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Two years ago, the Alberta government put in place a temporary oil-production quota. However, the quota's impact could well be felt in the province's oil production for years to come. The quota applied only to firms producing more than 10,000 barrels of oil per day and was instituted as a response to pipeline constraints that caused Alberta oil prices to be much lower than prices elsewhere. Production from both oilsands mines and oil wells dropped as soon as the government announced the quotas. The media warned that the quotas would force production to transfer to Saskatchewan, but the research for this paper found that this never occurred. The quota policy was announced in December 2018 and a week later, the price of Alberta oil had jumped from $29.09/bbl to $50.08 bbl, a 72 per cent rise. When the quota policy actually took effect the first of January 2019, the price increased again, but by much less. The anticipation of the quota alone was enough to create the desired price increase. The quota, which set limits for the total combined crude oil and bitumen permitted to be produced, was assigned to individual operators and designed to provide an 8.5 per cent reduction in oil production. The total quota was fixed at 3.56 million barrels a day in January 2019, but individual quotas could be traded across eligible operators, minimizing the overall costs of achieving the total goal. However, total production continued falling even when the quota was eventually relaxed; the market and a low world price created a scenario in which production fell below the amount permitted by the quota. All the oil companies reduced their production regardless of whether they fell within the quota's guidelines or not; however, the firms that were subject to the quota reduced their production more than the others. The quota was lifted in December 2020 when export capacity again became sufficient. While curtailing production had the desired result of raising Alberta oil prices and resolving the differential between local prices and the world benchmark, its ripple effects may well be felt in the longer term. This paper finds that fewer wells are being drilled and more wells are suspending production. Tradition dictates that when a well becomes inactive, it is rarely returned to a productive state. Those firms that resorted to low levels of drilling in order to meet the quota have created a situation that could affect Alberta oil production in the years ahead. [ABSTRACT FROM AUTHOR]

In this paper, we explore how the power wielded by regional incumbents has impacted subnational innovation agendas. Our findings suggest that the design of mission-oriented innovation policies should be more attentive to regional innovation policies and their relationship to how innovation may serve to bolster incumbents and not undermine them. We use a case-study of innovation in fossil fuels. Recently, innovation policy literature has explored innovation policy and global climate as a major topic. On the one hand, carbon lock-in has been used to explain why there has been such difficulty in reducing carbon emissions, in many cases, despite an increasing emphasis of mission-innovation policies. On the other hand, mission-innovation policies are believed to be a key to the development of disruptive innovations that could break this carbon intensive path dependency. Although the two literatures explore the same problem, there could be more integration. While carbon lock-in is being considered in the mission-innovation literature, it nevertheless has been largely overlooked at the mission-setting stage. On the other hand, the lock-in literature has tended to overlook the findings of mission-oriented innovation literature in offering solutions, which suggests that there is a more productive role for mission-oriented innovations in breaking free of previous constraints to serve in the low-carbon energy transition. To make our case, we argue it is important to distinguish among the various impacts disruptive innovations have on the market shares of incumbents'. We propose the following three schema: new market, market rewarding and market destroying. By variegating the potential impact of innovations, we suggest that mission-oriented innovation polices may be designed to only support certain types of innovations that do not directly undermine the market share of incumbents. Using a detailed case study of the Province of Alberta, Canada, we then explore the role of the province's mission-oriented policy in the development of technology to produce the Canadian oil sands. The case study illustrates how incumbents influenced the establishment and direction of the mission's goal. Shifts in incumbency opposition toward the province's mission-oriented innovation policy coincided with the changing impact of the innovation from being market destroying to market rewarding. We suggest that future research should be more attentive to the role of incumbents in influencing mission-oriented innovation policy and the importance of their influence at the mission-setting stage. Furthermore, we suggest that to meet the grand challenge of addressing climate change through mission-oriented innovation policies, these policies must be designed to break free of these institutional constraints. [ABSTRACT FROM AUTHOR]

Now, more than ever, governments and the public are recognizing the importance of health innovation. Precision health (PH) is the next frontier in medicine, enabling individually tailored ways to diagnose, treat and prevent disease in place of today's one-size-fits-all approach. Exploring new opportunities for economic growth is a priority in Alberta given the roller-coaster in recent years from reliance on hydrocarbon royalties coupled with resource-based economic divestment. PH offers Alberta the chance to diversify its economy by developing technology, attracting investment and creating a new health-care industry. As discussed in greater detail in a policy communiqué released alongside this research paper, PH comes with tremendous benefits. Foremost among these benefits is the ability to narrow health disparities among population groups and support social services in times of crisis. Plus, an Alberta-grown PH sector will fuel economic growth, innovation and lasting prosperity. Opportunities are expanding as the global PH market is forecast to grow by 11.3 per cent annually, reaching $141 billion in value by 2026. With a unified health system and many clinical and research strengths, Alberta is well placed to make great strides in PH. Government and universities are already working on PH strategies. However, success is not assured. The province is already dealing with severe fiscal constraints, especially in health care. This paper identifies several other policy issues, based on interviews with leaders in the public and private sectors. There are four main areas where Alberta faces challenges: innovation networks; facilitating discovery; governance and decision- making; and risk and procurement. Alberta's innovation networks are too fragmented, with too much competition and not enough collaboration. There is also a lack of supports and commercialization channels; entrepreneurs don't know where to turn or whom to talk to. Motivating researchers to develop and commercialize products is an especially contentious problem. Projects range from those with high commercial potential to theoretical concepts providing the foundation for future discovery. The interviews for this paper revealed a powerful divide between academics, who want the freedom to research their interests, and government and funding agency participants, who want specific goals and health-care challenges to receive the bulk of the dollars. Executing and co-ordinating a provincial PH strategy is another area where change is necessary. Governance is unclear and many participants are worried about the vagaries of politics affecting funding decisions. Research incentives are often misaligned or structured to produce impacts within one election cycle. This doesn't mean a single authority is required, since that likely would not align with existing structures in place. However, a central group charged with making high-level decisions about priorities might be a valuable resource. Finally, there's procurement and the tolerance of risk. AHS as a single service provider is beneficial in that it cuts down on duplication and overspending. But the system is also rigid and risk-averse, so it's not the ideal customer for SMEs or early-stage ventures. PH is far from a mature industry, meaning results are not guaranteed. There's a need to expand the comfort zones of the powers that be, so they are more willing to bet on innovations. There's also a need to bring promising products to their attention. Health care is not a traditional market with individual consumers, and administrators remote from clinical practice may not grasp the value of new technologies. This paper summarizes the findings of many interviews with decision-makers in health care, academia, government circles and the innovation sector. Much like PH, it presents solutions to specific problems confronting Albertans. [ABSTRACT FROM AUTHOR]

The 2019 MacKinnon report, commissioned by the Alberta government, recommended ending fee-for-service (FFS) as the model for paying primary care physicians because of its significant and inherent inefficiencies. Since then, the COVID-19 pandemic has also demonstrated the value of moving Alberta's family physicians to an alternative payment (APP) model. While the MacKinnon report was in favour of enacting legislation to change the compensation model, this paper instead recommends offering physicians a choice of alternative payment programs as an incentive to move on voluntarily from an FFS system. Other provinces have attempted to reform physicians' pay using a quadruple aim model for health-care improvement, which identifies the major points policy-makers must examine in instituting a replacement for FFS. The quadruple aim model is four-pronged and encompasses patient experience, population health, care team wellbeing and cost reductions. Alberta Health Services already uses the quadruple aim model to improve patient care and quality outcomes, although the MacKinnon report focused primarily on reducing costs. However, reforming doctors' compensation is not just about the amount they should be paid; it must also consider that the method of compensation has a profound impact on both cost and quality of care received. Meanwhile, the self-isolation and social distancing measures for both doctors and patients, established with the arrival of the COVID-19 pandemic, have put Alberta's doctors on a policy roller-coaster. Applying the FFS compensation model during the pandemic has resulted in the use of virtual care codes such as telehealth billing and in-person limited assessment codes. However, these codes were immediately problematic because they do not adequately account for complex patient care that requires longer visits, after-hours premiums and the Rural Remote Northern Program. During a pandemic is not the right time to embark on physician compensation reform. This gives the government time to reconsider the controversial approach taken prior to the COVID-19 pandemic. The need for compensation reform in Alberta is driven by the reality that Alberta has the highest proportion of physicians on FFS along with some of the highest FFS payments per physician in Canada. Meanwhile, family physicians in other provinces are now more likely to be covered by an APP rather than the former FFS system. The problem with FFS is that it tends to encourage physicians to create volume in number of patients seen per day, in order to increase compensation. Thus, it also encourages more diagnostic testing, which increases costs to the health-care system. In general, physicians compensated under FFS have much less incentive to consider costs when treating patients. The argument for legislating pay reform is poorly justified. No other province has legislated physicians out of the FFS system, and that is not a route Alberta should take, either. Nova Scotia has brought in a one-size-fits-all APP, while Ontario implemented a menu of higher paying APPs that produced greater downstream cost savings, making APPs an increasingly attractive payment option to family physicians. Ontario's approach would be better for Alberta because it improves patients' overall experience with primary care, their care outcomes and the wellbeing of those who care for the patients. Alberta should offer a menu of APP models tailored to primary care so that the family doctors themselves can choose the best model for their own practices. As this paper has demonstrated in its comparison of the experiences of other provinces, and as the COVID-19 affirms, the menu approach is the model most strongly aligned with the goals of quadruple aim. [ABSTRACT FROM AUTHOR]

