Alberta government ‘strongly’ committed to innovation, but with reduced funding

Mark Lowey
June 26, 2019

Alberta’s United Conservative Party (UCP) government is “strongly” committed to research and innovation, including some activities funded by the province’s now-defunct carbon tax, says a senior provincial official.

“The provincial government is strongly committed to this space,” John Brown, ADM of science and innovation at Alberta Ministry of Economic Development, Trade and Tourism, told the Inventure$ conference, presented by Alberta Innovates in June in Calgary.

“We want to use innovation as an enabler to both grow the (economic) pie and to have the pie a little bit more evenly distributed, so that if a certain sector goes in the tank, it doesn’t take the whole economy down,” he said during a panel session.

RE$EARCH MONEY asked Brown if the government would continue to fund innovation programs and projects delivered by Emissions Reduction Alberta and Energy Efficiency Alberta, agencies funded by the former NDP government’s carbon tax.

Brown replied that the UCP government abandoned a specific fiscal instrument – the province-wide carbon tax – which it considered inappropriate.

“That doesn’t mean that the policy objectives that the previous government was trying to achieve with that instrument went out with the bathwater. I think there are still some policy objectives that the current government would like to see achieved.”

The UCP’s election platform committed to keep a reduced carbon levy on the province’s large industrial emitters, with some of that money going into an innovation stream, he said.

“I can’t speak to the policy. That’s yet to be developed,” Brown said. “But I would suggest that the concepts that have underpinned the work, particularly of Emissions Reduction Alberta, would continue.”

The Jason Kenney government’s first piece of legislation scrapped the carbon tax for consumers and facilities that emit less than 100,000 tonnes of CO2 per year. This tax had generated more than $2 billion in revenues since it was introduced on Jan. 1, 2017.

However, there is still a carbon tax on large industrial emitters, although the government plans to drop this from $30 to $20 per tonne as of January 1, 2020. That will mean less money from the carbon tax for provincial innovation agencies.

Emissions Reduction Alberta (ERA), for example, has invested more than $570 million in 163 projects (with a total project value of $4.5 billion) in the last 10 years.

The Kenney government plans to use only the first $100 million plus 50% of remaining revenues from the industrial emitters carbon tax for new and cleaner Alberta-based technologies, including improved oil sands extraction technology and supporting research and investment in carbon capture, utilization and storage.

The remaining carbon tax revenues will support reductions in Alberta’s deficit, although $20 million per year will go to the province’s energy “war room”, which has a $30 million annual budget to counter what the government calls lies and misinformation about the oil and gas industry.

Energy Efficiency Alberta “won’t survive”

As for the fate of Energy Efficiency Alberta (EEA), which had an annual budget of about $132 million, long-time Conservative strategist and public policy consultant Michael Lohner said the agency won’t survive in its current form.

“Fully expect that EEA will be either reformulated under a new brand or disbanded altogether,” Lohner, a partner at Crestview Strategy, told the Canadian Solar Industry’s Association’s national conference in May in Calgary, which R$ covered.

However, existing contracts negotiated in good faith with EEA, whose 20 different programs include installation of residential and commercial solar power systems, won’t be cancelled, Lohner said. The Alberta government, he added, also will move away from the NDP’s commitment that renewable energy will make up 30% of the power grid by 2030, and will cancel the previous government’s Renewable Electricity Program. Renewables will have to compete, without subsidies, in the electricity market, he explained.

“This government will distance itself from the NDP’s Climate Leadership Plan completely,” Lohner said. At the same time, the government will likely retain what it considers valuable components of the plan and fund them through general revenues or the capital plan, rather than a provincial carbon tax, he added.

Campaign platform thin on innovation

The UCP’s 114-page election campaign platform document contains just over one page dedicated to innovation. The document says a UCP government will simplify the way startup and growth companies secure public and private funding. “We will reduce duplication and coordinate across the many investment agencies in the province. Investments of public money will have a clear return on investment criteria.”

In addition, the government will apply technology and process improvements to the government itself in order to lead by example, according to the document. This includes actively engaging in pilot projects to test global best practices that can help deliver public services faster, more securely, and at lower cost.

The Kenney government has yet to announce any initiatives that deliver on those commitments. However, in June the government cancelled contracts to build a $595-million centralized public laboratory facility next to the University of Alberta’s south campus. The Edmonton Laboratory Clinical Hub would have replaced outdated labs and offered the opportunity to collaborate with U of Alberta to develop and commercialize new lab tests.


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