West at a Glance - June 2017 Issue

(PDF; 382 KB)

Inside this issue

• Provincial Government Developments
• News and Opinion Highlights
• Key Economic Indicators
• Upcoming Events

Provincial Government Developments

British Columbia

• BC election results – The May 9th BC provincial election resulted in the BC Liberals winning 43 of the province's 87 ridings. The BC NDP won 41, and the BC Green Party won three. As both the Liberals and NDP fell short of the 44 seats required to form a majority government, the Green Party had the ability to support either side. As final election counts were announced in late May, the NDP and Green Party leaders, John Horgan and Andrew Weaver, revealed intentions to form a coalition to defeat Christy Clark's minority Liberal government. By convention, if the Liberals are defeated in the legislature, BC Lieutenant Governor Judith Guichon will look to the Green-backed NPD party to form a government. The situation increases uncertainty around various large-scale projects and strategies currently underway, most notably Kinder Morgan's Trans Mountain Expansion and the Site C hydroelectric dam project.

Alberta

• Alberta plans orphan wells cleanup – The Government of Alberta introduced legislation that will allow it to lend $235 million to the Orphan Well Association (OWA) to fund the proper abandonment and reclamation of a growing number of orphan Alberta oil and gas sites. The Government of Alberta estimates that the loan will create up to 1,650 new jobs in reclamation work in Alberta over the next three years. The loan program would be in addition to the ongoing closure and reclamation operations undertaken annually by the OWA, and the loan will be repaid to the Government of Alberta out of the association's existing levy over the next ten years. The cost of the loan will be covered by the federal government's one-time $30 million payment to the Government of Alberta announced in the 2017 Federal Budget.
   
• Alberta appoints new softwood lumber envoy – The Government of Alberta retained former Manitoba Premier and Canada's Ambassador to the US from 2009 to 2016, Gary Doer, to champion the province's lobbying efforts on softwood lumber in Washington, DC. Doer is currently a senior business advisor at Dentons global law firm, working on Canada-US cross-border legal matters. In this new role, Doer will be assisting the Alberta government's Washington office in connecting with key decision-makers from government and industry and providing advocacy advice.
   
• Alberta Indigenous tourism funding announced – The Government of Alberta is providing the Aboriginal Tourism Association of Canada (ATAC) with a $100,000 grant to help establish a provincial Indigenous tourism organization and grow tourism-related businesses across the province. This is the first time that ATAC has received grant funding from a provincial or territorial government. It plans to use the funds to help grow tourism businesses in First Nations and Métis communities in Alberta, which includes developing an Indigenous tourism entrepreneurship program.
   
• New funding for Alberta Indigenous apprenticeship training – The Government of Alberta announced funding of $500,000 towards the Trade Winds to Success Training Society's pre-apprenticeship program. The program targets Indigenous people and incorporates cultural practices such as Elder mentorship and a daily smudge ceremony in parallel with instruction to pursue careers in the trades. In 2016, WD provided over $1 million to support the expansion of the program including launching a new marketing plan to increase the number of participants and industry partners. As of 2016, a total of 1,191 students have graduated and 96 percent have found work.
   
• Alberta introduces pilot digital media grants – The Government of Alberta is introducing two $1.5 million grants for digital media. The Post-Production, Digital Animation and Visual Effects grant and the Interactive Digital Media grant will assist small and medium-sized enterprises and will award up to $200,000 in funding per company. The funding for the pilot grants has been made possible through the Capital Investment Tax Credit, introduced in January 2017. Applications for the grants will be accepted beginning May 23.
   
• Alberta and JOGMEC sign partnership agreement – Premier Notley signed a strategic partnership agreement with the Japan Oil, Gas and Metals National Corporation (JOGMEC) to collaborate on scientific research and technical aspects of oil and gas exploration, development, and production. JOGMEC is a Japanese crown corporation that invests in early-stage resource exploration projects. It has invested $1 billion in Canada and has worked on commercializing "Super Critical Water Cracking" technology in Alberta to reduce emissions associated with oil sands upgrading.

Saskatchewan

• Government of Saskatchewan responds to the federal carbon tax – On May 18, 2017, Federal Environment Minister Catherine McKenna, unveiled plans for a federal carbon tax which would impose a $10 charge per tonne of CO2 for any jurisdiction that has not implemented their own carbon pricing strategy. The Premier of Saskatchewan, Brad Wall, is opposed to the carbon tax saying it would remove $1.3 billion from the provincial economy and affect key industries like mining and agriculture. Premier Wall cited Saskatchewan-based innovations like the carbon capture and sequestration facility at Boundary Dam, zero-till farming methods, and ongoing research at the province's universities as ways in which Saskatchewan is already reducing its carbon footprint.
   
• Canada and Saskatchewan invest in water and wastewater infrastructure – The governments of Saskatchewan and Canada are investing up to $3 million toward the $6.4 million expansion project of the wastewater system in the Town of Balgonie. The investment will support the expansion of the existing wastewater system, contribute to the health and well-being of residents, protect provincial waterways, and benefit the local environment.
   