Alberta’s history with coal development goes back to 1874, but 21st century social, economic and environmental factors demonstrate that it’s not in the public interest to pursue coal mining on the Eastern Slopes of the Rocky Mountains. This paper uses a multiple account benefit-cost analysis to compare the positives and negatives of a hypothetical coal mine in the eastern foothills of the Rockies. We provide estimates of the economic, social and environmental impacts, and evaluate how coal mining affects different stakeholders. The economic benefits — $440 million in undiscounted incremental tax revenues and $35 million in undiscounted incremental employment earnings — are overshadowed by the costs arising from the displacement of ranching, tourism and the negative environmental effects on water, vegetation, air and wildlife. Compounding these effects is the non-zero probability that the Alberta government will pick up the tab for reclamation costs, and the adverse social impacts on local communities and on Indigenous Peoples’ rights and interests. Therefore, any new coal mine development is unlikely to provide the province with a net benefit. Following on the heels of the federal government’s rejection of the Grassy Mountain coal project in southwestern Alberta, the provincial government should consider banning coal mining in the Eastern Slopes. Any future coal development policy should include a public-interest test that examines both monetary and non-monetary impacts. This paper finds an estimated undiscounted profit before taxes and royalties of $511 million to the mine developer. Discounting that value by a rate of eight per cent, which would approximate the opportunity cost of investors’ capital, shows coal mines are at best a break-even proposition from a private perspective. Only under optimistic price and activity assumptions does the mine earn a net profit. Tax revenues would be marginal and additional labour income would accrue to only a few individuals. These benefits would be vastly outweighed by the adverse effects on a much greater population, including Indigenous Peoples. Further, the Eastern Slopes already suffer the effects of current forestry, oil and gas, ranching, road development and recreational activities. Water quality and habitat for such wildlife as the Westslope cutthroat trout would be significantly compromised. With coal markets in a long-term decline due to coal’s impact on climate change and the focus on transitioning to alternative energy sources, new coal mine projects in Alberta would be counter-productive in many ways. The comparatively small economic benefits derived from a new coal mine could not possibly justify the large and possibly irreversible damage done to the environment, local communities and to the rights and interests of Indigenous Peoples. [ABSTRACT FROM AUTHOR]

Alberta does not have a land transfer tax on the sale of real property, nor should the province contemplate bringing one in. Instead, if the Alberta government seeks new tax revenue, it should institute a sales tax or raise property taxes. This paper examines previous research on land transfer taxes in Canada, Australia and Europe, and concludes that such a tax would only add its own volatility to that inherent to Alberta's resource revenue-based economy. Calculations show that a one-per-cent land transfer tax in Alberta would have yielded between $460 million and $500 million for provincial coffers in 2017. However appealing that amount of revenue sounds, the tax's benefits do not outweigh its drawbacks. Land transfer values in Alberta can undergo substantial changes from one year to the next, making a land transfer tax a highly precarious revenue source. Given the already volatile fluctuations in Alberta's fiscal situation due to its boom-and-bust economy, the volatile nature of a land transfer tax would be thrown into the mix, thus compounding the difficulty of making budget decisions. Nor would a land transfer tax benefit Albertans who are in the market for a home. Studies show that such taxes discourage residential real estate transactions because of the burden of the added fees involved. They also impose a larger welfare loss per dollar of tax revenue than do residential property taxes. Further, while placing a larger financial burden on real estate transactions, the revenue generated by land transfer taxes does not displace or exceed the revenue that property taxes bring in. If land transfer taxes are burdensome for homebuyers, they are equally so for sellers who may be compelled to lower their asking prices to make up for the extra costs the tax imposes. This leads to a drop in fair market value of homes with a negative impact on the volume and value of real estate transactions. While a land transfer tax could potentially raise a significant amount of revenue for the Alberta government it still would be insufficient to cover the province's current fiscal deficit. The situation would be made worse by a negative spin-off effect for the economy due to the reduction of transactions, and a slippage in tax revenues because of declines in the value and volume of land transfers. This paper estimates those declines to be between five and 15 per cent, based on a land transfer tax rate of three per cent, which should be the highest rate if the Alberta government ever considers creating such a tax. Meanwhile, the land transfer tax would exact a relatively high tax payment from middle-income families - as high as seven per cent of median household income in Calgary and Edmonton - which could add a substantial amount to the mortgage debt for these families. Real estate transactions in Alberta are currently subject to a land titles fee, with property taxes being the standard for raising revenue from homeowners. This system should not be revamped in favour of a land transfer tax, as such a move would only be to the detriment of the provincial economy and to individual Albertans. [ABSTRACT FROM AUTHOR]

Failures in governance can jeopardize the responsibility of regulatory authorities to protect the public. Since governments set mandates for regulatory authorities under their jurisdiction, it's up to the former to mitigate the risk with effective oversight and legislation. Effective oversight should be founded on the five core principles of good governance: accountability, leadership, integrity, stewardship and transparency. In practice, regulatory authorities need leadership, ethics and a culture committed to good governance. They need strong relationships with stakeholders, effective risk management, both internal and external compliance and ongoing monitoring, evaluation and support. Unfortunately, jurisdictions do not always follow these principles and practices. As an example, several agencies found that the Alberta Energy Regulator, significantly exceeded its mandate in establishing an affiliated consultancy. Controls and processes to protect against conflicts of interest failed, while board oversight and AER leadership did not create a healthy corporate culture and the CEO grossly mismanaged public funds and assets. The results of three investigations into the AER led to new processes for board and CEO accountability, improved staff relations, retraining, closer watch of executive expenses, and improved channels of communication between the CEO and board and the board with government. Above all, the government of Alberta learned that when pursuing new and innovative activities, it must carefully define mandates; and that effective whistleblowing processes are vital to uncovering misdeeds. While the investigations focused on wrongdoing at the top, this paper identifies three other areas of concern. First, there is a lack of co-operation among regulatory agencies. Second, Self-Regulating Professional Organizations (SRPOs) are often reluctant to engage on issues involving licensed corporate entities or professionals. Third, members often see SRPOs as clubs rather than regulators. These flaws are evident in the AER's case. Anywhere from 10-50 individuals were involved, directly or indirectly, in wrongdoing -- including public servants, licensed professionals and members of quasi-regulatory associations or societies. Many of these people were professionals bound by clear codes of conduct, but these professionals did not approach this respective SRPOs with complaints about inappropriate behaviours at their employer. To ensure regulatory bodies stay within their mandates, governments should define the limits of allowable activities and use open, competitive recruitment processes to find competent leaders. They should also consider appointing respected members of the relevant stakeholder community to the selection panel. Governments must also establish competency and experience criteria for board members and the board chair to guarantee in-depth knowledge and avoid conflicts of interest; and back this up with transparent annual reports to government and the public. Boards and governments should establish equally strict criteria for choosing a regulatory body's CEO, with an emphasis on exceptional leadership skills, openness to performance assessment and knowledge of risk management. These are crucial steps if governments are to maintain public trust and confidence in regulatory agencies. Similar accountabilities should apply to agency employees who are members of SRPOs; they should be ready to seek guidance from SRPOs if faced with possible ethical breaches. Proper governance principles and best practices should be at the heart of every regulatory agency. [ABSTRACT FROM AUTHOR]

Alberta's current NDP government has multiple money problems. Some of those problems arose as a result of the drop in oil prices; others arose because of spending choices the government made. Either way, a course correction is necessary. Otherwise, the burden from this government's building up of debt will be unfairly shifted to the shoulders of future Albertans. This paper examines various measures the government can, and should, employ in both the short and long term to better align spending and revenue. The NDP's spending choices appear to be based on the precarious assumption that a rebound in oil prices will heal what ails the Alberta economy, as well as on the refusal to significantly reduce spending with almost zero attempt to contain costs. The NDP bases its choices on a black-and-white scenario of either spending or imposing austerity and drastic cutbacks. However, there is a middle ground that would allow the government to maintain services without the quality of those services suffering. These include moderating public sector wages, engaging in better procurement practices, lowering administrative costs, and delivering services and programs more effectively. Alberta is a big spender on health care, but the government could learn much from what other provinces are doing that enables them to spend less while still delivering quality health care. Alberta's 2017 budget projects deficits of $10.3 billion this fiscal year, dropping to $7.2 billion by 2019-2020, and offers no concrete budget-balancing plan. Credit-rating agencies such as Moody's see danger in the NDP budget of a speedily increasing debt burden, long-term deficits and growth in spending that is above inflation levels. The government's projected rise in oil prices, on which it is depending to stabilize the economy, is also considered to be far too rosy. There are ways out of the gloom. For example, by reducing raises for all public sector workers, unionized or not, the province could save $1.5 billion over three years. Emulating Ontario, Quebec and British Columbia by applying the brakes to runaway infrastructure spending would save $4.6 billion over the next three years. Public programs and services can be restructured, as has been done in other provinces, to make them more efficient and effective and administrative and procurement costs can be reduced. Reducing Alberta's per capita spending levels to those akin to levels in other large provinces would eventually yield annual savings of $6.6 billion. Economic growth won't come from poorly thought-out spending; rather, it will evolve from the creation of a more positive climate for investment. The NDP's carbon tax and its emphasis on more heavily taxing higher income earners do nothing to promote economic growth that could shore up government revenue. Tax reform is key: less economically damaging taxes would improve growth prospects and help close the deficit. Use of the carbon tax should address competitiveness issues through deregulation and cutting business taxes. And for the long term, the government needs a solid plan to balance the budget with specific annual deficit targets. Common sense, moderation in many things and a firm hand on the fiscal reins will go far towards righting this dangerously listing ship, but the NDP government has to be bold enough to take the initiative. Unrestrained spending is not the answer to any economic predicament. [ABSTRACT FROM AUTHOR]

