AB Pol Econ

“A National Energy Program”- Hyndman papers

17May

By Bob AscahNo Comments

Energy, Energy, Government Finances, Intergovernmental

“A National Energy Program”- Hyndman papers

The Provincial Archives of Alberta slumbers in obscurity, but the work of its archivists is essential to the conservation and preservation of Alberta's rich social and political history. Lou Hyndman served with Peter Lougheed's ministry from 1971 to 1985 when he returned to the private sector. Hyndman served in many key cabinet positions, including Education, Intergovernmental Affairs, and Treasury. He donated over 100 boxes of records from his time in the provincial government. In this extract, the Deputy Minister of Energy- Energy Resources, Dr. Barry Mellon advises his minister, the Honourable Merv Leitch about impending storm clouds circling over Alberta's energy sector. This revealing memorandum was written six months after Pierre Trudeau won a majority election on 18 Febru...

9May

By Bob Ascah1 Comment

Bankruptcies, Energy, Environment, Loan Losses

Follow the Money- if you can

Updated 13 May 2020 and 4 August 2020 In this post, I return to the receivership of Trident Exploration and the various "legal fictions" used including: Trident Limited Partnership, Trident Exploration (Alberta) Corp., Trident Exploration (Aurora) Limited Partnership I, Trident Exploration (2006) Limited Partnership I, and Fenergy Corp. Trident was a debtor to two provincial agencies: ATB Financial (ATB) and Alberta Investment Management Corporation (AIMCo). The Creditors Trident was placed into receivership in May of 2019 and attracted considerable attention because of the large number of unproductive wells and its vast reclamation obligations. The 177 page affidavit of Yvette Kennedy, Chief Administrative Officer of the Town of Stettler initiated the receivership process. AIMCo and A...

2May

By Bob AscahNo Comments

Uncategorized

AIMCo faces first major test- Analysis and Opinion

Updated 3 May 2020, 4 May 2020, 18 May 2020 AIMCo’s board and management are facing troubling questions about how it has conducted its investment management strategy. In 2016, the Institute for Public Economics published a paper I wrote that examined the success of the corporatization project. Prior to 2008, Alberta Investment Management, a division of the province's Finance department, provided investment management services to provincial public sector pension plans, to provincial agencies, and to the provincial government. The paper was a preliminary assessment on how the new organization delivered on the promise made by previous Finance Ministers: namely, the organization would deliver returns in excess of those achieved by the previous governmental organization. ...

24Apr

By Bob AscahNo Comments

Banks, Financial Institutions, Government Finances, Opinion/Research

“A Distrust of Everything”- Opinion

In 1982, I interviewed Nigel Gunn, who at that time was the Honorary Chairman of Bell Gouinlock, a well- respected boutique investment dealer specializing in municipal debt. My dissertation (Politics and Public Debt) is about federal public debt management from the 1920s to the 1950s. The one critical point Gunn made in the interview that I will never forget was his statement that when the United Kingdom Treasury abandoned gold in September 1931, "this lead to a distrust of everything." A similar phrase was heard during the 2007-2009 financial crisis, but with Ben Bernanke to the rescue- a student of history- the finger was put in the dike. Here we are again at another financial reckoning. At the present time, our Bank of Canada is following a conventional, yet extraordinary pat...

Federal Energy Program Finally Announced- Analysis/Opinion

20Apr

By Bob AscahNo Comments

Bankruptcies, Banks, Energy, Energy, Environment, Opinion/Research, Politics

Federal Energy Program Finally Announced- Analysis/Opinion

Belated Announcement On Friday, 17 April, the anxiously awaited federal program to support the oil and gas industry was announced by Natural Resources Minister Seamus O’Regan (pictured). Details were minimal despite weeks of waiting. As anticipated, much of the money was directed at orphan well clean up in Alberta, Saskatchewan and British Columbia. The amount- $1.75 billion was substantial and included $75 million for the offshore sector. In addition, $750 million was allocated to “create a new Emissions Reduction Fund to support workers and reduce emissions in Canada's oil and gas sector, with a focus on methane.” The announcement noted that the measure will maintain about 5,200 jobs in Alberta alone. In addition, loans would be provided through the Business Development Bank to qualifyin...

