Our Advocacy

Issue

The agriculture industry significantly contributes to Alberta’s economy and enhancing the strength of the sector is an important priority. It is particularly important for Alberta’s agri-food industry to market their products in a way that reflects the link between ‘Grown-in-Canada’ product and a supply chain, environment, standard, and identity that is uniquely and 100% Canadian.

Background

Country of Origin (COO) labelling is regulated by the Government of Canada and labelling standards must comply with the World Trade Organization Technical Barriers to Trade Rules16 and Codex standards which serves to prevent protectionist agendas and technical barriers to trade. Within this regulatory framework, it is particularly important for Alberta’s agri-food industry to champion a voluntary ‘Made in Canada’ brand in order to increase value and to provide a marketing link between grown-in-Canada product and the strong Canadian standards for food safety and environmental stewardship.

COO labelling is viewed as a critical mechanism to help ensure consumers can correctly connect with products, enable producers to adapt production to meet consumer demands and expectations and promote social or political-economic objectives (e.g. health outcomes, growth in desirable sectors, increased exports).17 Informing consumers of the origin of food products via labelling is motivated by the recognition that geography is often correlated with a product’s overall quality, or, in the stronger case, geography may even be a determinant of a product’s ultimate realized quality.18

The What We Heard Report (2021) released as a result of the consultation held on the Next Agricultural Policy Framework stated Public Trust as a current and emerging challenge facing the sector (p.9). "Respondents conveyed that educating the public and promoting the great work that occurs across the value chain is very important for the success of the industry, now and for years to come.”19 A unified campaign focused on marketing the agri-food industry both domestically and internationally is required to educate the public and promote Alberta and Canada’s agri-food industry.

The agri-food industry includes value-added agriculture and agri-food processing which are often forgotten as a vital part of the industry. The same What We Heard Report noted “Value-Added Growth and Attracting Business to Alberta” (p.8) as a significant growth opportunity for the industry. With the agri-food industry target set to increase by over 27% to $225 billion dollars in 2025,20 all sectors must be given the opportunity to reach their full potential through a unified COO brand.

Given the size of the agriculture industry in Alberta, the provincial government should be partnering to promote locally grown and processed agriculture products to position the Alberta agriculture industry as a leading force in Canada. The Next Agricultural Policy Framework (NAPF) also includes the Agri- Marketing program, a federal-only program, which provides funding for market development and promotion activities.21 In 2019, the Federal government unveiled the ‘Canada Brand’ which is currently undergoing a brand refresh. This branding toolbox has included a suite of graphics, images and messaging that can help brand products and leverage consumers' positive perceptions of Canada.

However, the qualifications for the brand include even more lax qualifications than “Made in Canada” and “Product of Canada” labels.22 While this is a step in the right direction, products that are ‘grown in Canada’ signify a supply chain, environment, standard, and identity that is uniquely and 100% Canadian.

The Alberta government has a responsibility to market Alberta’s agriculture, particularly when there is a very clear mandate from the agriculture industry in Alberta to promote locally grown, sourced, and produced food and demand for easily identified Canadian products. However, while there are various opportunities for marketing the agri-food industry, there is no distinct, recognizable, and unified brand. Products with a regulated COO can command between 21% - 39% higher price premiums compared with non-regulated regional labels.23 This serves to reinforce the importance of a distinct, recognizable, and unified ‘Grown in Canada Brand’. Therefore, because of the prominence of the agri-food industry in Alberta, Alberta is uniquely positioned to take the lead on creating a ‘Grown in Canada brand’ that reflects the safe, sustainable, and high-quality agri-food products.

Not only will an Alberta led ‘Grown in Canada’ brand advocate for a prominent industry in Alberta, it provides the opportunity to expand the domestic market, increase awareness among the public of the high standards in the agri-food industry, and signify products that are 100% Canadian.

The Alberta Chambers of Commerce recommends the Government of Alberta:

1. Work with the Government of Canada to expand on “Canada Brand” to create a voluntary, “Grown-in-Canada” label that would identify with 100% Canadian-grown product that would include a single unified label, logo, image, and theme.
2. Work with the Government of Canada to develop a unified public education strategy showcasing the agri-food industry’s practice of environmental stewardship resulting in reliable, sustainable and high-quality agri-food and value-added products.

16 https://www.wto.org/english/tratop_e/tbt_e/tbt_e.htm

17 Consumers’ Preferences for Geographical Origin Labels: Evidence from the Canadian Olive Oil Market

18 Barham E. (2003) “Translating Terroir: The Global Challenge of French AOC Labelling,” Journal of Rural Studies Josling T. (2006) “The War on Terroir: Geographical Indications as a Transatlantic Trade Conflict” Journal of Agricultural Economics

19 Government of Alberta. 2021. What We Heard Report. https://www.alberta.ca/assets/documents/afred-what- weheard-report-next-policy-framework.pdf

20 Canada’s Economic Strategy Table: Agri-food’: 3 https://www.ic.gc.ca/eic/site/098.nsf/vwapj/ISEDC_Agri- Food_E.pdf/$file/ISEDC_Agri-Food_E.pdf

21 NAPF report https://www.ourcommons.ca/Content/Committee/421/AGRI/Reports/RP8717216/agrirp05/agrirp05e.pdf

22 https://marquecanadabrand.agr.gc.ca/intro/index-eng.html

23 A Meta-Analysis of Geographical Indication Food Valuation Studies - 214

Issue

Serious challenges persist within Alberta's natural gas system which negatively impacts natural gas supply chain reliability, industry operations, and investor confidence. These challenges can and should be addressed to better manage the current system demand and industry operations and to further position Alberta as an industrial investment location of choice. With an abundance of natural resources, developing world-class infrastructure would provide investor confidence in the competitive advantage Alberta has for attracting new investment.