This paper examines Alberta's record of industrial policy and proposes principles for future innovation-focused provincial policy. I find that the development of the key technology to unlock the majority of the Canadian oilsands--steam-assisted gravity drainage (SAGD)--is an example of industrial policy in Alberta responsible for disruptive innovation and economic development. The incumbent industry preferred incremental innovation in enhanced oil recovery. However, strong political leadership raised the royalties on the conventional oil industry to fund the Alberta Oil Sands Technology and Research Authority (AOSTRA), an extensive project in what was seen as diversification in an alternative industry. The initial $854-million (2019 dollars) government investment was matched by industry funds. However, after this investment failed to demonstrate a breakthrough, the pivotal investment in SAGD was purely government-funded and led, in the face of opposition from industry that viewed the construction of the underground test facility as a boondoggle. Once SAGD was proven, the private sector--made up of personnel trained under AOSTRA, and with continued financial support from government--grew SAGD into a significant industry. Since then, the government's pivotal role in setting direction, the $1.4 billion (2019 dollars) in government investment and the opposition it faced have been largely forgotten. There is growing interest in the potential for mission-oriented innovation or industrial policy to address major social and environmental challenges and spur economic growth. As the Alberta government seeks to address the dual challenges of diversification and decarbonization, AOSTRA's success holds important lessons. There should be a clear, disruptive goal that is not overly prescriptive. The goal should be matched to the scale of public and private resources available and supported by strong political leadership and willingness to take on a long-term challenge. The work should be driven by a technically competent organization with freedom to partner and make sole investments. And finally, there needs to be a clear mechanism for knowledge diffusion and recovery of the value of the knowledge created. I explore these lessons and set out an industrial policy approach for the role of government in industry creation. Alberta's economic development history shows the important role of industrial policy in creating disruptive innovations and generating economic growth. It also shows how careful policy design can minimize rent-seeking as well as the costs of the necessary mistakes in the process--the "losers" that end up picked in the process of finding the "winners". [ABSTRACT FROM AUTHOR]

Lethbridge County introduced a new business tax on confined feeding operations (CFO), notably feedlots, in 2016. It was expected to bring in $2.5 million for county road maintenance in 2017. However, the tax could have a detrimental impact on feedlot owners and is not the fairest way to amass revenue for road repairs. Four criteria can be used to evaluate a particular form of taxation. They are fairness, efficient resource allocation, compliance and administration costs, and revenue stability. This paper examines the potential impacts of the tax and proposes three alternative methods for financing Lethbridge County road maintenance that meet those criteria. These alternatives create less of an impact on feedlot owners and share the tax burden more equitably. They also reduce the potentially negative ripple effects that the CFO levy may have on feed producers, cattle producers, meat packers and consumers. The current tax is based on livestock storage capacity, rather than on production volume. It's counter-productive in the long run because the feedlot's fixed costs of production are increased, while its variable costs remain unaffected. This permanent increase in fixed costs, estimated to be as high as 20 per cent of the average operating margin per head of cattle, lowers the return on feedlot investments. Thus, the new tax could result in some feedlots being closed for lack of a high enough return on investment. A more equitable revenue source for road maintenance would be user fees imposed on the trucking industry. This system is already in use in Oregon and New Zealand. It uses GPS technology to track trucks on the roads and then charges the trucking companies a fee based on road use. It would certainly be worthwhile for the province to initiate a pilot program to test the system's efficacy on Alberta roads. Lethbridge County could also implement a usage levy that would be based on how much it spends on roads, combined with a feedlot's capacity plus its distance from a provincial highway. Contributions to road maintenance would thus be directly tied to road usage. The new CFO tax does not distinguish between feedlots with a heavy use of county roads and those that don't use the county roads as much because they are close to provincial highways. The current CFO levy creates an unfair distribution of the tax burden. Under a usage-levy system, 94 feedlots, or 72 per cent of feedlots in the county, would have their tax burdens lessened, while 18 feedlots located on provincial highways would pay no tax. The third option would be a tax based on an equation of how many livestock per feedlot exceed the actual capacity of that farm's own crops to feed them. Those feedlots relying more heavily on trucked-in crops, and thus dependent on greater use of county roads to feed their animals, would pay higher taxes accordingly. The three alternatives would generate the same amount of revenue as the current levy and with similar degrees of predictability. However, these alternatives are fairer, more equitable and more efficient than the CFO levy. In the interests of maintaining both county roads and a healthy feedlot industry, Lethbridge County should replace the CFO levy with one of them. [ABSTRACT FROM AUTHOR]

Alberta's new royalty regime has made the province a more rewarding place for anyone looking to invest in conventional non-renewable resources. After Alberta's NDP government commissioned a review of the royalty regime to ensure the province was receiving its "fair share," it ended up determining that revenue-neutral changes were warranted to the royalty system for conventional oil, with oilsands largely left untouched. However, the few changes that were made have had a substantial impact on incentives for new investment. Those changes have, in fact, only made it more lucrative for investors in Alberta's conventional oil and gas. This paper focuses on oil and the fiscal regime (it does not consider other regulatory and carbon policies that affect competitiveness). The changes for conventional oil are significant enough that the new regime entirely overcomes the competitive disadvantages for non-oil sands producers created by the NDP government's increase in provincial corporate income taxes last year. Under the current regime, Alberta conventional oil bears a marginal effective tax and royalty rate (METRR) of 35.0 per cent (the METRR is relevant for new investment decisions). The changes have sharply reduced that to 26.7 per cent. This year, when compared against its peers in the U.S., Europe and Australia, Alberta has one of the highest METRRs for conventional oil. When the new royalty regime takes fully effect in 2017, it will have one of the lowest, bested only by Australia, the United Kingdom, Pennsylvania and, in Canada, Nova Scotia and Newfoundland & Labrador. Most notably, Alberta is more competitive now than its immediate neighbours, British Columbia and Saskatchewan, for conventional oil investment. It is also less distorting across different types of wells, which is an important quality in a well-designed royalty system. Alberta continues to implement a system of price-sensitive royalty rates with the government's take increasing with the oil price. Our results are derived using a certain projected oil price and a certain projected exchange rate -- in this case US$50 per barrel of West Texas Intermediate and 77 U.S. cents per dollar -- with changes to either potentially altering the rankings and making Alberta more or less competitive, depending on what happens with those two variables. Under the new regime, Alberta's tax burden on conventional oil projects is reduced for a wide range of oil prices. Whether the Province will attract investment for conventional oil once the market conditions improve will depend as well on other policies being adopted but at least the new royalty regime will help boost interest in the Province. [ABSTRACT FROM AUTHOR]

When considering an increase in their non-residential property tax rates, Alberta municipalities must also take into account the adverse effects such an increase will likely have on business investment in their communities. Based on data on commercial and industrial permit values for 17 Alberta cities from 1998 to 2017, this paper shows that increasing the non-residential property tax rate corresponds to a drop in businesses investment in buildings and structures. Raising the non-residential property tax rate by, for example, 10 per cent results in a seven per cent drop in business investment. Businesses have long expressed concerns about municipal government's excessive reliance on taxing commercial and industrial property. The issue has become particularly salient in Alberta since the City of Calgary increased its non-residential property tax rate, not only to replace its business tax, but also to offset the decline in the property tax base from the reduction in the assessed value of downtown office buildings. Calgary rationalized that eliminating the business tax and shifting the tax burden to the non-residential property tax would boost the city's competitiveness and attractiveness, besides contributing to improved administrative efficiency in the tax system. The business tax that the city eliminated was responsible for almost a quarter of non-residential and business tax revenues. However, the city envisioned that eliminating this tax and transferring its onus to the non-residential property tax would generate the same amount of revenue. This study finds that if the non-residential property tax rate is increased by one mill -- the tax rate per $1,000 of property value -- there is a concordant drop in annual real per capita commercial and industrial building permits by about $39.37. This then creates a boomerang effect - a decline in investment results in a lower stock of capital and a corresponding reduction in property and income tax bases in the future. With higher tax rates eroding tax bases, revenues thus cannot keep pace proportionately. Taxes on residential and non-residential property in Alberta make up about half of the total revenues for the province's municipalities. Property taxes are vital for financing local public services. While this study shows that spending more on municipal services does not significantly affect business investment, or business decisions on where to locate, increasing non-residential property taxes has a negative impact on such decisions and investments. Policy-makers in other Alberta municipalities observing the effects of the City of Calgary's recent hike in non-residential property taxes in the midst of an economic downturn should take into account the potential adverse effects on local economic growth and their municipal revenue bases. This study will contribute to informed policy-making in the province's municipalities. [ABSTRACT FROM AUTHOR]

