Monday, May 29, 2017

“The two Canadian projects look viable at this point,” Dina said Monday from Houston. The proposed developments would be the first of their kind in Canada. They would not only meet domestic demand but also allow the country to export polypropylene, in pellet form, to the United States and abroad. To get them built, the Alberta government will provide the projects $500 million in incentives, in the form of royalty tax credits.


The royalty tax credit feels like a gamble with the end result being less money in revenues.
Also it feels unfair. Why do the companies in the oil and gas sector get a subsidy of this sort but not the folks in the high tech industry sector?
It feels sometimes that the GOA is spinning its wheels in the same mud that they have been stuck in for the last forty four years and now the NDPCs are continuing the same mud splattering.

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https://www.albertaoilmagazine.com/2011/07/insights-do-targeted-tax-incentives-work/

The fine line between a subsidy and a tax credit

Targeted tax breaks are necessary for risky businesses, but do they work?
BY ANDREW LEACH
July 01, 2011
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Is oil subsidized? The billions of dollars which purportedly flow from government coffers to oil companies make for a great sound bite, but what’s the real story? As any good economist will tell you, the answer depends on your assumptions. What do you define as a subsidy? How, and using what methodology, do you measure subsidies? Once you figure out the answer to that, you also should ask whether we could find a better balance between government revenue and oil sector activity.
What counts as a subsidy? The definition must be far broader than the value of novelty checks presented by government MPs. There are three categories that should be included in any calculation. First, you need to add up the value of the novelty checks and any other direct transfer of funds from the government to oil and gas firms. Second, you need to ask which tax write-offs or exemptions are made available to oil and gas and other similar industries, and not to other sectors. Finally, you need to calculate the value of any goods or services sold to firms in the oil and gas sector at below market value by the government. Sounds easy, right? Not so fast.
Direct transfers are the easiest to calculate, since these are clearly documented in government budgets. The novelty checks are also helpful in this regard. There are few of these transfers in the oil and gas industry in Alberta.
Unequal tax treatment is more difficult to assess. The two types of programs most often cited are enhanced tax credits for exploration and development expenses and accelerated capital cost allowance programs. Both of these may increase the after-tax value of oil and gas projects, relative to projects with the same costs and revenues in another sector, depending of course on the tax relief programs from which that other sector benefits. The International Institute for Sustainable Development, in a 2010 report, estimated that the Canadian federal government allows the oil industry to claim special tax deductions and exemptions, over and above standard corporate income tax deductions, worth $1.4 billion per year.
Should these tax credits count as subsidies? It depends on your perspective. Some, including Jack Mintz of the University of Calgary, argue correctly that oil and gas exploration is risky and taxing risky investments at the same rate as low-risk ones would discourage these activities. You can also make the case that research and development activities are risky, and so should benefit from enhanced tax relief. Further, if tax credits increase the value of an oil play, then that increased value should be reflected in lease and land sale prices. If so, only firms drilling on land leased or purchased before drilling credits were announced are subsidized.
Should the tax system be used to level the risks between investment opportunities or to advance a set of goals? If you believe that it shouldn’t, then profits should be taxed at the same rate across all industries, and any industry-specific tax credit is a subsidy. The value of goods and services sold by governments to firms at below market value is most difficult to assess. Imagine if the government were leasing office space to your least favorite industry at half the market rate charged for similar space from commercial providers. You would likely scream and yell that the industry should not be subsidized if it can’t pay its own rent. Well, what’s good for the goose is good for the gander.
Most of the millions of barrels of oil equivalent produced in Canada each day is from Crown-owned mineral rights – the resource belongs to the people. Oil and gas is “sold” to companies at a price determined by royalty regimes. Are these taxes or subsidies? It depends on the true value of the oil and gas resource. Importantly, the value is not just the price today – it’s the future value of the oil if it were left in the ground to be extracted at a later date. That is what the Crown is giving up by allowing production today. Unfortunately, we don’t have an easy comparable – like the commercial office tower down the block in the analogy above – for the sale of oil and gas assets through royalties to know if companies are being charged too much or too little.
The International Institute for Sustainable Development estimates that royalty relief programs in the province of Alberta amount to a subsidy worth over $1 billion per year. The institute contends this conclusion was based on an assumption of the value of the resource – that the government got the value right in its New Royalty Framework, and subsequently decided to undercharge for the oil.
If that’s true, then royalty relief is a subsidy. If the New Royalty Framework overcharged for the resources, the adjustment would be warranted, and would not be a subsidy. A royalty rate set too high is equivalent to an added income tax, and a royalty rate set too low is equivalent to the sale of a capital asset below its market value – a subsidy. Regardless of what words you use to describe them, many tax and royalty deduction and deferral programs are offered to the oil and gas sector. As with any government program, two questions should be asked. First, what are the objectives of these programs, and, second, are they working?
Royalty relief programs are equivalent to a direct transfer of funds, with the giant novelty check replaced by barrels of oil. What are we, as owners of the resource, getting in return? A pessimist would say we are getting jobs in a labor shortage, inflationary pressure which dissipates rent from all of the oil being extracted, plus increased production of the province’s finite resources at lower values. An optimist would say that “subsidies” are protecting jobs and increasing incomes, boosting land sale revenues and keeping Alberta competitive. The truth lies somewhere in the middle, and as with all economic analysis, it depends on your assumptions.
Andrew Leach is an Associate Professor at the Alberta School of Business. He blogs on energy, environment, and oil sands issues at https://www.andrewleach.ca and is on Twitter @andrew_leach