Given the essential role hydrogen has in achieving net-zero goals it will be essential to improve the natural gas system reliability to ensure enhanced reliability of the production of this vital clean fuel of the future and enable the hydrogen economy to develop in a safe, reliable, and sustainable manner.

Background

Natural gas is an important economic driver in Alberta, with over 60% of Canadian marketable natural gas being produced within Alberta.117 According to the Government of Alberta, "83% of natural gas consumed in Alberta is used by the industrial, electrical generation, transportation and other sectors. Natural gas is also an important raw material for the province’s oil sands and electric power-generation industries."118 Natural gas is also the main raw input for hydrogen production, a key material used for producing transportation fuels, hydrogen peroxide, nickel, cobalt, ethane, and propane for Alberta, Canada, and the world.

Natural gas is supplied by federally regulated monopolies, similar to rail transportation. Currently, there are no quality specifications for natural gas at the delivery point for consumers in Alberta and this can adversely impact downstream users. Quality excursions have been experienced in Alberta and such events can have significant downstream impacts on industrial facilities and subsequently on consumer markets. Low-quality natural gas can cause production delays, damage to facilities, and quality impacts on derivative products of natural gas.

Another significant cause of concern is firm supply reliability. Natural gas customers pay a premium for "firm supply", which by definition means this supply will not be interrupted, however; Alberta companies have experienced interruptions in firm supply and continue to see risk to firm capacity supply reliability. Firm supply interruptions are the fault of the natural gas provider, typically due to a system failure. For example, a provider will experience a compressor failure, and it will be discovered a single component failure in the system results in supply interruptions. Why aren't there built-in system redundancies? Additionally, extreme cold ambient temperatures should not be a factor in firm capacity supply reliability as these temperatures are custom for Alberta to experience annually.

Maintenance coordination is also a challenge as it is not happening appropriately between natural gas providers and receivers to minimize the effects of supply interruptions. There are regular occurrences when natural gas supplier maintenance activities are scheduled during periods of high system demand. Implications of both issues include operational concerns, downtime-related costs, and decreased confidence in the supplier, supply chain and potential investors.

There are also serious concerns for timelines to secure natural gas volumes in Alberta (for existing or new facilities). Currently, firm supply is available with a 4+ year lead time, while new facilities can be built within a two- to three-year window. This misalignment of natural gas infrastructure expansion (or new build) and project development timelines will discourage new investment in Alberta.

Lastly, the advancement of hydrogen blending into the existing natural gas system, if not done carefully, risks exacerbating these chronic system reliability issues. Introduction of hydrogen into legacy natural gas systems of varying age and specification can result in leaks or equipment performance issues due to its different properties and its interaction with piping and component materials. If sections of piping require replacement to ensure safe operation, this could worsen the maintenance coordination issues discussed above. Gas consumers may also need to retrofit equipment to use blends of hydrogen and natural gas due to the lower heating value of hydrogen and the propensity for higher NOx emissions when combusted.

The Alberta Chambers of Commerce recommends the Government of Alberta work with natural gas suppliers and infrastructure suppliers and, where applicable, the federal government to:

1. Set quality standards for natural gas specifically at the delivery point and create provisions for losses related to the delivery of off-spec natural gas;
2. Ensure timely development of new, and expansion of existing, natural gas supply infrastructure to support growing natural gas demand, attract new projects, and secure further investment in Alberta;
3. Streamline regulation and approval process for critical infrastructure builds, such as pipelines, and;
4. Advance recommendations for hydrogen blending in existing natural gas systems only after multi-year pilot studies have been completed to ensure that the blending levels proposed can be managed safely, without adverse reliability impacts, and at a reasonable cost to consumers.

Issue

Government needs to strike a balance between achieving its emission reduction goals and preserving the competitiveness of the economy using pragmatic, flexible and innovative solutions.

Background

We recognize that Alberta’s emissions are challenging to reduce for three primary reasons. First, our population and economic growth rates, as well as our incomes, have grown faster than other provinces,200 and emissions are found to positively correlate with economic growth.201 Second, our large, anchor industries are emissions-intensive and consist of long-lived assets (oil sands plants, gas plants, chemical production, refineries, etc.) which can improve performance over time, but not as rapidly as other sectors with shorter asset lives.202 According to Canada’s Ecofiscal Commission, 18% of Alberta’s economy would qualify, under internationally recognized standards, as being both emissions-intensive and trade-exposed (compared to 2% in B.C. and Ontario and 1% in Quebec).203 Finally, the choice of fuels for electricity generation drives emissions.

The Technology Innovation and Emissions Reduction (TIER) program replaced the Carbon Competitiveness Incentive Regulation (CCIR) for large industrial emitters on January 1, 2020 and was updated following consultations in December of 2022.204

Since Alberta’s economy is particularly sensitive, there is concern that unduly aggressive actions taken to reduce emissions in Alberta may not lead to real emissions reductions. Instead, investment may shift to other jurisdictions without stringent GHG policies, negatively affecting Alberta’s economy and not ultimately impacting global greenhouse gas emissions due to carbon leakage. Ensuring that our economy and small businesses remain vibrant and competitive is imperative as small businesses make up 87% of all businesses in the province.205 Government needs to strike a balance between achieving its emissions goals and preserving the competitiveness of a critical part of the economy.

