Alberta Votes 2019: The week so far- jobs, oil and gas and cracking down on crime

Alberta’s political parties are in full-on campaign mode as Election Day approaches on April 16th. Each day the parties release information about their policies and platforms, candidate information and reactions to the day’s news. It can be difficult to try and keep up with it all, so from now until the election we’ll regularly compile information released by the parties and present the main points here.

For more information, click on party names to visit campaign websites.

(Parties listed in alphabetical order)

Alberta Party

Alberta Party announces plans to invest in new technology material sciences and bitumen pucks and create jobs from Alberta’s oil and gas resources.

“As Wayne Gretzky once said, you have to skate to where the puck is going. Passively sitting around and hoping the market works is yesterday’s approach. We need to aggressively get in the game and make big moves to generate more refining and petrochemical processing here in Alberta.”

Stephen Mandel – Leader of the Alberta Party

An Alberta Party government will energize the development of refining and petrochemical processing, creating more value within the province and thousands of good jobs for Albertans.

Supporting the Development of CanaPux

● Commonly referred to as bitumen pucks, CanaPux are developed by CN and Wapahki Energy, owned by Heart Lake First Nation (approximately 300 km northeast of Edmonton).

● The technology converts bitumen into a solid puck product that is capable of being exported by rail or other methods (rather than pipeline).
● This is a potential revolution for Alberta’s oil sands industry — one that enables Albertans to realize the full value of their resources by avoiding pipeline politics.
● An Alberta Party government will expedite approvals for the pilot facility and contribute financial support for one-third of the pilot ($16.7 million).

Increasing the Alberta Innovates budget with a focus on material sciences.
● Alberta Innovates contributes to the creation of new industries in Alberta and strengthens existing ones. It diversifies the economy and creates jobs and increases exports.
● Alberta Innovates currently funds research that focuses on turning bitumen into products other than gas, diesel and other fuels such as asphalt, vanadium batteries, plastics and carbon fibre.
● The development of these alternatives is a long term approach that will help to increase demand for our resources, create jobs, lower our exposure to global oil prices, and help diversify our economy.
● The NDP have reduced the Alberta Innovates budget going from $288M in 2018-19 to $244M in 2020-21.
● An Alberta Party government will not only reverse those cuts but increase the total Alberta Innovates budget by 30% to $375M by 2020-21 and direct the additional funds to a rapid expansion of research into new uses for our resources.

Expanding Refining in Alberta
● Once Phase 1 is proven out, an Alberta Party government will support construction of Phase 2 and Phase 3 of the Sturgeon Refinery.
● This helps Alberta expand its refining capacity, creating more value here in the province and creating thousands of skilled jobs for Albertans.
● An Alberta Party government will expedite the review of necessary approvals and expand its Bitumen Royalty in Kind (BRIK) program.
● Construction of both Phase 2 and 3 have a combined total construction expenditure of an estimated $18.0 billion which will result in an increase in GDP of $16.0 billion, and create 140,000 person-years of employment.
● Once construction is complete, the additional the two phases will increase GDP by an average of $5 billion per year, and result in an estimated 13,000 additional jobs per year.

Energizing Petrochemical Processing
● To stimulate petrochemical processing in the province, an Alberta Party government will establish a Gas Royalty in Kind program that takes a similar approach to the Bitumen Royalty in Kind program.
● This will have the Government of Alberta take a portion of its natural gas royalties “in kind” rather than in cash. This will enable the government to market the natural gas in ways that stimulate gas processing and petrochemical plant expansions in the province.
● An Alberta Party government will also establish Alberta’s petrochemical diversification program as a 10 year program, rather than the NDP’s unpredictable annual program. This would provide stability and certainty to the market, helping attract more investment.
● The petrochemical diversification program will also be adjusted to move from a royaltycredit to a more efficient subsidy program.

NDP

Rachel Notley pledges to expand heavy-load roads and build new access highway to Fort McMurray, creating 7,500 jobs.

“We will never forget the sight of families fleeing out of the city on Highway 63 while flames licked at the trucks and cars. It was one of the scariest moments of people’s lives,” said Notley. “Fort McMurray needs a second route out and we will get it done. We will keep families safe and help people sleep a little easier a night.”

Rachel Notley – Leader of the New Democratic Party of Alberta

Under Notley’s plan, the government would expand the Alberta High Load Corridor, a 6,500 kilometre network of designated routes across Alberta that can accommodate heavy loads with heights of up to 12.8 meters and weights of up 800 tonnes.

