Minister Deron Bilous
Minister of Economic Development and Trade of Alberta - Ministry of Economic Development and Trade of Alberta
Part of the Spotlight on Alberta's Economic Future

We Are One Country and We Need to Start Acting Like It

Takeaways

  1. While the Government of Alberta values renewable energy sources, Canada’s energy transition will not happen overnight. So we need to improve and diversify our oil and gas sector to strengthen our economy, while simultaneously developing renewable energy.
  2. Alberta is trying to diversify its economy by building on its strengths in artificial intelligence and machine learning, petrochemicals, cannabis, aerospace and agriculture.
  3. The NAFTA/USMCA renegotiations have highlighted the need for Alberta and Canada to diversify our export markets. This will also support us through the next economic downturn.

Action

The federal government needs to give more recognition to Alberta as a significant contributor to Canada’s wellbeing. It must improve market access for Alberta’s energy products – both abroad and within Canada – and move projects in the national interest forward in a timely manner.


How is Alberta’s economy doing overall?

2014, 2015 and 2016 were very challenging years for Alberta’s economy because of the global collapse of oil prices. But the government made a choice to invest when some were calling for austerity budgets. Thanks to this Alberta recovered faster than Saskatchewan even though it was hit harder. In 2017, Alberta led the country in GDP growth at 4.9% and we are poised to lead again in 2018 and 2019. Over 9,000 new full-time jobs were created last year, most of which were in the private sector. Manufacturing, exports, wages, retail, housing starts, business and corporations and restaurant receipts are all up. So, our indicators are all looking very positive. Having said that, our government is committed to continuing to work to support our businesses, whether that is in accessing new markets or in supporting Alberta’s SMEs.

“In 2017, Alberta led the country in GDP growth at 4.9% and we are poised to lead again in 2018 and 2019.”

Alberta’s greatest resource is our talent and the province has a real opportunity to be a world leader when it comes to artificial intelligence and machine learning. We also have significant opportunities in the petrochemical space, commercial cannabis, aerospace technology and agriculture, which we are developing. Alberta has the infrastructure and knowhow to be a logistics hub for all of Western and Northern Canada. So for us, it is a matter of plugging into our expertise and prioritizing what we are already doing.


What is the status of Alberta’s oil and gas sector?

Obviously, Alberta’s energy sector has had a very rough couple of years. But, drilling is up throughout the province. Large investments have been made by Japan Canada Oil Sands Limited (JACOS), which announced a $2 billion investment to expand its facilities near Fort McMurray. Nauticol Energy, a new petrochemical company, has also announced the construction of a facility in Grande Prairie. Our government’s Petrochemicals Diversification Program has led to Inter Pipeline’s $3.5 billion facility that is turning propane into plastics, which is one of its kind in Canada. Companies have told us that Alberta is the best jurisdiction for value added petrochemicals but they need some support from government to level the playing field. We did that and have been very successful in our first round. Our second round is ongoing so there will be further investments in our petrochemical space in partial upgrading.

The biggest challenge that we face is market access, that is, getting our energy products to tidewater. This is why you will not find a greater champion of pipeline access than Premier Notley. We continue to push the federal government to ensure that projects like the Trans Mountain Pipeline and Energy East move forward. These projects are critical to our country getting the best price for our resources. We have energy here in Alberta that we could supply to other parts of Canada that are currently importing energy form other countries.

“We have energy here in Alberta that we could supply to other parts of Canada that are currently importing energy form other countries.”

The recent announcement of the LNG Canada project moving forward is positive and Premier Notley understands that the project is good for Canada. Our frustration is that the LNG pipeline is being treated differently than a pipeline moving Alberta’s crude. In fact, the LNG pipeline will increase tanker traffic more significantly than the Trans Mountain Expansion (TMX). At the end of the day, we want to see pipelines in all directions. We know that we produce our energy to standards higher than anyone in the world, whether it is environmental standards, or safety and oversight. So, we need to get world-class prices for our world-class resources.


Has there been a paradigm shift in the province in terms of economic diversification and focusing on non-energy sectors?

