Alberta
Province orders dismissal of Chestermere Mayor, three councillors, and all three CAO’s
Chestermere city council. From left: Coun. Blaine Funk, Coun. Shannon Dean, Coun. Stephen Hanley, Mayor Jeff Colvin, Coun. Mel Foat, Coun. Ritesh Narayan and Coun. Sandy Johal-Watt. City of Chestermere/Facebook)
City of Chestermere councillors and senior staff dismissed
Minister of Municipal Affairs Ric McIver has issued a ministerial order dismissing four of the City of Chestermere’s municipal councillors and all three chief administrative officers (CAOs).
After the city failed to comply with the supervision of the official administrator and some of the minister’s directives that have been in place since March 15, 2023, Minister McIver has dismissed Mayor Jeff Colvin, Coun. Mel Foat, Coun. Blaine Funk and Coun. Stephen Hanley, as well as the three CAOs.
The directives, intended to restore good governance to the City of Chestermere, were issued following a municipal inspection. Since then, the city has continued to be managed in an irregular, improper and improvident manner.
“The directives issued by my predecessor are not onerous and represent the bare minimum that citizens ought to expect from their municipal government. However, after undertaking all reasonable efforts to have the city comply with its obligations, it has failed to do so. I am profoundly disappointed that it has come to this, but the people of Chestermere deserve better. This community should be able to have trust in its local elected government.”
While the minister determined that the city has failed to comply with its obligations, he has also determined that dismissal of Coun. Shannon Dean, Coun. Sandy Johal-Watt and Coun. Ritesh Narayan was not justified given their efforts to hold council to account and attempt to move council in a more positive direction toward proper governance practices and compliance with legislation.
Councillors Dean, Johal-Watt and Narayan remain as elected councillors but will have no role in the governance of the city until a byelection is held and council quorum is restored.
The ministerial order dismissing Chestermere council members and senior administration is effective Dec. 4. An official administrator and interim CAO are in place to oversee the City of Chestermere’s governance and operations until a byelection is held to elect new councillors for the vacant positions at a date to be determined in 2024.
Quick facts
- A municipal inspection was ordered by the minister of Municipal Affairs under the Municipal Government Act (Section 571) in May 2022.
- The independent inspection, which concluded in September 2022, found the City of Chestermere to be managed in an irregular, improper and improvident manner.
- An official administrator was appointed in September 2022 to supervise the municipality and its council.
- On March 15, 2023, the minister of Municipal Affairs issued 12 binding directives through a ministerial order requiring the City of Chestermere to take action to address key areas of concern.
- On Oct. 18, the minister of Municipal Affairs issued to the City of Chestermere a notice of intent to issue a ministerial order which would dismiss all seven council members from office, as well as all three CAOs.
Alberta
Game changer: Trans Mountain pipeline expansion complete and starting to flow Canada’s oil to the world
Workers complete the “golden weld” of the Trans Mountain pipeline expansion on April 11, 2024 in the Fraser Valley between Hope and Chilliwack, B.C. The project saw mechanical completion on April 30, 2024. Photo courtesy Trans Mountain Corporation
From the Canadian Energy Centre
By Will Gibson
‘We’re going to be moving into a market where buyers are going to be competing to buy Canadian oil’
It is a game changer for Canada that will have ripple effects around the world.
The Trans Mountain pipeline expansion is now complete. And for the first time, global customers can access large volumes of Canadian oil, with the benefits flowing to Canada’s economy and Indigenous communities.
“We’re going to be moving into a market where buyers are going to be competing to buy Canadian oil,” BMO Capital Markets director Randy Ollenberger said recently, adding this is expected to result in a better price for Canadian oil relative to other global benchmarks.
The long-awaited expansion nearly triples capacity on the Trans Mountain system from Edmonton to the West Coast to approximately 890,000 barrels per day. Customers for the first shipments include refiners in China, California and India, according to media reports.
Shippers include all six members of the Pathways Alliance, a group of companies representing 95 per cent of oil sands production that together plan to reduce emissions from operations by 22 megatonnes by 2030 on the way to net zero by 2050.
The first tanker shipment from Trans Mountain’s expanded Westridge Marine Terminal is expected later in May.
Photo courtesy Trans Mountain Corporation
The new capacity on the Trans Mountain system comes as demand for Canadian oil from markets outside the United States is on the rise.
According to the Canada Energy Regulator, exports to destinations beyond the U.S. have averaged a record 267,000 barrels per day so far this year, up from about 130,000 barrels per day in 2020 and 33,000 barrels per day in 2017.
“Oil demand globally continues to go up,” said Phil Skolnick, New York-based oil market analyst with Eight Capital.
