AB Pol Econ

20Jun

By Bob AscahNo Comments

ATB, Politics

Hyndman papers: Treasury Branches (Part 1)

In these excerpts from the Hyndman papers are glimpses of both the political and administrative issues associated with a provincial government owning a de facto bank. The first memorandum, from the Provincial Treasurer to his deputy, suggests that just prior to the memo's execution an M.L.A., irate at being surprised that a Treasury Branch in his/her constituency had closed or was about to close, and they had been not informed. The closure of bank branches in rural areas during the 1980s and 1990s caused the federal government to require the banks to go though a reporting process and the giving of notice to communities about the intended branch closures. This was also adopted by the Alberta government around 2000 and still is included in the Mandate and Roles document which outlines a 9...

13Jun

By Bob Ascah2 Comments

Agencies, Energy, Environment, Government Finances, Opinion/Research

Exploring the Regulatory Maze (3): The Auditor General Reports…

The bizarre story of the Mine Financial Security program (MFSP) continues to unfold. In May, the Minister of the Environment and Parks, Jason Nixon announced a review of the program noting depressed profits in 2020 motivated the government to reset the rules in calculating security requirements. This meant that increased security requirements under the existing requirement would be reduced. Then on 10 June, Auditor General Doug Wylie released a report which focused on processes to provide information about government's environmental liabilities. The report unfortunately raises serious questions about the competencies of provincial officials at all levels as well as the failure of senior officials and ministers to accept responsibility for environmental cleanups. Wylie’s report addres...

3Jun

By Bob Ascah1 Comment

Agencies, ATB

ATB reports highest operating revenue ever- profit seems secondary

On 21 May ATB Financial released its 2020-21 annual report before its virtual public general meeting. Media pick-up was light with Postmedia reporting the lukewarm results. ATB's financial reporting over the past four years places great emphasis on "operating revenue" and not net profit. This would appear to fly in the face of a new statutory provision in the ATB Financial Act that requires ATB, in carrying on its business, to: (a) manage its business in a commercial and cost-effective manner,(b) seek to earn risk-adjusted rates of return that are similar to or better than the returns of comparable financial institutions in both the short term and the long term, and(c) avoid an undue risk of loss by prudently managing its business, which includes establishing...

30May

By Bob AscahNo Comments

Energy

Exploring the regulatory maze (Part 2): Mine Financial Security Program

On 6 May the Minister of Environment and Parks, Jason Nixon announced a program review on the Mine Financial Security program (MFSP). According to the news release, "(A)s of June 30, 2020, $1.48 billion was being held in security under the MFSP. Oilsands mines account for just under $1 billion of this total." The program "helps manage coal and oilsands liabilities by collecting financial security from mine owners and protects the public from paying for project closure costs" (emphasis added). In addition to security deposits, the oilsands producers “use their reserves as collateral for financial security." This promise from Nixon to protect the taxpayers was backed up by Laurie Pushor, the new CEO of the Alberta Energy Regulator. In a one-year on the job interview with The Canadian Press’...

30May

By Bob Ascah3 Comments

Energy, Environment, Government Finances

International Energy Agency- Bombshell Report

Until about five years ago the International Energy Agency was beholden to Big Oil. It is no more. Its blockbuster report dropped on an unsuspecting world on 18 May raises deep questions about Big Oil’s survival much past the next decade. The report of 223 pages entitled Net Zero by 2050- A Roadmap for the Global Energy Sector, contains four main chapters, four appendices, and six pages of references. With ESG investing in ascendance, Alberta’s regulatory system of setting security requirements broken, now there is considerable doubt that long-term bitumen reserves have the value they once had.. The IEA volume is organized in four parts: implications of country’s net-zero pledges; global pathway to net-zero CO2 emissions in in 2050; sectoral pathways to net-zero CO2 emissions by 2050; and...

