Alberta
Province will balance the economy and the environment – Emissions Reduction and Energy Development Plan
Balancing the economy and the environment
Alberta’s new Emissions Reduction and Energy Development (ERED) Plan charts Alberta’s course for cutting emissions, attracting investment and growing the economy.
Albertans have been stewards of one of Canada’s largest economic engines, the oil and gas sector. For decades, Albertans have stepped up to deliver responsible, ethically produced energy, helping mitigate global energy crises and leading in technology innovation to reduce emissions.
The ERED Plan is Alberta’s path forward to net-zero aspirations by 2050 while maintaining affordable, reliable and secure energy for Albertans. The plan affirms that responsibly produced oil and gas will continue to be a fundamental part of the global energy mix in the coming decades while sending a clear signal to the world that Alberta is the place to invest.
“Our made-in-Alberta plan to reduce emissions while growing the economy is a plan that works for Albertans. This could never be a one-size-fits-all model passed on by the federal government. I’m so proud of the work that has been done to bring this forward. Alberta can, and will, be a part of the solution to safeguard North American and global energy security. We can make real progress on environmental protection without sacrificing Alberta’s and Canada’s economic engine.”
Cutting emissions should not make life harder and more expensive. Actions in the ERED Plan like modernizing the electricity system, integrating new technology and supporting natural gas-fired generation will help keep energy reliable, safe and affordable for Albertans.
In February, Premier Danielle Smith sent a letter to Prime Minister Justin Trudeau, informing the federal government that a made-in-Alberta plan was on the way. Alberta’s government is calling on the federal government to stop setting unrealistic, unachievable targets, to stay in their lane and work with the provinces without interfering in provincial jurisdiction. Families need to keep the lights on, buy groceries and have enough gas in their car to get their kids to soccer practice without carrying the burden of expensive government climate policies.
Former premier Ralph Klein took the first step by putting out the first such plan in 1998. Since then, decades of hard work from the men and women who make their living in Alberta’s industries have led to today. The plan Alberta’s government is unveiling salutes the work done by Albertans over decades, culminating in a significant focus over the last four years, and charts the province’s next steps. More work is yet to be done.
“Alberta’s plan forward to reduce emissions while growing economic activity sets a course of success for our province. The conversation about emissions reduction must include energy security, affordability and reliability. This plan does exactly that.”
Alberta’s ERED Plan outlines investment and partnership opportunities, including ways to better support Alberta’s skilled workforce, strengthen relationships with Indigenous organizations and communities, and collaborate with industry. By driving emissions reductions in all sectors through clean technology and innovative solutions, Alberta’s plan protects and diversifies jobs and keeps money in the pockets of hard-working Albertans.
“Alberta will make an outsized contribution to Canada and the rest of the world by developing low-cost technologies towards successful decarbonization. Given Alberta’s ingenuity and energy expertise, it is in the best position to support Canada’s aim to achieve net-zero emissions in 2050.”
“Alberta has demonstrated tremendous leadership in economic reconciliation for Indigenous Peoples by creating opportunities for Indigenous communities to participate in projects that will drive tangible economic benefits and prosperity for generations to come.”
The ERED Plan outlines actions and opportunities across Alberta’s environment and economy, from oil and gas to agriculture and waste management. A summary of actions is available on the ERED Plan website.
As part of Alberta’s work to address the rising cost of living due to inflation, the ERED Plan includes a commitment to explore building codes, labelling and building benchmarking, balancing informed consumer choice with property right considerations, and exploring and growing innovation and technology for homes like new building materials and heat pumps.
“The Pathways Alliance is encouraged by the Government of Alberta’s plan to reduce emissions and achieve net zero while ensuring industry can compete globally, attract investment and continue to provide economic growth and prosperity for Albertans and Canadians.”
“Alberta’s Emissions Reduction and Energy Development Plan presents evidence that Alberta does not require overlapping federal regulation to do what is necessary to meet net zero by 2050 goals. The plan’s net zero by 2050 aspiration is the statement that investors and analysts have been looking for as the overarching signal of commitment to emissions reductions action.”
Quick facts
- Alberta was the first jurisdiction in Canada to establish a climate plan in 1998.
- Alberta was the first jurisdiction in North America to introduce an industrial carbon price and emissions trading system in 2007.
- Alberta was the first government in Canada to set a methane emissions reduction target for the oil and gas sector and is on track to meet and exceed its 2025 methane emissions reduction goal.
