Alberta
Multi-billion Dow Chemical investment pegs Alberta as a top spot for low carbon plastics production
The announcement Dow will construct the world’s first net-zero carbon emissions ethylene and derivatives complex, in Fort Saskatchewan, Wednesday November 29, 2023.
From the Canadian Energy Centre
By Will Gibson
Net zero petrochemical complex seen as a signpost for future investment in Alberta’s Industrial Heartland
Dow Chemical’s Nov. 28 announcement confirming it will invest $8.8 billion to build a net zero petrochemical complex near Edmonton was close to a decade in the making for Fort Saskatchewan Mayor Gale Katchur.
“Now that they’ve finally announced the project, I’m one of the happiest mayors around,” says Katchur, who was first elected in October 2010.
“What Dow is building will inspire other industries with innovation and technology like this. Dow has been a cornerstone for our community for the past 60 years. This investment ensures they are going to be around for a lot longer.”
The project, which has support from the municipal, provincial and federal governments, will increase Dow’s production of polyethylene, the most widely used plastic in the world.
Welcomed by the community
By capturing and storing carbon dioxide emissions and generating hydrogen on-site, the complex will be the world’s first ethylene cracker with net zero emissions from operations.
“I remember speaking to Dow executives during their regional visit some years back. They were curious about potential public concerns, given the visibility of their visit and the nature of their business,” Katchur says.
“My response was clear: the primary concern in our community is the pace of progress. People here recognize and appreciate the petrochemical industry. We understand the benefits that it brings.”
Competitive advantages
Katchur’s joy is shared by Mark Plamondon, executive director of Alberta’s Industrial Heartland Association, who sees the Michigan-based multinational’s decision as an endorsement of the region’s competitive advantages.
“Dow is a global company and could put their capital anywhere in the world,” says Plamondon, whose group attracts global investment in heavy industry to the 582-square-kilometre region northeast of Edmonton.
“What this demonstrates is Dow can meet both their economic and environmental goals by investing in this region. That sends a real message.”
Bob Masterson, CEO of the Chemistry Industry Association of Canada, sees Dow’s decision to build the facility as a signal of where the industry will make large investments in the future.
“In the short term, you are looking at the province’s largest construction project requiring more than 7,000 high-skill, high-paying jobs for the next seven to 10 years,” says Masterson, whose Ottawa-based group represents chemistry and plastics producers across Canada.
Alberta a top destination for low carbon chemical production
“What Dow’s decision really says is Alberta is a top destination for the chemistry industry to invest. One of the top chemical producers in the world is making this investment in Canada,” he says.
“When you look at the bigger picture, the only real rival for low-carbon investment of this kind is the U.S. Gulf Coast, where you have the same access to natural gas liquids as a feedstock and supportive public policy environment.”
The Industrial Heartland region is particularly attractive for companies looking to invest in low-carbon products, Masterson says.
“Alberta has an abundant low-carbon feedstock in natural gas liquids to produce hydrogen and the geological space to sequester carbon. These natural assets can encourage investment and support low-carbon chemistry industry,” he says.
“One of the largest petrochemical companies on the planet believes it can build a low-carbon chemistry plant based on these assets. Other companies will see they can generate and extract that value out of those resources in a very sustainable and responsible manner.”
Filling space on the Alberta Carbon Trunk Line
In addition to geological and natural resources, the region already possesses critical infrastructure to woo investment in low-carbon production, such as the Alberta Carbon Trunk Line (ACTL), the world’s largest CO2 pipeline.
Dow has signed an agreement with ACTL owner Wolf Midstream to utilize space on the system.
ACTL is the foundation of a hub that captures CO2 from an oil refinery and fertilizer plant and moves it for permanent storage in a nearby depleted oil field.
The pipeline currently transports 1.6 million tonnes of CO2 per year but is built to transport 14.6 million tonnes of CO2 per year.
“The infrastructure is in place already. The trunk line has plenty of surplus capacity to transport additional emissions,” Plamondon says.
“That just adds to the value proposition for potential facilities that are moving to low-carbon production.”
Alberta
Premier Smith says Auto Insurance reforms mean lower premiums and better services for Alberta drivers
Premier Smith says Auto Insurance reforms may still result in a publicly owned system
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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