There are many businesses, industries and municipalities that are looking to reduce their carbon footprint by converting to natural gas as an alternate energy source. While still a source of GHG emissions, in comparison with other fuel sources natural gas is less carbon intensive, relatively cleanburning, abundant, safe, reliable and efficient. Burning natural gas gives off much fewer toxic emissions than coal or oil and for the same amount of energy produced; gas emits 30% less carbon dioxide when burned than oil, and as much as 45% less than coal.206 Despite this known benefit, natural gas still has significant carbon pricing applied.

An additional consideration should be measuring the total net contribution of GHG and rewarding those companies and industries who aim to mitigate their output. For example, the greenhouse industry, while consuming large amounts of natural gas, also grows plants that absorb carbon dioxide from the atmosphere. Compound the carbon absorption with innovations like green carbon capture and the environmental impact in the form of GHG is very low. Taking the final net carbon footprint as a benchmark will serve the dual purpose of keeping industries competitive and innovative while also promoting tangible and measurable emissions reductions.

Furthermore, consideration of organizations that aim to have a positive environmental impact by taking specific action to clean the environment. An example of which could be a reclamation company or a hydrovac company. Both examples would have to pay the carbon tax, however neither would get additional credits for the clean-up work they do.

Earmarking a portion of the funds collected through the TIER program to create educational tools that highlight the high ethical, environmental, and sustainable standards of the natural resource sector in Alberta will lay the groundwork for the education of Albertans. The goal of any climate policy is to change behavior and drive businesses and consumers to make choices that support low or zero carbon products. The provincial government must allow for the most effective way to encourage these new patterns of behaviour. Government should continue to provide incentives through tax credits to emerging alternative energy innovations which may provide wider spread and supportable long-term cooperation towards a low carbon economy.

Incentives enable businesses to mitigate the threat of climate change with a focus on new emerging industries and opportunities to innovate. Climate change can offer an opportunity to harness Alberta’s expertise and availability of technical workers and concentrate on emerging prospects such as artificial intelligence (AI) and cleantech. The expected economic gain of over $1 trillion dollars, Canada wide, in climate change innovation should be headquartered in Alberta as part of modernization, growth, and expansion to ensure that Alberta is ahead of the curve.

Flexibility to allow businesses to use innovative market driven solutions to fill the gaps between conventional and renewable forms of energy must be encouraged. Offering equal tax incentives between emerging technologies and those alternative energy sources already established, like solar and wind, will ensure that the government is not dictating “winners and losers”. Alternatives and solutions must be driven by consumers and businesses and not dictated by government to ensure the best overall result. For example, the UK offers an accelerated depreciation allowance for energy efficiency equipment and technology, so that companies can replace old, energy consuming equipment with better models, which allows them to cut their operational costs.

The balance between preserving the economy while converting to low carbon emissions requires policies that are effective while also politically palatable. If policies and programs are applied ineffectively or seem to be incomplete and unduly punitive their chances of being successful and leading the charge to change behaviour will be unsustainable. There are numerous opportunities available that Alberta must seize in order to demonstrate its adaptability, resiliency and reinforce its long-held tradition of being pioneers in spirit and action. Capitalizing on the opportunities that arise from adapting to a low emissions economy is a path to economic sustainability which Alberta is uniquely positioned to undertake.

Climate change is not possible in a single political cycle and needs buy in from society and government as a whole. Any policy implemented needs to be meaningful, pragmatic, sensible and flexible in order to achieve the final goal of emissions reductions and environmental preservation.

Additionally, when measuring the success of any climate change effort all costs (direct and indirect) need to be considered so that the real impact on business and the economy can be assessed and policy adjusted to strike the balance between a healthy economy and reduction of emissions.

The Alberta Chambers of Commerce recommends the Government of Alberta:

1. Ensure carbon policies maintain competitiveness with like jurisdictions in Canada and the United States that have similar investment interests.
2. Communicate the goals and the timelines of climate policies and amendments or modification plans if the goals and timelines are not met.
3. Ensure there is cost neutrality within the business sector and that revenue from carbon pricing is available and cycled back to the business community through other tax incentives and capital cost allowances.
4. Provide pathways for market driven solutions through tax incentives to all emerging technologies for carbon reductions to allow consumers and businesses the freedom to drive the choices towards preferred lower carbon options.
5. Only implement a levy on natural gas when a less carbon intensive and cost effective solution is available.
6. Implement options to measure net carbon impact and only apply levies to the net amount, taking into account the measures used to mitigate the total carbon footprint, including absorption of carbon dioxide and technologies such as green carbon capture.
7. Allocate a portion of levies collected for the purpose of creating and providing educational programming tools related to natural resource development including both energy and agriculture.
8. Measure both the direct and indirect cost impacts of climate policies.