- Alberta is expected to transition from coal-fired electricity in 2023, seven years ahead of provincial and federal targets.
- The Technology Innovation and Emissions Reduction (TIER) Regulation, Alberta’s industrial carbon pricing system, is at the core of emissions management in Alberta.
- From 2009 to 2021, $2.5 billion from industrial carbon pricing funds were invested in programs that support emissions reductions and climate resiliency.
- Alberta is recognized as a leader in developing carbon capture, utilization and storage (CCUS) technology, committing more than $1.8 billion to support CCUS projects to date.
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
Alberta maintains a balanced budget while ensuring pressures from population growth are being addressed.
Alberta faces rising risks, including ongoing resource volatility, geopolitical instability and rising pressures at home. With more than 450,000 people moving to Alberta in the last three years, the province has allocated hundreds of millions of dollars to address these pressures and ensure Albertans continue to be supported. Alberta’s government is determined to make every dollar go further with targeted and responsible spending on the priorities of Albertans.
The province is forecasting a $4.6 billion surplus at the end of 2024-25, up from the $2.9 billion first quarter forecast and $355 million from budget, due mainly to higher revenue from personal income taxes and non-renewable resources.
Given the current significant uncertainty in global geopolitics and energy markets, Alberta’s government must continue to make prudent choices to meet its responsibilities, including ongoing bargaining for thousands of public sector workers, fast-tracking school construction, cutting personal income taxes and ensuring Alberta’s surging population has access to high-quality health care, education and other public services.
“These are challenging times, but I believe Alberta is up to the challenge. By being intentional with every dollar, we can boost our prosperity and quality of life now and in the future.”
Midway through 2024-25, the province has stepped up to boost support to Albertans this fiscal year through key investments, including:
- $716 million to Health for physician compensation incentives and to help Alberta Health Services provide services to a growing and aging population.
- $125 million to address enrollment growth pressures in Alberta schools.
- $847 million for disaster and emergency assistance, including:
- $647 million to fight the Jasper wildfires
- $163 million for the Wildfire Disaster Recovery Program
- $5 million to support the municipality of Jasper (half to help with tourism recovery)
- $12 million to match donations to the Canadian Red Cross
- $20 million for emergency evacuation payments to evacuees in communities impacted by wildfires
- $240 million more for Seniors, Community and Social Services to support social support programs.
Looking forward, the province has adjusted its forecast for the price of oil to US$74 per barrel of West Texas Intermediate. It expects to earn more for its crude oil, with a narrowing of the light-heavy differential around US$14 per barrel, higher demand for heavier crude grades and a growing export capacity through the Trans Mountain pipeline. Despite these changes, Alberta still risks running a deficit in the coming fiscal year should oil prices continue to drop below $70 per barrel.
After a 4.4 per cent surge in the 2024 census year, Alberta’s population growth is expected to slow to 2.5 per cent in 2025, lower than the first quarter forecast of 3.2 per cent growth because of reduced immigration and non-permanent residents targets by the federal government.
Revenue
Revenue for 2024-25 is forecast at $77.9 billion, an increase of $4.4 billion from Budget 2024, including:
- $16.6 billion forecast from personal income taxes, up from $15.6 billion at budget.
- $20.3 billion forecast from non-renewable resource revenue, up from $17.3 billion at budget.
Expense
Expense for 2024-25 is forecast at $73.3 billion, an increase of $143 million from Budget 2024.
Surplus cash
After calculations and adjustments, $2.9 billion in surplus cash is forecast.
- $1.4 billion or half will pay debt coming due.
- The other half, or $1.4 billion, will be put into the Alberta Fund, which can be spent on further debt repayment, deposited into the Alberta Heritage Savings Trust Fund and/or spent on one-time initiatives.
Contingency
Of the $2 billion contingency included in Budget 2024, a preliminary allocation of $1.7 billion is forecast.
Alberta Heritage Savings Trust Fund
The Alberta Heritage Savings Trust Fund grew in the second quarter to a market value of $24.3 billion as of Sept. 30, 2024, up from $23.4 billion at the end of the first quarter.
- The fund earned a 3.7 per cent return from July to September with a net investment income of $616 million, up from the 2.1 per cent return during the first quarter.
Debt
Taxpayer-supported debt is forecast at $84 billion as of March 31, 2025, $3.8 billion less than estimated in the budget because the higher surplus has lowered borrowing requirements.
- Debt servicing costs are forecast at $3.2 billion, down $216 million from budget.
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