Alberta: Heart of Canada's Oil Patch - Part II

Monday, November 1, 2004 - 01:00

The Editor continues his interview with The Hon. Ralph Klein, Premier of Alberta.

Part I of this article appears in the October 2004 issue of The Metropolitan Corporate Counsel.

Editor: You recently led a mission to China and South Korea designed to generate interest in investing in Alberta's oil development projects. What message did you convey to your hosts?

Klein: Alberta is a global player when it comes to international trade. Since 40 per cent of Alberta's jobs come from foreign exports, it's not hard to see why it's important to us. The U.S. is, of course, the most important market for our goods. About 90 per cent of all the goods our province exports to other lands goes to our southern neighbours. But it would be shortsighted not to also look at other parts of the world and other opportunities. That's where China and South Korea come in. Those two countries are Alberta's third and fourth largest trading partners. My messages to Chinese and Korean government and business officials were two-fold. First, I wanted to bring them up to date on developments in our oil and natural gas sectors and remind them of what our province has to offer in this sector, that we are a good place to invest and do business because of our low taxes, sensible regulatory environment, and skilled workforce. Obviously, oil and natural gas companies operating in our province are worldwide leaders and have a lot to offer from a cooperative point of view. My second message was around Alberta beef. Wherever I went, I made sure people knew about the steps taken to make absolutely sure that our beef is among the safest in the world, following the discovery of a single case of B.S.E. in Alberta. We are anxious to get beef trade with other counties back to where it was before the discovery of B.S.E.

Editor: What about getting the oil to a deep water port where it can be shipped overseas?

Klein: Opportunities between Alberta and China or South Korea in the oil and natural gas business run deeper than simply focusing on shipping oil and natural gas. Like I said before, oil and natural gas companies doing business in our province are world leaders when it comes to discovering and extracting these resources. Alberta and China have a lot in common from a climate and geography standpoint. We both have cold weather and remote areas where these resources are found and there is potential for Alberta companies to provide expertise in cold weather and remote exploration techniques to the Chinese to help them develop their reserves. Alberta companies are already involved in a number of joint ventures and projects with the Chinese. South Korea is a bit different because Korea does not have the kind of significant known oil and natural gas reserves as we do and depends more on importing to meet their needs. Alberta opportunities in Korea centre more on distribution systems and infrastructure for oil, gas, and electricity.

Editor: Would you tell us about the education, science and technology cooperation agreements that you entered into during your mission to East Asia?

  • Alberta-accredited schools in China. Will this begin to develop a flow of Chinese students to Alberta colleges and universities?

  • Biotech and nanotech cooperation agreements with South Korean Ministry of Science and Technology.

Klein: The education agreement covers several areas. One is an Alberta-accredited school in China to offer Chinese students the chance to receive an education based on the Alberta curriculum, which, I am proud to say is recognized as being among the best in the world. Chinese students completing the curriculum could qualify for an Alberta high school diploma. It's hard to say right now whether that will lead to more Chinese students attending Alberta universities and colleges, but it does provide them with a greater opportunity to make the transition if they do decide to go to school here, because a Chinese student finishing the curriculum can be more easily compared to Alberta applicants, in terms of academic qualifications. Another part of the education agreement involves China providing Alberta with a special advisor on Chinese language and culture. The advisor will help develop a provincial Chinese language curriculum and offer professional development services to Alberta's Chinese language teachers. Also, we've agreed to promote international education by supporting student and educator exchanges and encouraging relationships between schools and educational institutions. These arrangements provide Albertans in school with the opportunity to learn more about and appreciate the contributions made to Alberta by people of Chinese descent and it gives them the chance to become more familiar with a part of the world that has enormous economic potential and is an important force in the world marketplace. The science and technology cooperation agreement with South Korea outlines several ways our two areas will work together, such as undertaking joint research projects and collaborating in the areas of energy, nanotechnology, biotechnology, and other innovative technologies. I said earlier that Alberta is a global player, economically speaking. Science and technology is a sector where we have a strong foundation that has been growing rapidly in our province. Our goal is to pave the way so we can continue growing into a global leader in areas like biotechnology.