https://www.alberta.ca/release.cfm?xID=20527D0EDD3BF-A8A0-2F29-960D7A45197E3999

September 21, 2006 Energy Minister confirms end of Alberta Royalty Tax Credit Program Government to collect additional revenue as a result of change Edmonton...The Alberta government will eliminate the Alberta Royalty Tax Credit Program (ARTC) as of January 1, 2007. The elimination of the ARTC based on 2005-06 figures would increase revenues from energy resources to the province by a further $111 million. "This change better reflects today's climate, market and prices," said Energy Minister Greg Melchin. "Unprecedented investment, exploration and profits in the energy sector are just part of the picture. Our decision also factors in provincial corporate tax reductions and full tax deductions on royalties at the federal level. This program has run its course." The decision follows a review and consultation with industry and stakeholders. It requires a legislative change that will be retroactive to the beginning of 2007. The ARTC program was established in 1974 in response to that year's federal budget, which made royalties a non-deductible expense for federal income tax purposes. The program enabled oil and gas companies to receive a credit on their income tax. The credit was a percentage of a set amount of the crown royalties they paid in the year on wells that qualified for the program. Since 1974, the program has undergone minor adjustments to provide assistance in times of low prices. In 2005-06 more than $14 billion in resource revenues were collected by the province. Last month, the government announced amendments to eliminate or substantially reduce four other royalty programs that could increase resource revenues by up to $186 million annually. For more information on Alberta's royalty structure visit the Alberta Energy website at www.energy.gov.ab.ca. - 30 - Media enquiries may be directed to: Jerry Bellikka Director Communications Alberta Energy Tel: (780) 422-3667 Cell: (780) 237-5509 To call toll-free within Alberta, dial 310-0000 first. Alberta Government Home | Ministries Listing | Energy Home Page | News Releases | Top of Page | Send us your comments or questions Copyright(c); 2006 Government of Alberta


In Alberta it's all about drill baby drill.
We don't need to be subsidizing the oil and gas industry and related businesses.
We are providing preferential tax credits and I don't believe this is fair--either to the public or to the other industries who have to compete in the "free market" without these subsidies.
In addition why is it that the GOA responds as the speed of sound the these lobbyist groups while it ignores the people of Alberta who got these folks to power? What are we? The non-lobbyist group?


The provincial wing of Canada’s largest trade and industry association is recommending the Alberta government bring in a royalty tax credit to reward oil and gas companies for using Canadian …
EDMONTONJOURNAL.COM

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http://edmontonjournal.com/business/local-business/manufacturers-group-calls-for-special-royalty-tax-credit

