AB Pol Econ

29May

By Bob AscahNo Comments

Energy, Fiscal History, Government Finances

Alberta’s Crack Cocaine: Challenges for the next Premier- Opinion

On the eve of Alberta's closest election and arguably since 1935, it's most crucial, I am reminded of an analogy I heard first around 2013. The term was used in a public forum on the recent Alberta budget. Grant Robertson, a career Alberta public servant and recently retired former deputy minister in Treasury Board compared Alberta's non-renewable resource revenue dependence with the use of crack cocaine. His comment produced a titter in the audience. When I heard this phrase come up again recently in my conversation with Todd Hirsch on 8 May, one week into the provincial election, I took notice. Mr. Hirsch, the well known ATB Financial former economist was likewise using this phrase in the same way used by Mr. Robertson about a decade ago. The ups and downs of Alberta's roller coaster a...

16May

By Bob AscahNo Comments

Uncategorized

Ideas, Thoughts, Experiments- Alberta 2023 Conversation with thought leaders Episode 1- Todd Hirsch

To watch the conversation go to Youtube In the first of a series of conversations with well respected and informed Albertans, Todd Hirsch, best known as for his role as the Chief Economist with ATB Financial, discussed three challenges faced by Alberta. These challenges are fiscal, economic, and political. This series, begun during the hotly contested 2023 provincial general election, is designed to engage readers on subjects which, regrettably, are not being discussed on the election campaign trail. These issues will form the real challenges that a new government will need to confront over the next four years. In the conversation which took place on May 8th, Hirsch reveals some of the background to his report for the NDP "A Better Future." He had two conditions stipulated in doing t...

4May

By Bob AscahNo Comments

Uncategorized

Alberta election: Is the province’s energy regulator acting in the public interest?

The below article was published in The Conversation on Thursday 4 May 2023. Reproduced with permission from The Conversation. Reprinted in The Tyee 4 May 2023 as "Who’s Going to Pay to Clean Up the Oil and Gas Mess in Alberta?" Alberta’s claim that it’s a responsible energy producer are increasingly ringing hollow. Efforts by oil and gas companies to restore old mines and wells so that the land around them is returned to its original form — known as reclamation — have been sorely lacking, and they’re failing to pay municipal property taxes. Premier Danielle Smith lobbied for oil and gas companies to have their royalty payments forgiven to compensate them for cleaning up dirty wells — something they were already legally obligated to do. Industry regulations are ineffective. We can help yo...

Watching and Weathering the Withering Rise in Interest Rates

24Apr

By Bob AscahNo Comments

Banks, Economic Data, Financial Institutions, Government Finances

Watching and Weathering the Withering Rise in Interest Rates

Last Thursday I was invited to present some thoughts about the impact of rising of interest rates to the weekly KEI Webinar. The recording can be found here. There was an engaging conversation afterwards which touched on the recent banking crisis, crypto-currencies, government deficits, prospects for a global recession, performance of central banks particularly the U.S. Federal Reserve, and the future of the U.S. dollar as a reserve currency. Some humour was intended to be inserted with a showing of the famous Two Johns- Bird and Fortune on the Subprme Crisis The following text are speaking notes which were loosely followed. All date is from the Federal Reserve Board website. "Well thank you Perry for inviting me to provide some commentary around the impact...

Oil and Gas royalties, unpaid municipal taxes, and unaddressed reclamation

17Apr

By Bob AscahNo Comments

Agencies, Budget, Energy, Environment, Opinion/Research

Oil and Gas royalties, unpaid municipal taxes, and unaddressed reclamation

In June 2022, Alberta’s then Energy Minister Sonya Savage, a former executive with the Canadian Energy Pipelines Association, warned the federal government not to consider a tax on windfall profits of the energy industry. When asked about the oil industry’s record cash flows and remediation liabilities, Savage stated: “The current spike in oil prices isn’t enough reason to require the industry to spend more on cleaning up the tens of thousands of abandoned oil and gas wells in the province.” In reflecting on this statement, it suggests that expanded spending by Alberta’ producers on remediation expenses might imply royalty payments to Alberta might fall. In short, the province may have a short-term financial interest in not losing revenue when reclamation spending increases. This cont...