Improving access to domestic and international markets can create large economic benefits. Multimodal infrastructure corridors of road, rail, utilities and communications can improve accessibility by reducing interprovincial and international trade costs. Depending on the geographical area they serve and the modes of transport and types of connections they promote, infrastructure corridors can create trade-offs and synergies between different kinds of economic, social, and environmental outcomes. Yet the implied effects can vary across different regions, population segments and industries. A complete review of a proposed infrastructure corridor package involves a rigorous analysis of all of these potential effects. In this paper, we focus more specifically on quantifying potential gains from reductions in trade costs on Alberta's economy and identify the importance of improved access to lower cost transportation options like rail for select commodities. We find that lowering trade costs substantially increases Alberta's real GDP through its effect on international and interprovincial trade flows. Although interprovincial tariffs on domestic goods are forbidden by the Canadian Constitution, the economic effect of internal non-tariff trade barriers is substantial. Albrecht and Tombe (2016) show that eliminating these interprovincial trade costs would increase Canada's GDP between three to seven per cent. These barriers represent additional costs on Canadian firms and adversely affect their competitiveness in domestic and international markets. High interprovincial trade costs may also pose an additional barrier to entry for foreign firms otherwise willing to enter the Canadian market. As a result of this, Canadian firms end up producing at a less efficient scale and pass the cost of these inefficiencies to consumers. Interprovincial trade costs therefore hurt both producers and consumers. Gains from improved infrastructure are also amplified by the interconnected nature of industries. Output of one industry is often an input for another industry. Shipments cross provincial and national borders as part of these supply-chain relationships which allow for more efficient production but at the same time create additional trade costs on producers. Infrastructure corridors provide one option to lower these trade costs by increasing transportation capacity, creating savings in travel time and distance, creating better quality physical transport infrastructure, simplifying the regulatory and legislative differences across provinces and territories, and improving access to information, to name a few. To quantify the potential effect of increased transportation infrastructure on trade costs, we combine rich data on interprovincial trade flows and shipment-level information on volumes, values, and transportation costs by mode. We empirically estimate the potential for increased rail shipment capacity on shipment costs between various internal trade pairs within Canada. Two key results stand out. First, we find that while distance is an important factor, a higher share of shipments by rail is associated with markedly lower trade costs. Specifically, we find a 10 percentage point increase in the share of value shipped by rail is associated with a 3.2 per cent lower aggregate cost of trade after controlling for commodity, source, and destination of shipments. Second, we also find important differences in the relevance of rail across commodities. We find larger trade costs reductions for coal, mineral products, and fuel oils. The focus on rail is an important one for Alberta since coastal or canal shipping is not a feasible alternative. As a natural next step, we then evaluate the potential gains to Alberta's economy from increased access to internal and international markets that improved infrastructure might provide. We find that lowering trade costs substantially increases Alberta's real GDP through its effect on international and interprovincial trade flows, in both the short run and the long run. The results show that, in the short run, lower trade costs by one per cent increases real GDP by roughly 0.8 per cent and lower trade costs by five per cent increases real GDP by roughly 4.4 per cent. These correspond to approximately $3 billion to $15 billion per year in additional economic activity in Alberta. We find larger gains in the long-run, equivalent to roughly a one per cent increase in real GDP for each one per cent reduction in trade costs. Gains from lower trade costs come primarily through lower cost access to imported inputs and final goods. There are also gains from increased demand by purchases outside Alberta on goods produced by Albertans. This increases real incomes and productivity, which is captured by the increase in real GDP. The combined results of lower import costs and an increase in GDP imply an about six per cent long-run increase in real personal income, equal to an extra $6,423 annually for the median Alberta family. This is a level effect and represents a persistent increase, not a one-time bump. That is, GDP is permanently higher and by extension, annual personal incomes are also permanently higher. Although we don't explore the infrastructure investment options for lowering the trade costs by these levels, the corresponding impacts on real GDP of doing so indicate how high the costs of expanding infrastructure could be while still yielding net benefits to Alberta. An infrastructure corridor could facilitate the expansion of Canada's rail shipment capacity. While many transportation modes could expand within such a corridor -- including roads, pipelines, transmission lines and so on -- our data allow us to specifically quantify the extent to which Alberta's economy could gain from more access to lower cost shipment options like rail. Rail shipment costs are lower than truck transportation when distances are sufficiently long. We find that each one percentage point increase in the share of non-air trade sent by rail is associated with a 0.32 per cent lower trade cost. This implies that if the share shipped by rail increased by 10 percentage points, then trade costs to and from Alberta would, on average, decline by 3.2 per cent. Expanding the rail capacity is particularly valuable for Alberta, since increasing the share of exports shipped by rail by ten 10 percentage points may increase Alberta's GDP by nearly 1.5 per cent in the short-run and over 2.5 per cent in the long-run -- equivalent to over $9 billion per year in economic activity. This is a relatively large increase in economic productivity -- equivalent to roughly $4,500 per household, on average, per year -- and, in addition, it abstracts from other potential sources of gains, such as increased labour migration into the province. The combined increase in GDP and lower import costs from increased rail penetration imply an increase in real personal income. It is more modest here at approximately 3.3 per cent (rather than six per cent), but still very significant and equal to an extra $3,419 annually for the median Alberta family. As before, it is important to note that this is a level effect and represents a persistent increase and permanently higher annual GDP and annual personal incomes. Our analysis is only a first step and explores only one potential effect of expanding infrastructure capacity. Overall, the potential for positive economic effects from multimodal infrastructure corridors is compelling and warrants additional investigation. Governments can play a role by supporting expanded research activities into the feasibility and potential benefits of dedicated multimodal infrastructure corridors in Canada. In addition, though we made progress using detailed shipment-level data, there are shortcomings in coverage and detail that constrain the scope for potential research. Governments should therefore increase the collection and reporting of relevant data on internal trade to facilitate research into the costs producers and consumers face, and the potential gains from internal trade liberalization. Despite the value of expanding research capacity, our analysis points clearly towards the potential gains from internal trade liberalization. Expanded transportation infrastructure capacity can lower trade costs, and therefore governments hoping to expand internal trade should explore means of increasing such capacity, especially the possibility of increased rail shipment capacity. [ABSTRACT FROM AUTHOR]

Seventy per cent of Canada's beef production capacity is located in just two meat plants in Alberta. This is one of the most obvious examples of the high concentration in Canada's food-production sector. Industry has naturally tended to larger but fewer facilities, due to the economic imperatives of economies of scale. However, the COVID-19 pandemic has revealed the risks to Canada's food supply by having so much food production located in so few places. The work done at foodprocessing facilities entails large numbers of employees, often working shoulder to shoulder. There is a clear potential for a disease to spread quickly, leading to a disruption in food output, or even a complete shutdown of a critical facility. This is what happened during the COVID-19 pandemic. It could easily happen again. Changing the structure of the Canadian food industry is one option to better insulate the industry against pandemic in the future, creating a greater number of smallerscale facilities scattered in more places across the country. The question is whether Canadians are willing to pay for such changes. That payment could come through taxes, to fund the significant incentives required to entice food producers to move away from the larger and fewer facilities that provide them greater profits through economies of scale, or it could be in the form of higher food prices, as less efficient and more expensive models of production lead to more expensive products. It may still be possible, however, for Canadians to enjoy a secure supply of the more affordable food provided by the highly concentrated model without having to pay for it, if facilities can be adapted to lower the risk of outbreaks. Mechanization can reduce the dependency on large numbers of workers, while those workers that remain could operate within more stringent safety measures. Safer plant design, more mechanization and fewer workers would, of course, come at some short-term cost, both in terms of the capital outlays required by facility owners and in terms of jobs lost. But in the long term, the result could well be a continued supply of secure, cheap food for Canadians. With that outcome evidently being what Canadians value most of all, the future of Canada's food supply is likely to be safer but as concentrated as ever. [ABSTRACT FROM AUTHOR]

