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Alberta launches grant program in bid to turn province into global leader in petrochemical sector

A 820 tonne, 96 metre petrochemical splitter that is going to be moved to Fort Saskatchewan, in Edmonton Alta, on Sunday January 6, 2019. This is the largest load to ever move on Alberta highways.
A 820 tonne, 96 metre petrochemical splitter that is going to be moved to Fort Saskatchewan, in Edmonton Alta, on Sunday January 6, 2019. This is the largest load to ever move on Alberta highways. THE CANADIAN PRESS/Jason Franson

The provincial government announced Friday that it is launching its Alberta Petrochemicals Incentive Program (APIP), plans for which were first announced this summer.

It is aimed at attracting investment in the industry to turn the province into a global leader in the sector.

“By launching this program, Alberta moves towards achieving the goal of becoming one of the most attractive investment opportunities for petrochemicals in the world,” Dale Nally, associate minister of natural gas and electricity, said in a news release.

Petrochemicals are derived from petroleum or natural gas and are used to produce a wide range of products from plastics to soaps and detergents to fertilizers, for example.

Nally said the new incentive program should make Alberta an even more attractive place for producers and noted the province is already well-positioned to benefit from the industry because of its vast supply of natural gas, experienced workforce and low corporate tax rate.

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To help bring in new petrochemical or fertilizer facilities, the APIP will make it possible for companies to apply for grants worth 12 per cent of facilities’ “eligible capital costs.”

READ MORE: UCP government to use grants to attract petrochemical investments to Alberta 

Companies will only receive the grants once projects are already built and employing people in the province.

To be eligible for the program, projects are required to satisfy a number of requirements, including having a minimum of $50 million in capital investment, creating “new and permanent” jobs in the province and meeting the federal definition of a manufacturing and processing facility.

In a statement issued following the petrochemical announcement on Friday, Opposition Energy Critic Kathleen Ganley suggested the program does not address what she believes is the government’s failure to rejuvenate the province’s economy.

She criticized the government for what she called the cancellation of economic diversification programs while the province incurs job losses and a shrinking economy despite its corporate tax cuts.

“We’ve lost momentum to diversify Alberta’s economy that was started under our (previous NDP) government,” she said. “Now the UCP has put forward a program that will lead to fewer jobs, less investment, and greater risk for Albertans compared to our plan while in government.”

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The government said global demand for petrochemicals is expected to continue to rise and noted Alberta is already a significant petrochemical hub in Canada.

READ MORE: Canadian petrochemical growth spurt expected despite rising desire for fewer plastics 

“According to the Chemistry Industry Association of Canada, Alberta’s chemicals sector, comprised predominantly of petrochemicals, was valued at $12.1 billion and employed about 58,400 people directly and indirectly in 2019,” the government said.

Citing figures from Alberta’s Industrial Heartland Association, the government said the petrochemical sector has the potential to create an additional 90,000 “direct and indirect” jobs via the industry by 2030, and provides an opportunity to bring in an additional $10 billion in revenue for the province through corporate and personal income taxes.

There is no cap on the APIP, but the government said it will report on expected costs each fiscal year, “based on applications received and projects approved.”

“Diversifying our energy industry is key to ensuring Albertans will have good-paying jobs and careers to get excited about in the future,” Jobs, Economy and Innovation Minister Doug Schweitzer said. “Alberta has the potential to become a major player in low-carbon hydrogen and sustainable plastics production, but we’ll only get there if we have a competitive edge over other jurisdictions.

“Petrochemical companies have dozens of factors to consider when choosing where to invest, and we’re putting together a winning formula to ensure Alberta is at the top of their lists.”

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Watch below: Global News videos about petrochemicals.