Morinville-St. Albert UCP MLA Dale Nally and the Alberta government launched a new program Thursday aiming to attract petrochemical investment to the province.
On Thursday, Nally, the associate minister of natural gas and electricity, held a press conference to announce the grant program, known as the Alberta Petrochemicals Incentive Program (APIP) – a 10-year grant program Nally said will help create petrochemical projects and diversify the provincial economy.
The program delivers grant funds instead of royalty credits to companies once eligible projects are operational. The province said in a press release grants "are the most effective way to attract investment," since they allow companies to better account for the full value of the incentive when they calculate a project's return on investment. Projects must be built and operational during the program's 10-year lifespan.
“The program will encourage companies to invest in major market-driven petrochemical manufacturing facilities that will generate millions of dollars in revenue for our province each year. Short-term, these projects will create tens of thousands of construction jobs and hundreds of additional jobs once they become operational,” Nally said.
Nally said Alberta is already a leader in Canadian petrochemical manufacturing, with centres in Medicine Hat, Joffre and Grande Prairie, but “the sky is the limit for this sector’s benefit” to Alberta.
"Over the last 10 years, petrochemical investment in the United States reached $250 billion, more than 10 times what was invested in Canada,” Nally said.
"With our affordable 300-year supply of natural gas, technically skilled and educated workforce, and respected innovation and research sectors, Alberta is ready to seize the opportunity to become a global destination for petrochemical manufacturing, benefiting all Albertans."
Nally said an opportunity exists to grow Alberta’s petrochemical sector by more than $30 billion by 2030, which could result in more than 90,000 direct and indirect jobs over the construction and operation of new facilities.
When the COVID-19 pandemic hit, it made the petrochemical industry even more critical, Nally noted, as the industry has helped create items like ventilators, gowns and transparent face masks.
This new program is in addition to the current Petrochemical Diversification Program, which cost $1.1 billion.
In a press statement, Mark Plamondon, executive director of the Alberta's Industrial Heartland Association, said this program will have a "significant impact" on enhancing Alberta's competitiveness for large-scale investments.
"This program, coupled with the other tremendous competitive advantages that Alberta's Industrial Heartland has to offer, including world-leading carbon capture and storage infrastructure, will stimulate job-creating economic activity that will benefit all Albertans and all Canadians," Plamondon stated.
Criticism from Canadian Taxpayers Federation
Shortly after the program was announced, Franco Terrazzano, Alberta director of the Canadian Taxpayers Federation, criticized the program for being a “new petrochemical corporate welfare program” that does not cap costs.
“We need to get the economy going again, but the answer is not to make struggling taxpayers sign a blank cheque for another petrochemical corporate welfare program,” said Terrazzano.
“Premier Jason Kenney should stay focused on tax relief instead of risking tax dollars trying to play investment banker.”
