In an open letter to Prime Minister Justin Trudeau, Saskatchewan Premier Scott Moe and Alberta Premier Rachel Notley are calling on the oil price differential to be added to the upcoming First Ministers’ Meeting in Montreal on Dec. 7.
“As proposed, the meeting agenda does not include any discussion on the crisis facing the energy industry and the price differential that is crippling the Alberta, Saskatchewan and Canadian economies,” the premiers wrote.
“Our country is losing $80 million dollars a day because we cannot get tide water access and world prices for Alberta’s oil and gas.”
It went on to say to Trudeau, “during your recent visit to Calgary, you called the economic impact of the oil price differential a “crisis.” We agree. A crisis of this magnitude must be reflected in any discussion on ‘economic competitiveness.'”
The duo are calling on the oil differential and energy market access to be added to the agenda of Canada’s premiers.
Each type of oil around the world has its own price. New-York-traded West Texas Intermediate (WTI) is the benchmark price for light crude oil in North America. Western Canadian Select (WCS) is the reference price for heavy crude oil from the oilsands.
The discount between Alberta’s WCS and the benchmark WTI was about US$25 per barrel on Tuesday.
“We trust that the agenda for our upcoming First Ministers’ Meeting can be revised to better reflect the need for a substantive discussion on issues of critical importance to the Canadian economy,” the letter said.
On Sunday, Notley announced that Alberta will temporarily cut oil production starting in January by 8.7 per cent, or 325,000 barrels per day. The goal is to reduce a supply glut and get a better price for Canadian crude. She said the price differential is costing Canada $80 million per day.
Moe announced Monday that Saskatchewan will not be following Alberta’s lead in cutting production. He said after consultation with local producers it was decided a mandated supply cut would do more harm than good — resulting in lost jobs and economic activity.
The full letter to Prime Minister Trudeau penned by Premiers Notley and Moe
— With files from The Canadian Press