Alberta
New $1 billion pipeline deal spreads Indigenous ownership through Alberta, B.C. and Saskatchewan
From the Canadian Energy Centre
By Will Gibson
‘We are writing the history of tomorrow today, not living the outcomes of our forefathers’
In a landmark agreement announced July 30, a consortium of up to 72 Indigenous communities in Alberta, British Columbia and Saskatchewan will buy a 5.34 per cent stake in TC Energy’s NGTL natural gas network.
The agreement is backed by a $1 billion loan guarantee from the Alberta Indigenous Opportunities Corporation (AIOC).
TC Energy’s sprawling NGTL network spans 25,000 kilometres and handles about 10 per cent of North America’s natural gas, connecting production in Alberta and British Columbia to domestic and export markets.
Map courtesy TC Energy
The loan guarantee has similarly impressive scope and size, quadrupling the AIOC’s previous largest financial commitment, a $250 million loan guarantee provided to 23 Indigenous communities in September 2022 to help purchase an 11.57 per cent stake in seven Enbridge oil sands pipelines in northern Alberta.
The deal will raise the AIOC’s support of Indigenous equity ownership in resource projects to over $1.68 billion since 2019.
“I’ve participated in three of these transactions, including the Enbridge loan guarantee, and you can see an evolution in the size and complexity of these agreements,” says Justin Bourque, founder and president of Âsokan Generational Developments, a consultancy that specializes in partnerships between Indigenous communities and industry.
“They are building on the good work from previous deals and it’s wonderful to see the AIOC expanding into neighbouring provinces, where these types of agreements will have significant benefits to the participating Nations in B.C. and Saskatchewan as well as Alberta.”
Âsokan Generational Developments president and founder Justin Bourque pictured on his trap line in northern Alberta with the Long Lake oil sands facility in the background. Photo for Canadian Energy Centre
The new agreement also demonstrates growing comfort among Indigenous communities, industry players and lenders as these equity arrangements become more commonplace, says Heather Exner-Pirot, director of energy, natural resources and environment at the Macdonald-Laurier Institute, an Ottawa-based think tank.
“There are some formidable challenges with trying to negotiate with multiple communities across different treaty areas and provinces, but this shows the confidence the Alberta government has in backstopping these bespoke deals with communities and companies when the merits of the project deserves it,” says Exner-Pirot, who also serves as a special advisor to the Business Council of Canada.
Heather Exner-Pirot, senior fellow with the Macdonald-Laurier Institute. Photo supplied
“It also demonstrates the confidence from the lenders in these equity deals for pipelines. And that confidence is well founded because these existing pipelines are a stable business that generate the revenues to pay back the loan as well as income for the communities to use as well.”
The announcement builds on momentum for Indigenous ownership of Canadian energy projects, including June’s announcement that the Haisla Nation and Pembina Pipeline Corporation will move ahead with the Cedar LNG project.
The floating LNG export facility on Canada’s west coast will be the world’s first with Indigenous majority ownership.
Bourque sees the agreements providing a framework for future partnerships between Indigenous communities, government and industry beyond equity ownership.
“This is an important stepping stone in our evolution and it’s exciting to see it continue through pursuing opportunities in energy development, decarbonization and energy transition projects,” Bourque says.
“We are writing the history of tomorrow today, not living the outcomes of our forefathers.”
Photo courtesy TC Energy
Exner-Pirot also sees a bright future for collaborations between Indigenous communities and energy companies, in part because the federal, Saskatchewan and BC governments now also offer loan guarantee programs.
“These deals take months, if not years, to come together and what this shows is the AIOC, Indigenous communities and energy companies have found a template that works,” she says.
“The NGTL loan guarantee is the biggest but it won’t be the last one.”
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.
Author:
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.”
“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.”
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.”
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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