If you look back over the past 40 years, every time there has been a downturn in commodity prices, people have looked for diversification. But, the best time to diversify is when times are good and prices are high because you have more tools to be able to focus on diversifying the economy. Our government faced the challenge of trying to diversify during a massive economic recession, and it was very challenging. But for us, diversification is about building on our strengths. Now, we do not oppose renewable sources of energy, but the reality is that we cannot transition overnight and we also need a strong economy to transition. Alberta is an energy leader and will always be, so we looked at diversification strategies for our energy sector as a responsible producer. When I talk about the gas-to-plastics plant or the petrochemical industry, that is diversification within the energy sector.

“Alberta invests more per capita in innovation than any other province.”

We have seen other investments in other sectors, but energy is critical not just to Alberta’s economy but quite frankly, to the Canadian economy. Premier Notley said it best when she said: “There is not a school, a road, a bridge or a hospital anywhere in this country that does not owe something to Alberta’s energy sector.” Our government has demonstrated that the environment and the economy go hand-in-hand and we have the most robust Climate Leadership Plan in North America. By putting a hard cap on emissions and setting robust methane reduction targets, we are phasing out coal and are moving to 30% renewables from 4%. We partner with our energy companies to look at ways to reduce their greenhouse gas emissions, to reduce the amount of carbon in every barrel of oil, to reduce their water usage, and to meet our targets when it comes to the environment. At the same time, we support our industries in order for them to reduce their costs, so it is a win-win. We have entities like Alberta Innovates that provide a number of different grants and support for companies as we transition to our 30% share of renewables.

We are also focused on diversifying the economy in energy, agriculture, forestry, tourism as well as artificial intelligence. We recently announced an Interactive Digital Media Tax Credit and have created 3,000 new tech spaces to ensure that we are graduating the talent that is needed for those industries to flourish.


What are your priorities in terms of trade diversification and investment attraction?

The renegotiation of NAFTA, now the US-Mexico-Canada Agreement (USMCA), has demonstrated the need for the market diversification of the Canadian and Albertan economies. From the get-go, our government recognized that companies that have a diversity of products and markets are best positioned to weather an economic downturn. We have conducted a number of programs to help support our forestry and agriculture sectors’ access new markets. I was privileged to lead the largest trade delegation in Alberta’s history in November of 2016, with over 80 companies and 150 Alberta participants, to different cities in China.

“Companies see that Alberta has one of the best-educated workforces, is the youngest province, has incredible post-secondary educational institutions, is continuously developing talent and has the lowest taxes in Canada.”

The other thing that Alberta has done is focus and ramp-up our efforts and opportunities in the tech space. We now have direct flights out of Edmonton and Calgary to Silicon Valley, and have placed an Alberta representative there in order to help generate deal flow and attract investment. Companies see that Alberta has one of the best-educated workforces, is the youngest province, has incredible post-secondary educational institutions, is continuously developing talent and has the lowest taxes in Canada. Alberta is the best jurisdiction in Canada for investments, which is why we have been able to attract companies like Google, DeepMind, Microsoft, Amazon and Cavendish.


If you had 3 minutes with the Prime Minister, what would be your call to action for him?

First and foremost, I would talk to the Prime Minister about everything that Alberta is already doing. We set up Invest Alberta a couple of years ago within the Department of Economic Development and Trade in order to help attract companies. We have also worked hard to ensure that our innovation systems are moving in the same direction as the priorities of different levels of government.

Market access for our energy products is absolutely critical. I would bring up not just the value of the Trans Mountain pipeline, but also the importance of critical infrastructure that could benefit the whole country. There needs to be more recognition of Alberta as a significant contributor and leader in the wellbeing of the country. The federal government must move forward on projects that are in the national interest, and in a timely manner.

“We are one country and we need to start acting like it; we need everyone pulling in the same direction.”

I would like to see the Prime Minister really step up to provide much needed energy to Central and Eastern Canada using Alberta’s energy sector. Premier Notley is the first person to say Alberta is not landlocked because Canada is not landlocked; we have access to more coastlines than any other country in the world. We are one country and we need to start acting like it; we need everyone pulling in the same direction.

Alberta is number three in the world when it comes to artificial intelligence, ahead of Waterloo and Montreal. I do not know if the federal government knows that, but it needs to see that Alberta invests more per capita in innovation than any other province. Yet what we get from the federal government as far as matching dollars is less than several other provinces.