Alberta
Indigenous-owned LNG projects in jeopardy with proposed emissions cap, leaders warn
Indigenous leaders meet with Japan’s ambassador to Canada Kanji Yamanouchi. Photo courtesy Energy for a Secure Future
From the Canadian Energy Centre
By Cody Ciona
‘It’s like we’re finally at the table and we’re having to fight to keep our seat at the table’
A proposed cap on oil and gas emissions will threaten opportunities for Indigenous communities to bring cleaner alternatives to coal to international markets, Indigenous leaders warned during a recent webinar.
Karen Ogen, CEO of the First Nations LNG Alliance, fears Indigenous-led projects like Cedar LNG and Ksi Lisims LNG are threatened by the cap, which is essentially a cap on production.
“If we’re going to help China and India get off of coal and help reduce their greenhouse gas emissions, it makes common sense for us to be selling our LNG to Asia and to other countries. To put a cap on, it would just stop us from doing that,” Ogen said.
“It’s like we’re finally at the table and we’re having to fight to keep our seat at the table.”
Indigenous communities across Canada have increasingly become involved in oil and gas projects to secure economic prosperity and reduce on-reserve poverty.
Since 2022, more than 75 First Nations and Metis communities have entered ownership agreements across western Canada. Among those are key projects like the Coastal GasLink pipeline and the joint investment of 23 communities to obtain a 12 per cent ownership stake in several oil sands pipelines.
The planned federal emissions cap will stall progress toward economic reconciliation, Ogen said.
“Our leaders did not accept this and fought hard to have rights and titles recognized,” she said.
“These rights were won through persistence and determination. It’s been a long journey, but we are finally at the table with more control over our destiny.”
Chris Sankey, CEO of Blackfish Enterprises and a former elected councillor for the Lax Kw’alaams Band in B.C., said the proposed emissions cap could stifle Indigenous communities pushing for poverty reduction.
“We’re working hard to try to get our people out of poverty. All [the emissions cap is] doing is pushing them further into debt and further into poverty,” he said.
“When oil and gas is doing well, our people do well.”
Together, the Trans Mountain Pipeline Expansion, LNG Canada project and Coastal GasLink pipeline have spent more than $10 billion in contracts with Indigenous and local businesses
Indigenous employment in the oil and gas industry has also increased by more than 20 per cent since 2014.
For Stephen Buffalo, CEO of the Indian Resource Council, an emissions cap feels like a step in the wrong direction after years of action to become true economic partners is finally making headway.
“Being a participant in the natural resource sector and making true partnerships, has been beneficial for First Nations,” he said.
“So, when you see a government trying to attack this industry in that regard, it is very disheartening.”
Premier Danielle Smith released the following statement following the re-election of a Liberal government in Ottawa.
I congratulate Prime Minister Mark Carney on his minority government election victory last night.
I also want to sincerely thank Pierre Poilievre for his powerful and principled advocacy against the last decade’s punitive taxation and anti-resource policies that have made our country weaker, more divided and overly-dependent on the United States.
Mr. Poilievre’s vision for a safer, more affordable, united and prosperous Canada drove the policy debate in this country for the last several years and has inspired millions to see the unique potential of our nation. While Liberals and New Democrats demeaned and demonized Albertans, our values and our industries for political gain, Mr. Poilievre made empowering Albertans and our energy sector a cornerstone of his campaign. His respect and admiration for Albertans could not have been clearer. He is and continues to be a true friend of Alberta.
As Premier, I invite the Prime Minister to immediately commence working with our government to reset the relationship between Ottawa and Alberta with meaningful action rather than hollow rhetoric. A large majority of Albertans are deeply frustrated that the same government that overtly attacked our provincial economy almost unabated for the past 10 years has been returned to government.
As Premier, I will not permit the status quo to continue. Albertans are proud Canadians that want this nation to be strong, prosperous, and united, but we will no longer tolerate having our industries threatened and our resources landlocked by Ottawa.
In the weeks and months ahead, Albertans will have an opportunity to discuss our province’s future, assess various options for strengthening and protecting our province against future hostile acts from Ottawa, and to ultimately choose a path forward.
As Premier, I will facilitate and lead this discussion and process with the sincere hope of securing a prosperous future for our province within a united Canada that respects our province’s constitutional rights, facilitates rather than blocks the development and export of our abundant resources, and treats us as a valued and respected partner within confederation.
Our government will be holding a special caucus meeting this Friday to discuss this matter further. I will have more to say after that meeting is concluded.
From the Fraser Institute
By Tegan Hill
Amid the tariff war, the price of West Texas Intermediate oil—a common benchmark—recently dropped below US$60 per barrel. Given every $1 drop in oil prices is an estimated $750 million hit to provincial revenues, if oil prices remain low for long, there could be big implications for Alberta’s budget.
The Smith government already projects a $5.2 billion budget deficit in 2025/26 with continued deficits over the following two years. This year’s deficit is based on oil prices averaging US$68.00 per barrel. While the budget does include a $4 billion “contingency” for unforeseen events, given the economic and fiscal impact of Trump’s tariffs, it could quickly be eaten up.
Budget deficits come with costs for Albertans, who will already pay a projected $600 each in provincial government debt interest in 2025/26. That’s money that could have gone towards health care and education, or even tax relief.
Unfortunately, this is all part of the resource revenue rollercoaster that’s are all too familiar to Albertans.
Resource revenue (including oil and gas royalties) is inherently volatile. In the last 10 years alone, it has been as high as $25.2 billion in 2022/23 and as low as $2.8 billion in 2015/16. The provincial government typically enjoys budget surpluses—and increases government spending—when oil prices and resource revenue is relatively high, but is thrown into deficits when resource revenues inevitably fall.
Fortunately, the Smith government can mitigate this volatility.
The key is limiting the level of resource revenue included in the budget to a set stable amount. Any resource revenue above that stable amount is automatically saved in a rainy-day fund to be withdrawn to maintain that stable amount in the budget during years of relatively low resource revenue. The logic is simple: save during the good times so you can weather the storm during bad times.
Indeed, if the Smith government had created a rainy-day account in 2023, for example, it could have already built up a sizeable fund to help stabilize the budget when resource revenue declines. While the Smith government has deposited some money in the Heritage Fund in recent years, it has not created a dedicated rainy-day account or introduced a similar mechanism to help stabilize provincial finances.
Limiting the amount of resource revenue in the budget, particularly during times of relatively high resource revenue, also tempers demand for higher spending, which is only fiscally sustainable with permanently high resource revenues. In other words, if the government creates a rainy-day account, spending would become more closely align with stable ongoing levels of revenue.
And it’s not too late. To end the boom-bust cycle and finally help stabilize provincial finances, the Smith government should create a rainy-day account.
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