3Apr

By Bob AscahNo Comments

Credit Ratings, Energy, Government Finances, Politics

Auditor General and orphaned wells

On 23 March the Auditor General issued his spring reports into four areas including the Liability Management program for oil and gas wells administered by the Alberta Energy Regulator. AER has a system to mitigate the risks for the closure of oil and gas infrastructure; however, parts of the system have not operated effectively…criteria were not fully met in the following areas: risk management practices goals, performance measurement and public accountability assessing information from OWA timely closure of inactive sites collecting sufficient financial security and minimizing risk of inappropriate licence transfers suspension, abandonment, remediation and reclamation regulatory processes Three main problems with the current liability management system are: lack of pr...

28Mar

By Bob AscahNo Comments

Budget, Energy, Environment, Government Finances, Health, Opinion/Research, Politics

Solutions-based policy development and Some Modest Recommendations

There are major issues confronting Alberta- a massive understatement if there ever was! As a student, practitioner, and teacher of public policy for over 40 years, the following ideas are in a germination phase and readers are encouraged to comment and add their suggestions on the central germ of this idea. A solutions-based approach to government policy-making offers a means of identifying a small number of “problems” which require immediate attention and on which there is a consensus on the need for action. This approach starts with Problem identification. The government’s prerogative, but our current government arguably sees things much differently than a majority of Albertans- (e.g. the visceral hate of the federal government as represented by Mr. Trudeau.) In this blogpost, I set o...

<em>A Better Future </em>– Recommended Reading

26Mar

By Bob AscahNo Comments

Budget, Capital Spending, Fiscal History, Government Finances, Opinion/Research

A Better Future – Recommended Reading

Updated 27 March 2023 A Better Future: Fiscal Recommendations to Position Alberta for Success, authored by Todd Hirsch for NDP leader Rachel Notley was released Friday 23 March. Hirsch, ATB’s Chief Economist (2007-2022) is deeply knowledgeable about Alberta’s economy and the financial system having worked earlier in his career at the Bank of Canada (full disclosure: I hired Todd while I was at ATB Financial). In short, he is a respected economist and a consummate communicator, A Better Future is a valuable contribution to a long overview discussion of Alberta’s public finances. In the Introduction, Rachel Notley observes the following. Albertans want and deserve excellent healthcare and a top-flight education The Government of Alberta relies on natural resources revenue. Natural resourc...

<strong>OSFI’s new guidelines: A step toward making banks and insurers more conscious of their climate impacts</strong>

22Mar

By Bob AscahNo Comments

Banks, Energy, Environment, Intergovernmental

OSFI’s new guidelines: A step toward making banks and insurers more conscious of their climate impacts

This article of mine was published yesterday in The Conversation. Reproduced with permission from The Conversation. After an extensive consultation process, the organization that supervises banks and large insurance companies in Canada — the Office of the Superintendent of Financial Institutions (OSFI) — has released guidelines for financial institutions to address climate change. This is timely, considering banks and insurers are massive funders of the fossil fuel industry. The release of the guidelines, called the B-15, comes more than a year after a January 2022 pilot study by Canada’s central bank and OSFI on how resilient financial institutions would be under new climate policies. The study found that the creditworthiness of oilsands producers is expected to fall over the next few ...

21Mar

By Bob AscahNo Comments

Banks, Credit Ratings, Financial Institutions

A Run on the Banking System?

Over the weekend, I turned my attention to rapidly evolving financial fissures, fissures which may portend another Global Financial Crisis (GFC). The earthquake's tremors began over a week ago when Silicon Valley Bank (SVB) tried to raise 2 billion dollars US in new equity. Quickly, investors asked why this was necessary and large depositors ran for the exits. SVB's broad tentacles through California's tech sector brought more pressure as tech companies and wealthy individuals sought the exits. It was the second largest bank failure in U.S. history. On Monday 13 March it was announced that the Vice-Chair of the Federal Reserve Board of Governors would lead a a review of the supervision and regulation of Silicon Valley Bank, SVB's problems stemmed from a bad decision last year to invest...