April 20, 2005 Alberta Hansard 897 Legislative Assembly of Alberta Title: Wednesday, April 20, 2005 1:30 p.m. Date: 05/04/20 [The Speaker in the chair] head: Prayers The Speaker: Good afternoon. Let us pray. In our mind’s eye let us see the awesome grandeur of the Rockies, the denseness of our forests, the fertility of our farmland, the splendour of our rivers, the richness of our resources, the energy of our people. Then let us rededicate ourselves as wise stewards of such bounty on behalf of all Albertans. Amen. Please be seated. head: Introduction of Visitors The Speaker: The hon. Minister of Energy. Mr.

Melchin: Thank you, Mr. Speaker. I’m pleased to introduce to you and through you to members of the Assembly today His Excellency Ernesto Darias. He’s the ambassador of the Republic of Cuba. His Excellency is accompanied by Ms Mary Carmen Arencibia. She’s a commercial counsellor. He’s accompanied also by Mr. Antonio Castañón, economic counsellor. It was our pleasure to host them for a luncheon, their ambassador’s first visit to Alberta. Mr. Speaker, Alberta has close to $51 million annually in exports to Cuba, primarily sulphur, wheat, peas, and machinery.

Alberta companies are active in Cuba, including Sherritt International, which is now the largest foreign oil producer in Cuba. Alberta’s postsecondary institutions, like NAIT, are equally active in numer- ous partnerships and projects in Cuba. I’d ask our honoured guests, if they are there, if we’d give them our warm traditional welcome. head: Introduction of Guests The Speaker: The hon. the Premier. Mr. Klein: Thank you, Mr. Speaker. It seems that lunch with the Premier has become somewhat of a popular auction item.

That’s proof, no doubt, of the quality of the lunches, sandwiches, and not necessarily of my conversational skills. Today I had the pleasure of dining and visiting with the successful bidders of this item at the Denim and Diamonds dinner and auction event. This incredible event raised more than $121,000 for juvenile diabetes. Mr.

Speaker, I’d like to introduce to you and through you to all members of the Legislature my guests today: Len Kerekanich, president of Rotating Right Inc. – Rotating Right – Tyrel Kerekanich; Donna Micklos; and Barbara Armstrong, senior manager of resource and program development for juvenile diabetes in Edmonton. I ask that they rise and receive the warm welcome of the Assembly. The Speaker: The hon. Deputy Premier. Mrs. McClellan: Thank you, Mr. Speaker. As you know, it’s always a pleasure for MLAs to introduce school groups to the Legislature.

The group I introduce today is a sc hool gr oup from Veteran school in my constituency. Veteran is a beautiful little community in east-central Alberta and has a wonderful school. Today these students are accompanied by their teacher, Mrs. Letniak, by parent helpers Dawn Resch, Chris Eamer, Karen Nelson, and Darrel Durksen. I would ask that all members give this group a very, very warm welcome to our Legislature. The Speaker: The hon. Minister of Education. Mr. Zwozdesky: Thank you very much, Mr. Speaker.

It’s a pleasure for me as well to rise and introduce to you and through you to all members here 63 of the absolutely most bright and beautiful young students that Edmonton-Mill Creek has to offer. They are here visiting us from Blessed Kateri school. They are joined by some parents and teachers; namely, Robert Burghardt, Cathy Kahanyshyn, Eva Perri, who’s a teacher assistant, Miss Diane Nguyen, who’s a student teacher, and Francine Verbonac, Elaine More, and Melinda Giebelhaus. I would ask all of them to please rise and accept the very, very best wishes from all members here. The Speaker: The hon.

Minister of Advanced Education. Mr. Hancock: Thank you, Mr. Speaker. It’s my pleasure to introduce to you and through you to members of this Assembly Elaine Ho, provincial director for the Alberta College and Technical Institute Students’ Executive Council, ACTISEC, and Brett Bergie, outgoing provincial director of ACTISEC, and Duncan Wojtaszek, the executive director of the Council of Alberta University Students.

Alberta College and Technical Institute Students’ Executive Council represents 100,000 college and technical institute students, and the Council of Alberta University Students represents 80,000 university students across Alberta. They’re seated in the public gallery. They’re here, no doubt, to hear more about the wonderful things that are happening in postsecondary education in our province. I’d ask them to rise and receive the traditional warm welcome of the House. The Speaker: The hon. Minister of Government Services. Mr. Lund: Thank you, Mr. Speaker.

It gives me a great deal of pleasure to introduce to you and to members of the Assembly a constituent of mine, Jim Quinn. Now, Jim Quinn is president of Quinn Construction, and today he’s hosting a delegation from Cuba, the CUPET organization, who have come to our great province to explore opportunities in the oil and gas industry. Their visit to Alberta is focused on preventative maintenance training, turnaround management, foreign worker exchanges, specialized and advanced training, technical training at postsecondary institutions, quality control, and technology upgrading.