Any well-functioning federation is bound by shared values and by economic arrangements that ensure regions are better off inside the federation than outside it. But conflicts in both areas are inevitable, especially in a country as diverse as Canada. This paper focuses on the conflict within the Canadian federation involving the sharing of income and wealth, most often through federal revenue, spending and transfer policies. Many in the West, including more than 60 per cent of Alberta and Saskatchewan residents, believe they do not get a fair share from Confederation. A close look at the regional distribution of federal fiscal balances from 1961-2018 reveals very large differences. Alberta, B.C. and Ontario are the only net contributors over this period. Ontario was the largest net contributor at more than $768 billion, with Alberta coming in at $631 billion and B.C. at $138 billion. Accounting for population size, Alberta's contribution was by far the largest in per capita terms at over $3,700 per person per year over the 1961-2018 period and over $5,000 per person per year in recent decades. Quebec was the largest beneficiary with net inflows of nearly $500 billion. Outside the territories, Prince Edward Island saw the largest net fiscal benefit of over $8,600 per person year since 2010. One result is over $1.5 trillion in aggregate demand has been directly redistributed from regions with positive federal fiscal balances to those with negative balances. Over the period studied, net transfers to the Atlantic Provinces averaged over 20 per cent of their personal income. For the other net recipient regions, they have averaged between nine per cent and four per cent. For the net contributor regions, the average net outflows amount to two percent of personal income in the case of B.C., three per cent in the case of Ontario and 10 per cent for Alberta. Federal fiscal policy also affects trade and labour flows. Regions with large fiscal inflows tend to have large trade deficits and larger populations than would otherwise be the case. The opposite tends to hold for regions with large fiscal outflows. In that case of Alberta, for example, recent analysis suggests net federal fiscal outflows lowers its real incomes by over eight per cent and its population by about 12 per cent. As income shifts to lower productivity regions, the national impact may be a reduction of 0.8 per cent in Canada's real GDP. Numerous factors, including per capita incomes, demography, and program designs, shape the regional distribution of federal fiscal balances. The largest net recipient provinces tend to gain under all or most of the major fiscal policy elements (including various taxes, equalization, OAS, EI, and federal purchases). The net contributor regions, on the other hand, tend to make net contributions under all or most elements. For example, all 10 policy areas result in net outflows from Alberta. The comparable numbers are seven for British Columbia and six for Ontario. Much of this variation is due to differences in average incomes and demographics. Alberta, for example, has a higher level of income and therefore consumption spending, which leads to higher GST payments. Its younger population also leads to lower average OAS benefits flowing to residents within the province. Finally, we employ measures of horizontal and vertical equity to evaluate questions of fairness. Specifically, we explore whether regions with similar per capita market incomes have similar net federal fiscal balances. In general, we find a reasonable degree of equity observed over the almost seven decades but with some outliers. The most obvious is Alberta with a much higher net federal fiscal contribution than would be expected given its relative income position, although a good part of this is primarily during the 1970s and 1980s and associated with federal energy policies. We show that after 2000, Alberta's relative per capita net fiscal contribution is in line with where one would predict given its relative per capital market income. Smaller deviations can be observed for Nova Scotia and Manitoba with larger net fiscal benefits than one would expect and, in the case of Saskatchewan, smaller net fiscal benefits than expected based on equity considerations. Turning to stabilization objectives, the analysis indicates that, except for Alberta, federal fiscal policies have tended to provide an important measure of regional economic stabilization, with the largest benefits for Ontario, Nova Scotia, New Brunswick, Newfoundland, Quebec and Manitoba. The picture for provincial revenue stabilization is somewhat better for most provinces but worse for the provinces of Alberta, Saskatchewan, and Newfoundland and Labrador. The need for reforms in this area is apparent. Federal fiscal policies since 1961 have redistributed substantial amounts of income, employment and population across the regions. Whatever one thinks about the underlying merits of the various programs leading to this redistribution, understanding the data and mechanisms is important. Our analysis aims to support informed conversations as the regions deliberate over fiscal arrangements within Confederation. [ABSTRACT FROM AUTHOR]

Short of imposing a sales tax, and hampered by low energy revenues, the Alberta government has few options for reducing expenditures and making a dent in the province's $8.8-billion deficit. The most obvious area for the new government to cut would therefore be the $21.6 billion allocated in 2018 to public sector salaries, wages and benefits. That figure amounts to 38.4 per cent of the total expenditures of $56.2 billion, and translates to 210,104 full-time equivalent employees being paid approximately $102,773 each in annual salary. Any cuts must be made judiciously, taking into account the fact that services must be maintained at certain levels. Also, wage rollbacks and hiring freezes could create a sudden flight of talented people out of the public service and into the private sector, as happened during similar cuts in the 1990s. However, when compensation levels are too high, Albertans end up paying more for services, so a careful balance must be achieved. Finding that balance is extremely important for policy purposes and involves detailed comparisons with private sector remuneration. This paper examines wage premiums - the difference in this case in wages between public and private sector employees - in administrative and nonadministrative jobs at different levels of the public sector and various sectors of private industry. The comparisons can then be used to determine how potential savings could be realized through cuts to public sector compensation. The public sector generally pays better than the private sector in Alberta, although the high-paying oil and gas industry in the province means the wage gap is not radically large and is even negative in some cases. Ideally, a 3.7-per-cent decrease across-the-board in total public sector compensation would be possible without jeopardizing the delivery of government services or risking a public service brain drain. The Alberta government would then save $799.2 million, or approximately 9.1 per cent of the projected $8.8-billion deficit. However, the reality clashes with the ideal. A 3.7-per-cent cut across-the-board would lead to overpayment of those at the bottom of the pay scale and impose a heavy wage penalty on those employees at the top, who would see their salaries reduced by a proportionately larger amount. This would further encourage the exodus of talented, skilled, well-paid people from the public service and compromise the integrity of services provided to Albertans. Moreover, the ripple effects of any cuts must be taken into careful consideration. These include political implications, macroeconomic impacts and effects on the private sector labour market. Cuts to the public sector never occur in a vacuum and their effects on the general provincial economy, overall employment picture, tax revenues and economic growth are just some of the metrics which must be factored into any policy decision. [ABSTRACT FROM AUTHOR]

This paper provides an empirical estimation of the effects of provincial corporate tax rates on economic growth using annual panel data from Canadian provinces over the period 1981-2016. Our empirical approach enables us to investigate the long-run relationship between provincial tax rates and economic growth by allowing short-run dynamics to vary across provinces. We find that a reduction in the provincial CIT rate has a statistically significant positive effect on economic growth rate. Based on our preferred specification of the econometric model, a one percentage-point reduction in a provincial government's statutory CIT rate increases the growth rate by 0.12 percentage points four years after the initial CIT rate cut and increases real per capita GDP by 1.2 per cent in the long run. The results are robust to various sensitivity checks. These results are consistent with the empirical estimates in our previous study of Ferede and Dahlby (2012), who used a different econometric methodology and sample period. They are also broadly consistent with the findings of recent empirical studies of the impact of corporate income taxes on the economic performance of U.S. states. In a companion communiqué, we use the econometric results to estimate the increase in Alberta's growth rate from the Alberta government's announced reduction in the provincial CIT rate from 12 per cent in 2018 to eight per cent in 2022. [ABSTRACT FROM AUTHOR]

The federal government's decision to impose a minimum national price on carbon emissions has the potential to make certain businesses in the country less competitive. Specifically, there are emissions-intensive and trade-exposed industries across Canada that compete against producers from other jurisdictions where governments do not put a price on carbon. For these industries, the obligation to pay a carbon price creates a competitive disadvantage. Specifically, these businesses will face higher costs and may encounter a loss of market share to international competitors from jurisdictions that lack the same emission-control measures. That not only hurts Canadian businesses, it could also negate any emissions reductions that carbon pricing in Canada achieves on a global scale. The federal government has opted to protect such emissions-intensive, tradeexposed businesses using subsidies called output-based allocations (OBAs). This is the same system that Alberta is introducing through its forthcoming Carbon Competiveness Regulation. It also shares certain similarities with cap-and-trade programs, such as those in Ontario and Quebec, which provide free allocations of emissions permits to certain firms. OBAs are a desirable complementary policy to a carbon price as they maintain the incentive for producers to invest in production methods and facilities that are less emissions intensive. So while producers are still, nevertheless, subsidized to offset the tax burden of the carbon price, they will, under an OBA system, see greater benefits the more they work to reduce their emissions intensity. Still, to function most effectively and most efficiently, an OBA policy should follow certain key principles. The most critical principle in the design of an OBA policy is ensuring that OBAs are allocated to facilities independent of their individual emission levels, and allocated equally (on a per unit basis) to facilities producing the same product. One of the major flaws with Alberta's current Specified Gas Emitters Regulation (SGER) is that it does not follow this principle. Rather, subsidies under SGER are allocated based on a facility's historical emissions intensity. As a result, more generous subsidies are given to those facilities that are "dirtier" (that is, those with higher emissions intensities) than to "cleaner" facilities with lower emission intensities. Secondly, it is important for a well-designed OBA policy to have transparent costs. Including a clear accounting of OBAs in government finance reports will ensure the public is fully aware of the revenues being directed to the subsidies. Thirdly, OBAs for different facilities are best allocated using a classification system based on the product being produced, and not using more conventional industry-classification codes. Commonly used conventional industry classifications--for example, conventional oil and natural gas extraction--group together facilities that produce distinct products and compete in different markets. Consequently, this classification will not recognize the various levels of emissions intensity and trade exposure within an industry. This will result in some facilities receiving more OBAs than they should and others receiving less than they should. Finally, a well-designed OBA system should seek to be as administratively efficient as possible with minimal implementation costs imposed on government and businesses. It is important to recognize that the federal carbon price and OBAs are a new policy and that many large emitting facilities have been making investment decisions based on a previous regulatory environment. Therefore, a compromise approach may be to initially provide an output subsidy based on a facility's past emissions intensity (as Alberta has historically done under its SGER system) and then to transition gradually to the optimal OBA system over time. [ABSTRACT FROM AUTHOR]

