Alberta
Federal and Provincial governments to spend $400 million to clean up Alberta oil and gas sites, create thousands of jobs
Funds target cleanup on Indigenous oil and gas sites
Two new rounds of the Site Rehabilitation Program will provide $400 million to create thousands of jobs for Albertans while completing significant environmental cleanup across the province – including on First Nations reserves and Metis Settlements.
The governments of Alberta and Canada are advancing their commitment to ensure Indigenous businesses and communities play a meaningful role in Alberta’s post-pandemic energy strategy by targeting $100 million of federal Site Rehabilitation Program (SRP) grant funding to clean up inactive oil and gas sites in Indigenous communities across Alberta.
Alberta’s government worked with Indigenous communities, Indigenous businesses, the Indian Resource Council and the Metis Settlements General Council to develop the details of this grant allotment, which includes $85 million for First Nations reserves and $15 million for Metis Settlements to work with licensees to close sites located on or around their lands.
“The Site Rehabilitation Program is cleaning up legacy oil and gas sites across the province and creating thousands of much-needed jobs. As stewards of the land, this funding will ensure that Indigenous people benefit from resource development on land that was first inhabited by their ancestors.”
“Working with Minister Savage and the Government of Alberta, we are creating jobs, cleaning up our environment, and supporting the hard-working people in our oil and gas sector – including in First Nations and Métis communities.”
“This is an investment in a strong future for Indigenous people in Alberta, who will benefit from the jobs created and the reclaimed lands in their communities. Programs like this are game-changers for Indigenous communities.”
“First and foremost, I am thankful to the Creator for another day and for the bounty that Mother Earth provides. The SRP Indigenous set aside will allow Alberta First Nations and Metis Settlements to reduce liabilities by decommissioning and cleaning up well sites across Alberta. During this time, First Nations-owned companies and member-owned companies, along with existing and new partnership creations, can get working to create gainful employment in a difficult period as this pandemic and downturn of the oil industry has caused hardships for many. We look forward to working with the province, ministers, industry, Indian Resource Council and service providers to make this program a success. ‘Our Mother Earth takes care of us, as her children, we need to take care of her.’”
“This $100-million collaboration between First Nations represented by the Indian Resource Council, the Metis Settlements and the Government of Alberta shows unprecedented progress towards reconcili-action in the protection of land, lives and livelihoods.”
A second new funding allotment will provide up to $300 million to oil and gas producers who paid for closure work in 2019 or 2020. This is the program’s largest grant period and is designed to give contractors and licensees the funding and time to work on closure projects of all scopes and sizes – leading to the cleanup of a significant number of oil and gas sites across the province.
“Closure work creates jobs and positive environmental outcomes that enhance Alberta’s ESG record and provides valuable economic benefits to rural communities. PSAC has long advocated for a mechanism to accelerate the decommissioning of orphan and inactive sites to provide the sector with jobs during this prolonged downturn. We are pleased that the Governments of Canada and Alberta have heard us and responded with this important program.”
Including these two rounds, which will open to applications on Feb. 12, $800 million in SRP grants have been made available to eligible applicants since launching in May 2020. In total, the program is expected to generate almost 5,300 direct jobs and lead to indirect employment – and economic benefits – across the province.
The Alberta government continues to work with an Industry Advisory Committee and an Indigenous Roundtable to help make continuous improvements to the program and its processes.
Alberta’s Recovery Plan is a bold, ambitious long-term strategy to build, diversify, and create tens of thousands of jobs now. By building schools, roads and other core infrastructure we are benefiting our communities. By diversifying our economy and attracting investment with Canada’s most competitive tax environment, we are putting Alberta on a path for a generation of growth.
Quick facts
- Through the Site Rehabilitation Program (SRP), launched in May 2020, the Alberta government is directing up to $1 billion of federal oil and gas COVID-19 economic stimulus over two years to get Albertans back to work by speeding up well, pipeline and site closure efforts in the energy sector.
- As of Feb. 12, $310.3 million of grant funding has been allocated to 633 Alberta-based companies for periods 1 through 4 of the program.
- Applications for grant periods 5 and 6 will remain open until March 31, 2022.
- During period 6, Indigenous communities will be provided a community-specific allocation.
- Contractors have until Dec. 31, 2022, to complete their work through the program.
- Remaining grant periods for the balance of the $1-billion funding commitment will be announced in the coming months.
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:
Making utility bills more affordableAlberta’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.
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.
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.
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.
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
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