The delegation is seated in the members’ gallery, and I would ask them each to rise as I call out their names: Jim Quinn, president, Quinn Construction, Paulette Hanson, Mike Pitre, Steve Boomer, Ernie Groom, Ralph Farrell. The members of the Cuban delegation are Abilio Gutierrez, Janvier Dieguez, Sochi Cabarcos, Jorge Aristides, Mirian Acosta, and Antonio Machado. I would now ask the Assembly to give them the traditional warm welcome. The Speaker: The hon. Minister of International and Intergovern- mental Relations. Mr. Stelmach: Well, thank you, Mr. Speaker.

I wish to introduce to you and through you to members of this Assembly eight very special guests from the Dr. Turner lodge in Fort Saskatchewan. They’re accompanied today by group leader Darlene Thorne. They are seated in the members’ gallery, and I would ask them all to rise and receive the traditional warm welcome of this Assembly. The Speaker: The hon. Member for Wetaskiwin-Camrose. Mr. Johnson: Thank you, Mr. Speaker. It’s my pleasure to introduce to you and through you to the members of this Assembly

Alberta Hansard April 20, 2005898 32 bright, energetic students from the Centennial school in Wetaskiwin. These student visitors are accompanied by five adult leaders, including principal Da vid Luck, teacher William Black, counsellor Eva Rasmussen, student t eacher Rhonda Harbert, and parent Mrs. Cathy Robinson. They’re seated in the members’ gallery, and I’d ask them to rise and receive the warm welcome of the Assembly. The Speaker: The hon. Member for Edmonton-Centre. Ms Blakeman: Thank you very much, Mr. Speaker.

I’m pleased to introduce to you and through you to all members of the Assembly another arts company from Edmonton travelling to Ottawa soon to showcase us at Alberta Scene. Concrete Theatre is working in the community using theatre to promote cultural diversity and explore social issues. They’re taking a production of The Incredible Adventures of Mary Jane Mosquito to showcase us. This is written by Tomson Highway and targeted to children in preschool to grade 6. I’ve seen it. It’s a very charming little musical cabaret in English with French and Cree.

I’d like to introduce the company, please, and if you would stand as I call your name: Julie Golosky is the per- former and a wonderful opera singer; Ryan Sigurdson is her accompanist for this performance; Mieko Ouchi, a very well-known filmmaker and director of this production; Gina Puntil, a famous stage manager; and Marian Brant, an old friend and general manger of Concrete Theatre. Please join me in sending them off to Ottawa. Thank you. 1:40 The Speaker: The hon. Member for Edmonton-Rutherford. Mr. R. Miller: Thank you, Mr. Speaker.

I’m so pleased to have the opportunity today to intr oduce to you and through you to all members of the Assembly a special guest who is seated in your gallery. Her name is Sandra Sayer, and she is here not only to watch the proceedings this afternoon but to pay particular attention to her son Mikkel, who is a page in the Assembly. I know she is very proud of him. Mikkel is a grade 11 student at Concordia high school, and I’m sure he won’t disappoint her this afternoon. So I would ask Sandra to please rise and receive the traditional warm welcome of the Assembly. The Speaker: The hon.

Member for Edmonton-Highlands- Norwood. Mr. Mason: Thank you very much, Mr. Speaker. It gives me great pleasure to introduce to you and through you to the Assembly Mr. Steve Bradshaw. Steve is currently the financial secretary and assistant business agent for the Amalgamated Transit Union Local 569, which is my old local, representing workers at Edmonton Transit. He’s also an executive member of the Edmonton-Mill Woods NDP constituency. I would ask that Steve rise and r eceive the traditional warm welcome of this Assembly. The Speaker: The hon. Member for Edmonton-Calder. Mr. Eggen: Thank you, Mr. Speaker.

I have two introductions to make today. It gives me great pleasure to introduce to you and through you to this Assembly Frances Organ. Even at the age of 85 Frances continues to take classes in a variety of areas, epitomizing the idea of lifelong learning. Her long history of volunteerism in our community is remarkable and is greatly appreciated by all of those who she assists. It also gives me great pleasure to introduce to you and through you to this Assembly Sheila MacKay.

Sheila is very involved in the society of Capital Care Norwood auxillary and volunteers two or three days a week helping to make patients feel more comfortable. Sheila has served two terms as secretary of the Alberta Health Care Auxiliaries Association, among other endeavours that she pursues. I would ask Sheila and Frances both to now rise and receive the very warm traditional welcome of this Assembly. The Speaker: The hon. Member for Edmonton-Strathcona. Dr. Pannu: Thank you very much, Mr. Speaker.

It gives me great pleasure to introduce to you and through you to all hon. members of this Assembly Jeffrey Laventure-Johnston. Jeffrey is y oung, 25- years-old, and works as a buyer at Home Depot. He currently is also a caregiver for his brother who is an AISH recipient in Alberta. He is here today, I think accompanied by his brother, and they’re both in the public gallery. I’ll ask Jeffrey to please rise and receive the warm welcome of this Assembly. head: Oral Question Period The Speaker: First Official Opposition main question. The hon. Leader of the Official Opposition. Securities Commission Dr.

