If the Alberta oil sector was any other industry, the federal government would be rushing to help.
Instead, Alberta Finance Minister Joe Ceci said the Liberals have been proving again and again that they just don’t understand the crisis facing the province’s oil industry and are doing exactly the opposite of what they would be doing if the sector were the auto industry.
“I don’t think Ottawa gets the economic circumstances that are going on in this province,” said Ceci in an interview with the West Block’s Mercedes Stephenson.
“We need them to recognize that, to act quickly and not just voice platitudes. … If we were, say, Bombardier or if we were the auto industry, there would be all hands on deck trying to address this as quickly as possible.”
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Ceci’s remarks come after a contentious week for the government that saw his federal counterpart, Bill Morneau, present the fall economic outlook amid questions over whether his proposed tax write-offs for capital investments in clean technology and production machinery were enough to help the oil sector.
Landlocked Alberta crude is selling at a steep difference in price compared to American light oil.
That’s because Alberta crude has more supply than it is able to get through existing pipelines that would reach tankers and international markets.
That price difference has been hurting the province for the last several years, leading to lost profits for companies and layoffs for workers both in the oil fields and cities like Calgary where oil companies in the province are largely headquartered.
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With the Trans Mountain expansion project indefinitely stalled following a Federal Court ruling, Ceci said the government needs to commit to helping Alberta with the cost of moving crude by rail.
Even if the pipeline gets built, the relief it would bring won’t be quick, he said.
“We need movement on building that pipeline but that still is several years away,” he said.
“In the interim, we need solutions.”
While Ceci acknowledged he had previously asked Morneau for the accelerated capital costs allowance measures in the fall economic outlook, which help companies recoup their own investments into their businesses more quickly, he said that is not enough.
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“The thing that hampers that allowance is companies have to be investing in machinery and right now, it’s so difficult for anybody to plan that because they’re not making any money. They don’t have any money to spend,” he said.
“So it’s a tool that’s not useful at this time.”
While Prime Minister Justin Trudeau dismissed calls for the federal government to help with the cost of transporting crude oil by rail, as Ceci and Alberta Premier Rachel Notley have requested, Ceci said there is no other option until the pipeline is built.
“The only way to get takeaway capacity in the interim is crude-by-rail,” he said, noting that the only other option may be to slim down production and that some companies are already doing that.”
Unless something changes, Ceci said the situation will continue to see American oil companies reaping profits off the backs of provincial workers.
“Right now, the only people making money off Alberta are Americans,” he said.
“They’re buying private jets and limousines, and we’re suffering.”