200 Frew, N. (2022). Growth rate slows, but Alberta population still up nearly 200,000 over 2016: census. CBC News. https://www.cbc.ca/news/canada/edmonton/alberta-population-dwelling-2021-census-1.6344858

201 Onofrei M., Vatamanu A.F., and Cigu E. (2022). The Relationship Between Economic Growth and CO2 Emissions in EU Countries: A Cointegration Analysis. Frontiers in Environmental Science. doi: 10.3389/fenvs.2022.934885

202 Climate Leadership Report to the Minister: https://open.alberta.ca/dataset/212a6266-b8d3-4822-b208- 9221da2a0966/resource/9f52cd8e-5477-45a6-a337-f2d64d091cf9/download/2015-climate-leadership-report-tominister.pdf

203 https://ecofiscal.ca/reports/provincial-carbon-pricing-competitiveness-pressures

204 APPENDIX: Emissions Management and Climate Resilience Act. Technology Innovation and Emissions Reduction Amendment Regulation. https://kings-printer.alberta.ca/documents/Orders/Orders_in_Council/2022/2022_403.html

205 Holden, M. (2022). Jobs and job growth in Alberta by business size. Business Council of Alberta. https://businesscouncilab.com/work/jobs-and-job-growth-in-alberta-by-business- size/#:~:text=It%20is%20well%2Destablished%20that,are%20almost%20identical%20nation%2Dwide.

206 http://naturalgas.org/environment/naturalgas/

Issue

Current federal legislation does not allow for meat, poultry, eggs, dairy products, fruits and vegetables to cross provincial/territorial borders, or to be exported out of Canada unless these products are processed in a federally licensed facility. The new Safe Food for Canadians Act will expand this to include all foods shipped out of province/territory. The Canadian government claims that this is required to ensure that Canada fulfils its commitments under current world trade agreements.

Background

Currently, implementation of Canadian Food Inspection Agency (CFIA) regulations and licensing requirements is cost prohibitive to many small to mid-sized processors and constitute a major barrier to interprovincial and international trade. The processor’s share of these costs is excessive when compared to costs incurred by their competitors for similar services in other jurisdictions, notably in the USA. This places Canadian processors at a disadvantage to many competitors.

SMEs advise that current CFIA food safety regulations are outdated and need to be revised to remove unnecessary regulations that lack adequate scientific validation of enhancing food safety outcomes while creating a significant impediment to business interests. There is also a need to minimize duplication of administration costs between provincial/territorial and federal regulators.

Facility construction requirements, along with steep inspection, licensing and testing fees all constitute major obstacles for processors that want to trade interprovincially or internationally. Unified provincial/territorial standards and regulations, with increased accessibility to federal licensing would be of significant financial benefit to small and medium sized processors that want to increase their business through interprovincial or international trade. Easy to implement, cost competitive, and uniform food safety standards and regulations, for both interprovincial and export markets, are required, without compromising food safety standards.

With the current CFIA modernization in progress, it is important to the competitiveness of Canadian businesses to reduce barriers to trade and enhance business growth opportunities. This is especially important with the impending impact of the Comprehensive Economic and Trade Agreement (CETA).

Canadian processors trading interprovincially or internationally operate at a disadvantage to international competitors. For example, the United States Department of Agriculture Food Safety and Inspection Service (USDA FSIS) does not levy licensing and inspection fees on their food processing plants (up to the first 40 hours per week). As a comparison, the Province of Alberta charges $4 per hour for the first 7.25 hours per day. CFIA inspection stations cost from $9,855 per year for one red meat station to $16,218 per year for a poultry station. If an abattoir is processing more than 25 cattle/hogs per hour or 28 birds per minute, they must purchase an additional table. There is also the requirement to pay for inspection fees and various tests for Listeria, Salmonella, and E. coli.

Before food products are imported into Canada, the CFIA conducts an initial inspection of the processing plant from which these products originated, and then conducts random inspections of the imported products. This same oversight and outcome-based approach should be applied to all interprovincial and international trade.

Interprovincial trade of agriculture and food products comprises a major portion of the Canadian agri-food business. “From 2000 to 2005, interprovincial exports of agricultural and food products were higher than Canada’s agri-food exports to the United States. Interprovincial exports of agrifood products rose by 20% during this period, increasing from $21 billion to $25 billion in value. During this period, the value of agri-food exports to the United States was between $16 billion and $20 billion.”

While the exact cost of interprovincial trade barriers caused by differing food regulations is not known, the Canadian Chamber of Commerce estimates that internal barriers to trade cost the Canadian economy up to $14 billion each year. While much of this loss can be attributed to the limited potential customer base, there is also a 55% overlap of administrative and regulatory service between Canada and Alberta.

Despite numerous efforts to reduce interprovincial trade barriers such as the Agreement on Internal Trade (AIT) and regional trade agreements such as the New West Partnership Trade Agreement (NWPTA), the Atlantic Procurement Agreement (APA), the British Columbia – Alberta Trade, Investment, and Labour Mobility Agreement (TILMA), and the Agreement on the Opening of Public Procurement for Ontario and Quebec (AOPPOQ), the problems persist and are an obstacle to the growth and profitability of Canadian businesses.

The Alberta Chambers of Commerce recommends the Government of Canada:

1. Works collaboratively with provincial/territorial and federal inspection agencies to effect positive changes to food safety outcome inspections, enabling processors to compete more efficiently in both domestic and international markets: a) To support a single industry outcome that can be implemented with consistency and cost- effectiveness across Canada by the provinces/territories, with each provincial/territorial regulator subject to Canadian Food Inspection Agency oversight; b) The food safety regulations need to be reviewed for relevancy and modified/broadened if current criteria are unnecessarily restrictive and insensitive to sound business interests; and c) The implementation must be consistent and cost-effective throughout the food distribution chain, without compromising Canada’s reputation for high food safety standards; and
2. Reassess inspection and regulatory costs and how they are allocated, to enable processors to trade across provincial or national borders, without being at a competitive disadvantage.