Manufacturers' group calls for special royalty tax credit

Published on: October 13, 2015 | Last Updated: October 13, 2015 5:27 PM MDT
An industry association recommends Alberta bring in a royalty tax credit for oil and gas companies that use Canadian manufacturers in their supply chains. In this file photo from 2013,  workers at Altex Industries in Edmonton grind the interior of a heat exchanger.
An industry association recommends Alberta bring in a royalty tax credit for oil and gas companies that use Canadian manufacturers in their supply chains. In this file photo from 2013, workers at Altex Industries in Edmonton grind the interior of a heat exchanger. JOHN LUCAS/ EDMONTON JOURNAL
The provincial wing of Canada’s largest trade and industry association is recommending the Alberta government bring in a royalty tax credit to reward oil and gas companies for using Canadian manufacturers in their supply chains.
The credit would “undoubtedly impact provincial royalty revenues” but it would also attract new investment and generate more manufacturing activity, the Alberta division of Canadian Manufacturers and Exporters says in a position paper submitted to the province’s royalty review advisory panel.
“Not only will that result in more business tax revenue, but by creating high-paying jobs, will also raise personal income tax revenues,” the paper says.
Alberta Energy spokesman Chris Bourdeau said the royalty review panel headed by Dave Mowat has received the submission and looks forward to reviewing it.
David Plante, CME’s vice-president, Alberta, said a royalty tax credit could be key to diversifying the Alberta economy by encouraging more manufacturing.
“There’s tremendous opportunity there that’s being left on the table, and we believe that by working co-operatively with the owners and the developers of the resource, we could create a whole lot of wealth and jobs for Albertans, and indeed all Canadians,” Plante said Tuesday.
The paper was written by Mike Holden, CME’s director of policy and economics.
“The general gist of it is you pay less royalties if you use domestically sourced manufactured goods,” Holden said. “We want to provide incentive to source goods from domestic companies because we think that it would be a net benefit to the provincial economy and even to the provincial government itself.”
The CME said its intent is for a royalty tax credit that would apply only to new projects or new operational expenditures.
A CME study last year that looked at supply-chain spending in Alberta’s oilsands found that Alberta manufacturers capture 28 per cent of the direct and indirect economic spinoffs. Another 14 per cent goes to other provinces while 58 per cent goes to foreign suppliers in countries like South Korea, China and the United States. (The study didn’t look at the impacts on manufacturing of other aspects of the oil and gas industry such as drilling, refining or pipeline construction.)
The new position paper says that if Alberta’s share of oilsands supply-chain business could be boosted by 25 per cent, the province would see an additional $46 billion in new manufacturing output between now and 2030 in that part of the wider oil and gas sector.
“With resource revenues expected to be at their lowest levels in more than 15 years, it may seem like a bad time to implement a policy that will undercut those revenues even further,” the paper says.
“However, the short-term impact of a royalty tax credit program on the provincial budget will be minimal, and in the long term it could provide significant benefits.”
CME represents more than 10,000 companies, mostly small and medium-sized enterprises. Its member network accounts for about 82 per cent of Canadian manufacturing production and 90 per cent of all goods and services exports.
dhowell@edmontonjournal.com
Todd Shreenan
The province of Alberta under the new or old government still doesnt get the magnatude of the environmental liability energy companies have and how to get it reduced. It would seem to me that the only thing that energy companies understand is money, as i have worked in the energy industry for over 30 years. Example: CNRL in 2003 had ~36,500 conventional wells in AB, and of that CNRL had over 16,000 of these well in a state of suspention or abandonment (non producing). This is only one example as these records are public knowledge.
I would like to think that when plans and protocols made by governments in matters such as royalty reviews or coorporate tax increases, reduction in liability to Alberta could be accounted for. Mybe if the over 600 active energy exploration companies in Alberta were given tax and royalty credit for proven environmental preformance in the operations of abandonment and reclamation they would be more apped to increase environmental budgets instead of paying coorporate tax.
Alberta legislation requires AEPA requires the conservation of all soils and such as well as a duty to reclaim all facilities and land associated with the lisenced property but does not have a time line on the reclamation. It is considered by far given the current level of constapation within the different regulatory bodies to leave the site and pay the small inconsaquential fees on the property than reclaim the propery.
We as Albertans need to get our priorities straigt, let get the liability reduces and at the same time spur some positive employment in Alberta.

