Alberta Premier Ed Stelmach announces the outcome of Alberta's conventional oil and gas competitive review at a news conference in Calgary, Thursday, March 11, 2010. The government announced it is sharply reducing royalties paid on conventional oil and natural gas that could potentially cost the government hundreds of millions of dollars in lost revenue.Jeff McIntosh/The Canadian Press
Alberta is poised for an economic recovery that will drive it to a surplus faster than any other province, but leave it with yet another labour shortage, Premier Ed Stelmach says.
Speaking in an interview with The Globe and Mail, the Premier also said the province's rebounding oil industry will have to improve its environmental performance, and suggested Alberta can make its oil sands crude less carbon-intensive than conventional oil - a tall order.
The comments come after a tumultuous year for Mr. Stelmach, who ran afoul of public opinion in the critical fields of finance, health care and energy.
A drop in tax revenue and energy royalties resulted in a higher-than-expected deficit of $5-billion in the debt-free province. Mr. Stelmach's fall legislative session was bogged down by a health-care scandal that saw him kick out a member of his party for speaking against government inaction on a crisis of emergency-room overcrowding. Finally, two comprehensive reports last month said both his province and Ottawa have largely abdicated their environmental monitoring responsibilities in the oil sands.
This year will be critical for Mr. Stelmach to turn around public opinion on all three files, as he plans to call an election for early in 2012. There is no question what tops his list.
"Job growth, No. 1 priority," he said. "And the rest we'll work through. They're all important issues. But I really do think [it's important to be]coming back to a stronger economy. [There are currently]positive signs, but it is bumpy. And it will be a tough budget. There's no doubt about it."
He had initially pledged to balance Alberta's books by 2012-2013. Fluctuation in oil prices and the strength of the Canadian dollar have moved the goalposts, he said, and he now doubts the province can achieve a surplus that quickly. (He was criticized this month by the Canadian Taxpayers Federation for reneging on the pledge to balance the books by 2012-2013.)
"If it's $100-million to the good or $100-million in the red, it's close [to a balanced budget by that year] But I can tell you - there's going to be nobody in this country that's closer to balance, including the feds, than we are," Mr. Stelmach said.
The slow return to a surplus can be partly attributed to the government's increased spending. However, Mr. Stelmach said he will keep investing in infrastructure and job training to drive the economic recovery. The province needs 70,000 more skilled energy workers by 2014, he said.
Labour shortages throughout the boom of the previous decade put a choke on development, making employers desperate for trained workers and driving skilled and unskilled wages to unprecedented levels.
The Premier's loftiest goal would be cutting oil sands' greenhouse-gas emissions to a level below conventional oil. Currently, they're about 25 per cent higher, and most new development is in situ, or underground, bitumen deposits - the extraction of which produces more carbon than open pit bitumen mining.
Total emissions, as such, will rise.
"Carbon, I feel pretty comfortable because intensity is down. Will there be more carbon? Yes, because we're producing more, but the intensity is down," Mr. Stelmach said. "The goal here to get it lower than conventional oil, and I'm confident that the producers will."
Mr. Stelmach also continued his defence of the oil sands environmental record, while acknowledging the regulatory regime must improve. After a pair of reports slammed both his government and Ottawa for inaction on the file, Mr. Stelmach's environment minister vowed to beef up Alberta's environmental monitoring and make the data fully public.
"There was obviously a lot of pressure on the federal government to do something, But now that we're there … we're prepared to work with them and to provide the transparency and of course accurate information for Albertans, and for others," Mr. Stelmach said.
"We share the same goal, and that is to develop resources responsibly. And the other goal that we share, I believe, as the federal government and the province, is that the oil sands … will lead Alberta, but also Canada, out of this fiscal recession."
The stakes are high for Mr. Stelmach to turn things around. He's facing a challenge on the political right, where polls show the Wildrose Alliance has moved into a dead heat with Mr. Stelmach's Progressive Conservatives.
But it's not Wildrose he fears. Instead, it's the left, where the Liberals, New Democrats and the fledgling Alberta Party will hope to capitalize on a Wildrose-Conservative vote split.
"I watch both sides of the political spectrum," Mr. Stelmach said. "And there's an old saying. I don't know if you have any rural experience, but there's a saying in rural Alberta: It's the quiet dog that will come and bite ya, not the barking dog."
That quiet dog? "Generally, the left," he said. "Let's not just focus on one political party to the far right and lose the direction that Albertans want us to go in."