ANNOUNCEMENT 01 Feb 2016
In February 2016, the government of Canada/Province of Alberta announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
On February 1, 2016 the government of Alberta unveiled a new Petrochemicals Diversification Program. The program will encourage companies to invest in the development of new Alberta petrochemical facilities by providing royalty credits.
According to the official announcement, the program 'is expected to support the construction of several petrochemical facilities that use methane or propane to produce the materials for products that include plastics, detergents, and textiles.' The government expects that that the 'new facilities could create up to 3,000 new jobs during construction, as well as more than 1,000 jobs once operation begins, and attract between $3 billion and $5 billion worth of investment.' The Government of Alberta will award royalty credits to select petrochemical facilities through a competitive application process.
The total amount of the program is $500 million. Credits will be awarded once approved projects are completed and feedstock consumption begins. While petrochemical facilities do not directly benefit from royalty credits, as they do not pay royalties, the credits earned by an approved facility can be traded or sold to an oil or natural gas producer. This producer would use these credits to reduce their royalty payments to government.
The government noted in a subsequent elaboration on the program that "there is no preference for Alberta-based or Canada-based proponents, it is not part of the initial screening criteria, nor part of any of the seven evaluation criteria under the program."
On November 20, 2018 Premier Rachel Notley announced that the province will double its support for petrochemical upgrading under this program, with total investment now reaching Can.$2.1 billion (U.S.$1.6 billion) to promote petrochemical upgrading and more jobs. The provincial government estimates that this investment is expected to help create as many as 15,500 jobs during construction of multiple facilities across the province and an additional 1,000 jobs once operational. Total private-sector investment is expected to be Can.$20.6 billion (U.S.$15.5 billion) and, once operational, the facilities will generate approximately Can.$284 million (U.S.$214 million) each year in revenue to the province.