Hicks on Biz: Trump could be good for Alberta BY GRAHAM HICKS FIRST POSTED Edmonton Sun: THURSDAY, NOVEMBER 10, 2016
Please, no more hysterics.
The sky is not falling.
American President-elect Donald Trump could be very good for Alberta.
Did we happen to mention the Keystone XL pipeline?
Alberta’s biggest challenge is not climate change and greenhouse gas emissions, but the need for new pipelines to get our stranded oil and natural gas to market.
Outgoing American President Barack Obama vetoed the Keystone XL pipeline – carrying up to 1 million barrels of dilbit (diluted bitumen) a day from the oilsands to under-utilized upgraders/heavy-oil refineries along the Gulf of Mexico. Trump has promised to reverse that decision as soon as possible.
Trump believes fossil fuels will continue to play a major role in providing cheap energy to America and the world.
Trump will take a very different environmental stance than Obama, with an underlying assumption that environmental concerns can be met without excessive government interference and subsidy.
Trump will embrace the “greening” of fossil fuels as another solution to global warming.
Environmental improvements that make money will be welcome.
Those requiring government subsidy will not.
This is good news for Alberta. Our expertise in lowering greenhouse gas emissions from fossil-fuel production will be back in demand.
Keystone XL – the safest pipeline in the world - will alleviate the current oilsands production bottleneck.
The USA needs our oil. Despite big production increases, America still imports 10 million barrels of oil to feed its daily 19.4 million barrels' appetite.
The USA needs the Keystone pipeline.
Trump has promised, like Justin Trudeau here, massive infrastructure spending (roads, bridges, hospitals etc.) to make America great again. This is great news for Edmonton’s world-class engineering and construction cluster, led by Stantec and PCL.
Trump’s America-first trade proposals are expected to be aimed at China and Mexico, not Canada.
He’s expected to go after countries that have massive trade imbalances with the USA, not Canada.
Trump, as a businessman, knows Canadian business is hugely invested in the USA. Our pipeline companies, utilities, banks, real estate developers, engineering and construction firms have a greater presence in the USA than ever before. The USA needs our investments, Our economies are as intertwined as any two countries in the world.
The greatest danger to Canada’s economy won’t be exclusion from the American economy, but our ability to compete under essentially the same free-trade deal as we now have.
Trump is promising corporate America lower and fewer taxes, less regulation and no carbon tax. He will offer tax breaks to bring off-shore companies back home, erect trade barriers (not against Canada) to discourage the import of cheap foreign goods and encourage made-in-America manufacturing.
Meanwhile, Alberta has raised taxes on corporations and high-income earners. Regulations and government decrees are piling up. The cost of Alberta’s industrial electricity will double in the name of climate change. A carbon tax equivalent to a provincial sales tax is looming. (To its credit, the ND government is lowering royalties on conventional oil production in 2017.)
If Trump delivers on his taxation promises, Alberta companies won’t look to China to produce their goods. Instead, they may move lock, stock and barrel to the USA. Why would new investment come to Alberta, when the USA can offer a much better deal?
Our current Alberta regime believes all good things flow from a government that acts in what it perceives as the interests of the people.
The new American government is all about minimizing government interference, lowering taxes, letting the free-market rule and rewarding individual effort.
My greatest optimism is in finally getting the Keystone pipeline built, even though all our international output will still be shipped to our one-and-only international customer, the USA.
My greatest fear is that the ND government’s onerous taxing policies, the carbon levy, and massive wind farm/solar subsidies will push current and future Alberta businesses and entrepreneurs south of the border to a far more business-friendly regime.