Reset for federal-provincial-municipal fiscal arrangements? Opinion

17Apr

By Bob AscahNo Comments

Credit Ratings, Fiscal History, Government Finances, Intergovernmental, Opinion/Research

Reset for federal-provincial-municipal fiscal arrangements? Opinion

It is cliché to say we are living in extraordinary times. Comparisons with the Global Financial Crisis doesn’t work, although monetary madness is again afoot. For Alberta, there are comparisons with the 1980s when homes were sold for a dollar, allowing mortgagors to walk away. And of course, there is the Great Depression, which devastated all of Canada and left lasting resonance on how people related to others, to governments, and to money. So now, we are in a time of both crisis and reflection. Should governments (national and sub-national) be co-operating or competing? We know the beggar thy neighbour policies of the Great Depression did not work, but our next-door neighbour seems intent to draw up the bridges on the castle. In Canada, we are in in a period of inter-governmental co-oper...

Keystone-XL, the Alberta Petroleum Marketing Commission and the Borrowers

9Apr

By Bob AscahNo Comments

Agencies, Credit Ratings, Energy, Energy, Government Finances, Opinion/Research

Keystone-XL, the Alberta Petroleum Marketing Commission and the Borrowers

At the end of March, the Alberta cabinet passed Order in Council 104/2020 which authorized the “President of Treasury Board and Minister of Finance to make advances to or purchase securities of the Alberta Petroleum Marketing Commission.” In addition, the Minister was given the authority to raise: “up to $2 000 000 000, by the issue and sale from time to time of notes, bonds, debentures or interest-bearing or non-interest-bearing treasury bills issued by the Crown in right of Alberta or any other securities under which the Crown in right of Alberta is the debtor (collectively referred to hereafter as “Government securities”) for the purpose of making advances to or purchasing securities of the Alberta Petroleum Marketing Commission in respect of the development of a...

3Apr

By Bob AscahNo Comments

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

Politics of Alberta Growth Mandate (AGM)

Politics of the Alberta Growth Mandate In past articles, the Alberta Growth Mandate was explained as a significant policy initiative in the first NDP budget of October 2015. It should be noted that, in the fall of 2015, Alberta was reeling from significant declines in investment and job losses, and a rookie NDP government was looking for quick wins to support jobs in the Alberta economy. The policy objective was to support Alberta companies (as defined by the Alberta Investment Management Corporation (AIMCo)) and based on meeting one of the following criteria. a. Creates jobs in Alberta b. Builds new infrastructure in Alberta c. Diversifies Alberta’s economy d. Supports Alberta’s growth e. Connects Alberta’s companies to export markets f. Develops subject matter expert...

Keystone XL- Some Questions- Analysis and Opinion

2Apr

By Bob AscahNo Comments

Energy, Energy

Keystone XL- Some Questions- Analysis and Opinion

On Tuesday 31 March, Premier Jason Kenney announced the province was making a $1.5 billion investment to “kick-start” the Keystone X-L pipeline owned by TC Pipelines (formerly TransCanada Corporation-TRP-TSX). Calling Albertans “resilient,” this “bold move” was deemed necessary to “ensure a future for our largest industry.” The Premier, in his brief announcement, equated jobs and the economy with pipelines. Noting that the “world needs a reliable, democratic source of energy,” Kenney elaborated on a theme popularized by Stephen Harper and Ezra Levant known as “ethical oil.” Drawing a line between Alberta’s vast oilsands- the biggest resource play in any democracy- and the XL pipeline to get Alberta’s bitumen to market- this investment will immediately create 7,000 jobs, according to Albe...

30Mar

By Bob AscahNo Comments

Budget, Credit Ratings, Government Finances, Intergovernmental

Government Borrowing

Updated 2 April 2020 A number of historic events have taken place this past week, with long-term ramifications for the Canadian and Alberta economies. Bank of Canada actions to purchase money market paper of provincial governmentsBank of Canada starts quantitative easing and will purchase commercial paperManitoba Premier calling on the federal government to establish a Pandemic Emergency Credit FacilityProvince of Alberta issues a century bond Alberta is witnessing the deepest economic storm since the mid-1980s and likely will see conditions similar to the Great Depression over the next few months. Unlike the Great Depression, our social safety net and government willingness to “do whatever it takes” will moderate the financial and economic distress. Unlike the Great Depression, ...