Taft: Thank you, Mr. Speaker. After weeks of pressure from stakeholders and investors and the Liberal opposition the Minister of Finance has handed off the Alberta Securities Commission file to the Auditor General. My questions are to the Minister of Finance: given that the Minister of Finance has told this A ssembly that the report she received from part-time ASC commissioners indicated that there were no enforcement breaches at the commission, has the minister received new information that has caused her to change her mind? Mrs. McClellan: Mr.

Speaker, I would be pleased at the appropriate time to table the letter to the Aud itor General in its entirety, but I would like to make sure that the Assembly understands that the Auditor General, as a normal course of his function, had proposed an audit on the Securities Commission. That was talked about in January. Mr. Speaker, I have said this in the letter, and I think it’s self- explanatory. There have been questions raised regarding the Alberta Securities Commission’s enforcement processes.

The independent members of the Alberta Securities Commission have provided their assurance that enforcement policies administered [under] the Alberta Securi- ties Commission have been, are, and continue to be applied consistently, fairly, and within an even hand. Nevertheless, given the critical role Alberta Securities Commission plays in capital markets, it is my hope that your review will be complete and timely. I hope that this report can be completed as quickly as possible, with a separate report by you made available to the Legislature and through the Legislature to all Albertans.

The Speaker: The hon. leader. Dr. Taft: Thank you, Mr. Speaker. Given consistent allegations of enforcement breaches at the Securities Commission, will the Auditor General have the authority to investigate any unenforced complaints he discovers?

April 20, 2005 Alberta Hansard 899 Mrs. McClellan: Mr. Speaker, one thing I neglected to say was that this letter was dated April 13, a week ago today. Mr. Speaker, the Auditor General has all of the authority that he requires to do a complete investigation, and if the hon. member was listening, he would have heard me say, “It is my hope that your review will be complete and timely.” The Speaker: The hon. leader. Dr. Taft: Thanks, Mr. Speaker.

Again to the same minister: will the Auditor General’s investigation allow for any and all current and former employees of the Alberta Securities Commission who want to come forward to come forward with a guarantee of legal protec- tion so they don’t feel gagged by threats from their employer? Mrs. McClellan: Well, Mr. Speaker, I’m not sure that it’s appropri- ate that I be questioned as to the abilities of the Auditor General. That question is more properly put to him.

What I have said and I will reiterate one more time is that I have asked him to ensure that his report is complete and timely, so obviously there will be absolutely no restrictions suggested, which would be entirely inappropriate to do anyway, by this minister. The Speaker: Second Official Opposition main question. The hon. Leader of the Official Opposition. Electricity Marketing Dr. Taft: Thank you, Mr. Speaker. Alberta’s electricity consumers deserve straight answers from this government when it comes to electricity deregulation.

They were forced to pay sky-high prices, but this government’s explanations have left them in the dark. On Monday the Minister of Energy was decidedly evasive in response to my question, so I will try again. To the Minister of Energy: will this minister categorically deny that TransAlta electricity traders were involved in any manipulation of Alberta’s electricity market? Mr. Melchin: Mr. Speaker, we continue to be very clear that the market surveillance administrato r is very active in protecting Alberta’s interest to ensure that the system does work. At this stage there has been no evidence.

Clearly, there’s some old information that continues to come forward. It’s old information. Much of it has been investigated in the past. The things with respect to TransAlta were actually not part of what happened in Alberta. It was part of what happened in Washington state. Dr. Taft: The same pattern continues. Again to the same minister, a repeat of a question from two days ago: will the minister tell this Assembly if the Alberta electric system operator investigation into potential market manipulation reported in September 2003, which the minister knows about, was referring to TransAlta? Mr. Melchin: Mr.

Speaker, since the hon. member is aware of when the question was previously asked, he’ll also be aware of when the answer was previously given. Dr. Taft: Again to the same minister: is it this government’s position that there was no price manipulation of Alberta’s electricity market? Mr. Melchin: Mr. Speaker, at this stage of all investigations there has been no evidence to suggest manipulation in that context. The Speaker: Third Official Opposition main question. The hon. Member for Edmonton-Gold Bar. 1:50 Enron Activities in Alberta Mr. MacDonald: Thank you, Mr. Speaker.

On July 19, 2001, Bill Williams III, one of the managers of Enron’s trading operation, sent an e-mail stating, “We will be taking over the Dispatch of Enron Canada Corp.’s Sundance 3 and 4 Units for the evenings of July 19 – July 22.” My first question is also to the Minister of Energy. How often did Enron’s greedy American traders take control over electricity generation here in Alberta? Mr. Melchin: Mr. Speaker, information with respect to Enron back in 1999 in particular has been investigated. There is some more information that has come forward at the insistence of the market surveillance administrator.

That information has been forwarded to the federal Competition Bureau as to future dates. No one takes lightly the fact that people might be acting improp- erly with respect to our electricity system. In that respect, evidence has still not been found at this stage to prove that there has been any wrongdoing. The Speaker: The hon. member. Mr. MacDonald: Thank you, Mr. Speaker.