Issue

Literature has long suggested that Alberta has the natural assets and technical feasibility to support further renewable energy development.161 That being said, Alberta’s renewable energy generation is low compared to the other provinces.162,163 Despite the importance and potential of renewable energy as part of a low carbon future, Alberta generated 11% of its electricity in 2017 from renewable sources,164 which is significantly less than the national rate of 66% renewable generation.165 Alberta’s largest source of renewable energy is wind power, generated from turbines often built together at wind farms on rural land, producing roughly 5% of total electricity in the province.

Background

Alberta’s electricity market is deregulated, allowing private generators to participate in a competitive power pool. Subject to the approval of the Alberta Utilities Commission (AUC), any generator can connect to the grid, where the transmission network allows buyers to purchase the energy with Power Purchase Agreements.166 Independent Power Producers make competitive offers to sell their energy to the grid and receive a price at the intersection of electricity supply and demand on an hourly basis.167 Smaller energy producers (under 5 MW) can develop projects under the MicroGeneration Regulation, allowing energy generation from renewable or alternative sources to offset the generator’s use, as well as sell back excess power to the grid.168

As the third largest producer of energy in Canada, Alberta trades electricity with British Columbia, Saskatchewan and Montana.169 In 2017, Alberta was an electricity importer.170 The bulk of Alberta’s energy comes from fossil fuel sources, with roughly 45% of electricity generated coming from coal and another 45% from natural gas in 2018.171 Despite having a number of legacy hydroelectric dams built in the 1900s, renewable electricity generation was quickly outpaced by fossil fuel energy development.

The Government of Alberta established a goal of generating 30% of electric energy from renewable sources by 2030 within the Renewable Electricity Act, passed in 2016.172 To facilitate the development of renewable projects to meet this target, the AESO developed and implemented the Renewable Electricity Program (REP). This program provides an Indexed Renewable Energy Credit, where the government pays or is paid the difference between the pool price for wholesale electricity sale and a bid price that represents the lowest acceptable cost for the renewable project.173 This program was designed to attract the most bidders by allocating the market price risk and opportunity to the Government of Alberta, providing revenue certainty for the renewable project owner174. In the first three rounds of the REP, 12 projects were selected to receive this funding, totaling 1,359.3 MW of renewable capacity to be operational by 2021. The program was able to procure the lowest renewable electricity prices in Canada.175

In anticipation of introducing more renewable energy, the AESO recommended a transition from an energy-only market structure to a capacity market structure.176 Under a capacity market, generators would be compensated for both producing energy and for providing capacity to produce energy.177 This transition was recommended to ensure the system was reliable, provided stable revenue, drove innovation and cost discipline, and was adaptable to policy decisions.178 The AESO determined that this transition would be required to accommodate the greater number of renewable generators being introduced by providing greater price stability and to incentivize investors to develop more renewable and natural gas projects because of the revenue sustainability.179 However, critics of the program cited concerns about oversupply and higher prices.

However, following the 2019 election, the current government, passed a bill terminating both the next round of REP and the Alberta Carbon Tax.180 These policy changes are one reason the AESO has forecast that Alberta will not reach 30% renewable capacity by 2030.181 There are several shovel ready projects in Alberta. AESO reports that 49 solar and wind generation projects from international and provincial players already received regulatory approval for construction. These projects have a combined generation capacity of 3,805 megawatts, including 300 MW wind project developed by EDP Renewables and several 200 MW wind projects developed by ENMAX, BluEarth Renewables and Suncor. Combined, these projects could create over $8 billion of investment in Alberta and more than 10,400 jobs by 2024.

In the wake of COVID-19, it only makes sense to hedge our public bets by diversifying into the smallscale renewable energy market, particularly in Alberta where there is significant economic activity to be unlocked by enabling renewables at a faster pace. Leveraging stimulus spending to reduce barriers for renewable energy will help Alberta tap into the potential of its vast renewable energy resources, which will mean more jobs, more investment coming to the province and affordable electricity.

The Alberta Chambers of Commerce recommends the Government of Alberta:

1. Set clear targets and make commensurate investments in energy storage projects to ensure Alberta can leverage its opportunities in renewable energy;
2. Develop outreach programs to attract students to relevant academic programs – with the aim of producing a diverse, highly skilled work force of post-secondary graduates and/or tradespersons;
3. Continue to invest in pilot projects across Alberta and neighboring provinces, to further level the playing field for renewables on the provincial grid; and 4. Engage in a united action with other levels of government, electricity employers, and academic institutions to support education and training or retraining to optimize the labour potential of current workers.

