Copyright of the Daily Oil Bulletin 2018
Federal Carbon Tax Doesn’t Hinge On Alberta’s Co-Operation: Bains
Ottawa isn’t backing down on its nation-wide carbon tax as it is at risk of losing one of its strongest provincial backers in Rachel Notley’s Alberta if a bitumen export pipeline through B.C. is not built.
In answer to a question about the tax on a Calgary stopover Thursday, Navdeep Bains, the federal minister of innovation, science and economic development, refused to tie the Trans Mountain pipeline to the incoming carbon tax, which is slated to reach $50 a tonne in 2022. Alberta’s price on carbon emissions stands at $30 a tonne.
“We have a plan and we are very confident that the provinces understand the importance of that plan,” Bains told the DOB. “Having predictability in pricing is important. Having a plan that will reduce our carbon footprint is important as well, and as I have said before, it’s not an either-or [proposition].
“It’s not pitting one part of the country against the other, it’s not pitting the environment against the economy. We are trying to demonstrate leadership and clearly by supporting this [pipeline] project and putting forward a robust environmental plan we are demonstrating leadership both on the economy and the environment,” he said.
A previous backer of a national price on carbon emissions, Notley tied the Trans Mountain pipeline expansion to future carbon tax hikes in Alberta in the legislature on Thursday. "Moving forward on additional hikes to the carbon levy will depend on the Trans Mountain pipeline," she said.
Bains, who spoke at a Calgary Chamber of Commerce event focused on the federal budget, insisted several times he is confident Kinder Morgan Canada Limited’s pipeline expansion, which would triple volumes flowing to the B.C. coast for export abroad, will go ahead, despite efforts by moves from the current B.C. government to block it.
“We are very confident that this pipeline will be built. I think clearly the politicians are trying to represent their local constituencies, but we believe that this project is really important to Canada, it’s really important to grow the economy and create jobs and that’s why we are supporting it, and at the same time we have been very clear about our environmental commitments as well.”
In a question and answer session with Mary Moran, Calgary Economic Development president and chief executive officer, Bains pointed to several federal government initiatives that will help revive the Calgary and Alberta economy battered by the collapse in oil prices four years ago. He said Ottawa is focused on the long term economic prospects, education and science, entrepreneurship and open immigration to attract the world’s best talent.
“This budget was really a focus on people and on partnership. Remember, we are an activist government, we believe that we can and must play a role to create opportunities for business to grow and succeed, and I am your voice for business,” said Bains.
Moran said that while Calgary has the highest proportion of science, technology, engineering and mathematics (STEM) workers in Canada at some 38,000, it is “very heavily skewed” to oilpatch related engineering. “When it comes to software engineers, coders, developers, we only have about 3,000,” she said, pointing out that shortage was a factor in Calgary failing to make the short list of cities bidding for a second Amazon headquarters.
The province’s funding of 3,000 new tech spots announced this week “are going to help us get caught up,” she said, adding, “What is the 2018 budget doing to attract and retain this talent that we are in a global war for right now?”
“We recognize we are in a global race for the best possible talent,” replied Bains. “We are a country of 35 million people and we are competing with other jurisdictions that are making big bets on talent as well. But one of the value-adds, one of the things that differentiate Calgary, that differentiates Canada, is our diversity, the fact that we also have a truly open immigration system.
“And obviously we are focusing on strengthening our domestic [talent] pipeline, so we are making investments. You talk about those coders; we have a long-term game plan… We are talking about the next 10 to 15 years. That’s why we put forward a CanCode initiative. This is a program that will invest $50 million to help one million kids learn how to code right across Canada, including here in Alberta — one out of every five kids in the public school system. So we are developing a strong domestic pipeline. We are investing in learning.”
Focused on opening doors, not building walls
In terms of attracting international talent, the federal global skills strategy allows companies that need skills and talent in high demand to “bring that individual to Canada now in a matter of two weeks,” he said. “Imagine how important that is for a company, and imagine how that differentiates us versus the United States. What message have they been sending out? What message has Brexit sent? So while the world is focused on building walls, we are focused on opening doors.
“What we want to do is create a culture of entrepreneurship,” he added. “In the past we spent a lot of money on the aerospace sector, or the automobile sector for example — those happen to be traditional industrial policy platforms that existed with a lot of programs. We consolidated those programs and created a new program open to every sector of the economy, including oil and gas.
“Fundamentally, we are willing to use political capital to take risks on entrepreneurs and with businesses, because we know some may fail, but many will succeed and that will create the jobs that we want to see in the economy.”
Moran noted her disappointment in the city and the energy sector being passed over for the federal supercluster initiative — the “elephant in the room,” she said — as well as losing bids for the Amazon secondary headquarters and the Canada infrastructure bank. The supercluster initiative recently selected five supercluster tenders across the country for funding, none of which specifically target the oil and gas sector.
Bains said the Amazon bid was not necessarily a failure: “I think the process itself is very important — the fact that you worked with the city, the fact that you worked with businesses, you identified where your strengths and opportunities are, how you compete with other jurisdictions, in itself was probably a great learning experience [that] probably positions you well going forward. I'm optimistic that this will open doors for many many more opportunities.”
And he said Calgary will still benefit from the supercluster initiative, which involves several businesses and institutions in Alberta. “The economic benefits will be close to $50 billion over the next 10 years, so the benefits will be reaped here in Calgary, in Alberta and across the country as well.”