Again to the same minister: why did this weak and ineffective government allow Enron’s west desk, trading desk, in Portland, Oregon, to take over the dispatch of over 700 megawatts of electricity from Sundance power plants here in Alberta and sell it somewhere else? Mr. Melchin: Mr. Speaker, I’m not specifically aware of the time that he references. We’d be happy to look into the details. I don’t have the specifics in front of me, so it’s kind of hard to answer that detailed a question relating to some two to three years ago. Mr.

MacDonald: Again to the same minister: given that this greedy takeover of Alberta generation by Enron occurred outside the time frame currently being investigated by the Competition Bureau, will the minister finally do the right thing and launch a full, independent public inquiry and find out once and for all how often and for how much the public in Alberta has been ripped off by this electricity generation scheme? Mr. Melchin: Mr. Speaker, it’s convenient to continue to bring forward suppositions, allegations, and so forth and try and put in

preambles that undermine the integrity and confidence in the system, but I’m here to say that the market surveillance administrator is a very effective watchdog, with the professional competence to actually watch and monitor, and does an excellent job on behalf of Albertans. The Speaker: The hon. Member for Edmonton-Highlands- Norwood, followed by the hon. Member for Cardston-Taber-Warner. Automobile Insurance Rates Mr. Mason: Thank you very much, Mr. Speaker. Before the last election the Premier promised Albertans auto insurance rates equal to those in other western provinces.

He has yet to deliver, and yesterday’s announcement of a 6 per cent cut fails to address the 12.7 per cent overcharging identified in an insurance board study two months ago. My question is to the Premier. Why has the Premier broken his promise to Albertans that he would reduce rates

Alberta Hansard April 20, 2005900 to the level paid in other western provinces which have public auto insurance systems? Mr. Klein: Mr. Speaker, I understand the views of the hon. leader of the ND Party, who wants us to socialize everything, including the insurance industry. With respect to his

preamble it’s simply not true what he says. The intentions of this government were then and still are very good. They are intentions that I think that the hon. leader of the ND opposition would agree with, and that is that good young drivers should not be punished simply because they are young, good older drivers ought not to be punished simply because they are old, and good drivers generally in the age brackets in between ought not to be punished b ecause they are good drivers. The insurance regulations clearly achieve that. Mr.

Speaker, notwithstanding the chat, the chitter, the unwanted chit-chat from across the way, I can tell you that relative to my own insurance it is comparable, very co mparable to that paid in other jurisdictions. Mr. Mason: Mr. Speaker, not all Albertans have chauffeurs. Will the Premier tell this House why, when the insurance rate board said in February that Albertans are being overcharged by 12.7 per cent, the government is only rolling back rates by 6 per cent? Mr. Klein: First of all, Mr.

Speaker, every Premier that I know has a driver, not a chauffeur, who acts also as security, but not every Premier drives a ’77 Volkswagen. Right? Or a – I forget. It’s one of those . . . Mrs. McClellan: PT Cruiser. Mr. Klein: PT Cruiser. Right. So, Mr. Speaker, those are the cars that I drive, you know, as opposed to what he drives. Mr. Mason: Oh, Mr. Speaker, he got me there. Oh, yes. Now, if we can get back to the subject at hand, Mr. Speaker, why does the Premier think that being gouged only half as much as people were previously being gouged is good enough? Mr. Klein: Mr.

Speaker, relative to the crux and the core of the hon. member’s question, I’ll have the Minister of Finance respond. Mrs. McClellan: Well, Mr. Speaker, clearly, the hon. member has not followed the discussion that the Automobile Insurance Rate Board has had, nor does he fully understand the impact of the reforms in this province to date. First of all, there was a freezing, if you wish, a reduction of rates. Secondly, on the direct question on why, when the Automobile Insurance Rate Board stated that it was 12 per cent and they were only recommending 6, this is an interim reduction. Yesterday, Mr.

Speaker, I did clearly outline that there will be a review. That was anticipated and planned. That will begin shortly. We will hear all of the terms of that review. This fall the final number will be made apparent. It may be 12, it may be 13, or it may be 10, but that will be determined. So, really, the drivers in this province are getting a reduction six months earlier than was anticipated in the reform, and the ones I talked to are very, very pleased. The Speaker: The hon. Member for Cardston-Taber-Warner, followed by the hon. Member for Grande Prairie-Smoky. Infrastructure Spending Mr. Hinman: Thank you, Mr.

Speaker. The Minister of Finance described this current budget as one of investment for the future, and the minister of infrastructure has announced that additional money will go to schools. On behalf of the president of the Warner hockey school, Sandra Nelson – and, I might add, a long-time Conservative – will the ministers of Education, Gaming, infrastructure, Commu- nity Development, and perhaps even rural development meet with her and help her to make a centennial legacy for this province by providing the additional infrastructure funding needed to complete the Warner hockey school for girls?