“Both India and China are looking to add millions of barrels a day of refining capacity through 2030.”
In India, refining demand will increase mainly for so-called medium and heavy oil like what is produced in Canada, he said.
“That’s where TMX is the opportunity for Canada, because that’s the route to get to India.”
Led by India and China, oil demand in the Asia-Pacific region is projected to increase from 36 million barrels per day in 2022 to 52 million barrels per day in 2050, according to the U.S. Energy Information Administration.
More oil coming from Canada will shake up markets for similar world oil streams including from Russia, Ecuador, and Iraq, according to analysts with Rystad Energy and Argus Media.
Expanded exports are expected to improve pricing for Canadian heavy oil, which “have been depressed for many years” in part due to pipeline shortages, according to TD Economics.
Photo courtesy Trans Mountain Corporation
In recent years, the price for oil benchmark Western Canadian Select (WCS) has hovered between $18-$20 lower than West Texas Intermediate (WTI) “to reflect these hurdles,” analyst Marc Ercolao wrote in March.
“That spread should narrow as a result of the Trans Mountain completion,” he wrote.
“Looking forward, WCS prices could conservatively close the spread by $3–4/barrel later this year, which will incentivize production and support industry profitability.”
Canada’s Parliamentary Budget Office has said that an increase of US$5 per barrel for Canadian heavy oil would add $6 billion to Canada’s economy over the course of one year.
The Trans Mountain Expansion will leave a lasting economic legacy, according to an impact assessment conducted by Ernst & Young in March 2023.
In addition to $4.9 billion in contracts with Indigenous businesses during construction, the project leaves behind more than $650 million in benefit agreements and $1.2 billion in skills training with Indigenous communities.
Ernst & Young found that between 2024 and 2043, the expanded Trans Mountain system will pay $3.7 billion in wages, generate $9.2 billion in GDP, and pay $2.8 billion in government taxes.
From the Fraser Institute
By Spencer Gudewill and Tegan Hill
Last November, Premier Danielle Smith announced that her government will give up to $1.8 billion in subsidies to Dow Chemicals, which plans to expand a petrochemical project northeast of Edmonton. In other words, $1.8 billion in corporate welfare.
And this is just one example of corporate welfare paid for by Albertans.
According to a recent study published by the Fraser Institute, from 2007 to 2021, the latest year of available data, the Alberta government spent $31.0 billion (inflation-adjusted) on subsidies (a.k.a. corporate welfare) to select firms and businesses, purportedly to help Albertans. And this number excludes other forms of government handouts such as loan guarantees, direct investment and regulatory or tax privileges for particular firms and industries. So the total cost of corporate welfare in Alberta is likely much higher.
Why should Albertans care?
First off, there’s little evidence that corporate welfare generates widespread economic growth or jobs. In fact, evidence suggests the contrary—that subsidies result in a net loss to the economy by shifting resources to less productive sectors or locations (what economists call the “substitution effect”) and/or by keeping businesses alive that are otherwise economically unviable (i.e. “zombie companies”). This misallocation of resources leads to a less efficient, less productive and less prosperous Alberta.
And there are other costs to corporate welfare.
For example, between 2007 and 2019 (the latest year of pre-COVID data), every year on average the Alberta government spent 35 cents (out of every dollar of business income tax revenue it collected) on corporate welfare. Given that workers bear the burden of more than half of any business income tax indirectly through lower wages, if the government reduced business income taxes rather than spend money on corporate welfare, workers could benefit.
Moreover, Premier Smith failed in last month’s provincial budget to provide promised personal income tax relief and create a lower tax bracket for incomes below $60,000 to provide $760 in annual savings for Albertans (on average). But in 2019, after adjusting for inflation, the Alberta government spent $2.4 billion on corporate welfare—equivalent to $1,034 per tax filer. Clearly, instead of subsidizing select businesses, the Smith government could have kept its promise to lower personal income taxes.
Finally, there’s the Heritage Fund, which the Alberta government created almost 50 years ago to save a share of the province’s resource wealth for the future.
In her 2024 budget, Premier Smith earmarked $2.0 billion for the Heritage Fund this fiscal year—almost the exact amount spent on corporate welfare each year (on average) between 2007 and 2019. Put another way, the Alberta government could save twice as much in the Heritage Fund in 2024/25 if it ended corporate welfare, which would help Premier Smith keep her promise to build up the Heritage Fund to between $250 billion and $400 billion by 2050.
By eliminating corporate welfare, the Smith government can create fiscal room to reduce personal and business income taxes, or save more in the Heritage Fund. Any of these options will benefit Albertans far more than wasteful billion-dollar subsidies to favoured firms.
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