By Nick Clark
We celebrated Labour day a few days ago and I watched our Premier on TV serving hot dogs to a long line of people in Edmonton. Premier Notley wasn’t really smiling but putting on a brave face. For the first time, I actually felt sorry for her and the uphill battle plagued with problems that she's trying to resolve. While I don’t support the NDP from a political ideology, I believe it is time we all put our best foot forward and worked together to help solve the problems. We need to be smart in what we do because we're all in this together.
Labour Day was a nice picnic in the park for some...sad for many others in line for a free meal. The picture translated into a reflection of Alberta’s unemployment numbers; they’re depressing. Published on September 9, the latest stats show unemployment is at 8.4%. It doubled in the last two years and we are at a 20-year high. Dig into the demographics of the numbers: 9% of men in Alberta are unemployed. It is even harder on the youth of our province with unemployment rates now being reported above 15%. Depressing for new graduates.
Dear Premier: we do not need a new tax right now that will recklessly take money out of the pockets of Albertans, especially in the cold of winter. With this said, your move to give money back to low income earners and promoting energy efficiency programs should be applauded. But, this is not enough. Slow down until things are back under control. Our GDP has dropped $295 Billion this year compared to last and, on top of this, Finance Minister Joe Ceci's deficit of the +$10 Billion budget will continue to balloon over the years ahead unless there's controls on spending.
Sadly, for all of us, this is a spiral down into unknown waters. If the credit agencies further downgrade Alberta's once cherished AAA credit rating, we will find ourselves in an even deeper hole. Remember this old saying; "If you find yourself in a hole, stop digging."
On January 1, in slightly over 100 days, our government will introduce its new Carbon Tax. It’s expected to bring in $3 billion a year when fully implemented in 2018. Minister Phillips said the tax may not last forever but this promise is hard to believe.
In the short term, the tax is going to be felt hardest by those who heat their homes or businesses with natural gas.
The timing couldn’t be worse as we enter the winter months. In January, residential consumers will start paying more. On average, this amounts to an extra $300 over the next couple of years alone and business owners are going to be hit even harder with increased costs of $1,500 on average over the period of 2017 and 2018. Plus, we all will be paying 4.49 Ȼ/L more to fill up our vehicles at the gas station on January 1st. This goes up again the following year to 6.73 Ȼ/L
With so many problems facing Albertans, we encourage our political leaders to simply delay the quest to be a global leader in the fight against Climate Change and slow down the pace. Don’t cancel the initiatives, just consider the benefits of implementing the tax on natural gas in the summer months when it will not hurt consumers as much.
Subsidies to New Green Generators
Shannon Phillips, Minister responsible for the Climate Change Office, announced on Sept 14, that the government set a firm target of 30% of electricity used in Alberta will come from renewable sources by 2030. The government will support the addition of 5,000 megawatts in capacity. Sounds great.
“Cheers happening, people are happy with this," said Paula McGarrigle from Solas Energy Consulting; lots of people are standing behind the minister in support. The only thing to remember is those lining up are many of the same companies and people who financially will benefit from the subsidies the government is going to hand out. The devil is still in the detail and will not be known until later in November.
The people of Alberta NEED TO KNOW: the strategy the government is following is based on providing subsidies to new Green Generators. The amount of the subsidies is rumored to possibly cost tax payers more than the actual current cost of energy the existing generators are being paid today.
This is a 14-year forward looking plan to help grow our economy and reduce emissions. The minister estimated that it will cost at least $10.5 billion. What she didn’t tell you is that this money is coming out of the pockets of Albertans.
Again, while we were told in the media release that this process is going to be managed by AESO, the Minister didn’t disclose that we can also expect to see an increase in the price of energy.
The plan is bold.
Do the numbers add up? Currently, there is a generation capacity in Alberta of +16,000 megawatts. The demand is running today at 10,000 but the additional brings in another 5,000 megawatts and will further aggravate the current surplus situation . Simple math tells you the market is going to be oversupplied. What the article doesn’t say is how many megawatts are going to be retired to bring the market into balance and at what cost. When you retire generation units and replace the output with more expensive production facilities, consumer prices will just naturally go up.
AESO reports that green generators that are lining up want to be connected to the Alberta Grid. If you remove the contract for the renewable energy subsidy option – would they still be hanging around? If so, then approve the applications today and let’s get on with it.
Don't Make the Same Mistakes as Ontario
Ontario is going through the same problem as costs there ballooned due to their climate change policies. Rate payers in Ontario are angry and confused. Peak rates have increased 77% in just 5 years.
Dear Minister, watch carefully what is happening in Ontario. Don’t repeat the same mistakes. While we need to create new employment opportunities here in Alberta, please remember that manufacturers in Ontario complain about soaring electricity prices forcing production out of Ontario and giving Mexico and other countries a competitive advantage. If we fall into the same trap, we risk seeing employment numbers in the red for a long time. Companies already are moving jobs out of the province. Part Two of this blog will give you links that take you to India. You may be surprised at who moved jobs out of Alberta.
Consumers can't afford new taxes. Many are living with the reality they are having difficulty paying their current monthly utility bill. The last thing they need is an increase tax on carbon on the gas to heat their home in the winter months. 50% of consumers are living pay day to pay day. Default rates on utility bills in our retail shop have gone up 250% in the first 8 months of 2016. Times are tough and while we support “Greening the Grid”, let's move forward at a controlled pace that people can afford.
In addition to the tax on gas, at the same time, the NDP is taking legal action against some of our electricity generators, in an effort, as they say, to protect consumers. This all seems like a government in panic mode for cash with an aggressive but needless move in picking an outrageous fight with the industry.
Possibly a more moderate and inclusive approach of engaging industry players to help you solve some of the problems might produce better results. It is nice to see that Deputy Premier Sarah Hoffman is open to talking about the issues rather than going to court.
We don't need protecting. Energy prices are the lowest they have been in 15 years based on the current structure of deregulation which, in turn, has translated into mega savings for many Albertans. Policy advisors to the Deputy Premier need to put the cost of energy paid to Alberta generators into perspective and compare what we pay here in Alberta to the cost of energy in Ontario. The Alberta Power Pool price for energy here currently is running under $20/mWh.
Many consumers can buy electricity for 3 cents per kWh. Comparatively over in Ontario, where they went down a similar path to which Alberta seems to be heading, the estimated price paid to each energy source per megawatt hour in the first six months of the year ranged from $424 for solar, $213 for natural gas, $122 for wind, and $66 for nuclear.
As we mentioned to Finance Minister Ceci, our MLA pictured above, a number of months ago: "Whatever you do, don’t destroy the market and cause prices to needlessly increase." It doesn't seem that he is listening.
Here's what the government risks: if the wholesale market shifts into a period of uncertainty and volatility, consumer prices will go up. We urge the government to be cautious of unintended circumstances. The market is complex – understand the consequences of your policies. And most important: understand that the middle of winter is not the best time to hit consumers with a new tax on natural gas consumption.
Dear Premier – be honest with Albertans - tell them what they are going to pay under your bold plan.
Part 2 - Monday, Sept 19, 2016 Window of Hope. Don't cancel the tax; delay it
Part 3 - Wednesday, Sept 21, 2016 Fight Back. How to save up to 30% on energy
Part 4 - Friday, Sept 23, 2016 Are MLAs listening?
Part 4 - Friday, Sept 23, 2016 Are MLAs listening?