An Interview with Premier Alison Redford - April 30, 2012
It’s been a week since the ballots were counted in Alberta’s uncertain election. Since then, the surprising, convincing win by Alison Redford’s Progressive Conservative Party has been analyzed from every angle of electioneering science. Now the work begins as the scrutiny turns from polls to the serious matter of governing. From an energy perspective, the bearing of the government’s policy compass will be vital to maintaining future prosperity, with ‘prosperity’ being an umbrella term for a balance between economic well-being, security, and environmental responsibility.
History shows that government policy is one of the most important influences on the direction of how a society finds, gets, uses and trades its energy. The decade we’re in promises to keep delivering bundles of acute threats and opportunities, relentless change and competition, all scrutinized by ever-twitchy investment dollars. Premier Redford’s attentiveness to energy issues will be paramount to Alberta’s – and Canada’s – ongoing ability to adapt.
In fact, engaging the energy file is nothing new to our Premier. Prior to her election, she articulated her stance on energy matters after taking over from Premier Ed Stelmach in September, 2011. We had the privilege of interviewing Premier Alison Redford on the eve of the election call, 6 weeks ago. Our hour-long fireside chat, limited to energy issues, was video recorded. In this week’s ARC Energy Charts we offer a nine-minute, edited synopsis of the interview.
Among the many themes that were discussed, there were two important threads for investors. One was continuity – a promise to maintain Alberta’s competitive fiscal regime, with no changes to the royalty structure and no new taxes.
“Could the provincial government raise royalties again?” is one of the most frequently asked questions we get from nervous foreign investors, whose memories of 2009 have not faded. In our interview, the Premier’s affirmation of fiscal policy was clear – and also essential, because constancy ensures that companies will have the confidence to keep reinvesting over $40 billion of cash flow per year into Canada’s industry. As well, cementing Alberta’s competitive fiscal regime for the long term gives assurance to investors who bring upwards of $30 billion per year (debt plus equity capital) to the local economy.
Another discussion thread was the need to globalize Alberta’s land-locked oil and gas industry and how moving products to markets other than the United States will need support from other provinces and the Federal government. Premier Redford states her commitment to build cross-country consensus for an energy economy that benefits Canada, not just Alberta. The broad vision is to leverage all of Canada’s world-class energy expertise, though the immediate agenda item is to champion fairways of interprovincial energy policy so that companies can find the most competitive and environmentally responsible way to get oil and gas to high-value global markets.
We are confident the Redford government will do a good job working with industry so that it can graduate from a major continental player to a world-class, highly competitive energy supplier operating at the highest standards.
Yet, in a world where competition in energy markets is fast moving, stiff and outright nasty, we can’t assume government will magically advance the interests of Alberta’s energy industry. A collective effort by industry and government is needed to adapt to new realities and win markets amidst all the business uncertainties. At least one uncertainty has been removed – the election.