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Alberta

Premier Danielle Smith sent this letter to PM Justin Trudeau today

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An alternative to Just Transition: Premier Smith

Alberta Premier Danielle Smith invites Prime Minister Justin Trudeau to work with her to develop “Sustainable Jobs” legislation as an alternative to the proposed “Just Transition” legislation.

Dear Prime Minister:

I am writing to once again raise Alberta’s serious concerns with the proposed federal ‘Just Transition’ legislation. The world needs more Canadian energy, not less. It would be premature and ill-advised to signal the end of a vibrant, thriving industry that has the ability to reduce Canada’s and the world’s emissions through technological innovation and increased exports of LNG and other clean burning fuels the world so desperately needs. It is also critical to the security of our nation and allies to lessen dependence on fuel sources from unstable, undemocratic and dangerous countries with atrocious environmental records.

Simply put, the world needs more Canadian energy and technology, not less, and as the owner of the world’s third largest oil and gas reserves and the most advanced environmental technology on the planet – we need to signal our intention to provide substantially more of both.

According to your government’s own predictions, the federal Just Transition initiative alone will risk a full 25 percent of Alberta’s economy and 187,000 jobs in Alberta, while also causing major disruptions and displacement to 13.5 percent of Canada’s workforce. At a time when Canadians are struggling to afford basic services and goods, Canada’s oil and gas sector offers some of the highest wages in Canada, which translates to strong business and community support across the country. Signalling a move away from these types of high paying jobs, threatens the national economy, and the livelihoods of hundreds of thousands of workers across the country at a time when good jobs are needed the most. It also creates a chilling effect on investors considering large scale investments in the Alberta and Canadian energy sector.

Prime Minister, we are at a crossroads in Alberta’s relationship with the Federal Government. We can continue with the endless court challenges, legislation to protect jurisdictional rights and inflammatory media coverage over our disagreements, or, as is my strong preference, Alberta and Ottawa can work in partnership on a plan that will signal to all Canadians and investors from around the world that our governments have cooperatively designed a series of incentives and initiatives intended to achieve the following objectives:

  1. Substantially decreasing Canada’s and Alberta’s net emissions;
  1. Accelerating private and public investment in projects and infrastructure that utilize and develop Carbon Capture Utilization and Storage (CCUS), Bitumen Beyond Combustion, Geothermal technology, petrochemicals, hydrogen, lithium, helium, zero-emissions vehicles and nuclear technologies;
  1. Attracting and growing a larger skilled workforce to fill positions in both the conventional energy sector as well as emerging industries using the technologies cited above; and
  1. Significantly, and through the lens of global emissions reduction, increasing the export of LNG and other responsibly developed conventional oil and natural gas resources to Europe, Asia and the United States.

Prime Minister, all of the above objectives need to be clearly articulated and integrated into any Federal legislation or policies your government seeks to implement in the coming months, or that legislation will face irrepressible opposition from Alberta. I genuinely do not want to see that happen.

Further, this proposed legislation must be developed through cooperative discussions with affected provinces – namely Alberta. I would therefore invite you to meet with me in February on this matter, after which I would propose we have our appropriate ministers and officials meet repeatedly in the coming months with the goal of coming to a joint agreement on the key items to be included in your contemplated legislation so that it can be introduced and passed by the end of Spring.

Further, I request that you take to heart, and acknowledge publicly, the following items, in an extension of good faith to Albertans:

  1. Immediately drop the verbiage of “Just Transition”. Accordingly, rename the “Just Transition Act” to the “Sustainable Jobs Act”;
  1. Vow that all provisions of any forthcoming legislation will be designed to incentivize investment and job growth in both the conventional energy sector as well as in emerging industries utilizing Carbon Capture Utilization and Storage (CCUS), Bitumen Beyond Combustion, petrochemicals, hydrogen, lithium, helium, geothermal, zero-emissions vehicle and nuclear technologies;
  1. Demonstrate that no provision of the Act will be designed to phase out or reduce Alberta’s conventional oil and natural gas sector and workforce (as we are already experiencing a workforce shortage in this sector);
  1. Commit your Government to actively partnering with Alberta to expand LNG exports to Asia and Europe as part of our nation’s overall emissions reduction strategy; and
  1. Promise that you and your Government will work with Alberta in partnership to set reasonable and meaningful emissions reductions targets and will not unilaterally impose such targets on Alberta’s energy, agriculture and other industrial sectors on a go forward basis.

