believe things she says, even things she and her candidates said in the past weeks. Most troubling, it took her three days to condemn a candidate who compared having trans children in schools to having feces in a batch of cookies. Trans children have very high rates of suicide and self-harm compared to other kids, and this kind of behaviour puts them in danger. Smith first said the candidate wouldn’t sit in caucus, then said she would consider reinstating the candidate if she was really, really sorry, then said her decision to exclude was final.)
She has also declined to condemn candidates who echoed Putin talking points on the war in Ukraine (something she herself did before remembering she has Ukrainian ancestry and, more important, that Alberta is home to one of the largest Ukrainian diasporas in the world.)
If you need to focus group and poll your response on basic human rights and saving lives before finally doing the right thing, or doing nothing, it’s fair to question your leadership.
I truly believe Smith is an existential threat to our province. There’s never been anyone like her in power in Alberta before. We simply have no idea what she will do as premier, and that scares me more than a few years of a potentially not-great NDP government.
If you are a young person, or you have young people in your life, this is the whole deal. We must build a province where young people feel like they belong, and where they can build the best lives for themselves, not one where they are scared what government might do next to them, their family, and their friends.
‘NOT MANY ALBERTANS VOTE LIKE I DO’
So on this front, it’s clearly Notley who passes the Ralph Klein test: even when you disagree with her, you get the sense she’s essentially a decent person who is trying to do the right thing. The same simply can’t be said about Smith and the people she chooses to surround herself with.
Not many Albertans vote like I do. For many of us, politics is a tribal game. And that tribe has been more often than not, a Conservative one (Conservative parties under different names have ruled Alberta for all but 4 of the last 88 years). So, it’s very hard for Conservative voters to jump to the NDP. Does this mean they are New Democrats now? Have they become socialists forever?
Notley and her supporters have a smart response to this: consider your vote a loan. It doesn’t mean you have to vote NDP forever, but it does mean that the NDP is less risky than the UCP for the next four years. In that time, you can give the NDP a chance or work to reform the UCP back to its Progressive Conservative roots.
Indeed, I would go further. Every political party needs to consider every vote only a loan. For 11 years, I tried to get up every morning, put on my pants and go to work to continue to earn people’s trust and support every single day, simply by trying to make life better for them. The UCP seems to have forgotten that basic lesson, focusing more on firing up their base and sowing division and anger, hoping that will keep them in power.
So, I’m lending my vote to Rachel Notley and the NDP this time. I’ll watch them carefully, supporting when needed and criticizing when warranted, as I will do with the UCP if they win.
But ultimately, I’m voting not for some mythical Alberta of the past, and not out of fear or anger. I’m voting because I love this place, because I stand for dignity and prosperity for all, because I want young people to be proud of where they live and because I know Alberta can be even better.
Oh, and there’s always another Olympics waiting for our bid!
Former Calgary mayor Naheed Nenshi wrote this opinion column for CTV News
Watch this page for updates for live coverage of Alberta election results, breaking news and analysis tonight.
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- Our journalists will bring you up-to-the-minute reports with coverage from the field, while our commentators will provide analysis, explanations and insights to help understand the news as it unfolds. We will also share the latest seat counts and results by riding (below).
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9:15 p.m.
United Conservatives jump out to early lead in tight Alberta election
Alberta’s United Conservative Party jumped out to a lead over the NDP in early returns Monday in what was forecast to be a tight race in the provincial election.
Danielle Smith’s UCP was holding strong in its traditional rural strongholds while Rachel Notley’s NDP was faring well in Edmonton, where it won all but one seat in 2019.
Early results were still mixed in the key battleground of Calgary, with about 10 per cent of polls reporting, according to Elections Alberta.
Here are the incoming results by riding:
Calgary
Edmonton
Alberta
9 p.m.
Braid: Despite the wild and angry campaign, Alberta will settle down
Albertans haven’t gone crazy, OK? We’re still just regular Canadians who want decent, competent government and a team that can win a Stanley Cup.
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But the election campaign gave the province a terrible image across Canada. Here we are with wild-eyed right-wing fascists on one side, insane job-eating communists on the other.
