By Jason Fekete, Calgary Herald, July 21, 2011
An east-west energy battle is brewing among Canada’s premiers at the annual Council of the Federation conference being held in Vancouver, as Alberta and Saskatchewan spar with Ontario over oil and gas development.
The country’s 13 provincial and territorial leaders are meeting in Vancouver until Friday to find consensus on a number of key agenda items, including growing Canada’s resource exports to lucrative Asia-Pacific markets.
But Ontario Premier Dalton McGuinty sparked an interprovincial battle Wednesday with some of his counterparts — including Alberta’s Ed Stelmach and Saskatchewan’s Brad Wall — by declaring he’s tired of his province subsidizing Western Canada’s oil and gas industry.
Ontario is also taking issue with Alberta’s oilsands, refusing to categorize bitumen development as sustainable and environmentally responsible.
Hundreds of millions of federal tax dollars have gone to oil and gas projects in Alberta and Saskatchewan, and McGuinty wants Ottawa to cough up cash for his province’s clean-energy initiatives.
“There is preferential tax treatment at present for people who want to develop oil and gas projects. I’ve got nothing against that. But what about some good tax treatment as well for people who want to develop clean-energy industries in Ontario?” McGuinty, who’s facing an election campaign this fall, told reporters in Vancouver.
The Ontario premier said his province, which accounts for about 40 per cent of federal tax revenue collected, is ultimately paying for tax breaks offered to oilsands developers as well as Ottawa’s contribution to carbon capture and storage projects in Alberta and Saskatchewan.
Just last month, the federal government announced $120 million from its Clean Energy Fund to support Shell Canada’s proposed $1.35-billion Quest carbon capture and storage project at the Scotford bitumen upgrader near Fort Saskatchewan. The Alberta government has committed $745 million in funding for Quest over 15 years.
He also noted the federal government is committed to helping Newfoundland develop its Lower Churchill hydroelectric project.
“The federal government has historically — governments of all political stripe — provided support to other energy sectors,” he added.
McGuinty is already stoking some anger in the West and sparking memories of the Trudeau government’s National Energy Program from the early 1980s.
The NEP was designed to insulate Canada from soaring oil prices, facilitate greater Canadian ownership of the oil industry and generate more cash for federal coffers. Ultimately, the program delivered an economic blow to the energy sector that was compounded by a collapse in world oil markets.
“Well, um, the National Energy Program I don’t think was a transfer of dollars from Eastern Canada to Western Canada, and that is still vivid in the minds of western Canadians,” Stelmach said with a wry smile. “He certainly has his opinions.”
The oil and gas industry has created thousands of jobs across the country, including for Ontario’s battered manufacturing sector, he said, also noting Alberta has the largest per-capita wind energy production in Canada.
Wall said all provinces supported Ottawa’s financial backstop and preferential treatment for the auto sector, and he can’t understand why Ontario would pick on an energy sector that’s driving the Canadian economy.
Furthermore, the oilsands are generating thousands of jobs for Central Canada, while Ontario is collecting billions of dollars in equalization payments largely funded by the strong economies in the western energy-producing provinces, he said.
“I simply don’t understand what he’s saying. It doesn’t make any sense,” Wall told the Herald. “I don’t see anyone begrudging support for the auto sector.”
McGuinty’s comments came a day after his province objected to a news release announcing a national energy framework at the conclusion of an annual energy ministers’ conference in Kananaskis on Tuesday.
Ontario wouldn’t sign off on wording in a release that called Alberta’s oilsands a “responsible and sustainable major supplier of energy” to the world.
“We don’t agree with how the oilsands are framed in that article,” said Andrew Block, a spokesman for the Ontario Ministry of Energy. “The overall framework that was being discussed, we’re onside.”
Ontario Energy Minister Brad Duguid, who spoke out about the wording on the oilsands to a Toronto newspaper, did not attend the national conference and was unavailable for comment Wednesday.
Alberta Energy Minister Ron Liepert, who co-hosted the annual meetings, took issue with his Ontario counterpart’s remarks.
“I think minister Duguid should check with the tens of thousands of residents of his province whose jobs are directly tied to the oilsands and see what they have to say about the oilsands,” Liepert said.
“In the meetings, Ontario did not express any opposition to what we were approving, so either his officials didn’t get his approval or there was some kind of breakdown in communications.”
Exporting Canada’s energy riches to new markets is a top agenda item at the premiers’ conference. Stelmach, Wall and British Columbia’s Christy Clark are looking to increase ports and pipeline capacity to help feed an insatiable energy appetite from countries like China and India.
“We want to put Asia-Pacific on the map nationally and raise public literacy about how important it is,” Clark said Wednesday following a meeting between premiers and national aboriginal leaders. “This is the future of our entire country.”
Premiers, along with First Nations, Inuit and Metis leaders, are calling on the federal government to hold a first ministers’ meeting to address their concerns about aboriginal education, economic development and the startling number of missing or murdered aboriginal women.
With files from Rebecca Penty, Calgary Herald
jfekete@calgaryherald.com
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