Sierra Club of Canada: 1996 Rio Report Card

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1993 Grade: B

1994 Grade: B

1995 Grade: F

1996 Grade: D

Alberta remains slow to respond to the needs to protect biological diversity.

Some progress was made in protected areas in the last year, allowing them to move from a failing mark to a low pass. A Special Places Policy was implemented, and the Willmore Provincial Park received further protection through an act establishing the area as a wilderness park -- barring off road vehicles, roads, and industrial or commercial development. The law essentially codified the conditions that have prevailed in the Willmore Park since it was first established in 1959.

Meanwhile, the opening of once protected areas to development continues to be a problem. As noted in last year's report card, Alberta has redefined "protected areas" to allow resource development. Legislative reform is necessary as existing parks legislation does not prohibit industrial development. Roads and five wells have gone into the Dinosaur Provincial Park. This is a particularly appalling development when one considers that the Dinosaur Provincial Park is a UNESCO World Heritage Site.

Other parks are also suffering. Off-road vehicle use is occurring in Lakeland Provincial Park. The Park has also had a well drilled within its borders and logging is being considered. The Cypress Hills Provincial Park is also facing threats of logging and intensified agriculture.

The government has also failed to follow through on a 1974 commitment to set aside 70 per cent of the Eastern Slopes. Recently, the government told its Special Places 2000 Advisory Committee that no new parks would be created in the Rocky Mountains. While groups were wondering if the government has reneged on the 1974 commitment, the Minister suggested as recently as last week that five key areas, including the Whaleback, could be considered for protection. Muddying the waters of the government's intent further was the caveat that protection would not affect the government's intent to honour all existing forestry agreements and oil and gas exploration leases.

The Alberta government grade is also low on the endangered species area. On September 8, 1995, Premier Ralph Klein met with environmental groups and promised that Alberta would bring in its own endangered species legislation. Premier Klein was clear that the legislation would protect not only endangered species, but their habitat as well. The commitment was spurred by Alberta's opposition to federal endangered species legislation and a desire to show that species in Alberta won't need federal help. If that was the intended message, it just back-fired.

The amendments to the Alberta Wildlife Act, which have now received Third Reading and await only Royal Assent, will not protect anything. They merely require that the Minister establish an advisory committee on endangered species, with its own subsidiary scientific advisory body. According to Diane Pachel of the Alberta Wilderness Association, "There is no legal requirement that endangered species and their habitat be protected, nor that recovery plans be prepared and implemented."

The Alberta approach is all the proof one needs for federal legislation, while working cooperatively with provinces, providing a safety-net to ensure that no endangered species in Canada can become extinct because of jurisdictional wrangles.


Alberta - Climate Change

1993 Grade: -

1994 Grade: D

1995 Grade: F

1996 Grade: F

Carbon dioxide emissions (kilotonnes)
1990: 126,397
1994: 144,965
Increase: 12.81%

If a lower grade could have been awarded, Alberta would have received it. Alberta, with full support from federal Natural Resources Minister Anne McLellan, is responsible for the fact that Canada's action program is voluntary; Alberta also continues to thwart action on next steps either at home or internationally.

Alberta is now the largest provincial emitter of greenhouse gases in Canada, largely due to a 41 per cent increase in natural gas production between 1990 and 1994. Oil production increased 9 per cent over the same time period. In 1994, 96 per cent of increased oil production, and 98 per cent of increased natural gas production was exported to other parts of Canada or the United States. Of these exports, 40 per cent of the oil and 33 per cent of the natural gas went to other parts of Canada.1

As a result, energy sector carbon dioxide emissions increased 15.6 per cent between 1990 and 1994.2 Methane emissions from natural gas distribution and upstream oil and gas operations increased 23.6 per cent over the same period.

And this is only the beginning. In spring, 1995, the Oil Sands Task Force released The New Energy Vision for Canada asking for government royalty and tax breaks to support a 25-year expansion bringing "oil sands-based bitumen and upgraded crude oil production to between 800,000 and 1.2 million barrels per day" - a tripling of current production.

The Alberta government, hopelessly addicted to energy sector revenues, quickly agreed to Oil Sands Task Force requests for adjustments to the royalty regime from individually negotiated agreements to a generic arrangement setting the total marginal rate at 58 per cent for all projects (previous rates for Cold Lake and Syncrude ranged from 63 to 68 per cent). The result is lost direct tax revenue to the year 2002, as compared to the base case. The government revenue stream is slightly positive after 2002, and approaches $1 billion by 2010 - but is always below what would have been the base case revenue stream to 2030.3

From the federal government, the The Oil Sands Task Force sought adjustments to Class 41A capital costs tax treatment, including:

  1. No minimum capacity addition requirement
  2. No project "ring fencing" (in other words deductions can apply to all corporate income)
  3. No "available for use" restriction rules.
  4. Immediate capital deduction should remain a part of oil sands royalty terms.

The 1996 federal budget did not remove the ring fence for accelerated capital cost purposes, but did adjust the 25 per cent expansion requirement to also include expansions exceeding 5 per cent of company revenue. The result is that Oil Sands expansions of either 25per cent of capacity or 5 per cent of company revenue qualify for accelerated capital cost allowance - but deductions can be applied only against income from the project, not against income for the whole company as requested. Cost according to budget documents: $5 million a year - but only calculated for the next three years. Costs could skyrocket in future years as the Oil Sands expansion proceeds.

The Alberta government and its oil and gas industry representatives are champions for the Voluntary Challenge and Registry, so much so that the federal government hired the lobbyist from the Canadian Association of Petroleum Producers to run it. Despite being champions, the Alberta government action plan "has no substance," according to the Pembina Institute, a research and environmental advocacy organization analysing action plans of governments and industry. Armtwisting by the Canadian Association of Petroleum Producers resulted in nothing more than letters of intent being submitted by its members.

Alberta's three utilities say they are committed to stabilizing greenhouse gas emissions and yet Edmonton Power and Alberta Power have adjusted their 1990 baselines to include emissions from power plants which came on stream after 1990.

Research and development spending was restructured last year and now includes spending only on oil sands research.

The January 1996 deregulation of Alberta's electrical sector to allow for competition will increase greenhouse gas emissions because, according to the Canadian Energy Research Institute, the new system will provide a strong incentive for utilities to increase the life of their coal plants, increasing greenhouse gas emissions.

And there's more: The Pembina Institute was so frustrated with the Alberta government, its manipulation of the stakeholder Clean Air Strategic Alliance (CASA), its failure to honestly report all greenhouse gas emissions, and to accurately represent actions, that it resigned from CASA's climate change group last December.

22 - Greenhouse gas emission trends in Canada and Alberta, Media Backgrounder, November 1995. Pembina Institute.

23 - Environment Canada, Pollution Data Branch, May 1996: emissions for stripped natural gas, own use natural gas, own use refined petroleum products and pipelines.

24 - A Fiscal Regime for the Oil Sands, Alexander W. Hyndman, Competitiveness and Resource Taxation, University of Alberta, September 1995.

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Copyright 1996 Sierra Club of Canada