AB Today – Daily Report December 4, 2018
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AB Today – Daily Report December 4, 2018 Quotation of the day “We need them to toss the half-hearted statements away. We don't actually need Ottawa's sympathy. We need Ottawa's full attention." Premier Rachel Notley addresses her cabinet the morning after announcing a mandatory production cap on Alberta oil. Today in AB On the schedule House business is scheduled to resume at 10 a.m. on Tuesday for the final week of the fall legislative session. An evening session is planned, unless MLAs vote to adjourn at 6 p.m. No new legislation is required to implement the incoming oil production cap. The following bills are on the schedule for third reading debate: ● Bill 28, Family Statutes Amendment Act; and ● Bill 31, Miscellaneous Statutes Amendment Act. The following bills could be called for debate at committee stage: ● Bill 22, An Act for Strong Families Building Stronger Communities; ● Bill 23, An Act to Renew Local Democracy in Alberta; ● Bill 28, Family Statutes Amendment Act; ● Bill 30, Mental Health Services Protection Act; and ● Bill 32, City Charters Fiscal Framework Act. Monday’s debates and proceedings Two bills were debated during private members’ business. ● NDP MLA Craig Coolahan’s Bill 206, Societies (Preventing the Promotion of Hate) Amendment Act, passed second reading. ● Bill 201, Employment Standards (Firefighter Leave) Amendment Act, was debated briefly but not voted on. Bill 30, Mental Health Services Protection Act and Bill 32, City Charters Fiscal Framework Act were both debated at second reading during the evening session — neither was put to a vote. Bill 27, Joint Governance of Public Sector Pension Plans Act, passed committee stage by the Committee of the Whole. Bill 31, Miscellaneous Statutes Amendment Act, which makes minor changes to various statutes, received second reading without debate and progressed through committee stage. It is likely to pass without much debate. In the House The leaders of Alberta’s eight Métis nations were at the Legislature to mark the 80th anniversary of the founding of the Métis settlements. Alberta is the only province that still has a dedicated land base and governance structure for Métis enshrined in legislation. Committees this week The Standing Committee on Public Accounts will meet at 8:30 a.m. on Tuesday in the Federal Building to discuss outstanding recommendations from the Office of the Auditor General’s 2017-18 report on the Ministry of the Treasury Board and Finance. Price of Western Canadian Select soars following production cap announcement The value of Alberta crude jumped to nearly $30 USD per barrel at end-of-day Monday in response to the NDP government’s decision to decrease oil production levels by 8.7 per cent. That is nearly double the price it was trading at two weeks ago. The differnial between Western Canadian Select and West Texas Intermediate oil shrunk to $23 per barrel, down from over $50 in October. Premier Rachel Notley made the rare move of letting reporters into her cabinet meeting Monday morning while she addressed her executive council before signing a ministerial order requiring companies to cut back on oil production. “Extraordinary times call for decisive action,” Notley said, adding that Alberta’s crisis is “not of our making.” Starting January 1, 2019, the province is mandating production reductions of 325,000 barrels per day of raw crude oil and bitumen. The province says lowering the cap will help companies shed the 35-million-barrel glut that is now in storage and that, by the end of next year, the mandated reduction will drop to 95,000 barrels per day. The province hopes the curtailment will cut down the differential by $4 per barrel, caused in part by overproduction of 190,000 barrels per day. The premier thanked industry for playing ball and credits the opposition parties for “keeping partisan politics to a minimum.” Notley said she will keep pushing for pipelines when she meets with her fellow first ministers — including Prime Minister Justin Trudeau and Canada’s Minister of Intergovernmental Affairs Dominic LeBlanc — in Montreal Friday. Despite encouragement from Energy Minister Marg McCuaig-Boyd to jump on the production curtailment bandwagon, Saskatchewan Premier Scott Moe released a statement Monday saying his province would not be following suit. “While Saskatchewan understands the action taken by our neighbours in Alberta to reduce the oil glut that is depressing the Western Canada Select oil price, the impact of the differential and how it is spread across our energy sector represents a different challenge to our province,” Moe said. Moe said because Saskatchewan produces mostly light-to-medium conventional crude, capping production would not have the same effect as it will on Alberta’s industry, which has a higher percentage of in-situ oil facing the biggest slump in prices. Finance Minister Joe Ceci said the fiscal impact of the curtailment will be reflected in the