What Matters to you– Equalization, Corridors & World Need for Clean Energy

 Congratulations to all the successful candidates in the recent municipal elections.  I look forward to meeting the new members of the councils and boards, as well as reengaging with incumbent members.  I wish to thank all of those who ran in the election and were not successful in your run. In many cases you stepped out of your comfort zone and put your face and ideas out there on how you wanted to make a genuine difference for our communities.  That is no small feat and requires courage. 

Equalization: Albertans have done more than their fair share

I was very encouraged to see the results of the question on equalization – whether Albertans want to remove the program from Canada’s constitution. This referendum question garnered the attention of the country, and the answer is a compelling demand for the federal government to engage with Alberta on this issue.  Like many, I feel that Albertans have done more than their fair share over the years. Even with Alberta’s disproportionate level of contribution, it’s always been somewhat tolerable.  However, given the number of federal policies that have been put in place to hamper our economy and freedoms, as well as the inability to fully access those funds when we needed it the most after years of contributions, is simply unacceptable.  If we are indeed a highly valued member of confederation, then we need to see it in this program, and a plethora of others.  Albertans wholeheartedly want a fair deal, and they deserve one.

Corridors for the Future

Some constituents have asked me “How does this work have an impact on us?” This is a fair question. When you look at the local economies, they are directly related to the larger logistics and transportation situation.  I’ll give you two circumstances where the movement of local goods and pricing of those goods is impacted. Note that this impacts nearly all the industries in our area in a profound way.

A. Pulp / Paper / Lumber

1. 1. The impacts of transportation capacity through Long Beach, Los Angeles and Prince Rupert are directly affecting the shipping costs and product cost of our local mills. The ability to book the train cars and move the materials has both a time and a cost impact.
   2. Ships predominantly bring into the North American market 40’ sea containers. These sea containers used to flow very readily through North American ports, then onto trains and trucks to be moved into the overall supply stream.  The cost of using a sea container to bring products onshore was, arguably, $2500, per container.  That price has ballooned to nearly $20,000 per container.  To further compound the issue, ships that normally could offload at a port, move onto the next one, offload, then onto the next one, offload, and take on cargo for the return trip in a short time frame, are now sitting anchored at one port for a week in some cases.  So instead of catching the smaller ports along the way for cargo (Canadian Ports), they are heading back to Asia directly.  As such, our pulp, paper, and lumber exports are not able to make it to the market in a timely manner.  The products are parked in warehousing, double handled, triple handled, and outgoing shipping costs are at a premium.  So, we end up pricing ourselves out of the market, or we need to slow productions, which then directly impact jobs at the local mills.

B. Fractionation Sand

1. 1. 1. Most of our fractionation sand comes in from either Texas or Wisconsin. It’s estimated that 70% of the sand used in our local fields are USA products delivered by rail.
      2. Locally, we have several formations which are very favourable in product type to be used in our own oil fields. The need is there for the materials, however, the costs and security of supply by volume are jeopardized by transportation costs.
      3. The estimated cost to move sand by rail from Glenevis up to Grand Prairie is only 1/3 cheaper than the cost of moving similar sand from either Texas or Wisconsin. Logistics matters, rail infrastructure matters.

Through the work of the economic corridors task force, we can communicate with many companies and multiple levels of government.  We can look north to south and east to west, to where we can and should be playing a larger role not only provincially, but nationally.  We have been extremely successful in our model up to this point, in allowing industry to push for growth where they saw the right market conditions, but with the number of policies and government regulations that have been layered over the years, and trade barriers between provinces, we have limited our ability for sustained growth. Recognizing mutually beneficial economic corridors will not only unlock and debottleneck the current level of production we have – it will set the stage for the next 50 years of growth.  We are the gateway to the north and have yet to take advantage of that strategic fact.

The Vision: A Productive Northwestern Canada

A strong, collaborative, and productive Northwestern Canada makes us as a province and as a region. We can be a global player, rather than a lagger vulnerable to the whims of federal government policies and election cycles.  Those I’ve spoken to at all levels of organizations in the provinces, territories, and even a federal banking arm, look extremely favourable at the work the economic corridors task force is doing and the vision that is being laid out. Many believe this is a way to move forward in an efficient manner so that we are not left behind due to problems we created ourselves.

Have a great week.