For a century, oil and gas wells have been Alberta's economic pride. That there could be a hidden cost in maintaining these wells past their productive life is difficult to imagine, much less accept. The financial burden of abandoning a well officially is no doubt why Alberta producers delay doing so as long as possible. Turning a blind eye, they routinely keep non-producing wells in a state of "inactive" suspension and refuse to rule out the possibility that someday oil prices or technology, or both, will change significantly enough to make those wells profitable again. In most cases that will never happen, but the province plays along anyway: It enforces no limit on how long a well can be kept inactive before it must be reactivated or abandoned. While a convenience for well owners, there is no benefit to Albertans. They are exposed to the risk of thousands of inactive wells becoming a hazardous threat to public safety. The longer a well is inactive, the higher the likelihood that its owner may no longer be around to arrange and pay for its official abandonment, a process whereby wells are permanently sealed using regulated methods that insure they cause no environmental damage. Oil and gas producers come and go. Periodic price shocks, like the one that recently ravaged the sector, drive companies into insolvency. When the owner of an inactive well is no longer around to pay for its abandonment costs, the well becomes orphaned. Alberta's permissive policies have led to a situation where there are now more than 80,000 inactive wells in the province. Some have been inactive for decades. If the possibility existed that they could eventually become economical, those wells might be considered a blessing. However, the simulations that model scenarios where prices are substantially higher or where production technology is significantly improved, clearly show that the vast majority of these wells will never be reactivated, no matter how dramatically conditions improve. If oil prices rise 200 per cent, the modeling shows that just 12 per cent of oil wells become reactivated, and just seven per cent of gas wells. When the model tests to see what happens when a technological innovation improves so that the remaining oil or gas in a well that cannot be recovered is suddenly made recoverable (i.e., a 514 per cent increase in oil reserves), just 10 per cent of inactive oil wells are reactivated, and just six per cent of gas wells. The most effective way to reduce the number of inactive wells, the model finds, is by reducing the cost of their abandonment. With a 25 per cent reduction in abandonment costs, the pool of inactive wells shrinks by 20 per cent for both oil and gas, while the number of abandoned wells increases by nearly 50 per cent for both oil and gas. In all cases, the amount of oil and gas production that would change one way or the other -- either by a minimal level of reactivation or a significant wave of abandonment -- is marginal and not of meaningful benefit to Albertans. Creating an industry fund that takes responsibility for a well that has been orphaned has been Alberta's approach to managing all its orphan wells. The deemed liability of 80,000 inactive wells is so large presently that the fund would be insufficient to cover the costs. The only way to prevent the province's vast and growing number of inactive wells from remaining an ongoing risk to the public is by limiting the ability of owners to keep wells inactive as long as they like. Policies should recognize that most inactive wells will likely never produce oil or gas again. [ABSTRACT FROM AUTHOR]

The article discusses a report commissioned by Alberta Municipalities, focusing on the challenges faced by local governments in the province. The report provides conceptual tools, principles, and restructuring suggestions to address issues like slower growth, constrained finances, and the impact of COVID-19 pandemic. It offers recommendations for improving local governance in metropolitan areas, regions outside metropolitan areas, and small, remote urban municipalities.

Between 2011 and 2021, a significant number of Alberta's towns, villages and rural areas experienced population stagnation or decline, while the cities and many nearby municipalities continued to grow. As smaller municipalities' populations shrink or fail to grow, they also become disproportionately older--trends that can threaten tax bases and community involvement. This demographic trend has two main causes. First, Alberta's cities offer increasing employment opportunities in the rapidly growing service sector, while many smaller communities have seen declines in employment in the resource and manufacturing sectors important to their economies and struggle to attract new industries. Thus, as in the rest of the country, towns, villages and municipal districts lose residents, especially young people, to where the jobs are. Second, while the province's birth rate continues to decline, and overall growth has come to depend almost as much on international immigration as on natural growth, newcomers to the province tend to prefer the major urban areas. Following Alberta's boom years, the last decade saw decreased migration from other provinces into Alberta and a declining fertility rate. The province's economy is now on the mend, with the highest employment rate in Canada; however, the once-high birth rates and elevated rates of internal migration from other provinces are unlikely to return. The pace of growth will depend on Alberta's ability to attract a healthy share of the many new immigrants Canada intends to welcome over the decade ahead. Alberta's smaller municipalities, in turn, need strategies to attract immigrants. For this, they will require employment opportunities and dedicated resources to assist newcomers. Manitoba has had success in doing this and may offer Alberta an example of how to proceed. Some emerging economic and social trends may work to the benefit of smaller municipalities. For example, industries that require large amounts of land or significant storage facilities often opt to locate outside the big cities. New developments in agriculture and energy, especially in geothermal and hydrogen, may open new opportunities for growth in towns and rural areas. While Alberta is unlikely to replicate B.C.'s success in attracting retirees, the popularity of outdoor recreation provides a chance for many municipalities to attract new residents. Although changes in work practices brought about by the COVID-19 pandemic make future trends difficult to predict, as people continue to work at a distance from their places of employment, it is possible that Alberta could see a demographic shift away from the urban centres. Smaller municipalities may attract both city dwellers and immigrants seeking the benefits of life away from the cities, including bigger and less costly properties. Nevertheless, slower growth and population aging are likely to continue, and communities must use the coming years to prepare, putting in place necessary services, especially those related to health care. This is especially vital in communities far from the urban centres. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic and the policy measures adopted in response have disproportionately impacted persons with disabilities. Given the increased risk of COVID-19 and the resulting health impact for this vulnerable population, governments must engage stakeholders such as community organizations to co-design pandemic response plans. Collaboration with key stakeholders could assist in transforming services in crucial areas, such as health, where emergency policies are organized around the needs of persons with disabilities. Unfortunately, there is inadequate data collection and insufficient emergency preparedness planning and responses for persons with disabilities. This knowledge gap means consideration of health and social policy implications specific to the needs and experiences of persons with disabilities is lacking. This research study aimed to evaluate strategies through which decision-makers could engage stakeholders, such as community organizations, to co-design disability-inclusive policy responses during the COVID-19 outbreak in Alberta. Through interviews, the study focused on understanding the level of engagement, barriers to community organizations' engagement and participatory policy aspects best suited for co-design. Key findings from the research highlighted the participants' viewpoints on barriers, facilitators, preferences and other critical approaches through which decision-makers engage with community organizations. Results highlighted that top-down and tokenistic consultation approaches limit community organizations' engagement in designing pandemic planning and response. Inaccessible ways of consultation and navigation barriers exacerbate obstacles to stakeholder engagement. Stakeholder engagement in data surveillance efforts was unclear, and the impact assessment process needs strengthening. The study results also showed that having COVID-19 disability advisory groups at the federal and provincial levels are a robust mechanism to connect communities with the government. However, the process of influencing government decision-making and policy actions needs to be openly communicated to civil society. Solutions are achievable. Political commitment, long-term investments and an accessible engagement environment would significantly improve stakeholder engagement. Governments must transition from traditional consultative methods to sustainable engagement practices while sharing how public policies reflect communities' input. Financial investments must create an accessible consultation environment for designing participatory pandemic policies that reflect the priorities of persons with disabilities. Some key recommendations emerging from our analysis include: * Invest financially to create an accessible consultation environment for codesigning policies. * Consult stakeholders to develop new regulations or adjust existing ones to create inclusive pandemic response plans. * Inform how pandemic response plans include and address community inputs and concerns in a transparent manner. * Professionally contract stakeholders to co-design and communicate pandemic information. * Engage with multiple stakeholders to evaluate the impact of pandemic response plans. [ABSTRACT FROM AUTHOR]