Editor: Over the years you have also attracted a great deal of American investment to Alberta. What do you tell American investors about the province as an investment destination and place to do business?

Klein: We tell potential investors that Alberta currently has one of the world's most dynamic economies and that we believe this is the best place in the world in which to live, work, and invest. That belief is based on our economic strength and diversification, our globally competitive business tax environment, our modern and efficient infrastructure, and our strategic access to the North American market. Investors are attracted to destinations with young, skilled, and productive workers and safe communities with healthy lifestyles. Alberta has all of these, and more. Albertans have an entrepreneurial spirit not found in many places. We are no-nonsense people who want government to get out of the way and let things get done. As a result, Alberta is a business-friendly environment with the lowest overall tax burden in the country and a fiscally responsible government that understands and works with business.

Editor: Are there any trade issues on the table today that affect Alberta's ability to attract American investment? Or that affect the province's exports to the U.S.?

Klein: I've already mentioned the importance of our trading relationship with the U.S. Alberta's economic success is in large part because of international trade and the vast majority of our exports abroad are bound for the U.S.

Canada-U.S. trade disputes are often the stuff of news headlines, but the fact is the great majority of trade between Canada and the U.S. happens without incident. Studies show that the value of exports from our province has soared since the first free trade agreement was signed.

Although the Alberta government would prefer that there were no trade issues, it would be unreasonable to expect there would be no differences of opinion in a trading relationship as large as the one between Canada and the U.S.

Of course, the largest trade issue facing us today is the border staying closed to imports of live cattle from Canada. The significant impact the continued border closure is having on our producers is no secret. It is having a very negative effect and we are continuing to work very hard to encourage all countries to base their decisions about whether to open the border on sound science, which clearly shows our beef is safe.

In terms of trade disputes, the highest profile dispute going on is in softwood lumber. This dispute has created challenges for softwood lumber producing companies and related companies in our province, but these companies have shown an incredible amount of resiliency and entrepreneurial spirit in weathering the duties currently in place. It's encouraging that North American Free Trade Agreement and World Trade Organization dispute resolution panel rulings have supported Canada's position in the dispute. Alberta has always been and remains open to options to arrive at a long-term and durable solution to the dispute. The Alberta government consults with industry in the province when looking at options and makes decisions based on what's in the best interest of our forest industry, communities, and workers.

There are other disputes in the area of wheat and swine trade. We are working with the federal government, other provincial governments, and industry on areas of common interest in these cases. Each of these cases is in the early stages, so we'll have to wait and see what becomes of them.

Editor: Alberta's prosperity must make it the envy of other Canadians. Are there times when that prosperity is something of a challenge as well as a blessing?

Klein: There are those who might say that's a nice problem to have, but there's no question there are challenges. I shared with reporters recently that since we announced the debt was eliminated, I've received over $9 billion in funding requests. It is unrealistic to expect the government can or will accommodate all those requests. Good government is about balancing Albertans' desire for good, quality services without breaking the bank to do it. Alberta's economic strength makes the country stronger and increases the quality of life for all Canadians. Alberta leads the country in both inter-provincial and international migration, creating new and exciting opportunities for people and their families.

Editor: At some point, you are going to be handing over responsibility to a new Premier. When that day arrives, what do you hope to have accomplished?

Klein: First off, I don't see that day coming soon. I intend to lead my party into another election and serve out another term, at least - as long as Albertans want to have me continue in office and as long as my health holds up. So, I'm not thinking too much these days about looking back. I'm looking forward.

Nonetheless, I hope that my record will show that my government and I left Alberta in better shape than it was when we came to office. I think that's the main goal of any Premier, and anyone who runs for public office. In the case of my government, we'll be leaving a province without any debt, which ranks as something I'm very proud of. In fact, all Albertans should be proud of that, because they worked very hard to make it a reality.

My other main goal is to leave a province in which all systems are running smoothly, so to speak. There will of course always be the issues of the day to be contended with, it's always a priority for our government to maintain effective, high-quality, and sustainable health and education systems; safe, strong communities; services for people who need a little help; roads and infrastructure that meet the demands of a growing economy; and a fiscal framework in which growth and prosperity are encouraged. That will be a pretty good list of accomplishments, in my view.