• Saskatchewan is leading the provinces in the growth of building permits – On May 9, 2017, the Government of Saskatchewan issued a news release announcing that year-over-year building permits increased by 13.2 percent (seasonally adjusted) in March 2017. It is the highest percentage increase among the provinces and far above the 1.5 percent national average. Residential permits were up 26.8 percent over the same period. Building permit revenue totalled $151 million in March 2017, up from $137 million in 2016.

Manitoba

• Manitoba announces Public Private Partnerships (P3s) to be used for new schools – The Manitoba government announced a request for proposals on May 2, 2017 to build four new schools worth over $100 million beginning in 2019. The proposal calls for the use of a P3 model that has had success in Saskatchewan.

News and Opinion Highlights

• US announces preliminary duties on Canadian softwood lumber – The US Department of Commerce announced preliminary countervailing duties (CVD) on softwood lumber imports from Canada. The determination places a CVD rate of 19.88 percent on typical Canadian producers, with specific rates for five named companies: Canfor (20.26 percent); Resolute (12.82 percent); Tolko (19.50 percent); West Fraser (24.12 percent); and J.D. Irving (3.02 percent). Duncan Davies, Chair of the BC Lumber Trade Council, said that there is not likely to be any immediate fallout since the tariff has already been absorbed in the 30 percent rise in the price of lumber over the past three months. No job losses have yet to be reported in BC, but this could change with the preliminary anti-dumping duties expected to be announced later in June.
   
• Kinder Morgan issues IPO for its Trans Mountain Pipeline project – Kinder Morgan is moving ahead with its plan to begin construction on the Trans Mountain Pipeline in September, now that financing and a final investment decision have been completed. The company has begun to award initial contracts and to fulfill benefit agreements with Indigenous and local communities. Their resolution comes in spite of continued opposition from local citizens, environmental groups, First Nations, and the newly formed coalition between the BC NDP and Green party who are opposed to the expansion of the Kinder Morgan pipeline. Kinder Morgan Canada's May 31st IPO raised the necessary $1.75 billion in the largest energy sector IPO on the TSX in two years.
   
• Alberta's cleantech sector reaches critical mass – The Alberta Clean Technology Industry Alliance (ACTia) released its Alberta Cleantech Sector industry survey, which finds that the sector is approaching critical mass. Over 90 percent of the surveyed companies plan to hire more staff this year, with companies paying an average salary of just under $100,000 per year. These companies brought $307 million in revenues into Alberta in 2015, with 65 percent coming from exports to the US. Companies identified public funding as a critical capital source and cited a lack of access to capital as a major barrier to growth. Additional barriers included a lack of opportunities to prove their technologies at a commercial scale and a lack of regulatory drivers for novel technology adoption.
   
• Alberta's planned coal phase-out is accelerating – Alberta's two largest coal power producers, ATCO and TransAlta Corp., have announced plans to accelerate the conversion of their coal-fired power plants to natural gas. An early conversion has become financially feasible because of the oversupply of cheap natural gas in Western Canada. Both companies hope to convert the majority of their units by 2020 ahead of the provincial 2030 deadline.
   
• Red River College unveils Innovation Centre – Winnipeg's Red River College announced the construction of a $95 million Innovation Centre. The new facility will bring together science, research and development, entrepreneurship, and student learning.  Alongside its primary function as a teaching facility, local start-ups will bring in projects which will be turned into assignments for the students.
   
• $20 million defence contract awarded to local company – Winnipeg-based Arne's Welding Ltd. will produce 300 trailers for the Department of National Defence over the next two years and supply parts for the next 30. The $20 million contract could lead to another 270 unit order, worth an addition $18 million.
   
• Livestock and Forage Centre of Excellence receives federal funding – On May 26, 2017, the federal government announced $4.47 million contribution towards a new research centre at the University of Saskatchewan. The $37.5 million Livestock and Forage Centre of Excellence will conduct research to improve beef quality, food safety, productivity, and environmental sustainability.
   
• Vale Canada suspension of mine operations – Vale Canada announced it will be suspending operations at its Birchtree Mine located in Thompson, Manitoba. There are currently 200 people employed at the mine that will be affected by the closure. Vale Canada previously announced it would be closing their Thompson smelter and refinery in 2018. In total, 700 positions will be cut.
   
• Cameco Corp. of Saskatchewan signs new deal with Ontario's Bruce Power – On May 26, 2017, Bruce Power of Ontario and Cameco Corporation of Saskatchewan announced long-term arrangements in support of Ontario's Long Term Energy Plan. The two companies extended their exclusive fuel supply arrangement for an additional 10 years and entered an arrangement for Cameco to provide reactor components for all six of Bruce Power's Major Component Replacement projects starting in 2020. The total value of the arrangements is estimated to be approximately $2 billion to 2030.

Key Economic Indicators

Upcoming Events