The High Load Corridor is considered among the very best in North America, giving Alberta industry a distinct competitive advantage. The six-year, $1.35-billion expansion would:
• Add 3,500 kilometres, for a new total of 10,000 kilometres.
• Create 7,500 construction jobs.
• Support northern industrial development, with specific benefits for oil and gas.
• Extend and improve the network in southern Alberta, with specific benefits for the renewable energy industry as more, larger wind turbines are transported.
• Maintain roughly 150,000 oversized/overweight permits issued annually.

Notley’s plan to expand the High Load Corridor builds on previous announcements such as the Highway 40, Highway 43X bypass and the Vinca Bridge. The Vinca Bridge will shorten trips from the Industrial Heartland to Fort McMurray by 200 kilometres, saving industry $10,000 per trip. Industrial stakeholders including heavy haul carriers, oil sands developers, pre-fabricated home builders, and municipalities have been consulted by the Government of Alberta.

A New Way Out. For a Safer Fort McMurray.
Rachel Notley is committed to building a secondary access highway in Fort McMurray, which would ease congestion, improve access, and boost safety throughout the region. The Regional Municipality of Wood Buffalo formally endorsed the East Clearwater Highway project in 2016 as the preferred option to respond to recommendations from the Fort McMurray fire and build a new evacuation route for all communities between Anzac and Fort McKay. The Government of Alberta has invested $5 million into pre-design and planning.
Consultations will be held with Indigenous peoples, municipalities, industry, and area residents.

More processing, upgrading and refining. Made-In-Alberta.
The International Energy Agency forecasts that global demand growth for petroleum products in the coming decades will be strongest in the petrochemical and aviation fuel sectors. Alberta has the potential to seize tens of billions in global petrochemical, upgrading and refining investment over the next decade, but it will not happen on its own. Rachel Notley’s Made-in-Alberta plan to significantly increase the volume of oil and gas that is processed, upgraded or refined in Alberta before it’s exported. Notley’s plan has already attracted $12.6 billion in private investment and created over 11,700 direct jobs.

2030 target and strategic goals:
• Secure $75 billion in mid-to-downstream private capital investment and 70,000 jobs.
• Double Alberta’s current petrochemical production within established methane and ethane value chains.
• Leverage the emerging propane value chain currently under development to attract tertiary manufacturing facilities.
• Capture more value from liquid rich natural gas produced in Alberta and B.C. by incenting new infrastructure connections between Alberta’s four value-added industrial clusters (Heartland, Red Deer, Grande Prairie and Medicine Hat), and emerging coastal Liquefied Natural Gas export terminals in B.C.
• Leverage the commercialization of new partial upgrading technologies to unlock more refining markets in the U.S. and globally to meet growing demand for aviation fuel and low-sulphur marine fuel. Export up to 30 per cent more bitumen on available pipeline space.

UCP

UCP outlines plans to tackle growing crime wave.

“We will do everything within our power to stop the revolving door in our justice system, and to keep Albertans safe.”

The UCP has promised more judges, more prosecutors and stronger laws part of a plan to tackle Alberta’s growing crime wave.

Kenney cited statistics that reveal a growing crime problem in Alberta:

Auto theft is way up and Alberta leads the country in auto-theft—at three times the national average with 62 stolen vehicles per day, on average.¹ The Alberta Motor Association says there has been a 32% increase in vehicle thefts since 2014². 29% percent of all vehicle thefts in Canada happen in Alberta, according to Statistics Canada³
By 2018, the rural crime rate in some communities rose by 250% compared with 2011.⁴They included communities such as Innisfail and Bonnyville where property break-ins were up 94% and up by 133% respectively between 2016 and 2017.⁵
In 2018, Edmonton Police Service reported⁶)that since 2015, assaults were up 11%; property crimes were up 13%, and sexual assault incidents were up 17%.
In 2018, Calgary Police services reported⁷ that over the last five years there was a 6% increase in property crimes, a 25%increase in financial robberies, a 26.3% increase in sex offences, a 27.6% increase in robberies, and a 35.9% total increase in assault crimes.⁸
Maclean’s reported last November that 7 of the top 10 cities in their Canada’s Most Dangerous Places 2019 ranking (based on 5-year change in crime severity index) are from Alberta.⁹

Kenney stated a United Conservative Party government will hire 50 new prosecutors and support staff, a $10 million investment.

Kenney also announced that a UCP government will boost funding by $20 million over four years (69 percent) to the Alberta Law Enforcement Response Teams (ALERT), who deal with children’s exploitation, domestic violence, stalking, and gang issues, among others. The $20 million funding increase will:

Double ALERT’s funding for its sub-unit, the Integrated Child Exploitation (ICE) unit that tracks, arrests and prosecutes child pornographers
Double the funding for its sub-unit, the Integrated Threat and Risk Assessment (I-TRAC) unit, the police unit that helps combat domestic violence and stalking
Create a new Opioid Enforcement Team

A UCP government will also work with ALERT to obtain a charitable foundation (akin to the Calgary and Edmonton Police foundations) which can then attract additional funds from the private donors.

