Energy industry sees Alberta as ‘risky’

Capital funds spent elsewhere as Alberta government founders

By Mark Smith, MLA Drayton Valley-Devon

The Alberta economy, especially the energy sector, continues to struggle. And the sad truth is it could all have been avoided.

Early on in my mandate I had several oil company representatives book appointments to come and see me. In those conversations they explained clearly and bluntly that when spending their capital, they did so only after doing a risk inventory.

Government decisions to raise corporate and personal taxes, conducting Royalty Reviews, an increasingly bureaucratic and complex process for building pipelines to tidewater, are all among those risk factors contributing to decision to spend their capital outside of Alberta.

Across Canada, more than $100 billion worth of energy projects have been cancelled – that is $100 billion that could have been spent providing jobs and wealth for Canadians and especially Albertans.

Instead we have seen that capital spent in places like Texas and North Dakota. And it’s not just the Americans that are benefiting. We have also seen companies that could have invested in Alberta choosing instead to spend their money in dictatorships and third world nations where the human rights and environmental record pale compared to Alberta.

Yet these nations are seen as less risky for job-creating investment than Alberta. In a world where capital is fluid and can be spent anywhere, these companies believed they would receive a better return on their dollar in a third world dictatorship than they could receive in Alberta.

But, we can’t be too hard on private enterprise. Even our own citizens, and especially governments, have concluded that it is better to buy billions of dollars of oil from Middle East dictatorships than it is to build a pipeline to eastern Canada, where they could purchase Alberta oil for the same price- with a significant reduction of Green House Gas emissions.

Weak political leadership, court judges that constantly change the rules on building pipelines, and US funded environmental radicals have successfully landlocked Alberta oil and the results are devastating.

West Texas Intermediate crude is selling for around $72 a barrel. The price for Western Canada Select crude oil has been selling for around $26 dollars a barrel.

The numbers are clear and help to explain why Tim McMillan, the chief executive of the Canadian Association of Petroleum Producers, has called this a “crisis”. If the past four years have taught us anything it’s that you can’t live in a fantasy world and ignore economic reality. We are going to need a government that can balance budgets, use our tax dollars efficiently, and create a business climate where our main resource has access to tidewater.

The constituents of Drayton Valley-Devon have been hit as hard as anyone in the province of Alberta by the ideologically misguided decisions of the present NDP government.

We need to grow the economy by creating a business climate where businesses believe they can invest in an Alberta economy and have the capacity to have a fair return on their investment dollars, ensuring job creation here in Alberta.

Albertans make the hard decisions, do the hard fiscal work in order to ensure that we create a society that can take care of all of us, especially those that are most vulnerable.

Albertans are famous for rolling up their sleeves and getting to work and that’s what’s needed to get our economy back on track.

Mark Smith is MLA for the Drayton Valley-Devon constituency and writes a regular column for The Pipestone Flyer.

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