Perhaps Sandra’s buddy MLA, the minister of infrastructure, could respond. The Speaker: The hon. minister. Dr. Oberg: Thank you very much, Mr. Speaker. I’d be more than happy to respond to that. I have met with the person that he mentioned on two occasions. I had the opportunity to drive in a car from Raymond, Alberta, where we made a wonderful announcement about a new school in Raymond. I had the opportunity to drive from Raymond to Taber with this individual, and she put forward an excellent case about the Warner hockey school, about what they were doing with kids in Warner.

Indeed, my next-door neig hbour actually goes to the Warner hockey school. So to say that we know nothing about it I think would be very much an exaggeration. We know a lot about it. We’re working very closely with the people of Warner. Mr. Hinman: I certainly didn’t say that you didn’t know anything about it. To the Minister of Finance: on behalf of the mayor of Milk River, Terry Michaelis, will the minister help the town to reduce its debt and interest rate with the Alberta Capital Finance Authority from the current 11.6 per cent to a lower rate? Mrs. McClellan: Well, Mr.

Speaker, certainly the borrowing from Alberta Capital Finance Authority is done under a set of terms and rules and conditions that all who borrow under it understand. It’s a well-known fact that there is an advantage to borrowing under that financing arrangement. It’s consistent, not subject to change. But I think that if the particular organization in question has some concerns in that area, they should most properly address them directly to Alberta Capital Finance Authority. 2:00 Mr. Hinman: They’ve tried. That’s why they’re asking for help.

To the Minister of Children’s Services: will the minister commit to recognizing and providing core funding for the Taber Safe Haven women’s shelter? Mrs. Forsyth: Well, we have, Mr. Speaker. I know the hon. member had a lengthy conversation with one of the members of my staff, and she explained to him about the funding that they’re currently receiving. If my memory serves me well, they also received another $10,000 under this budget. The Speaker: The hon. Member for Grande Prairie-Smoky, followed by the hon. Member for Edmonton-Meadowlark. Access to the Future Fund Mr. Knight: Thank you, Mr. Speaker.

Alberta is in an enviable position with respect to our economic activity, capital investment,

April 20, 2005 Alberta Hansard 901 and subsequent revenue accruing to the province. A 20-year strategic plan has been developed, one of the pillars of which is leading in learning. My question to the Minister of Finance: with postsecondary education being a cornerstone of this province’s future, how will the program be funded if the heritage fund for advanced education is to receive only $250 million in the three years ’05-06 through ’07-08? Mrs. McClellan: Well, first, Mr.

Speaker, I want to remind all hon. members that advanced education received a 13.4 per cent increase, or $196 million, in addition to the first instalment of the access to the future fund. I want to make it very clear that there is a clear commitment of this government to a $3 billion access fund for advanced education. A clear commitment. We have made it very clear that the $250 million identified in this budget was an initial investment and that future surpluses could be allocated to a number of things, one of them being the endowment funds. It will be built when we have the dollars.

The Speaker: The hon. member. Mr. Knight: Well, thank you, Mr. Speaker. To the same minister. In the same time frame, ’05-06 through to the end of ’07-08, reallocations from the sustainability fund do not indicate any additional transfers to the scholarship fund or the science and engineering research fund. What plan is in pl ace to address shortfalls in these areas? Mrs. McClellan: Well, Mr. Speaker, as was indicated in our budget speech of last week, we anticipate a $1.5 billion surplus this year. There is an anticipation of somewhat of a surplus in year 2 and year 3 of this three-year business plan.

It is very clear that those dollars will be allocated to the capital acc ount to deal with infrastructure pressures that are beyond the $9.2 billion capital plan that we have in place, that we will continue to fund the heritage fund to inflation- proof it, and that we have invested $500 million to the Heritage Foundation for Medical Research endowment. With the $250 million for the access fund in this year, it is very possible that there can be a significant contribution to that in this three-year business plan. The Speaker: The hon. member? The hon. Member for Edmonton-Meadowlark, followed by the hon.

Member for Edmonton-Castle Downs. Horse-racing Industry Mr. Tougas: Thank you, Mr. Speaker. Yesterday in this Legislature the Minister of Gaming went to great lengths to describe how the for-profit horse-racing industry, quote, earns, unquote, $45 million in lottery revenue. A plumber earns his money. A carpenter earns his money. An opposition MLA earns his money. My questions are for the Minister of Gaming. Given that the gambling machines at Alberta’s racetracks are owned and operated by the province of Alberta, what exactly does the horse-racing industry do to “earn” its $45 million? Mr.

Graydon: Well, the Minister of Gaming is going to earn his money this afternoon. I guess that a short answer would be that the machines are located at racetracks. The racing industry provides the entertainment, as far as racing is concerned, which invites people to those racetracks, and when they’re there, hopefully they also spend a little bit of time being entertained on the slot machines, a portion of which revenue goes to the racing association. Part of that revenue, obviously, goes to the Alberta lottery fund. They bring the guests in, and we entertain them. Mr.

