Legislature adjourns on sombre note over energy projects

By The Canadian Press

EDMONTON — Alberta politicians were facing a muted energy boom and a growing list of cancelled or scaled-back mega-projects as the fall sitting of the legislature adjourned Wednesday.

Plunging oil prices and tumbling stock markets forced the province to drastically retool it’s revenue projections in recent weeks, trimming $6.5 billion from summer estimates.

Liberal Opposition Leader Kevin Taft said there’s no question that Alberta’s economic outlook took a pounding this fall and he wasn’t optimistic of a quick rebound.

“I think this fall in Alberta history is nearly unprecedented,” Taft told a news conference.

Alberta had been booming like never before.

Thousands of workers streamed into the province from all corners of Canada and around the globe over the last few years.

But then oil prices that soared to more than US$140 a barrel in the summer began a long slide and dipped as low as US$45 a barrel last month.

The impact on Alberta was profound. A half-dozen multibillion-dollar upgrader projects that were either under construction or in the final planning stages were scaled back or postponed.

“When all these mega-projects get ramped down, you can’t ramp them up again on six months notice,” Taft said after his final appearance in the assembly before he steps down as leader later this month.

“It takes years to recruit the workforce to get everything going again. I think Alberta is into a deep slowdown for a minimum of three years.”

Premier Ed Stelmach’s Progressive Conservatives were forced to react to prevent a stampede of lost investment in the oilpatch and scaled back a royalty increase set to take effect in January.

To encourage drilling activity, some projects were given the option of a transitional royalty rate for five years that will be 10 percentage points less than the new rates.

Deputy premier Ron Stevens said the move is simply a reflection of new economic times Alberta has found itself in.

“The purpose of that was to maintain and create jobs,” Stevens said in an interview.

A group representing 450 smaller oil and gas companies applauded the last-minute change.

The government did manage to sign a royalty deal with Syncrude to bring the energy giant in line with royalty changes.

This came as a relief after one of Syncrude’s largest partners, Imperial Oil, had signalled strong reluctance to tear up its royalty deal before the original 2015 expiry date.

Health-care reforms were also a big part of the fall sitting.

The government rolled out a 12-point plan this week that includes having clinics perform some treatments now available only in hospitals.

Premier Ed Stelmach told the legislature Wednesday that economic uncertainty is forcing all provinces to look at how to contain health-care costs.

“Without new wealth generation, we won’t be able to afford the programs we have today,” said the premier.

But the Liberals released a document on the final day of the fall sitting that offers the first evidence of cost-cutting measures planned by the government to contain Alberta’s $13 billion health budget.

A government job posting says “proposed legislation will impose constraints on growth of costs in health care provide-wide.”

Health Minister Ron Liepert would not confirm that such legislation is in the works, but he told the assembly that Alberta simply can’t afford more double-digit spending increases health care.

“What we’re attempting to do is find efficiencies in the system and that’s exactly what we’ve been talking about,” said Liepert.

The legislature will reconvene for a spring sitting in February.