Despite all appearances, this campaign was never about which side was more dangerous. It was about capturing the reasonable middle where most Albertans park their politics. Both parties tried to do that by demonizing the other, while offering policies and solutions well within the bounds of reason.
5:36 p.m.
Memorable quotes from the campaign trail
Candidates for both the United Conservative Party and New Democrats have been campaigning over the last four weeks for their party to form the next Alberta government.
Here are some memorable quotes from the campaign:
“(The NDP) devastated the Alberta economy. They created policies that drove investment out, drove jobs out, and we had to reverse all of that,” UCP Leader Danielle Smith said on May 1, the day the writ was dropped. “The choice in this election couldn’t be clearer. It’s a choice between a UCP government that will cut your taxes and make life more affordable or an NDP government that will make you pay more across the board.”
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“Over the past four years, our health care has been thrown into chaos by the UCP,” NDP Leader Rachel Notley said during the first week of the campaign. “They’ll tell you they fixed it, but Albertans aren’t feeling it and they’re not buying it . . . our (emergency rooms) are still full, our ambulances are still delayed and many (patients) are waiting months and months for critical tests and surgeries.”
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“I am satisfied Mr. Pawlowski intended to incite the audience to continue the blockade — intended to incite protesters to commit mischief,” Justice Gordon Krinke said in Lethbridge on May 2, when he found Calgary pastor Artur Pawlowski guilty of charges related to his role in protests against COVID-19 public health measures. In a leaked phone call between Smith and Pawlowski, before his trial, Smith told Pawlowski the charges against him were politically motivated and she would make inquiries on his behalf and report back.
“(Smith) has a policy of not speaking publicly on matters before the courts, except when she’s talking to the person who’s before the courts about how she’s going to interfere with the matter before the courts,” Notley said when asked to comment on Smith’s no comment on the Pawlowski case. “That is the most ridiculous thing I’ve ever heard from her. OK, maybe it’s not the most ridiculous, because there’s a lot of ridiculous.”
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“(Judicial independence) is a fundamental pillar of our democracy. The premier breached this principle by discussing the accused’s case,” ethics commissioner Marguerite Trussler said in her report released May 18 into Smith’s actions as premier when she called her justice minister about Pawlowski’s case.
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“I’ve asked the ethics commissioner to give advice,” Smith said May 19. “I am a non-lawyer. As premier, I do need to be able to get advice from my top official, my top legal adviser. If she has recommendations on how to do that better next time, I will absolutely accept them.”
— The Canadian Press
5:30 p.m.
Special measures in place to enable voting for electors affected by wildfires
Alberta’s 2023 election campaign has taken place alongside a record-breaking spring for wildfires in Alberta. Ten communities were under evacuation orders Monday.
Elections Alberta has set up alternate voting locations for those displaced. Evacuation has been added as an eligible reason to vote by special ballot and mobile voting stations have been placed in evacuation centres.
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Incident Command Centres are working to have special ballots delivered to firefighters and emergency crews.
— The Canadian Press
10:55 a.m.
Calgary region had 7 of the top 10 busiest advance polling stations in Alberta last week
Electors in Calgary and area were among the most eager to get to the polls.
Of the 10 busiest polling stations in the province during the advance polling period last week, seven were in Calgary, Elections Alberta said on Monday.
And of those seven, four were in the southern half of Calgary and another was located south of the city.
Generally speaking, more Alberta voters chose to cast their ballot during the advance voting period than ever before.
“For the second election in a row we have seen record-breaking voter turnout during advance voting days,” said Chief Electoral Officer Glen Resler in a statement issued Monday morning. “In 2019, we saw 700,476 ballots cast during the five days of advance voting, this year we have welcomed 758,550 to the polls so far.”
Here were the 10 busiest polling stations during the advance voting period, May 23-27, according to Elections Alberta:
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- ED 83 (St. Albert): St. Albert Centre
- ED 81 (Sherwood Park): Sherwood Park Mall
- ED 01 (Calgary-Acadia): Southcentre Mall
- ED 14 (Calgary-Hays): McKenzie Towne Church
- ED 08 (Calgary-Edgemont): Foothills Alliance Church
- ED 65 (Highwood): Okotoks Centennial Hall
- ED 02 (Calgary-Beddington): Huntington Hills Community Hall and Sportsplex
- ED 33 (Edmonton-Gold Bar): Bonnie Doon Centre
- ED 47 (Airdrie-Cochrane): Frank Wills Memorial Hall
- ED 23 (Calgary-Shaw): Cardel Rec South
10:35 a.m.
