Good morning, it’s James Keller.
Alberta has spent years searching for a way to deal with slumping oil prices and in particular the heavy discount, or differential, on the province’s oil. The most straightforward solution is new pipelines, but the death of Northern Gateway and Energy East, and the legal setbacks for Trans Mountain and Keystone XL, have bred impatience.
Several oil companies have come up with an alternative, asking the Alberta government to restrict production in an effort to drive up prices. The proposal has caused a sharp divide within the industry and underscored the frustration that the province has so far been unable to turn its oil and gas sector around.
The proposal is being floated by Cenovus Energy Inc., Canadian Natural Resources Ltd. and MEG Energy Corp., with Cenovus chief executive Alex Pourbaix arguing the intervention is needed because a massive market failure is hurting not only oil companies but government revenues and the broader economy. However, companies such as Suncor Energy Inc. and Husky Energy Inc. – whose refining operations benefit from low prices – oppose intervention, saying it would risk triggering retaliation from the United States.
Western Canadian Select fell below US$14 a barrel this past week, well below the US$56 price for New York-traded West Texas Intermediate. The Alberta government has said a US$40 differential costs the province $40-million in lost revenue every day.
Alberta Premier Rachel Notley hasn’t weighed in on the idea, saying only that the province is studying its options and expects to announce measures to protect the industry in the coming weeks.
Persistently lower oil prices, and the damage they have done to the economy, have cast a shadow over every facet of the province and were almost certainly a factor in the demise of Calgary’s 2026 bid on Tuesday. Calgarians voted 56 per cent against hosting the $5-billion Winter Games amid fears of cost overruns that would only further damage the city and the province.
Calgary Mayor Naheed Nenshi, who was a vocal supporter of the bid, says the city still needs projects connected to the bid such as a new field house and affordable housing, which means finding a way to replace $2-billion in funding from the provincial and federal governments. The town of Canmore, which would have hosted several events, is also coping with the loss of a planned athletes village and the resulting 242 units of affordable housing.
This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief James Keller. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here. This is a new project and we’ll be experimenting as we go, so let us know what you think.
Around the West
ELECTRICITY: The BC NDP government welcomed with much fanfare the agreement by LNG Canada to build an enormous project in the province’s northwest, but have acknowledged the greenhouse gas emissions from the plant put the province in a tight spot to reach its climate change goals. The government will detail its climate change plan next month, but it’s clear British Columbians will be encouraged to make many changes to how they live. Justine Hunter offers a real-world view on how British Columbia will march toward a reliance on electricity for power, rather than fossil fuels. She notes everything from when and how your dishwasher gets turned on to the car you drive to the way your home is heated is due for an overhaul. It will be expensive and require political will to stick to the plan.
OPIOIDS: In a horrifying example of how entrenched and deadly the opioid crisis is in British Columbia, the province’s children’s watchdog called on the B.C. government to create supervised consumption spaces specifically for teens. Jennifer Charlesworth acknowledged the idea will be controversial, but she said the blunt reality is “these young people are using substances and it’s our responsibility to do everything in our power to make sure that they are safe." Earlier this week, the B.C. Coroners’ service reported that 128 people died from overdose in September, an 8-per-cent increase from the previous month. The mounting death toll, including new research that has found men in the construction trades are one of the key groups of people dying of overdose, has prompted Vancouver’s chief medical health officer to join the call to policy makers for new ways of doing things.
CONCUSSIONS: The University of Calgary is leading a national study into concussions and head injuries in high-school athletes in a $12-million project financed by the National Football League, Allan Maki writes. It’s a huge study involving 6,000 high-school athletes competing in rugby, hockey, football, lacrosse, wrestling, soccer, basketball and cheerleading. It will include 35 researchers working over three years before producing the findings.
BRONCOS: Two survivors of the horrific bus crash that killed 16 members of the Humboldt Broncos hockey team are now playing for the University of Ontario Institute of Technology in Oshawa, Ont., Matthieu Gomercic and Bryce Fiske. They spoke with The Globe’s Jamie Ross.
RCMP: Surrey has embarked on a plan to replace the RCMP with its own municipal police force, a two-year process that hasn’t been done since a municipal force replaced the RCMP in Cape Breton in 2000. This week, the official in charge of the change said he doesn’t think the ratio of officers to citizens is relevant and it’s not something he’s focusing on. Policing was at the centre of Surrey’s municipal election campaign. The municipality is the fastest growing city in the province, but it has been beset by a gang war and gun violence.
TRANSIT: Surrey’s desire to ditch years of work on a light-rail transit project in favour of more expensive SkyTrain service is stirring up some hard feelings among Vancouver-area mayors. One has suggested Surrey should pay back the money already spent on the LRT – about $50-million – while another has suggested Surrey should lose funding altogether for its projects. The mayors have agreed they will look at Surrey’s latest proposal, though that step falls short of an endorsement of the plan.
TELEVISION: Western Arts correspondent Marsha Lederman writes that when the co-authors of the bestselling children’s book Princesses Wear Pants were looking to adapt the story for TV, they selected Vancouver’s Atomic Cartoons over Hollywood stalwarts such as Dreamworks to animate it. The company’s president, Jennifer Twiner McCarron, says she loves the empowering message of the book: Pink and sparkly is great, but “sometimes you’ve got to put pants on underneath your princess dress and get things done.”
Cathal Kelly writes that if Calgary doesn’t want the Olympics, then who on Earth would?
Gary Mason writes about the case of Derek Pyne, an economics professor at Thompson Rivers University in Kamloops, B.C., who has been banned from campus and suspended over research he conducted into so-callled predatory journals – publications that offer academics a home to publish their research with little or no scrutiny of the work. Prof. Pyne’s research centered on his own university’s department of business and economics.
Robert Lamond, chairman of Humboldt Capital Corp., writes that Alberta, which holds royalty rights over virtually all production, is the largest identifiable revenue loser as heavy crude prices stay low: “Low Canadian oil prices call for an old remedy: pro-rationing. The essence of the system is to limit production amounts in a pro-rata form, resulting in less production – a large reduction of economic waste – but leading, obviously, to higher prices.”
Alexandra Gill takes in vaudeville dinner theatre Bacio Rosso, which she writes is unlike anything she’s seen.