Kenney also promised that under a UCP government Albertans would know the truth about crime in their province.

“We will pass the Public’s Right to Know Act. This bill will require an annual report to the legislature containing detailed provincial crime statistics.”

A UCP government would also replace the Parole Board of Canada with an Alberta Parole Board for offenders serving sentences of under two years.

And because crime victims can often fall through the cracks, a UCP government will also conduct an immediate review of the current model of victim service delivery, victim assistance funding, and victim compensation to ensure optimal assistance to victims of crime.

A UCP government would also invest $5 million to increase access to Drug Treatment Courts as an effective way of helping drug addicts to leave the cycle of crime and addiction through treatment, testing, incentives, sanctions and social support.

The responsibility for law enforcement is shared with the federal government. A UCP government will therefore also negotiate with the federal government (and with other provinces as necessary) to:

Secure additional Queen’s Bench justice appointments to reduce the backlog in superior courts.
Ensure that Grande Prairie be given its own Queen’s Bench.
Develop and put in place a specific Repeat Offender Policy.
Ensure the return of criminals who have fled to other provinces, to face justice in Alberta. (According to Alberta police forces, flight-across-borders has become a critical problem given the number of jurisdictions involved, especially in western Canada.)
Review current Criminal Code sentencing principles to ensure that in rural crime offences, specific facts be considered by a sentencing court as aggravating factors, and that the principles of deterrence and denunciation be prioritized.”

In 2018, the UCP released its Alberta Rural Crime Strategy, calling for a provincially regulated police response system linking all enforcement agencies to pursue the relatively small number of organised, repeat offenders who are responsible for most rural crime.

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Alberta

Alberta government should create flat 8% personal and business income tax rate in Alberta

Published on April 23, 2024

Todayville

From the Fraser Institute

By Tegan Hill

If the Smith government reversed the 2015 personal income tax rate increases and instituted a flat 8 per cent tax rate, it would help restore Alberta’s position as one of the lowest tax jurisdictions in North America

Over the past decade, Alberta has gone from one of the most competitive tax jurisdictions in North America to one of the least competitive. And while the Smith government has promised to create a new 8 per cent tax bracket on personal income below $60,000, it simply isn’t enough to restore Alberta’s tax competitiveness. Instead, the government should institute a flat 8 per cent personal and business income tax rate.

Back in 2014, Alberta had a single 10 per cent personal and business income tax rate. As a result, it had the lowest top combined (federal and provincial/state) personal income tax rate and business income tax rate in North America. This was a powerful advantage that made Alberta an attractive place to start a business, work and invest.

In 2015, however, the provincial NDP government replaced the single personal income tax rate of 10 percent with a five-bracket system including a top rate of 15 per cent, so today Alberta has the 10th-highest personal income tax rate in North America. The government also increased Alberta’s 10 per cent business income tax rate to 12 per cent (although in 2019 the Kenney government began reducing the rate to today’s 8 per cent).

If the Smith government reversed the 2015 personal income tax rate increases and instituted a flat 8 per cent tax rate, it would help restore Alberta’s position as one of the lowest tax jurisdictions in North America, all while saving Alberta taxpayers $1,573 (on average) annually.

And a truly integrated flat tax system would not only apply a uniform tax 8 per cent rate to all sources of income (including personal and business), it would eliminate tax credits, deductions and exemptions, which reduce the cost of investments in certain areas, increasing the relative cost of investment in others. As a result, resources may go to areas where they are not most productive, leading to a less efficient allocation of resources than if these tax incentives did not exist.

Put differently, tax incentives can artificially change the relative attractiveness of goods and services leading to sub-optimal allocation. A flat tax system would not only improve tax efficiency by reducing these tax-based economic distortions, it would also reduce administration costs (expenses incurred by governments due to tax collection and enforcement regulations) and compliance costs (expenses incurred by individuals and businesses to comply with tax regulations).

Finally, a flat tax system would also help avoid negative incentives that come with a progressive marginal tax system. Currently, Albertans are taxed at higher rates as their income increases, which can discourage additional work, savings and investment. A flat tax system would maintain “progressivity” as the proportion of taxes paid would still increase with income, but minimize the disincentive to work more and earn more (increasing savings and investment) because Albertans would face the same tax rate regardless of how their income increases. In sum, flat tax systems encourage stronger economic growth, higher tax revenues and a more robust economy.

To stimulate strong economic growth and leave more money in the pockets of Albertans, the Smith government should go beyond its current commitment to create a new tax bracket on income under $60,000 and institute a flat 8 per cent personal and business income tax rate.