Tougas: Well, if the government takes 33 and a third per cent of the money from gambling machines at racetracks, as the minister said last week, where does the other 66.6 per cent go? Mr. Graydon: Well, obviously, part of th at is what goes to Horse Racing Alberta. Another part of that goes to the facility operator, which is either Northlands, Stampede Park, Evergreen Park in Grande Prairie, and Whoop-Up Downs, I believe it’s called, in Lethbridge. That’s where the other portion of the money goes. Mr.

Tougas: Well, why does horse racing, which is a private, for- profit industry, get a 66.6 per cent cut of the profits from gambling machines at racetracks while charities at Alberta casinos get just 15 per cent? Mr. Graydon: Well, we have to look at who builds the facility, Mr. Speaker. In the case of the r acetracks the facilities are owned by Northlands or Stampede Park, as two examples.

The other casinos in the province where charities get a lesser percentage, those facilities which cost multimillion dollars to provide and build, the nice new ones that we have, are owned by companies and not by the racetracks, or they’re privately owned. The Speaker: The hon. Member for Edmonton-Castle Downs, followed by the hon. Member for Edmonton-Decore. Project Kare Mr. Lukaszuk: Thank you, Mr. Speaker. The body of another woman was recently discovered in a remote area near Camrose, Alberta. Police have identified her as having led a high-risk lifestyle.

This victim is added to a list of a dozen other women who died violently in our province over the last several years. The killer or killers are still out there. The latest discovery has created even more fear and concern among families and friends of women who also find themselves in similar dangerous lifestyles. To the Solicitor General: what are the police doing to identify and capture the person or persons responsible for these reprehensible crimes? The Speaker: The hon. Solicitor General. Mr. Cenaiko: Well, thank you very much, Mr. Speaker.

This, of course, is a very tragic situation that has occurred, the abduction and senseless murder of another young Albertan. The RCMP have assembled a team of skilled investigators and analysts, 43, that are working on the case every day and have been for the last few years. Through the government of Alberta we are employing four Edmon- ton Police Service investigators that are also assisting on this case. Mr.

Speaker, last year the province and the Solicitor General’s office provided $2.9 million to provide funding to Project Kare, and in this budget last week that amount has increased to $3.7 million, an additional $800,000, to provide the financial support for these investigations. The Speaker: The hon. member. Mr. Lukaszuk: Thank you, Mr. Speaker. My first and last supple- mental: what is the province doing to assist the police as they are conducting their investigations?

Alberta Hansard April 20, 2005902 Mr. Cenaiko: Well, Mr. Speaker, the person or persons responsible obviously have been preying on the most vulnerable in our society, and this is one of the issues, again, that we have to be looking at. The government, as I mentioned, is providing full support to the RCMP, full support to the Edmonton Police Service, as we do look at 41 homicides throughout this province, not just in the capital region but homicides going back to the 1930s. Obviously, the Project Kare team was developed in the last few years with regard to those serious murders in the capital region.

We continue to monitor as well as assist the RCMP in whatever way we can, but we’re also asking the public’s s upport regarding any information they know and asking them to call Crime Stoppers at 222-TIPS. The Speaker: The hon. Member for Edmonton-Decore, followed by the hon. Member for Calgary-Hays. 2:10 Oil Well Drilling on Crown Land Mr. Bonko: Thank you, Mr. Speaker. Current oil field development on disputed Crown lands in northern Alberta illustrates the lack of direct input Albertans have in ensuring long-term sustainability in the province’s natural areas and economic potential.

My question to the Minister of Sustainable Resource Development: before a surface disposition licence was issued to companies involved in oil and gas development at Sawn Lake, did the minister think it necessary to initiate an environmental impact assessment or bother consulting with affected communities? Mr. Coutts: Mr. Speaker, I’m not familiar with the exact incident that the hon. member has brought forward, but I’ll certainly look into it. It sounds to me that it might be something the EUB might be having approval of, and maybe the hon. Minister of Energy might be able to supplement. Mr. Bonko: Mr.

Speaker, what, if any, public consultations are completed before a licence is given to clear an area the size of half a township? Mr. Coutts: Again, Mr. Speaker, I believe that when it comes to clearing sites, that’s part of the application process to the EUB. Mr. Bonko: To the same minister: does the minister consider the shoot first and ask questions later approach to be a responsible, sustainable practice in developing long-term integrated land management policy? Mr. Coutts: Mr.

Speaker, there are processes in this province that have proven themselves for almost 60 years on how approvals are given for development in oil and gas and certainly in forestry, and those processes are followed. I will certainly take this question under advisement and get the details. Thank you. The Speaker: The hon. Member for Calgary-Hays, followed by the hon. Member for Edmonton-Calder. Courthouse Security Mr. Johnston: Thank you, Mr. Speaker. Judges in Alberta have expressed concerns about the safety and security in courtrooms and buildings that they are employed in.

In light of the fact that in 2004 there was an attempt to take a weapon from a guard in a courtroom and other incidents around Alberta, I have a question for the Solicitor General. That question is: what is the government doing to ensure safety in Alberta courtrooms, not just for judges but for prosecutors and members of the public? The Speaker: The hon. minister. Mr. Cenaiko: Thank you very much, Mr. Speaker. We take the matter of courthouse security very, very seriously.