Todd Shreenan
Julie Ali · 

Thank you for indicating the main priorities of the GOA. It's to drill baby drill. In other words while there is a need for economic stimulus I see no reason for the preferential treatment provided to the oil and gas industry plus associated industries. In other words, why are we spending public money (in this case in the reduction of revenues) to prop up the fortunes of private companies in the oil and gas industry while looking the other way while we have tailings ponds for fifty years and an orphan well program that is inadequately funded by the so called responsible oil and gas industry? The failures of both the PCs and the NDPCs to hold the industry accountable is stunning. The silence of the public is also amazing.
The folks who were working on tailings pond reclamation are now retiring and the best the industry can come up with for a solution to the tailings ponds is to use flocculants and coagulants to make a solid mass of toxins at the bottom of a pit that they cover with water so as to fulfil the requirements of the laughable energy regulator. I fail to see how the hiding away of toxic chemicals under a layer of water is reclamation of any sort.
In addition if the industry can't pay the bills for the orphan well program then why haven't they been made to increase the payments to the orphan well program forty four years ago? Why the dereliction of duty by successive PC governments and now by the NDPCs who have given the industry $235 million of our cash as a LOAN with no interest? I mean the $30 million given by the Federal Government folks could have helped the high technology industry improve it's status thereby diversifying away from big oiil but no-the GOA under the less than bright NDPCs provide this money to the oil and gas companies to ensure they don't have to pay interest. What the heck is going on in government? Does no one represent the public interest? Does no one consider the land? We have a permanent moonscape in the form of tailings ponds that will never be reclamed no matter what the industry tells us. This will be our children and grandchildren's inheritance for our failures to hold the political parties accountable. It isn't the fault of big oil that they played each political party and held them captive. Nope. This is the fault of the politicians we hired and they did not act in the public interest and continue to fail us.
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***
While the oil and gas sector and related industries get preferential treatment other areas of business are ignored:

While I don't believe in providing tax breaks to any company I note that the GOA has provided stimulus to companies in the oil and gas sector and associated areas. So this raises the question of why the preferential treatment to one area of the economy?
Why?
I guess the lobbyist group calling upon the GOA to dispense royalty tax credit relief to them have more influence than other groups.
Pretty sad.


Alberta's leading video game developer is calling for the NDP government to provide a tax credit to keep high-tech developers in the province.
CBC.CA

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http://www.cbc.ca/news/canada/edmonton/ready-to-explode-alberta-video-game-developer-wants-tax-break-for-high-tech-industry-1.4005894

'Ready to explode': Alberta video game developer wants tax break for high-tech industry

'There are so many people who are coming out with great education and passions to build these products'

By Travis McEwan, CBC News Posted: Mar 01, 2017 7:14 PM MT Last Updated: Mar 01, 2017 7:14 PM MT
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A high-profile Edmonton-based video game developer is calling for the provincial government to provide a tax credit to keep high-tech developers in Alberta.
"I see a lot of those little start ups happening. A lot of those things trying to get started. There's so much talent in this province," said Aaryn Flynn, general manager of BioWare, on Wednesday.
Flynn worries that without incentives to create more digital media jobs in the province, young developers will move to other provinces.
Aaryn Flynn
BioWare's general manager, Aaryn Flynn, is calling for provincial support of Alberta's high-tech industry. (Travis McEwan/CBC)
"There are so many people who are coming out with great education and passions to build these products and then they find themselves going to British Columbia, maybe going to Ontario or Quebec.
"Nothing would make me happier than to capture those folks and keep them here."
Ontario, B.C., and Quebec all offer a digital-media tax credit that covers a percentage of labour and wages.
Ontario offers a 35-per-cent tax exemption. Quebec offers 37.5 per cent, while British Columbia offers a 17.5-per-cent exemption.
Alberta has no digital-media tax credit.
"The two big things are: a very broad-based tax-credit program which supports investment industry and supports growth for job creation; secondly, once that's there there's very holistic educational and post secondary programs to support that create young developers and encourage and nurture young developers who come out and are able to find jobs."
On Wednesday afternoon, the culture and tourism ministry issued an email response.
"The government recognizes that the digital media and gaming sectors have tremendous potential for growth in our province.  
"We are developing two new pilot grant programs related to post-production and interactive digital media, that we look forward to sharing details on later this spring."
Mass Effect Andromeda
BioWare's Mass Effect: Andromeda, the fourth of the series, is expected to be released on March 21. (Supplied)
BioWare has released 15 games since it was founded 22 years ago. It's owned by Electronic Arts, a global software development company.
Their latest game, Mass Effect: Andromeda, will be released on March 21. It's the fourth of the series and comes four years after the previous game was released.
​Travis.mcewan@cbc.ca


****
While frankly speaking I don't think any of these businesses should be getting a hand out from us I don't believe we should be spreading the love to only one sector.