Canada's federal carbon tax currently applies in Alberta, Saskatchewan, Manitoba and Ontario. Farmers in these provinces lack consistency on the tax, which is differentially applied to agricultural fuels. They must navigate between distinct sets of rules depending on the type of fuels they're using and what those fuels are used for. Some fuels are eligible to be fully exempt from the carbon tax; others may be allowed a partial exemption, and still others may force farmers to face the full amount of the carbon tax. The most significant agricultural fuel sources facing the full amount of the carbon tax are natural gas and propane used for grain and oilseed drying and for the heating of barns and other farm buildings. The burden of these tax payments on farmers is unclear. Agriculture and Agri-Food Canada reports carbon tax cost estimates for grain and oilseed drying that range from an average of $210 per farm in Alberta to $774 per farm in Saskatchewan. Individual farmers, in contrast, have reported carbon tax costs of up to $10,000. Agriculture's sector-level emissions and trade flows are comparable to those of many industries in Canada that meet the criteria for being labelled an emissionsintensive and trade-exposed (EITE) industry. EITE industries are typically eligible to receive carbon pricing support on all priced emissions as part of either the federal government's output-based pricing system (OBPS) or similar provincial government programs. Agriculture is typically excluded from these programs because of the thousands of small producers in the sector, most of whom remain below the minimum emissions thresholds required for participation. As a result of this exclusion, agricultural subsectors have generally not been evaluated to see whether they meet EITE criteria. With all federal parties in favour of additional carbon pricing support for farmers, it is likely that support will soon be expanded to additional fuel uses. Future support to the agriculture industry is best offered via a mechanism that maintains the full incentive of the carbon tax. Two options that satisfy this objective are either a lump sum rebate to farmers or an output-based rebate system specific to agriculture. With both options it is important that any rebate amount is divorced from emissions and fuel use, A third option, which does not maintain the incentive of the carbon tax, is to expand farm-fuel exemptions. All of these options come with advantages and disadvantages, which would need to be carefully weighed. It would also be informative to complete an EITE assessment for agriculture that is based on all of the sector's combustion emissions being subject to the carbon tax. This would help to inform the potential impact of the carbon tax on agricultural production costs, farm profitability and the global competitiveness of Canada's farmers. Such an assessment would provide important insights on how to best support Canada's agricultural competitiveness without undermining its overall emissions reduction plan. [ABSTRACT FROM AUTHOR]

In roughly two years, and well ahead of schedule, Alberta is expected to have completely transformed its electrical grid from being largely powered by coal to instead being powered by natural gas, hydroelectricity, wind and solar. By 2030, however, it is likely that another fuel source will compete with natural gas as a major part of Alberta’s power grid: namely hydrogen. Fully decarbonizing Alberta’s electric power sector as Canada works to achieve its goal of net-zero greenhouse gas emissions will be challenging due to the lack of significant hydroelectric or any nuclear power in the province. However, Alberta has many advantages that make hydrogen feasible as a pathway to decarbonizing its power grid. First, the steam and combustion turbines that are powered by natural gas today to produce electricity in Alberta can be adapted to use hydrogen. Second, Alberta has vast amounts of natural gas that can be used to produce hydrogen, and ample geology for underground carbon capture and storage for the greenhouse gases emitted in producing hydrogen. And third, in periods where the province’s renewable energy sources produce excess electricity, that power can be used to produce hydrogen, which can be stored for later use when renewable energy is less available. These advantages, combined with certain federal and provincial policies, position hydrogen to play a significant role, providing low-emission firm power when variable solar and wind power are unable to meet the province’s power demands. Given the limits of battery storage capacity, cost, and technology beyond hourly & possibly overnight use, storing hydrogen for multi-hour, -day and seasonal storage in underground, salt caverns appears to be a practical alternative for Alberta. Absent government policy, hydrogen-based power costs would likely remain uncompetitive in Western Canada, where natural gas is abundant and cheap. However, Alberta’s climate policy, with its output-based allocations regime, is set to combine with the federal government’s plan to raise the carbon price to $170 per tonne to make all forms of hydrogen-based power production more cost-effective than natural gas in the province after 2030. The potential for Alberta to transition to a reliable, low-carbon electricity grid will require that any future adjustments to the output-based allocations regime consider the impact on the economics of hydrogen investment and production. The government should also ensure that Alberta reserves its salt caverns for eventual use as hydrogen storage and that any newly installed turbines are capable of being easily retrofitted to use hydrogen as fuel. Hydrogen is an opportunity to bridge today’s system, based on fossil fuels, to tomorrow’s net-zero fuels and technologies. It is an opportunity that Alberta is well-positioned to seize. [ABSTRACT FROM AUTHOR]

Innovative clean technologies are part of the solution to reducing greenhouse gas emissions in both Canada and Alberta, particularly in the latter's petroleum industry. However, while governments and their agencies may provide policies and financial support, proponents of cleantech still face numerous barriers to full deployment and commercialization. To navigate the innovation and funding process successfully, it's crucial for proponents to know the factors that impact the effective commercialization of cleantech innovations. They must also understand the role policies play in either supporting or hindering favourable outcomes. Start-ups require support that focuses on innovation with a strong commercial potential, while scale-ups need to rely on proven strengths if they want to obtain private sector support for growth. Granting agencies and governments have an important role in supporting innovation. More clearly demonstrating and communicating their due diligence around funding decisions justifies expenditure of public money. Moreover, their decisions can and should send a signal to private sector financiers whether a certain innovation represents a good investment. Due diligence equally works to signal financiers when a specific project does not merit investment. The need to find innovative solutions to reducing emissions may seem pressing, but the race should not be to the swiftest. De-risking for commercialization means that a proponent must firmly establish that the technology works, is economically feasible and can attain sufficient market penetration for a return on investment to the prospective financier, as well as provide socio-economic and environmental benefits. Trying to simplify or speed up the stages of innovation and the funding process means proponents can be exposed to incompletely proven and riskier technologies, which can damage credibility with financiers. A balance must be struck between the financier's wish to expedite the de-risking process and the need to avoid inadequate de-risking which can jeopardize the project and its funding at a later stage. Distinctions must also be made between firm-level support, which allows a company more flexibility in pursuing or cancelling projects, and project-level supports, in which the funding is specifically targeted for use in the development of a particular innovation and has a defined end point. Cleantech innovation in Alberta faces added hurdles associated with a post-2014 economic downturn that has reduced some firms' cash flows and has made firms, as well as government, less inclined to support cleantech innovations. This situation makes it crucial for innovation proponents seeking funding to distinguish clearly between a proposed project's economic and environmental benefits. A technology whose primary benefit is reducing emissions is susceptible to changes in emissions pricing or regulations, and thus is not an attractive candidate for investors. An innovation that primarily reduces costs but offers a secondary environmental benefit is a better investment because it is much less sensitive to policy changes. Alberta innovators must make sure they emphasize the economic benefits, and do their due diligence and careful de-risking if they want to surmount the added obstacles. Cleantech innovation doesn't have to become a casualty of the provincial economic environment if the proper steps in the innovative and fiscal processes are conscientiously followed. [ABSTRACT FROM AUTHOR]

The article offers information on a study comparing public and private sector wages in Alberta,U.S. It highlighting the variability of public sector wage premiums across provinces; the variation of wage premiums across different industries in Alberta; the distribution of wage premiums based on earnings levels in the public sector; and the potential impacts of eliminating wage premiums on the government's deficit.

The Alberta government is in the midst of reviewing its Persons with Developmental Disabilities (PDD) program, which funds more than 12,000 adults and has a budget totalling almost $1 billion. Despite numerous funding increases over the years, program beneficiaries, their families, advocates and service providers feel the PDD program still has many challenges to overcome. The review and its aftermath offer a timely occasion for all these groups to offer their input and make recommendations to help influence policy reform. The PDD program helps its beneficiaries to live at home, pursue employment opportunities, enjoy community access and receive specialized services from about 160 non-profit and for-profit community disability service providers. The program's goal is to allow Albertans with developmental disabilities to live as independently and inclusively as possible in their communities. Like most public policies and programs, government responses toward Albertans with developmental disabilities have evolved with shifts in societal attitudes, economic conditions, ideological positions and political considerations. Since the province's inception in 1905, developmental disability structures and supports have reflected Alberta's sometimes authoritarian and socially conservative leanings, such as in its dark history of eugenics, and at other times its progressive tendencies, evident in innovations such as Canada's earliest schools for children with disabilities and the assured income program for adults with developmental disabilities. Over the past 114 years, there have been four transformative shifts in policies and services for Albertans with developmental disabilities. During the early part of the 20th century, when eugenics theory and the medical model of disability prevailed, Albertans with developmental disabilities were confined to government-run institutions where legislation allowed many so-called "feeble-minded" individuals to be forcibly sterilized well into the 1960s. In the middle of the century, the deinstitutionalization movement's demands for community-based care led to the emergence of non-profit service providers to deliver publicly-funded disability services in local communities. Subsequently, rise in the social model of disability, which conceptualizes disability as society's failure to respond to individual limitations, paved the path for a rights-based conversation and spurred the development of more inclusive models of support. While the first three transformations were shaped by societal changes in views toward disability, the most recent one rests on a broader shift in views about the role of government in society, The onset of neoliberal ideas and reforms in the 1980s, favouring less government intervention, greater individual responsibility and market-inspired designs for public programs, accelerated the privatization of services, gave rise to individualized and family managed funding models and heightened government's focus on promoting efficiency, competition and accountability. The PDD program is a legacy of this complex and sometimes messy evolution. At any given time, a diverse array of competing underpinnings coexisted in Alberta's developmental disability field to shape policy responses, and they continue to do so in profound ways. The current program review is an important opportunity for all groups including people with developmental disabilities, their families and advocates, the agencies that provide daily supports, program administrators and members of Alberta's newly elected government, to bring in alternative perspectives and propose new solutions. Once existing guidelines or new recommendations become formalized, the window to influence change is lost. Thus, it is important to keep discussions open until robust solutions are found that are acceptable to as many stakeholders as possible. The history of this policy field shows us that success is more likely when there is alignment of goals across all vested parties, and when proposed solutions build on shared beliefs and can leverage existing policy mechanisms, tools or structures provided these are viewed as legitimate and acceptable to all stakeholders. Preliminary highlights of the findings from the review suggest that there are many areas of concern related to the programs scope, structure, processes and outcomes. As Alberta faces new economic and social realities and uncertain global influences, the review offers a timely opportunity for a rejuvenated discussion about how to shape this policy field for the 21st century. [ABSTRACT FROM AUTHOR]