Alberta votes in the strangest — and closest — election in its political history
Whoever wins the Alberta election on Monday, it will be one of the strangest campaigns ever fought in the province, with plenty of drama but few policy issues, and the real possibility of the closest outcome in Alberta political history.
In 2015, when the NDP won, it was the reversal of 40 years of conservative rule, aided by vote-splitting and a voting public whose patience was at an end. In 2019, when the United Conservatives won, it was a massive victory, featuring a re-energized right-wing movement looking to revitalize the province’s economy.
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But this time, with the two parties neck-and-neck as voting day approaches, the election is not about jobs or pipelines or even party platforms.
It’s about Rachel Notley, leader of the NDP, and Danielle Smith, leader of the United Conservative Party, writes Tyler Dawson.
5 a.m.
Alberta arrives at election day following bitter campaign
Albertans head to the polls Monday to elect their next government, wrapping up a divisive four-week campaign that’s seen each leading party pitch their vision for the province while taking aim at the opposing leader’s record.
Voters are set to decide whether they’ll re-elect Danielle Smith’s United Conservatives, or return to an NDP government headed by Rachel Notley, in a battle between premiers past and present.
Alberta election: Everything you need to know before you vote
Albertans go to the polls on May 29 — today.
While there are plenty of promises and policies from the parties to wade through, it’s also important to brush up on voting information.
Before you cast your ballot, here’s what you need to know.
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Promises made: Where the NDP and UCP stand on top issues in Alberta election campaign
With Alberta’s election hitting the home stretch, what have the leading political parties in the province done or promised to do if elected today?
Both the UCP and the NDP have been making promises for weeks on major issues leading up to the official campaign, which began in May.
Here are some highlights, which don’t reflect the entirety of the platforms.
Profiles of main party leaders Danielle Smith and Rachel Notley
UCP Leader Danielle Smith
Succeeding Jason Kenney, Smith comes from roots in the socially conservative Wildrose Party. She has been premier since October 2022 after she won the UCP’s leadership race.
Smith, 52, who holds a bachelor’s degree from the University of Calgary with a major in English and a minor in economics, started her career in media. First as an extra in the Vancouver film and television industry and then as a journalist on radio, television and in print. While working as a radio broadcaster in March 2020, Smith tweeted and later deleted claims that the antimalarial drug hydroxychloroquine is a cure for COVID-19.
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As premier, Smith fired Alberta Health Services’ governing board for what she called “freedom-busting health restrictions” implemented during the COVID-19 pandemic. She later walked back her plans to pursue pardons for violations of COVID-19 health and safety restrictions.
Smith was a lobbyist for the Alberta Enterprise Group, encouraging capital investment and big business in Alberta. She introduced the Alberta Sovereignty Act to prevent the enforcement of “federal rules deemed harmful to Alberta’s interests.” The act passed but only with significant changes to remove the legislation-rewriting powers the original measure would have given Smith and her cabinet.
Since 2017, Smith and her husband, David Moretta, have owned and operated the Dining Car at High River station, a converted rail car in High River.
NDP Leader Rachel Notley
Notley, 59, became premier of Alberta in 2015, ending 44 years of Progressive Conservative Party rule in the Western Canadian province. She lost re-election in 2019 to Kenney.
The daughter of former Alberta New Democratic Party leader Grant Notley, Rachel Notley was a labour advocate and lawyer before entering politics. She specialised in workers’ rights and health and safety. She advocated for the rights of special-needs children with the organisation Moms on the Move.
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Notley credits her mother, an anti-war activist, for getting her involved in activism, taking Notley to an anti-
The campaign has taken place alongside a record-breaking spring for wildfires in Alberta. Ten communities were under evacuation orders Monday.
Elections Alberta has set up alternate voting locations for those displaced. Evacuation has been added as an eligible reason to vote by special ballot and mobile voting stations have been placed in evacuation centres.
Incident Command Centres are working to have special ballots delivered to fire fighters and emergency crews.
war demonstration before she was ten years old.