It's troubling that the GOA has learned nothing from the past but continues to use public dollars (in this case as reduced revenues through the royalty tax credit) to prop up specific industries while ignoring others.
Why the preferential treatment?
Why does big oil get the honey and the others get the swat?


http://calgaryherald.com/business/energy/varcoe-albertas-petrochemical-dreams-edge-closer-to-reality

Varcoe: Alberta's petrochemical dreams edge closer to reality

Published on: May 16, 2017 | Last Updated: May 16, 2017 5:52 PM MDT
The North Saskatchewan River runs past Fort Saskatchewan, right, with Alberta's Industrial Heartland, in the background.
The North Saskatchewan River runs past Fort Saskatchewan, right, with Alberta's Industrial Heartland, in the background. RYAN JACKSON / EDMONTON JOURNAL
Slowly, but surely, the province’s plan to entice companies to build large petrochemical plants in Alberta is plodding ahead.
It may seem painfully slow at times, but at least it’s moving in the right direction.
More importantly, proponents and industry analysts believe the opportunity window is now open and the economics appear sound — potentially triggering more than $6.9 billion of investment into Alberta’s energy sector.
On Monday, a proposed propylene and polypropylene production complex to be built in Alberta’s Industrial Heartland area took a step forward.
Calgary-based Pembina Pipeline Corp. announced the signing of a formal joint venture agreement with partner Kuwait-based Petrochemical Industries Co.
The two businesses created a new company, known as Canada Kuwait Petrochemical Corp., and are proceeding with front-end engineering work for the propane dehydrogenation and polypropylene upgrading facility in Sturgeon County, northeast of Edmonton.
The facility would take 22,000 barrels per day of propane produced in Western Canada and convert it into polypropylene, used to produce plastics for products such as automobile parts or appliances.
“The encouraging results of the recently completed feasibility study … give Pembina the confidence to further advance the project,” company senior vice-president Stuart Taylor said in a statement.
As part of the agreement, the partners will refine the capital costs, now estimated at $3.8 billion to $4.2 billion, and develop an updated project schedule.
Analysis will be completed by late next year, slightly behind initial projections, and both partners will then make a final investment decision.
“This is a great step because we’ve got the big momentum going,” said Ed Gibbons, chair of Alberta’s Industrial Heartland Association.
A separate proposal from Calgary-based Inter Pipeline Ltd. to build a large petrochemical facility in the same area is also making strides.
Inter Pipeline is considering construction of an integrated $3.1-billion propane dehydrogenation and polypropylene complex facility in Strathcona County. A final investment decision is expected around the middle of this year.
“The economics look good. We’re comfortable with the business proposition today,” Inter CEO Christian Bayle said last week.
“What kind of sets the timing for moving forward definitively on this project is getting the right (customer) off-take agreements in place.”
Both of these developments would be foundational blocks in Alberta’s strategy to build up the value-added segments of the energy economy.
These plants would take a raw product now in plentiful supply — propane — and enhance its value through processing.
With the dramatic growth of shale gas in recent years, propane output is rising in North America. Western Canada’s production typically sells at a discount.
As long as the proponents can lock in cheap feedstock and long-term contracts with buyers, analysts say these facilities will be competitive with rivals in the U.S. and around the world.
Feedstock typically makes up 60 to 70 per cent of the component costs for petrochemical operations and Western Canada has a distinct “leg up” with low-priced propane, said Todd Dina, director of global olefins with energy consultancy IHS Markit.
This advantage should offset higher construction costs in Alberta, as well as the greater distance from larger U.S. markets.
“The two Canadian projects look viable at this point,” Dina said Monday from Houston.
The proposed developments would be the first of their kind in Canada. They would not only meet domestic demand but also allow the country to export polypropylene, in pellet form, to the United States and abroad.
To get them built, the Alberta government will provide the projects $500 million in incentives, in the form of royalty tax credits.
Setting aside the argument on whether governments should offer any incentives to businesses — something common in the petrochemical sector — the developments aim to capitalize on an opportunity, with strong demand for polypropylene anticipated in the next five years.
“There’s a good chance they will get built,” said Stephen Zinger, senior vice-president of chemicals with consultancy Wood Mackenzie.
It’s estimated the two petrochemical complexes would create more than 240 full-time jobs and about 4,000 temporary positions during construction.
Bayle said the royalty tax credits are a helpful part of the economic equation, but cautioned there is still work to do and the company may take more time beyond this summer to make its final investment decision.
However, the spectre of the government providing any incentives still rubs critics the wrong way.
Wildrose MLA Drew Barnes welcomes the jobs that come with petrochemical developments, but believes there are better ways to entice private-sector investment to Alberta — such as establishing a more competitive corporate tax rate.
“I don’t believe that the government or any bureaucrat is qualified to pick winners and losers,” he said.
The NDP first announced its incentive program in February 2016 — selecting the two projects last December — and the minister in charge isn’t worried about the pace of progress or their chances for success.
He’s confident shovels will be in the ground later this year for Inter Pipeline’s project, and in 2018 for Pembina’s petrochemical complex.
“We know the economics are there, we know there’s significant interest,” Economic Development Minister Deron Bilous said in an interview.
Progress on Alberta’s bold petrochemical plan may seem snail-like at times.
But for an economy that’s been hammered by recession, two big building blocks in the province’s value-added energy puzzle are now inching into place.
Chris Varcoe is a Calgary He