The Alberta government has been spending a lot of money lately on infrastructure, possibly partly because it was under the impression that Alberta suffered an infrastructure deficit relative to other provinces. That impression was provided in a 2015 capital-planning report by former Bank of Canada governor David Dodge, commissioned by the NDP government. Dodge also suggested that the province had ample room to borrow aggressively to catch up to the five other provinces to which he had compared Alberta (namely: B.C., Saskatchewan, Manitoba, Ontario and Quebec). Unfortunately, it appears that impression was inaccurate. [ABSTRACT FROM AUTHOR]

Alberta ended its regional planning commissions in 1996. They were replaced by voluntary inter-municipal negotiation, but this has raised concerns about adverse effects on land use. Pressure to terminate the commissions came largely from the rural municipalities. Some of them felt the commissions retarded their economic development. They believed that in a less restrictive planning environment, they would be able to attract a greater share of development, especially business. This study assesses the consequences of that change. Alberta's rapid growth over much of the post-1995 period affords an exceptional opportunity to search for noticeable changes in the urban-rural tax base and land-use patterns and balance. Municipal tax base is measured, and land use reflected, by property values. Those values are taken to be the provincially determined equalized assessments used for property tax purposes. Fortunately, these provide a reliable and consistent measure of property values across municipalities and over time for properties of different kinds. For the types of properties of prime interest for this analysis, residential and unregulated business property, equalized assessments approximate 100 per cent of market value. Residential property represents over 60 per cent of total provincial equalized assessments and business property about 20 per cent. In cities, the percentages are 70 per cent and 24 per cent; residential and business properties represent almost all the taxable property. The focus of the analysis is whether, during the past two decades, the shares of residential and/or business property have shifted from cities to rural municipalities. The possibility of shifting city-rural tax base/land-use patterns is explored from four perspectives. This report examines trends in the distribution of residential and business equalized assessments among the types of municipalities in the province. To obtain a better perspective in specific cases, the city-rural split of assessments is reported for the Edmonton and Calgary metropolitan areas and nine cities between 1997 and 2014. Examining the movements in the ratios of business to residential assessments of 31 city and rural municipalities provides further insight. The final approach is to simply review changes in the location of population and dwellings between cities and rural areas. There has been no notable or general shift of land development away from cities and to rural areas. Despite the rapid growth and the devolved planning environment, the cityversus- rural distribution of tax base and land use has, overall, been remarkably constant although development was definitely not uniform across Alberta cities. If anything, the cities' shares of residential development may have increased while their shares of business development have been more uneven. For both types of property, however, the development patterns have varied across both city and rural municipalities. Concern that the changed planning environment might have shifted property development towards the rural municipalities does not appear to have been justified. Whether this development met other planning criteria is not explored here. This analysis encourages more detailed investigations using alternative indicators. [ABSTRACT FROM AUTHOR]

The article provides information on the consumption and production of greenhouse gas emission for Saskatchewan, during the production process of final good and services. Topics discussed includes Investment in greenhouse gas emission, Environmental condition of Alberta and natural gas of Alberta.

Colleges and universities in Alberta feel the booms and busts of the oil-driven economy, too. When oil prices are high, and oil exploration and new project construction are booming, post-secondary institutions will often find themselves unable to keep up with the demand for the education and skills-training programs that employers are clamouring for, with fewer spots available for students than there are students eager to fill them. When oil prices drop, and exploration and construction dry up, the schools face the opposite problem: They have too much capacity in the kinds of programs for skills that traditionally serve those sectors directly connected to oil, or closely linked to them, where there is suddenly a glut of available labour. Making matters particularly complicated is that when oil prices fall, there is never any certainty of when they will rebound. If the lower oil prices are short lived like after 2009, colleges and universities have needed only to be patient and ride out shortterm disruptions, without the need to restructure their program offerings. However, that was not the case after 1985, where oil prices stagnated for an extended period of time. Now, some observers project that the decline in oil prices that began in 2014, with prices yet to fully recover, could last even longer, perhaps with oil becoming the "new coal" and remaining in glut indefinitely. Not knowing whether oil prices will rebound sooner, later, or never puts Alberta's post-secondary institutions in a tricky situation. Their programs providing skilled workers to the province's oil-based economy are longstanding and well-respected and the prospect of shrinking them or dismantling them, and shifting a school's focus to different programming priorities, should not be taken lightly as it could be very expensive to reverse if oil prices do indeed end up rebounding. But if they do not, they will nevertheless face pressure to do so, anyway, due to the considerable resources being tied up by programs that are not in high demand. If post-secondary administrators and governors cannot know when oil prices will rebound, if ever, they are even less able to predict what sectors Alberta's future economy will shift toward as it diversifies away from its energy export reliance. Whatever decision is made, to stay the course or shift to exploit expected opportunities, university and college leaders are taking risk where the consequences will be borne across the institutions' students and faculty and the Alberta taxpayer. In that light there is a larger, existential question that must be addressed when considering Alberta post-secondary education institutions and how they respond to the slumping energy sector. What is the mission of PSE institutions in the Alberta economy? Are they instruments of economic adjustment, providing education and skills training that allow Albertans to be mobile across jobs, employers, industries and regions? Or, are they instruments for fostering economic diversification, where research, education and skills training are oriented toward meeting the needs of a targeted or emerging economic opportunity? [ABSTRACT FROM AUTHOR]

Approximately 60 per cent of Alberta's oil sands production is non-upgraded bitumen which, after being mixed with a diluting agent (diluent) to allow transport, is exported. A popular view within Alberta -- and particularly among Albertan politicians -- is that a much larger share of oil sands bitumen should be upgraded in the province. However, without public subsidies or government underwriting, it is uneconomic to build and operate new facilities in Alberta to fully upgrade the bitumen into synthetic crude oil. But there are new partial upgrading technologies being developed that, subject to successful testing at a larger (commercial) pilot scale, can prove to be not only economic in Alberta, but also generate large social and economic benefits for the province. The advantages include a much smaller capital investment, a significant increase in the value of the product and market for the product and, even more importantly, a dramatic reduction in the need for large amounts of expensive diluent to transport the product to market. Indeed, the only diluent required will be that to move the bitumen from the production site to the partial upgrader and this can be continually recycled. The market for the synthetic crude oil produced by full upgrading is only getting tougher. Any Alberta bitumen fully upgraded here would compete closely with the rapidly expanding supply of light U.S. unconventional oil. Partial upgrading does not upgrade bitumen to a light crude, but to something resembling more of a medium or heavy crude, and at a lower cost per barrel than full upgrading. Unlike in the increasingly crowded light-crude market, the Alberta Royalty Review Advisory Panel recognized that currently there are gaps in several North American refineries that could be filled by this partially upgraded Alberta oil. A partial upgrader serving that less-competitive market not only appears to hold the potential for investors to make attractive returns in the long term, it would also provide important benefits to Alberta from a social perspective. Since partially upgraded crude can be shipped via pipeline without diluent (as bitumen requires), producing it in Alberta would free up pipeline capacity otherwise tied up by current volumes of diluted bitumen or dilbit (diluent typically represents about one-third of each barrel of dilbit). It also reduces the cost to shippers of paying tolls for diluent exported in the dilbit and recovering diluent at the U.S. pipeline terminal, where it is less valuable than if it were recovered in Alberta at the partial upgrader. The value of each barrel produced would also be higher, benefitting oil sands producers. Partial upgrading also seems to promise a lower emissions-intensity profile compared to other bitumen-processing technologies. Based on the model of a single 100,000-barrel-a-day partial upgrader, the value uplift could be $10 to $15 per bitumen barrel. Meanwhile, there could be an average annual increase to Alberta's GDP of $505 million, and as many as 179,000 person-years of employment created (assuming a 40.5-year operating period). The increase in taxable earnings would increase provincial revenues by an average of $60 million a year, not including additional federal tax revenues. If successful, there would be many such partial upgraders with corresponding multiplication of these benefits. But there remains the critical task of proving partial upgrading technology at a higher scale than current testing. This might also depend on the province helping sustain investors through the "death-valley" between successful research and initial testing and demonstration of full commercial viability. The province has stepped into help technologies cross that "death valley" before. The promise of partial upgrading may well justify, as manager and steward of Alberta's resources, helping bridge that valley again. [ABSTRACT FROM AUTHOR]