While premier, Notley gave Canada its first $15 minimum wage, stabilised funding for healthcare, restricted money in elections and increased taxes on corporations and the wealthy. Her government introduced harm-reduction measures targeting the opioid and fentanyl epidemic.
Her husband, Lou Arab, is a communications representative for the Canadian Union of Public Employees and a campaign strategist for the NDP. Notley and Arab live with their two children in the historic Old Strathcona district in Edmonton.
— Reuters
Politics
Letters to the editor: ‘Danielle Smith’s rejection of conventional thinking.’ Populism and politics, plus other letters to the By The Globe and Mail
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United Conservative Party leader Danielle Smith makes a campaign announcement in Calgary, on May 26.Jeff McIntosh/The Canadian Press
What next?
Re “The essence of Johnston’s report: Trust me, there’s no story here” (May 24): Columnist Andrew Coyne describes well what many Canadians were expecting from David Johnston and what he failed to deliver.
No. 1 is to know what the government knew, who specifically knew, when they knew it and what, if any, action they took. I find Mr. Johnston failed to deliver on a grand scale.
The result? Many Canadians have even less trust in government than they have ever had.
Not a good position for the country, nor the current incumbents in Ottawa.
Roger Emsley Delta, B.C.
Re “My work to protect Canada’s democracy from foreign interference is not done” (May 27): Most troubling to me is David Johnston’s scathing criticism of the whistle-blower who risked their own freedom to alert Canadians to the danger to democracy of China.
Without their courage and loyalty to the public interest at the highest level, none of this would have come to light. The messenger he would shoot deserves our deepest gratitude, as do the Globe reporters who similarly put their reputations on the line.
Alexandra Phillips Vancouver
David Johnston reminds us that he was appointed governor-general by Stephen Harper, that he has served in a number of public roles and never once was his integrity questioned. Except now.
Politicians, reporters and columnists wanted a public inquiry into foreign interference, not public hearings. They want the Prime Minister and his ministers on the “stand,” so to speak. Unconscionable attacks on the pristine reputation of Mr. Johnston have ensued.
Can we fuel criticism not with anger and personal attacks, but with clarity and respect for informed opinion? Not too high a standard, surely, when the central figure is a man of such stature and decency as Mr. Johnston.
Bill Wilkerson Port Hope, Ont.
Re “Targets of Chinese regime reject Johnston findings, call for public inquiry” (May 26): What would a public inquiry tell us that we don’t already know?
David Johnston confirmed The Globe and Mail’s reporting. He also shed light on the bungling way intelligence is, and is not, passed on to government officials. How could anyone do their job effectively when this is the case?
Most disturbing, in my view, is Pierre Poilievre’s rejection of Mr. Johnson’s invitation to take an oath of secrecy and read the full report. It points me to a profound cultural shift within our parliamentary democracy that now embraces members, and those who elect them, who would rather dismantle democratic procedures from the inside than be properly informed.
The Globe has done its job by alerting government and the public. We should now have action on Mr. Johnston’s findings. There’s lots of work to be done.
This should be the urgent path to maintaining our democracy, not a public inquiry.
Janet Tulloch Ottawa
Print money
Re “Stop the presses on the King Charles $20 bill” (May 24): “An antiquated, deeply diminished institution that belongs to a long-ago era.” I agree: Our constitutional monarchy is the worst possible system of government for Canada – except for all the others.
We live next door to a republic that recently demonstrated the dangers of a head of state who is the product of “democratic” choice. And look at Brazil, Argentina, Pakistan and countless other democracies with elected heads of state. They provide a stark contrast to modern and progressive constitutional monarchies such as Norway, Denmark, Sweden and the Netherlands.
I believe constitutional monarchies are a superbly modern way of balancing traditional safeguards and democratic progress, allowing bitter political disagreements to work themselves out without tearing the fabric of nations apart. And because our monarch lives hours away by plane, Canadians are spared the costs of upkeep and maintenance.
A good deal for Canada, eh? Saves a lot of $20 bills.
Larry Muller Trent Lakes, Ont.
Contributor Peter Donolo writes of the need for Canada to reduce its fixation on the monarchy, in favour of placing mug shots of prime ministers on our money. No offense to Lester Pearson, but why replace one entitled elite with another?