20May

By Bob Ascah1 Comment

Credit Ratings, Government Finances

S&P downgrades Alberta to A (Stable) Moody’s maintains Aa3 rating

Citing COVID-19 and budgetary balances which have not "yet recovered from the slump in oil prices that began in 2014, to a greater degree than we had expected," S&P Global Ratings downgraded Alberta's long-term credit rating to A from A+. Today Moody's issued a release noting the completion of a periodic review of Alberta's ratings. No change to the rating was initiated. S&P Global Ratings There really wasn’t anything newsworthy in yesterday's downgrade announcement. The agency noted that Alberta’s after-capital deficits, that is Revenue less operating and capital expenses is the “largest of any local and regional government in the country this fiscal year and last” resulting in the one-notch downgrade. Of concern was a deterioration of liquidity: “free cash and investment balance...

12May

By Bob Ascah2 Comments

Banks, Environment, Opinion/Research

Mark Carney’s magnum opus: A Book Review

Mark Carney, the much-celebrated central banker from Canada has a new book entitled Value(s). This 600-page (with endnotes) book represents a much-awaited synthesis of his ideas from his days as bank governor, senior Finance official and Goldman Sachs investment banker. His return to Ottawa, appointment at Brookfield and earlier appointment as the U.N. Special Envoy for the Environment might seem like a crowning achievement but Dr. Carney’s career has probably not peaked yet. Naturally there is much speculation about his future relationship with the Liberal Party of Canada but it strikes me that his ambitions (and talents) are more global in nature. Carney is not what I would consider a conventional economist. His D.Phil at Oxford was entitled "The dynamic advantage of competition,” ...

26Apr

By Bob AscahNo Comments

Uncategorized

Greenhouse Gas Pollution Pricing Act: Analysis and Opinion

Updated 18 May 2021 On 25 March 2021 Canada’s Supreme Court issued arguably its most crucial judgment in a decade. The case arose from three appeals from the high courts of Alberta, Ontario and Saskatchewan respecting the constitutionality of the Greenhouse Gas Pollution Pricing Act (GGPPA). Challenges of the GGPPA were made to the legislation by the Alberta, Ontario and Saskatchewan government in their various jurisdictions. In Ontario and Saskatchewan the courts of appeal sided with the federal government while the Alberta Court of Appeal ruled against the constitutionality of the GGPPA. While the jurisprudence within the case will be cited for generations, it is difficult at this stage to assess the long-term consequences on the future balance of the Canadian federation. The winners we...

18Apr

By Bob AscahNo Comments

Environment, Health, Opinion/Research

Exploring a regulatory maze

This post, the first of a series of articles dealing with the nature of regulation-making authority in Alberta endeavours to understand the breadth and complexity of regulation in various forms. This post was tweaked by a news release concerning a violation of the Environment Protection Enhancement Act. The series will investigate the complex nature of legislation and delegated regulation-making powers, the nature of enforcement, and the possible implications for society and the economy at large. Suncor pleads guilty On Friday 16 April the Alberta Department of Environment and Parks issued a press release stating Suncor Energy Products Partnership Product s Suncor Energie, S.E.M.E pleaded guilty to breaching legislation “relating to the release of hydrogen sulphide.” The event happened on ...

11Apr

By Bob AscahNo Comments

Budget, Fiscal History, Government Finances

Budget 1982-83: A Message not sent

During the fall of 1981, Peter Lougheed's government was facing stagnant government revenue and, at the same time, pressing demands for additional spending during a time of historically high interest rates and rising unemployment. This memorandum, which was not sent, reflects the Treasurer's and Alberta Treasury's worries that spending was spiraling beyond the limits set by the Priorities Committee. This was an era when the notion that spending reductions really entailed reductions from what was being requested or needed or expected in light of inflation and population growth. This was an era where the capacity to raise revenue and the capacity to spend was bifurcated. At the federal level the position of Treasury Board President and Finance Minister was coincident with rising deficits, ...