161https://www.cangea.ca/uploads/3/0/9/7/30973335/2288_deep_dive_analysis_of_best_geothermal_reservoirs_fo r_commercial_development_in_alberta_-_final_report_20170404.pdf

162 http://publications.gc.ca/collections/collection_2017/eccc/En4-294-2016-eng.pdf

163 https://open.alberta.ca/dataset/2bf1b608-8e3b-4bc9-854e-23d19bbecbdc/resource/a238daa7-1513-4ac0-841ed512d73a9c16/download/energy.pdf

164 National Energy Board (2019). Provincial and Territorial Energy Profiles – Alberta.

165 https://www.cer-rec.gc.ca/en/data-analysis/canada-energy-future/2020/canada-energy-futures-2020.pdf

166 https://www.pembina.org/reports/plugging-in-2018.pdf

167 Ibid.

168 https://www.alberta.ca/micro-generation.aspx

169 https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/provincial-territorial-energy-profiles/provincialterritorial-energy-profiles-alberta.html

170 https://www.alberta.ca/micro-generation.aspx

171 National Energy Board (2019). Provincial and Territorial Energy Profiles – Alberta.

172 https://www.qp.alberta.ca/documents/Acts/r16p5.pdf

173 https://www.aeso.ca/market/renewable-electricity-program/about-the-program/

174 https://www.aeso.ca/assets/Uploads/AESO-RenewableElectricityProgramRecommendations-Report.pdf

175 https://www.aeso.ca/assets/Uploads/2019-Transmission-Capability-Assessment-Final-18Apr2019.pdf

176 AESO (2016). Alberta’s Wholesale Electricity Market Transition Recommendation.

177 Ibid. 178 Ibid. 179 Ibid.

180 https://globalnews.ca/news/5334599/alberta-carbon-tax-ucp-bill-kenney/

181 https://calgaryherald.com/business/local-business/renewable-electricity-target-downgraded-by-albertas-electricsystem-operator

Issue

Some businesses whose operations use licensed vehicles off public roads pay fuel taxes intended for the maintenance of infrastructure they don’t use. A rebate for these inappropriate taxes would support the growth of industries such as oil and gas, mining, and logging.

Background

In 2011, Alberta eliminated rebates for fuel purchased for off-road purposes in licensed vehicles. This rebate provided relief for businesses who drove their vehicles predominantly off public roads during exploration or on private roads. Extraction industries, particularly mining and logging were particularly impacted by the change. In addition, businesses operating in non-urban and northern areas of the province are disproportionately affected, given that non-maintained roads vastly outnumber maintained roads and highways in those regions.

By allowing businesses to claim back a portion of the taxes paid at the pump, the Alberta government had demonstrated a long-term commitment to ensuring fairness, by rebating the portion of taxes collected on fuel that is not expended on the roads these taxes are meant to maintain. When the province announced its elimination of former rebate programs, it cited abuses by subscribers who drove their licensed vehicles on publicly maintained roads and highways. While most licensed vehicles are operated in part on public roads, an effective rebate could account for this by requiring applicants to account for the extent of their off-road use in applications. This proportion would ensure that appropriate and fair taxation is extracted from all users. Similar accounting and rebating methods are already implemented for many businesses regarding the use of vehicles used for both personal and business purposes.

Four other jurisdictions in Canada – British Columbia, New Brunswick, Nova Scotia and Yukon – currently offer rebate programs for licensed vehicles used in off-highway industry operations. With businesses located in other Canadian jurisdictions eligible to claim rebates on clear diesel and gasoline, Alberta businesses are at a significant disadvantage.

If Alberta is to maintain and strengthen its position as a global energy leader, it must restore the competitiveness of and fairness for its businesses by developing a rebate that directly impacts their operations.

The Alberta Chambers of Commerce recommends the Government of Alberta:

1. Implement a rebate on fuel taxes for licensed vehicles to the extent they are used for business purposes off publicly maintained roads.

Issue

The size and scope of equipment and machinery being used for industrial and agricultural purposes has changed dramatically over the past number of years. Transportation laws need to strike the delicate balance between maintaining public roadways and facilitating business operations.

Background

Municipalities, on behalf of the province, are responsible for the maintenance and upgrading of the majority of roads that farmers and industry access. Many of the aging roads were built poorly relative to today’s standard. For example, trees and black dirt were used as fill, and are not constructed to be able to weight-bear today’s large equipment, and are especially vulnerable to road damage during the spring and wet conditions. Unfortunately, most agricultural and many industrial operations are time and weather sensitive, requiring heavy equipment to be moved at times that are not always harmonious with current road conditions. Many of these roads service the rural area and are not a high priority for upgrades.

The permitting and exemption system is a complicated mix of legislation and application processes. Many municipalities have developed over-weight permits to exempt vehicles from road bans by using a bond system where the bond will only be forfeited if damage occurs. Transportation Routing and Vehicle Information System (TRAVIS) is a Government of Alberta system designed to easily achieve necessary permits, but does not function with all vehicle types.

Total axle load, number of axles, distance between axles, number of tires, tire size, tire pressure, steering axles, all affect pressure between the tire and surface. Historically, as equipment weight increased, so has tire size. Larger tires, tires filled with less air (lower pounds per square inch (psi), and more axles spread further apart all reduce the pressure of the tire on the road surface. The tire industry has recently designed radial tires to replace bias ply tires for larger equipment. This has helped reduce tire pressures to almost half the inflation rate of bias tires. The current legislative framework, permitting, and subsequently fining system, does not take fully take technologies that reduce psi transferred to the roadways into account. The table below illustrates the load index depending on tire inflation and the number of axles.

Load index by axle and tire inflation[1] [2]

Source: www.goodyear.com1

It is important that legislation governing the transportation of equipment reflect the technological realities of the equipment used while protecting roadways from damage and allowing business activities to be completed.

