The Reminder is making its archives back to 2003 available on our website. Please note that, due to technical limitations, archive articles are presented without the usual formatting.
The recent release of The Fraser InstituteÕs global petroleum survey provides yet another example of the erosion of the ÒAlberta AdvantageÓ with survey respondents giving low marks to Alberta and instead citing the advantages of Saskatchewan. The survey of upstream petroleum industry companies was designed to measure and compare the extent to which factors such as the fiscal regime, political stability, labour availability, and the cost of regulatory compliance constitute barriers to investment. The survey results indicated that many within the industry felt that Alberta had more barriers to investment than Saskatchewan, which still had an NDP government at the time. Saskatchewan also fared better in a ranking based on a Regulatory Climate Index that was constructed from responses to questions pertaining to the cost of compliance with government regulations, regulatory uncertainty, environmental regulations, local processing requirements, trade regulation, and labour regulations and employment agreements. Essentially, survey respondents saw SaskatchewanÕs regulatory framework as constituting a lower barrier to investment. This was mainly because the cost of compliance was deemed to be greater in Alberta and environmental regulations pertaining to the upstream industry were seen as too complex. Combining the results of 11 survey questions to form a ÒBusiness Environment IndexÓ produced the same result. Investors do not see Alberta as being as attractive a place to do business as Saskatchewan because of frustration and uncertainty in relation to the provincial regulatory regime, labour availability issues, and other factors. The ranking of jurisdictions based on the responses to all 16 survey questions, including questions in relation to political stability, security, and native land claims, again showed that investors preferred Saskatchewan. The fact that all of the measures indicated that Alberta poses greater barriers to petroleum investment than Saskatchewan will come as a shock to many, especially given that the survey was undertaken months in advance of AlbertaÕs royalty announcement. With the changes in Alberta royalties on conventional oil and gas production, it would not be surprising to see the ranking differentials widen. When it comes to the Alberta Advantage, the Government of Alberta appears to have shot itself in the foot.