Julie Ali · 

These royalty credits mean less revenues for the GOA at a time when we are piling on major debt. Why should we be subsidizing any industry much less those in the petrochemical sector in this preferential manner?

I don't believe that the government provided such tax credits to the digital media industry when they were asking for such a handout and so why does this sector get our public dollars when they should be working in the "free market" like all the other industries; if they can't survive in the free market then this means that they are economically unfeasible.

And if one sector gets the tax credit why not others?

http://www.cbc.ca/.../ready-to-explode-alberta-video-game...
A high-profile Edmonton-based video game developer is calling for the provincial government to provide a tax credit to keep high-tech developers in Alberta.
LikeReply2 mins
To get them built, the Alberta government will provide the projects $500 million in incentives, in the form of royalty tax credits.

-----
That's a lot of money. Where is this money coming from?  What are royalty tax credits?
https://www.alberta.ca/release.cfm?xID=20527D0EDD3BF-A8A0-2F29-960D7A45197E3999
September 21, 2006
Energy Minister confirms end of Alberta Royalty Tax Credit Program
The ARTC program was established in 1974 in response to that year's federal budget, which made royalties a non-deductible expense for federal income tax purposes. The program enabled oil and gas companies to receive a credit on their income tax. The credit was a percentage of a set amount of the crown royalties they paid in the year on wells that qualified for the program. Since 1974, the program has undergone minor adjustments to provide assistance in times of low prices.
**
The ARTC was shut down in 2006. Then it appears that special interest groups got together to badger the government of Alberta for another form of the same tax:
http://edmontonjournal.com/business/local-business/manufacturers-group-calls-for-special-royalty-tax-credit
The provincial wing of Canada’s largest trade and industry association is recommending the Alberta government bring in a royalty tax credit to reward oil and gas companies for using Canadian manufacturers in their supply chains.

The credit would “undoubtedly impact provincial royalty revenues” but it would also attract new investment and generate more manufacturing activity, the Alberta division of Canadian Manufacturers and Exporters says in a position paper submitted to the province’s royalty review advisory panel.

“Not only will that result in more business tax revenue, but by creating high-paying jobs, will also raise personal income tax revenues,” the paper says.

Alberta Energy spokesman Chris Bourdeau said the royalty review panel headed by Dave Mowat has received the submission and looks forward to reviewing it.

David Plante, CME’s vice-president, Alberta, said a royalty tax credit could be key to diversifying the Alberta economy by encouraging more manufacturing.

“There’s tremendous opportunity there that’s being left on the table, and we believe that by working co-operatively with the owners and the developers of the resource, we could create a whole lot of wealth and jobs for Albertans, and indeed all Canadians,” Plante said Tuesday.

The paper was written by Mike Holden, CME’s director of policy and economics.

“The general gist of it is you pay less royalties if you use domestically sourced manufactured goods,” Holden said. “We want to provide incentive to source goods from domestic companies because we think that it would be a net benefit to the provincial economy and even to the provincial government itself.”

The CME said its intent is for a royalty tax credit that would apply only to new projects or new operational expenditures.