spring budget. Upgrader owners unhappy with cap, but some large producers already benefiting Companies that own upgraders had been enjoying the days of cheap prices for unrefined product. Suncor, which owns multiple upgraders, said it is still assessing the impact of the production cut and expects more details from the province by the time it releases the 2019 business projections. “Suncor believes the market is the most effective means to balance supply and demand and normalize differentials,” the company said Monday said. “Less economic production was being curtailed and differentials were narrowing as a result of market forces.” During question period, Energy Minister McCuaig-Boyd said she has heard support for the NDP plan from Cenovus, Canadian Natural Resources Limited, Nexen, and a smaller producer, MEG Energy. Both Cenovus and Canadian Natural Resources saw their stock prices jump by 10 per cent Monday. Both companies already began capping their production Monday, according to Bloomberg. Opposition shows varying degrees of support The only party dead-set against the mandatory oil curtailment was the Freedom Conservative Party. FCP Leader Derek Fildebrandt chastised the UCP for breaking from its free enterprise policy and expressed preference for the NDP plan because, unlike the Tories’ proposal, it provides exemptions for small producers. UCP Leader Jason Kenney was the most supportive of Notley’s move, using question period to commend the premier on making a “difficult but necessary” decision. On Sunday evening, Alberta Party Leader Stephen Mandel said the curtailment was the right decision, but added the province should have acted in the spring when it knew about the differential. “Spending two further weeks to have the premier’s envoy panel tell us that there was a perceived lack of industry consensus only caused further harm and was a clear effort to gain political cover to take action,” Mandel said. In response, McCuaig-Boyd said curtailment, which hasn’t been done since the 1980s, wasn’t a decision the province took lightly. Alberta Liberal Party Leader David Khan said there are no guarantees more oil workers won’t lose their jobs and called on the federal government to enhance employment insurance for those workers. Today’s events December 4 at 1 p.m. – Edmonton The NDP caucus will meet at the Alberta Legislature. December 4 at 4:30 p.m. – Edmonton Premier Rachel Notley will host the annual Light Up the Legislature celebration, which will include carolling, turning on the Christmas lights, hot chocolate and cookies. Topics of conversation ● Canada’s big five banks are predicting a slow down in Canada’s economic growth as a result of Alberta’s oil production cap, Bloomberg reports. ● UCP Leader Jason Kenney took to Twitter to announce the United Conservative Party filed a factum with the Saskatchewan Court of Appeal to apply for intervenor status in its challenge against the incoming federal carbon pricing scheme. ○ The UCP will join Saskatchewan Premier Scott Moe, Ontario and New Brunswick in launching a constitutional challenge against carbon taxes. ○ Saskatchewan's arguments will be heard in February; Ontario’s will be heard in April. ○ “Our argument is based on the right of government to levy a tax that is discriminatory against some provinces,” Saskatchewan Justice Minister Don Morgan said in an interview with reporters last Friday. ● New Brunswick Premier Blaine Higgs wants to revive the Energy East pipeline, a project abandoned by TransCanada. ○ Energy East would have carried 1.1 million barrels of diluted bitumen from Hardisty, Alberta to Saint John, New Brunswick. ○ The project requires the buy-in from Ontario and Quebec. ● CBC discovered a second executive on the Alberta Energy Regulator board expensed frequent travel from British Columbia to Alberta to attend meetings. ○ Jennifer Steber expensed mileage, taxis and flights from her residence in B.C. ○ The news follows an investigation that found AER CEO Jim Ellis expensed nearly $14,600 in flights. ● Reacting to federal Natural Resources Minister Amarjeet Sohi’s order that the National Energy Board investigate whether Canada’s pipelines are being used to capacity, Alberta Energy Minister Marg McCuaig-Boyd said she is unconvinced Sohi’s words will turn into real action. ○ “That’s a little more movement than we’ve seen in the past, but there needs to be less talking and more action from the feds,” McCuaig-Boyd told reporters on Monday. Question Period United Conservative Party Oil price differentials ● Question period began cordially with UCP Leader Jason Kenney asking if the mandatory curtailment of oil production had a sunset clause to ensure the government production restriction does not become permanent. ○ “I would like to commend the premier on the very difficult, but necessary, decision that she announced last night to give some short-term relief to our energy sector and save jobs. I would also like to thank the government for having approached this in a nonpartisan manner,” Kenney said.