The Alberta Chambers of Commerce recommends the Government of Alberta:

1. Identify and publish the standards to which roads and bridges have been built and their weight bearing capacity, ensuring that information is used to set weight restrictions. Ensure a legislative mechanism exists for municipalities and the provincial government to waive weight bearing restrictions on a case-by-case analysis for roads that are a low priority for upgrading where the need is time sensitive;
2. Identify roads and bridges in need of upgrading to allow for a more efficient heavy load system and provide budgeting based on economic reliance on a particular road;
3. Undertake and continue in ongoing research to identify and ensure changes in vehicle and tire technologies reflect pressure transferred through to the roadway and update the legislative, permitting, and enforcement framework accordingly;
4. Take into account appropriate exemptions for agricultural and other necessary time sensitive uses for public roadways;
5. Improve communication and education about how to obtain the proper permits; and,
6. Ensure permit providers obtain the correct and necessary information to make the process standard with minimal red tape.

Issue

Allowing Canadian-controlled private corporations (CCPC’s) to split income would create consistency within the treatment of income taxes. It would also support the success and enhance the growth of small businesses, especially family-based businesses.

Background

Historically, owners of Canadian-controlled private corporations (CCPC’s) have been able to split income with family members by paying dividends on CCPC shares owned directly, or indirectly through a Family Trust, to family members including spouses and children. Up until 2000, this strategy was available to small business owners with respect to the payment of dividends to all family members including minor children1, most often via the use of a Family Trust. The objective, and result, was the mitigation of the overall tax burden of the small business owner by being able to utilize the low marginal rates of tax for all family members by having these dividends taxed in the hands of family members rather than all in the hands of the small business owner.

In 2000, the Department of Finance introduced legislation to ensure that any dividends paid to a minor child (either directly or indirectly) would be taxed in the hands of the minor at the highest marginal rate, thus frustrating access to the child’s low marginal tax rates. These changes were colloquially referred to as the “kiddie tax” but specifically represented the first efforts of the Department of Finance with respect to introducing a “tax on split income” (TOSI). In the Budget releases following the 2000 introduction of the “kiddie tax” the government expanded the reach and application of TOSI by including not only dividends received by a minor from a related private corporation, but also capital gains realized on the sale of shares of a CCPC to a non-arm’s length purchaser, rents realized on real property owned by a non-arm’s length party as well as interest on debt issued to related parties. At the time, adult children and spouses were not subject to the reach of the “kiddie tax” rules as these were specific to minor children.

On July 18, 2017, the reach of the TOSI rules changed dramatically with the release of the Liberal government’s White Paper on the Taxation of CCPC’s. This White Paper formed the basis for legislation announced in the 2018 Budget that sought to treat certain adult children and spouses in the same manner as minor children with respect to the receipt of dividends and other sources of income received from a CCPC. The TOSI rules are very complex and problematic for business owners and their advisors in that they specifically eliminate any opportunity for a CCPC to remunerate spouses of “principal” shareholders of certain businesses with dividends or other sources of income. Because of their complexity and the selective nature of their application, it has become clear that, not only do the rules place certain industries (in particular service-based businesses) at a distinct disadvantage when it comes to tax planning opportunities, it also reflects a distinct gender bias as the vast majority of female spouses who have previously been provided with a source of independently reported income are now viewed as wholly-dependent upon their male principal-shareholder spouses.

The application of the new TOSI rules to spouses also reflects an inconsistency in the income tax treatment of the individual taxpayer versus the family and, in particular, spouses. The “family unit” has generally been viewed as the appropriate unit of taxation as opposed to the individual. Generally, spouses are considered together as a couple for many income-tested benefits, pension income-splitting and spousal RRSP’s which highlights the inconsistent approach to enabling principal shareholders to share income with their spouses. Beyond the pure income tax considerations, family law legislation in all provinces generally will recognize that both spouses make equal contributions in a marriage notwithstanding there may not be direct measurable capital contributions to a business. Family assets may be at risk for the purposes of financing CCPC debt, may be used indirectly in the execution of business operations or may form the quantum of funds contributed for business start-up.

In addition to the shared-asset argument, spouses of principal shareholders are a critical informal source of support for business operations. A non-active spouse will often act as a sounding board and provide valuable perspective and advice to the active spouse.

The Alberta Chambers of Commerce recommends the Government of Canada:

1. Department of Finance immediately amend the Income Tax Act to exempt spouses from the application of the tax on split income legislation.

Issue

Current legislation restricts the ability to attract international students and creates barriers for those who have been trained in Alberta to obtain permanent residency. Adjustments to provincial and federal immigration programs can improve the retention of domestically trained international students which will help to overcome the gaps in labour and skills availability to meet Alberta’s labour needs.

Background

Businesses across Canada are struggling to find skilled employees to meet their labour needs, and it is costing the economy billions.311 In Q3 of 2022, Alberta alone had a job vacancy rate of 5%, or 103,380 positions.312 International students represent a significant and currently underutilized opportunity for meeting the needs of the Albertan economy as they are proficient in at least one Canadian official language, have Canadian credentials, and have in-demand labour skills. They also contribute an estimated $21 billion to the Canadian economy each year.313 There are currently 24,636 international students studying in Alberta that could join the labour force after graduation.314

Attracting and retaining international graduates can be a successful strategy to help face the consequences of aging baby boomers and severe labour force shortages that Alberta is currently facing. The problem is current legislation restricts the ability to attract international students and creates barriers for those who have been trained domestically to obtain permanent residency at each stage of the process.