Author:

Tegan Hill

Associate Director, Alberta Policy, Fraser Institute

Alberta

Province to stop municipalities overcharging on utility bills

Published on April 22, 2024

Government of Alberta

Making utility bills more affordable

Alberta’s government is taking action to protect Alberta’s ratepayers by introducing legislation to lower and stabilize local access fees.

Affordability is a top priority for Alberta’s government, with the cost of utilities being a large focus. By introducing legislation to help reduce the cost of utility bills, the government is continuing to follow through on its commitment to make life more affordable for Albertans. This is in addition to the new short-term measures to prevent spikes in electricity prices and will help ensure long-term affordability for Albertans’ basic household expenses.

“Albertans need relief from high electricity costs and we can provide that relief by bringing in fairness on local access fees. We will not allow municipalities – including the city of Calgary – to profit off of unpredictable spikes in electricity costs while families struggle to make ends meet. We will protect Alberta families from the extreme swings of electricity costs by standardizing the calculations of local access fees across the province.”

Danielle Smith, Premier

Local access fees are functioning as a regressive municipal tax that consumers pay on their utility bills. It is unacceptable for municipalities to be raking in hundreds of millions in surplus revenue off the backs of Alberta’s ratepayers and cause their utility bills to be unpredictable costs by tying their fees to a variable rate. Calgarians paid $240 in local access fees on average in 2023, compared to the $75 on average in Edmonton, thanks to Calgary’s formula relying on a variable rate. This led to $186 million more in fees being collected by the City of Calgary than expected.

“Albertans deserve to have fair and predictable utility bills. Our government is listening to Albertans and taking action to address unaffordable fees on power bills. By introducing this legislation, we are taking yet another step towards ensuring our electricity grid is affordable, reliable, and sustainable for generations to come.”

Nathan Neudorf, Minister of Affordability and Utilities

To protect Alberta’s ratepayers, the Government of Alberta is introducing the Utilities Affordability Statutes Amendment Act, 2024. If passed, this legislation would promote long-term affordability and predictability for utility bills by prohibiting the use of variable rates when calculating municipalities’ local access fees.

Variable rates are highly volatile, which results in wildly fluctuating electricity bills. When municipalities use this rate to calculate their local access fees, it results in higher bills for Albertans and less certainty in families’ budgets. These proposed changes would standardize how municipal fees are calculated across the province, and align with most municipalities’ current formulas.

“Over the last couple of years many consumers have been frustrated with volatile Regulated Rate Option (RRO) prices which dramatically impacted their utility bills. In some cases, these impacts were further amplified by local access fees that relied upon calculations that included those same volatile RRO prices. These proposed changes provide more clarity and stability for consumers, protecting them from volatility in electricity markets.”

Chris Hunt, Utilities Consumer Advocate

If passed, the Utilities Affordability Statutes Amendment Act, 2024 would prevent municipalities from attempting to take advantage of Alberta’s ratepayers in the future. It would amend sections of the Electric Utilities Act and Gas Utilities Act to ensure that the Alberta Utilities Commission has stronger regulatory oversight on how these municipal fees are calculated and applied, ensuring Alberta ratepayer’s best interests are protected.

“Addressing high, unpredictable fees on utility bills is an important step in making life more affordable for Albertans. This legislation will protect Alberta’s ratepayers from spikes in electricity prices and ensures fairness in local access fees.”

Chantelle de Jonge, Parliamentary Secretary for Affordability and Utilities

If passed, this legislation would also amend sections of the Alberta Utilities Commission Act, the Electric Utilities Act, Government Organizations Act and the Regulated Rate Option Stability Act to replace the terms “Regulated Rate Option”, “RRO”, and “Regulated Rate Provider” with “Rate of Last Resort” and “Rate of Last Resort Provider” as applicable.

Quick facts

Local access fees are essentially taxes that are charged to electricity distributors by municipalities. These fees are then passed on to all of the distributor’s customers in the municipality, and appear as a line item on their utility bills.
- The Municipal Government Act grants municipalities the authority to charge, amend, or cap franchise and local access fees.

Linear taxes and franchise fees are usually combined together on consumers’ power bills in one line item as the local access fee.
- The linear tax is charged to the utility for the right to use the municipality’s property for the construction, operation, and extension of the utility.
- The franchise fee is the charge paid by the utility to the municipality for the exclusive right to provide service in the municipality.

Local access fees are usually calculated in one of two ways:
- (1) A percentage of transmission and distribution (delivery) costs, typically 10-15 per cent.
- (2) A fixed, cents per kilowatt-hour of consumed power charge (City of Edmonton).

Calgary is the only municipality that employs a two-part fee calculation formula:
- 11.11 per cent of transmission and distribution charges plus 11.11 per cent of the Regulated Rate Option multiplied by the consumed megawatt hours.