Alberta’s Kenney offers Canadian industry optimism
CALGARY -- Speaking to the 51st annual Global Petroleum Show in Calgary on Tuesday, Alberta Premier Jason Kenney tried to paint a picture of a brighter future for a Canadian E&P industry weary after several years of depressed activity. By outlining his strategy to strengthen the province’s oil and gas sector, Kenney was following up on promises that he made during the election campaign, which brought his United Conservative Party to majority power in April.
In offering hope to the audience of industry executives and professionals, Kenney acknowledged that Alberta has had several rough years that have seen oil-and-gas investment flee the province. “Due to lack of regulatory certainty, market access, together with certain policies, such as higher taxes, we’ve seen the shift of capital from Alberta’s energy sector to the sector in many other parts of the world, often jurisdictions that do not have the same level of regulatory and labor standards that we have in Canada,” said Kenney. “But all of that is about to change,” he added.
To bring that change, and greater prosperity, the premier ran through a laundry list of items that his regime is doing. For instance, he touted the recent roll-back of corporate taxes for businesses and the creation of a Ministry of Red Tape Reduction that is designed to reduce fiscal and regulatory burdens. Kenney said that the business tax rate in Alberta will be lower than that of “44 of 50 United States.” In addition, he pointed out the recently repealed retail carbon tax, which he said is saving Albertans $1.4 billion per year.
Another innovation of the new regime is a “Royalty Guarantee Act,” which will be introduced next week. "We know that one thing that causes investors to lose faith in a jurisdiction is uncertainty on regulations and on royalties," said Kenney. "And I have to admit that happened in Alberta, in recent years. That's why we will be bringing forward legislation to provide long-term certainty that the royalty structure in place, when a project is permitted, will remain in place."
Other planks in Kenney’s strategy include a continuation of programs to diversify Alberta’s energy sector; the assignment of a deputy minister to oversee the natural gas portion of the industry; simplified fast-track work permits; and shorter, more definite legislative timelines at the Alberta Energy Regulator. “Due to the lack of regulatory certainty, a lot of the investment capital has fled from here to Texas,” said Kenney.
The premier acknowledged that Alberta has many challenges on the federal level, not the least of which are two pieces of legislation working their way through Parliament, which would be quite detrimental to the industry. The C-69 bill would make it much more difficult to build new pipelines, while C-48 would ban the presence of oil tankers along a large chunk of the coastline of neighboring British Columbia. Indeed, Kenney and five other provincial premiers sent a letter to federal Prime Minister Justin Trudeau, protesting the measures as harmful to the future of Canada’s oil and gas industry. These are the same pieces of legislation that prompted the organizing of a pro-pipeline, pro-oil rally at noontime on Tuesday, which brought together roughly 2,500 people to the outdoor exhibition area of the Global Petroleum Show, to hear messages from elected officials from several provinces with oil and gas production. Kenney had to miss the rally, so that he could fly to Quebec, New Brunswick and P.E.I., to consult with his counterparts in those provinces, to try to gain a consensus on the bills moving through Parliament.
Kenney’s speech got off to a slightly late start, due to the interference of a protester. Just as the premier was set to walk up stairs and onto the stage, to the podium, the protester rushed to the stage and proceeded to begin making an often incoherent statement that ranged from pollution and the environment to opioids. The premier’s speech was delayed for more than five minutes, as the man proved difficult for security staff and police officers to wrestle away from the podium. They finally hauled him off, as he continued to yell and scream. Kenney took the situation in stride, remarking, “There are very few energy producers around the world, where you’d see something like that happen. This is a free, liberal democracy with freedom of speech, and we embrace that.”