Study Permits

Applications for study permits from outside of Canada require proof of acceptance at a Designated Learning Institution (DLI) and take over 13 weeks to process. According to the 2021 CBIE International Student Survey, 49.2% of international students experience issues with obtaining a student permit pre- arrival.315 Many post-secondary institutions continue to advocate to IRCC regarding the struggles of international students to receive their study permits in time to begin classes.316

While in Canada on a study permit, students often struggle with feelings of isolation as they are experiencing an entirely new culture.317 On a study permit, they are required to study full-time, meaning that they are taking three to five courses. If a student breaks the term of their study permit, they are at risk of being deported. Study permits are valid until 90 days after graduation.

Employment During Schooling

While attending a post-secondary institution in Canada, students often work either because their program requires it or to earn money to pay living expenses. In fact, 32.7% rely on off-campus work income, 10.6% on on-campus work income, and 3.4% on work-integrated learning income for financial support during their studies.318 48.5% of international students indicated that they were working and of those, 43% indicated difficulty finding work, lack of experience being the largest barrier.319

While in full-time studies, an international student can work an unlimited number of hours on campus. Until December 2023, this applies off-campus as well. After this period, international students will be limited to 20 hours of work per week as many jurisdictions in Europe do.

To work a coop or work-integrated learning term, international students require a coop or intern work permit. This is temporarily on hold until December 2023. If this permit is not obtained prior to arriving in Canada, the student may not be able to continue in their program and would be at risk of breaking the terms of their study permit.

Employment Following Graduation

After graduating from a Designated Learning Institution (DLI), international students must obtain a work permit if they wish to stay in Canada. The most common option is a Post-Graduation Work Permit (PGWP) which 72.6% of international students plan to apply for.320 A PGWP is valid for 8 months to 3 years depending on the length of program. Other work permits exist as well, and they require a job offer to obtain.

Permanent Residency

60% of international students plan to apply for permanent residence in Canada and 77.3% of students in Alberta intend to stay here after receiving PR.321 There are a few streams through which can become a permanent resident in Alberta. Each of these require job experience and most require a valid job offer:

Canadian Experience Class requires:

• A certain language level.
• At least 1 year of skilled work experience in Canada in the last 3 years before application.
• There is no education requirement, although accreditation from a Canadian institution gives the applicant more points.

Federal Skilled Workers Program requires:

• 1,560 hours of skilled work experience in certain National Occupational Classification (NOC) job groups within the last 10 years. Work must be paid, volunteer work and unpaid internships do not apply.
• Work experience gained while studying may count towards minimum requirements if the work:
  • Was paid by wages or commissions
  • Was continuous (no gaps in employment), and
  • Meets all the other requirements of the Program
• Proof that the applicant performed the duties set out in the lead statement of the occupational description in the NOC.
• Proof of Funds.

Alberta Advantage Immigration Program requires:

• A valid work permit.
• Full-time work in an eligible occupation in Alberta for either:
  • A minimum of 12 months full-time work experience in your current occupation in Alberta within the last 18 months, or
  • A minimum of 24 months of full-time work experience in your current occupation in Canada or abroad within the last 30 months or both – this work experience can be a combination of experience gained in Alberta, in Canada (outside Alberta) or abroad.
• Post-Graduation Work Permit holders require a minimum of 6 months full-time work experience in your current occupation in Alberta within the last 18 months.
  • Note: Work gained while studying does not qualify unless it was paid, fulltime, completed in Alberta, and directly related to the applicant’s current occupation.
• The appropriate license to do said work.

Barriers exist for international students to join the labour force in Alberta at each stage of the path to permanent residency. Should these be addressed, international students have the potential to help meet the labour needs of Alberta’s businesses.

The Alberta Chambers of Commerce recommends;

That the Government of Alberta:

1. Change the employment requirement under the Alberta Advantage Immigration Program from six months of full-time work to allow for a one-year offer of employment.
2. Reduce the barriers for graduates applying to the Alberta Advantage Immigration Program.

That the Government of Canada:

1. Expedite processing times for potential international students to receive study visas to mitigate the issue of not receiving them in time for fall semester.
2. Allowing work-integrated learning under a study permit without application for a work permit to allow access to the labour market without requiring that work-integrated learning opportunities be a mandatory program requirement.
3. Expand eligibility requirements of federal work-integrated learning programs to allow international student access so they have increased opportunities to work while studying.
4. Cease limits on the number of hours that an international student can work so they may support themselves through school and be eligible for immigration following their schooling. International students should be subject to the same employment standards as Canadians in each jurisdiction.
5. Change the length of time for which a post-graduation work permit can be valid, from the current status of valid for no longer than three years, to five years regardless of the program of study, so long as obtained from a recognized Canadian institution.

That the Government of Alberta and the Government of Canada:

1. Work together with post-secondary institutions to strengthen Canada’s global brand as a study destination to attract international students to Alberta’s post-secondary system, especially in the fields that particularly suffer from the insufficiency of qualified labour force.
2. Prioritize applications for permanent residency based on in-demand occupations to get much needed roles filled more quickly.
3. When considering applications for permanent residency, consider the experience that an international student gains through entrepreneurship, working off campus, working on campus, co-op and internship programs, and volunteer opportunities.
4. Work with post-secondary institutions and the business community to support programming that helps international students integrate into their new communities and set them up for long-term career success.

317 https://cbie.ca/wp-content/uploads/2022/06/CBIE-2021-International-Student-Survey-National-Report- FINAL.pdf

318 https://cbie.ca/wp-content/uploads/2022/06/CBIE-2021-International-Student-Survey-National-Report- FINAL.pdf

319 Ibid. 320 https://cbie.ca/infographic/

321 Ibid.