Concerns are growing that the Alberta Sovereignty Act will encourage investment from the province when it is needed most

Business leaders are wary of Alberta Premier Danielle Smith's controversial and aggressive new law

On the 15th floor of an office tower in downtown Calgary on Wednesday, a new clean technology fund was launched with the goal of decarbonizing the energy sector. But much of the talk at the event was about the Alberta government's controversial Sovereignty Act, introduced in the provincial legislature less than 24 hours earlier.

Some of the organizers could only shake their heads at that.

The irony is evident by the announcements that encourage collaboration between industry and government, while so much attention in the province is on aggressive new policies.

That's why concern in the business community is growing over the new law and how it could scare people and companies away from seeking out or investing in Alberta at a time when the oil patches are finally getting back on their feet after several years of decline and as the province tries to sustain growth. Its economy is in the midst of a possible recession.

There is not a shred of evidence that such actions will lead to economic growth, said Calgary Chamber of Commerce president Deborah Yedlin, who described the confrontational nature of the policies as "disturbing".

"This comes at a time when we are dealing with high inflation, supply chain challenges and labor shortages. We are trying to get people to come to Alberta so we can overcome the talent shortage. This will not be the first time." so that people see Alberta as a place to invest or of course to come and look for economic opportunities," he said, Wednesday.

"We see this as having the potential to introduce a very significant element of risk and uncertainty for businesses in Alberta."

Collaboration is key

On Wednesday, Avatar Innovations unveiled a new $3 million fund to provide cash for startups pursuing energy transition technologies. The company works with companies ranging from traditional oil and gas producers and pipeline companies to technology companies.

Avatar is also expanding into the United States to add to its network. The more people and companies involved, the more opportunities and funds are available to improve new technologies.

"Conversation about anything other than how we advance investment and technology and collaboration in the province will hinder those efforts," said CEO Kevin Krausert.

Investors won't be attracted to Alberta unless it's a safe and sound jurisdiction governed by the rule of law, said Krausert, who spent most of his career in the oil and gas drilling industry.

Meanwhile, there are concerns that Alberta Premier Danielle Smith's Sovereignty Act could build a wall around Alberta and target certain federal policies.

"I hope we don't have to use this bill," Smith told reporters on Tuesday. "I hope we have sent a message to Ottawa that we will vigorously defend our area of ​​constitutional jurisdiction and they should step down."

For decades, Alberta politicians of all stripes have routinely criticized the federal government. Call it a political hobby. Make no mistake, though, choosing not to enforce federal rules is a much more aggressive kind of opposition to Ottawa.

Internal opposition

Smith became prime minister after winning the leadership of the United Conservative Party in October. During that leadership campaign, no policy was discussed beyond the Sovereignty Act.

Then-Prime Minister Jason Kenney called the proposal "risky, dangerous, half-baked" and said it "would hurt jobs, the economy and the pipeline's prospects."

Sonya Savage, who was energy minister at the time, said the legislation could jeopardize Alberta's future as did Prime Minister Justin Trudeau's policies in the province's past, while also noting that international investors concerned with their Alberta assets had asked him about Sovereignty Act.

Savage remains in Smith's cabinet, now as environment minister. On Wednesday, he said his initial concerns had been overcome as the law was developed.

The average oil and gas company is probably not worried about the Sovereignty Act as it won't have an immediate impact on day-to-day activities in the sector, especially given that profits remain strong and commodity prices are also rising.

But there are concerns about the law's short- and long-term impact.

The largest oilpatch lobby group appears wary of supporting the bill.

"We are concerned about government policies that have the potential to create uncertainty for investors," said Lisa Baiton, CEO of the Canadian Oil Producers Association, in an emailed statement.

"It is important for governments at all levels to work with industry to attract investment back into Canada."

Lobbying Ottawa for cash

The Sovereignty Act comes at a time when many companies in the oil patch are seeking investment to decarbonize the sector and encourage the growth of new industries such as hydrogen and carbon capture and sequestration.

There is a need to attract significant funding not only from private investors, but also from the federal government.

In other words, oilpatch wanted a helping hand from Ottawa at a time when the Alberta government was fighting.

The largest oilpatch companies want tens of billions of federal dollars to design and build large-scale facilities to capture harmful greenhouse gases and inject them underground. Ottawa has announced funding for a carbon capture project, but the oil patch wants more.

Even smaller companies seek federal money. Just last week, a group of oil and gas drillers asked the federal government to create a new tax credit aimed at helping the industry decarbonise.

Ottawa is also the largest government funder of the large new hydrogen production facility being built in Edmonton, among other large and small projects.

The Sovereignty Act could hurt the clean energy sector, which is already struggling to attract investment, especially from venture capitalists.

Many of the players are small and mid-sized companies trying to research, develop and commercialize their technology. Without adequate funding, it is difficult to overcome these challenges and ultimately increase production.

Krausert, with Avatar Innovations, describes the federal government providing enormous funding for clean technology startups and companies the world would envy.

"I would be very nervous about putting any of them at risk," he said.

Krausert believes the way to build Alberta's future is to play well with others.

"Let's hope this is political theater for today." This article was written by EDUKASI CAMPUS. 

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