We’re well aware that judges, Crown prosecutors, defence counsel, provincial witnesses as well as the members of the public have to be protected within our public court systems. In this last budget we allocated $6 million to provide security to the perimeter of our courts, but as well we’re looking at in the future video conferencing throughout the province from our corrections facilities, working in conjunction with the Attorney General regarding video conferencing from a remand centre to the courthouse. So that’s another project that we’re working on this year. Mr.

Johnston: My only supplementary question is: can the minister tell the House if this increased security plan means checking individuals entering courtrooms or buying special equipment? Mr. Cenaiko: Well, Mr. Speaker, this year we’re providing additional funding to our provincial protection officers that do work in the courts. We’re going to be hiring an additional 45 officers this year to redeploy 30 RCMP officers out of the courts and back to front-line duties.

As well, this may create the fact that, yes, individuals going into the courts may be checked and security screened through a scanner and/or a metal detection device just to ensure the safety of the courts and ensure the safety of the public, the judges, the Crown prosecutors, and defence counsel within those courts. Each case that is held in court can vary from the degree of a high-risk case to those of normal proceedings, but again some of those high-risk cases do need that additional security. The Speaker: The hon. Member for Edmonton-Calder, followed by the hon. Member for Edmonton-Centre.

Oil Well Drilling on Crown Land (continued) Mr. Eggen: Thank you, Mr. Speaker. The future of a major heavy oil development near land reserved for the Lubicon Lake First Nation is very much up in the air, with the former partner in the consortium trying to block the project from going forward. The Minister of Energy has acknowledged in this House that the project has not received the necessary regulatory approvals. None of this, though, has stopped this oil company from moving in and inflicting major environmental damage on the site. My question is to the Minister of Environment.

Why does the government allow Alberta’s natural environment to be destroyed by energy companies like Deep Well Oil & Gas when their projects haven’t even reached the first base in the regulatory approval process? The Speaker: The hon. minister. Mr. Boutilier: Thank you, Mr. Speaker. I think that for the benefit of all members of the House – this question has been asked before and addressed by not only myself but the Minister of Energy – I would like to say that the mineral rights, in fact, were applied for to the Ministry of Energy and through the EUB.

In fact, they went through that process to receive their permission pertaining to mineral rights. So this House was not aware of that fact in previous questions, and I want to share that with the House and with the hon. member today.

April 20, 2005 Alberta Hansard 903 The Speaker: The hon. member. Mr. Eggen: Thank you. To the same minister: why does the minister, who’s otherwise meant to be protecting Alberta’s environ- ment, refuse to change the rules so that oil and gas companies can no longer clear trees, impact water bodies, and alter ecosystems until after their projects have been secured through all the necessary regulatory approvals. The Speaker: The hon. minister. Mr. Boutilier: Thank you very much, Mr. Speaker.

I want to say also that I would add that in terms of surface rights they also actually go through the Ministry of Sustainable Resource Development, which I understand has also been taking place, that the members of this Assembly would not be aware of. But I can assure this House and all Albertans that the regulations regarding the protection of our environment will continue.

I also want to share that today, of course, 700 Albertans from across all corners of our province are here at the first environmental conference of its kind in Alberta, right here in Edmonton, and I’m very pleased to say that, you know, in the final analysis our most basic common link is that we all inhabit this small planet and this Earth that we live on. We all breathe the same air, drink the same water, and as we go forth, I believe without any political stripe that the environment is something that crosses over all of the boundaries of the politics that are here in this House. Mr. Eggen: Mr.

Speaker, why doesn’t the minister step out of his message box once in a while and instead endeavour to change the rules so that oil and gas companies are required to have all necessary approvals before they can clear the trees, build roads, and perma- nently alter ecosystems? Mr. Boutilier: Mr. Speaker, I can assure the hon. member and all members of this Assembly and Albertans that are watching that before any work is done, the rules of environmental protection are followed, will be followed.

If there is any breach of that, I’d encourage the hon. member to bring it forward, and we will take quick and swift action pertaining to anything that is going on that is not following Alberta regulation. The Speaker: The hon. Member for Edmonton-Centre, followed by the hon. Member for Stony Plain. Mental Health Strategy Ms Blakeman: Thank you, Mr. Speaker. Currently the Mental Health Act includes provisions for mandatory treatment only after a person is proven to be a danger to themselves or others; in other words, a danger model.

B.C., Ontario, Saskatchewan, and Manitoba have legislated a treatment model that provides people with serious mental disorders community-based treatment and supervision. Studies have shown that these programs reduce hospitalization, increase compliance, decrease victimization of the mentally ill, and decrease violence against members of the public. My questions are to the Minister of Health and Wellness. Will the government update the Mental Health Act to move from a danger model to a treatment model for the treatment of mentally ill Albertans? Ms Evans: Mr.