For the duration of my day job, I’ve invited Canadians and academia to think about how they are placed in relation to Indigenous nations, politics, communities and histories. And as a citizen of the Ktunaxa Nation, a Canadian and a scholar, I’m still wondering why Canadians can have such limited imaginations that prevent them from seeing Indigenous displacement and oppression that is not merely historic, but still in play.
In this not-so-reconciliatory moment, consider putting Indigenous leaders, who were persecuted by Canada, on our bills, an invitation to remember where our money comes from and at whose expense.
Many Canadians still don’t have a clue about these things.
Joyce Green Professor emerita, politics and international studies University of Regina
God bless
Re “America’s long embrace of stupidity” (May 22): While intelligence can sometimes present challenges, the acceptance of ignorance is a losing proposition.
Donald Trump, who appeals to the uneducated, provides evidence that stupidity is not a superpower. His ignorance did not yield solutions to problems plaguing the world. His reign of errors did not resolve issues such as domestic inequality, global warming and international conflicts.
The current countercultural movement by Canadian populists poses a dangerous threat to our democracy. The vocal criticism of gatekeeper expertise by Pierre Poilievre, along with Danielle Smith’s rejection of conventional thinking regarding public health and governance, are prime examples of this hazard.
Leonard Cohen and St. Augustine’s words –”behold the ignorant arise and snatch heaven beneath our eyes” – suggest that salvation may be achieved through ignorance. However, this notion relies on faith in matters beyond our world.
A discerning individual should question the intelligence of such a perception of reality.
Tony D’Andrea Toronto
As contributor Michael Enright so eloquently points out, this situation is nothing new to our southern neighbours.
It is a manifestation of America’s great divide, the socioeconomic distance between the haves and have-nots. Exacerbated by an inadequate social safety net and exploited by predatory politicians and media outlets, it has led to a toxic stew of conspiracy theories, misinformation and outright lies.
Add in racial tensions, gun-ownership disputes, abortion rights and illegal immigration at the southern border, and one fears that it’s only a matter of time before the fuse is lit on this powder keg, with catastrophic consequences.
Dave Hurley Belleville, Ont.
Letters to the Editor should be exclusive to The Globe and Mail. Include your name, address and daytime phone number. Keep letters to 150 words or fewer. Letters may be edited for length and clarity. To submit a letter by e-mail, click here: letters@globeandmail.com
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(Bloomberg) — Strategists at Goldman Sachs Group Inc. have revised their forecasts to reflect a weaker shekel on renewed concerns that Prime Minister Benjamin Netanyahu’s judicial plan will increase pressure on the currency and the central bank won’t intervene to support it.
Comments by central bank Deputy Governor Andrew Abir last week that interest rates need to be the main tightening tool have downplayed the “potential for FX interventions,” the strategists said in a report on Friday. The shekel slumped 2.3% last week after parliament passed a new national budget, which granted more funding to the nation’s ultra-Orthodox in order to secure the bloc’s loyalty to his right-wing coalition.
Goldman revised its forecasts of the shekel to 3.70 and 3.60 against the dollar in the next three and 12 months, respectively, compared with 3.50 and 3.40 previously. While that’s still stronger than the current level, the strategists said they expect volatility around their estimates to “remain elevated.” The shekel rose 0.3% to 3.7178 as of 2:50 p.m. in Jerusalem on Monday.
“With limited policy support, we think domestic political developments will remain in the driver’s seat for the shekel,” Goldman’s strategists, including Kamakshya Trivedi, said in the report.
The shekel’s correlation with the performance of global technology stocks began to break down in January amid massive protests against Netanyahu’s plans to give politicians more control over the judiciary and its appointments. His decision in late March to delay the plan had provided some reprieve for the currency, until last week.
The shekel trades at a more than 10% discount to Goldman’s estimated fair value of around 3.3 per dollar, the strategists said.
In April, Moody’s Investors Service lowered the outlook on the nation’s A1 rating to stable from positive, citing a “deterioration of Israel’s governance.”
“If market participants and tech investors continue to grow more concerned about domestic political developments and their impact on institutional quality, then risk premium may build further in the currency,” the strategists at Goldman said.
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