*********
Based on the work of this group of lobbyists the government acted. Too bad it seems to ignore citizens who are yapping endlessly for help in the continuing care sector.
http://www.cbc.ca/news/canada/edmonton/alberta-announces-500m-royalty-credit-program-to-build-petrochemical-plants-1.3428902
$500 million in royalty credits available over the 10-year program

The Petrochemicals Diversification Program aims to encourage construction of such processing plants by awarding royalty credits to companies, which in turn can be sold or traded to natural gas producers.

The government will make $500 million in royalty credits available over the 10-year program. Only new facilities will be eligible for the program.

****
This is interesting. Government responds at the speed of sound to powerful business groups in Alberta but citizens bleat for decades for change in the continuing care sector and it's a no go. Why?

I guess the GOA isn't interested in the public interest. It's only interested in the elite that keep political parties in power.
https://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/alberta-pledges-235-million-loan-to-orphan-oil-wells-clean-up/article35050526/

Alberta pledges $235-million loan to ‘orphan’ oil wells clean up

CALGARY — The Globe and Mail
Published Thursday, May 18, 2017 3:51PM EDT
Last updated Thursday, May 18, 2017 7:17PM EDT
The Alberta government will provide a $235-million loan to accelerate the work of cleaning up “orphan” oil and gas wells that have come with a rash of bankruptcies connected to the global crude-price drop.
The sizable cash injection is a sign both the government and industry believe the long-term buildup of old wells, amassed over decades of development, is a significant issue in the oil-producing province.
Alberta’s inventory of orphan wells jumped to 2,084 as of March of this year, in comparison to 768 one year earlier. That number was just 162 in March of 2014, before global oil prices dropped and economic activity in Alberta slumped.
The government argues that there are many benefits to the loan: It will alieve the concerns of farmers and landowners who have had to live alongside neglected wells on their property; it will help guard against leaks or other environmental issues; and it will create up to 1,650 new jobs over the next three years, during a period of low activity for the oilfield service sector.
“We know there’s a big liability. There’s no getting by that,” Premier Rachel Notley said, making the announcement Thursday at the site of an orphaned well near Carstairs, Alta.
“So the question is: How do we get a handle on that in a way that is balanced and responsible?”
To help protect the province from the financial risk of a massive environmental cleanup, the government requires companies to have enough assets or keep enough funds on hand to decommission their own sites. If this system fails, Alberta’s oil industry collectively funds an Orphan Well Association that works to close and “reclaim” the land around old, unwanted wells.
The government loan, which will be directed to the association, still abides by the polluter pays principle, the Premier said. Earlier this year, industry said it would double the annual levy it pays to the association, to $60-million, by 2019. On Thursday it became clear those increased levies will be used to pay back to the loan to the province over a decade.
Ottawa’s infusion of $30-million, announced in the federal budget in March and earmarked for well cleanup in Alberta, will pay interest costs on the $235-million, the Premier added.
The government said it expects the $235-million loan will greatly accelerate the pace of the cleanup, reducing the liability facing the association by approximately one-third. Last year, the association closed 185 wells.
The issue of orphan wells has become particularly pronounced with the pivotal Redwater Energy Corp. bankruptcy case, which has seen the successive court rulings come down on the side of federal laws that protect the interests of secured creditors over the cost of cleanup under Alberta’s provincial environmental laws. The fallout means the least economical assets of bankrupted companies can be foisted on the Orphan Well Association – and there are concerns that liability could eventually fall to the government and taxpayers.
Gary Leach, president of the Explorers and Producers Association of Canada – a lobby group for small and mid-sized oil producers – said his members didn’t ask for this money.
“But the loan idea is a smart way to accelerate these projects, supplement the annual funding already provided by industry, and put some Albertans back to work on these projects sooner – which we like,” Mr. Leach said.
“I think it’s well understood in industry that given the economic slump, and the uncertainty created by the Redwater bankruptcy case, the list of orphan sites was going to increase and the levy to pay for this work would grow apace.”
A lingering question is how fast the number of orphan wells continues to grow. Alberta has about 180,000 wells currently in operation, according to the government, but also counts another 83,000 “inactive” wells – where there is still an owner but activity at the well has stopped due to technical, or economic, reasons. Earlier this month, the province announced the beginning of discussions to improve the management of historic, current and future liabilities associated with upstream oil and gas development – while maintaining the competitiveness of the industry to attract new investment.
Follow Kelly Cryderman on Twitter: @KellyCryderman

