A new clean-tech fund was introduced on the 15th floor of a downtown Calgary office building on Wednesday to decarbonize the energy industry. However, the contentious Sovereignty Act, which the Alberta government passed in the provincial legislature less than 24 hours earlier, was the topic of much of the conversation during the event.
Some of the planners couldn’t help but scoff at the timing.
It was ironic that an announcement supporting cooperation between business and government was made at the same time that the province’s confrontational new strategy was receiving so much attention.
Because of this, there are growing concerns in the business community about the new legislation and how it might deter people and businesses from setting up shop or making investments in Alberta at a time when the oilpatch is finally recovering after several years of decline and as the province strives to maintain economic growth amid a potential recession.
Deborah Yedlin, president of the Calgary Chamber of Commerce, says there is no proof whatsoever that the act will result in economic growth and finds the confrontational aspect of the legislation to be “troubling.”
“This occurs at a time when there is a labor shortage, excessive inflation, and difficulty with the supply chain. To alleviate the skills shortfall, we are attempting to attract people to Alberta. This won’t necessarily encourage people to consider Alberta as a location to invest in a business or to visit in search of employment prospects “On Wednesday, she added.
“We believe that this has the potential to significantly increase risk and uncertainty for firms in Alberta.”
Collaboration is key
Avatar Innovations launched a new $3 million fund on Wednesday to provide funding for entrepreneurs working on energy transition technology. The firm collaborates with a variety of businesses, including technology companies, pipeline companies, and conventional oil and gas producers.
To broaden its network, Avatar is also moving into the US. More chances and financing become available to scale-up breakthrough technology as more people and businesses get engaged.
CEO Kevin Krausert stated, “Discussions that are about anything other than how we progress investment, technology, and collaboration in this province will hamper those objectives.
Krausert, who has spent the majority of his career in the oil and gas drilling sector, asserts that Alberta will not attract investors unless it is a secure region that upholds the rule of law.
In the meanwhile, there are worries that Danielle Smith’s Sovereignty Act might enclose Alberta and target certain federal programs.
In a press conference on Tuesday, Smith said, “I pray we never have to utilize this bill. “I hope we’ve sent Ottawa a message that we’ll zealously protect our constitutional spheres of authority and they should just butt out.”
Politicians in Alberta of all sorts have consistently criticised the federal government for decades. Consider it a political hobby. However, there is no doubt that choosing not to uphold federal laws is a considerably more abrasive form of opposition to Ottawa.
Smith became prime minister after taking over as United Conservative Party leader in October. No policy was addressed more than the Sovereignty Act during that leadership contest.
The proposal, according to the then-premier Jason Kenney, “would do tremendous damage to jobs, the economy, and the prospect of pipelines” and was “risky, dangerous, half-baked.”
The Sovereignty Act may be as damaging to Alberta’s future as Prime Minister Justin Trudeau’s policies have been to the province’s past, according to Sonya Savage, who was the energy minister at the time. She also noted that foreign investors worried about their Alberta assets had been asking her about the Act.
Savage continues to serve as the environment minister in Smith’s government. On Wednesday, she said that when the legislation was being created, her initial objections had been taken into account.
Given that the Sovereignty Act won’t have any immediate effects on the sector’s daily operations and that profits are still strong and commodity prices are high, the average oil and gas business may not be concerned about it.
Concerns exist, however, over the legislation’s immediate and long-term effects.
The biggest oilpatch advocacy organisation seemed hesitant to embrace the proposal.
According to Lisa Baiton, CEO of the Canadian Association of Petroleum Producers, in a statement sent by email, “We are worried about any government policy that has the potential to generate uncertainty for investors.”
“To bring investment back to Canada, it is critical for governments at all levels to collaborate with the industry.”
Lobbying Ottawa for cash
The Sovereignty Act was passed at a time when many oil patch businesses are searching for funding to decarbonize their industry and support the development of emerging sectors like hydrogen and carbon capture and sequestration.
Significant financing must be attracted from the federal government as well as from private investors.
In other words, while Alberta’s government is picking a fight, the oil patch wants assistance from Ottawa.
Even smaller businesses are searching for federal funding. A group of oil and gas drillers only last week requested that the federal government establish a new tax credit to aid the sector’s decarbonization.