Investments by Alberta’s oil and natural gas industry are driving the creation of the very clean technologies needed to bring emissions down both in Canada and around the world. Oil and natural gas companies representing the majority of production in Canada are investing $24 billion on projects to help reduce annual GHG emissions from operations by 22 million tonnes by 2030, and have committed to emission neutrality by 2050. Putting an end to or hampering this important work, and continued tepid support for increased LNG export, is the best way for your government to fail in its goal of reducing our nation’s and the world’s emissions. It would be the ultimate example of scoring on our own net.

The Alberta energy sector has grown and thrived through innovation, providing good paying jobs for thousands and contributing billions of dollars in tax revenue for all levels of government.  They will continue to evolve and adapt to new technologies in search of new low to zero-emitting fuel sources like hydrogen and provide new, high-paying skilled jobs for decades to come. It is essential that the federal government stands shoulder to shoulder with Alberta to reduce emissions and continue to develop our oil and natural gas and future energy sources responsibly, while also positioning Canada as the optimal solution to global energy needs and security.

Prime Minister, we can and must work together. Operating in political silos, as adversaries on this issue, is getting us nowhere, and I believe all Canadians are tired of seeing it. Canada should be the world’s greatest energy superpower. It can be, if we come together collaboratively in pursuit of that objective. There is no limit to our nation’s potential.

Let’s turn the page starting with a meeting between us next month followed by a dedicated effort to craft “Sustainable Jobs” legislation that a vast majority of Albertans and Canadians will welcome and support. The consequences of missing this opportunity will be dire for the Canadian and Alberta economies, workforce and environment.

I look forward to your prompt reply.

This is a news release from the Government of Alberta.

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Alberta

Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn

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From the Fraser Institute

By Tegan Hill

According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.

The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.

For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).

And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.

In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.

This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.

Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.

Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.

Of course, if the government falls back into deficit there are implications for everyday Albertans.

When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.

According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.

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Alberta

Premier Smith says Auto Insurance reforms may still result in a publicly owned system

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Better, faster, more affordable auto insurance

Alberta’s government is introducing a new auto insurance system that will provide better and faster services to Albertans while reducing auto insurance premiums.

After hearing from more than 16,000 Albertans through an online survey about their priorities for auto insurance policies, Alberta’s government is introducing a new privately delivered, care-focused auto insurance system.

Right now, insurance in the province is not affordable or care focused. Despite high premiums, Albertans injured in collisions do not get the timely medical care and income support they need in a system that is complex to navigate. When fully implemented, Alberta’s new auto insurance system will deliver better and faster care for those involved in collisions, and Albertans will see cost savings up to $400 per year.

“Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable. When it’s implemented, our new privately delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”

Danielle Smith, Premier

“High auto insurance rates put strain on Albertans. By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”

Nate Horner, President of Treasury Board and Minister of Finance

Albertans who suffer injuries due to a collision currently wait months for a simple claim to be resolved and can wait years for claims related to more serious and life-changing injuries to addressed. Additionally, the medical and financial benefits they receive often expire before they’re fully recovered.

Under the new system, Albertans who suffer catastrophic injuries will receive treatment and care for the rest of their lives. Those who sustain serious injuries will receive treatment until they are fully recovered. These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence, such as impaired driving or dangerous driving, or conviction of certain offenses under the Traffic Safety Act.

Work on this new auto insurance system will require legislation in the spring of 2025. In order to reconfigure auto insurance policies for 3.4 million Albertans, auto insurance companies need time to create and implement the new system. Alberta’s government expects the new system to be fully implemented by January 2027.

In the interim, starting in January 2025, the good driver rate cap will be adjusted to a 7.5% increase due to high legal costs, increasing vehicle damage repair costs and natural disaster costs. This protects good drivers from significant rate increases while ensuring that auto insurance providers remain financially viable in Alberta.

Albertans have been clear that they still want premiums to be based on risk. Bad drivers will continue to pay higher premiums than good drivers.

By providing significantly enhanced medical, rehabilitation and income support benefits, this system supports Albertans injured in collisions while reducing the impact of litigation costs on the amount that Albertans pay for their insurance.

“Keeping more money in Albertans’ pockets is one of the best ways to address the rising cost of living. This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province.”

Nathan Neudorf, Minister of Affordability and Utilities

Quick facts

  • Alberta’s government commissioned two auto insurance reports, which showed that legal fees and litigation costs tied to the province’s current system significantly increase premiums.
  • A 2023 report by MNP shows
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