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Julie Ali While the right and the left fight it out I believe we should abandon this sort of clinging to parties and cast our vote for performance. In my opinion the PCs were entitled and self serving. Why else did they have a Tapcal Fund to boost their election chances? Who paid into this fund? Why? And then why did we not know until we turfed them? As for the NDP folks they are no different than the PCs in my humble opinion. Sure they talk a nice chatter about being for the little man and little woman in Alberta but they were quick to transform $235 million for the liability of the oil companies into our liabilities.  Why is $30 million for economic stimulation being used to pay for the interest on this loan? In the past Stelmach handed over $30 million as a gift to the orphan well fund and now we have the Notley doing the same thing albeit with the pretense of a "loan". This loan will not be paid back and nor will the $30 million from all Canadians. We're being scammed by every political party we hire and the citizens stick to yapping about right versus left. Why not consider the abysmal performance of both the PCs and the NDPCs? They're only good at one thing--using the public bank to server themselves and the elite. As the publci we need to use our brains and swing baby swing until we get folks who do represent the public interest rather than their own interest. Really the praise fo the Notley crew is so bizarre considering that we have the same problems that we had before with the PCs. Only the spin is better. We had the Stelmach tell us jobs would come out of the previous gift to the oil industry and now we have the Notley prattle to us about responsible use of public dollars to fund the clean up work of the polluters who earn billions of dollars from our resources. What the heck is wrong with citizens that you can't see we are being played and played? https://www.theglobeandmail.com/.../albe.../article35050526/ The government argues that there are many benefits to the loan: It will alieve the concerns of farmers and landowners who have had to live alongside neglected wells on their property; it will help guard against leaks or other environmental issues; and it will create up to 1,650 new jobs over the next three years, during a period of low activity for the oilfield service sector.

“We know there’s a big liability. There’s no getting by that,” Premier Rachel Notley said, making the announcement Thursday at the site of an orphaned well near Carstairs, Alta.

“So the question is: How do we get a handle on that in a way that is balanced and responsible?”

Reply2 mins
Jeanie Burr Bc the conservatives already had it in place, worked through all the pitfalls/stop measures put up by others. Then when notleys group got in they put a stop to everything (reopening old wells, rezoning spent wells areas, replacing/adding overhead/underground power distribution) but youd know this if youd go research in the archives or were in/had knowledge of the energy sector.
Jeanie Burr From a family actually in the energy sector, who actually knows about the energy sector, where do you get these "tales"? Im curious bc the people who are in, who have first hand knowledge are informed otherwise.
Leonard Fiddler Hey Jeanie are you a worker or an investor you can work in an industry and as long as the pay rolls in your happy but things change and that's the problem
Jeanie Burr Yes things did change. People stupidly didnt research the political parties backgrounds and theyre effect on the province when theyre in power. Otherwise if people had used their brains instead of listening to false propaganda we wouldnt have a govt in power determined to drive out investors, spiral our economy down a hole and bring in unneeded taxes for "environmental" purposes when theres already several in place. Something the ndp has done in every province theyve been elected, the effects of their term taking several years to correct/ reach a solvency again. Albertas top notch enviro regulations are second to none in Canada and 4th globally. <<<<something that is known to those in the trades or those who actually take the time to research.
Also Yes i stand by my previous comment for myself and quite a few people in the energy sector.
Leonard Fiddler How come after forty years in government the cons didn't try to promote this it took RACHEL two years to get progress and you cons still believe in the idiots and pigs at the trough you elected .wise up and forget the blue and vote for progress not regress

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ReplyMay 20 at 9:26pm
Julie Ali Ms. Notley has not progressed anything but sure as cats make kittens all the true believers will think she has. What she's done is created better spin. For example do you think that the myth of the Climate Leadership Plan is anything other than to improve the poor image of big oil to the world? We are paying our cash as citizens for this nonsense. I mean think of it. How does taxing everyone with a greenwashing GST in the form of a carbon tax cause change in use of oil? We're giving most of the people who are being taxed their money back. It's simply a GST to improve the image of Alberta and as for any money left after processing this GST well it's going to go to subsidize energy projects that are otherwise not economically feasible. It's basically doing the subsidization of the oil and gas industry but in another energy sector. We're being played.

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