Speaker, in the last couple of years there’s been significant work done on the integration of mental health services at the regional level. Now, the question the hon. member asks is worthy of consideration, and in the course of some of the innovative funding responses we get this year to things that we plan to do, we will be very inclined to working further with that. Perhaps during the Committee of Supply I can provide more detail on exactly how we see ourselves funding things. On the legislative requirement we’ll take that under consideration.

Ms Blakeman: Again to the same minister: I’m wondering what the holdup is, what the delay is, considering that other provinces have already given us the model to work from. Ms Evans: Well, Mr. Speaker, I’m going to reflect today on the remarks of a certain Senator, Senator Kirby, who spoke to me about, generally, the state of the nation and mental health. There’s a lot of work to be done in Canada to improve mental health. There’s been a stigma attached to it, and different provinces have described different solutions. My feeling is that we’re embarking on something entirely new with this integration service.

We are adding to the supports for mental health. We are working with the professionals and with the training institutions relative to the capacity that we bring in the system. Legislation, although it is one tool, is not always the answer. Frequently the better tool s are to work with the providers of service. Mr. Speaker, one of the emphases that I know was part of the budget speech was on the work that we’re going to do with chil- dren’s mental health, integrating between ministries and also with the providers and the various authorities, and I hope we’ll be able to get more answers.

The hon. member is right: we’re on the threshold of things that I think we can and will do better in future. 2:20 The Speaker: The hon. member. Ms Blakeman: Thank you. Again to the same minister: given that the government has never allocated enough funding to support deinstitutionalization, will the minister under this new third way commit to the resources that we’ve all been waiting for for 25 years? Ms Evans: Mr. Speaker, I think the track record of Alberta’s funding for mental health has been appropriate in terms of institutionalization. I have worked in such an institution. It is not always the answer.

Frequently institutionalization withdraws the member from the community and makes it much more difficult for them to integrate with the commun ity later. So I think the most important thing is to individually tailor our response to the patient with the provider and take a look at what the most appropriate circumstance is. Mr. Speaker, some of the supports that have been provided in individual family homes and other circumstances where trained professionals work directly with individuals have had much more success than the so-called traditional model of institutionalization.

So I look forward to working on that and to expanding on this further when we talk through the Committee of Supply. The Speaker: The hon. Member for Stony Plain, followed by the hon. Member for Edmonton-Rutherford. Electricity Transmission Mr. Lindsay: Thank you, Mr. Speaker. As Alberta grows, so does the demand for electrical system services. The Alberta Energy and Utilities Board has issued a decision to approve the independent system operator’s application to reinforce the Edmonton to Calgary

Alberta Hansard April 20, 2005904 transmission corridor. My first question is to the Minister of Energy. In terms of these upgrades that are needed in Alberta’s electrical transmission system, what significance does this particular project have? The Speaker: The hon. minister. Mr. Melchin: Thank you, Mr. Speaker. This approval by the Energy and Utilities Board recently to build a 500 kv line between Edmonton and Calgary is very significant in the overall context of the reliability of the transmission system so that we can ensure that power can be delivered where it’s needed when it’s needed.

We’ve had tremendous growth in that sector of population industry, and it’s put quite a bit of strain on the existing. With the new transmission lines being built, that w ill add to efficiency. You w ill actually by greater efficiency see less line loss lead to a savings, which will actually pay for the new additions. The Speaker: The hon. member. Mr. Lindsay: Thank you, Mr. Speaker. My only supplemental is to the same minister. When is this project expected to be completed, and are there other upgrades being considered at this time? Mr. Melchin: Mr. Speaker, this project has two different phases to it.

The first one just involves upgrading existing lines and facilities. That first phase is to be completed in the year 2007. The second phase includes a 330 kilometre line, which is to be completed in approximately 2009. They have the approvals at this stage to do that planning. There still has to be access questions for the specific routing of that line to be approved, and the contemplation is within 2009. The Speaker: The hon. Member for Edmonton-Rutherford, followed by the hon. Member for Whitecourt-Ste. Anne. Commercial Vehicle Insurance Rates Mr. R. Miller: Thank you, Mr. Speaker.

Yesterday the Minister of Finance ignored the concerns of small business owners in this province by refusing to provide them with relief on their auto insurance premiums. My question is for the Minister of Finance. Why did this minister once again ignore Joe’s pool hall and other small businesses by excluding commercial vehicles from the mandatory, better-late-than-never premium reductions? Mrs. McClellan: Mr. Speaker, the automobile insurance reforms that were introduced in this province in October of 2004 were clearly to cover private vehicles and the compulsory portion of insurance.

There was, I believe, at that time a commitment that we would review whether there should be any further inclusion in that and that we would after some experience with the initial auto reforms look at that, and I would expect that that is what would happen. If the reference is to either th e question in the House or to the release from us on the reduction, I’d like a clarification on that because I’m not sure if the hon. member is just referring to the release of the 6 per cent mandatory reduction or to the question on insurance on property, et cetera. Mr. R. Miller: The question was about auto insurance.

I’m wondering now: will the minister expand the scope of the upcoming AIRB public hearings to include commercial vehicles? Mrs. McClellan: Well, Mr. Speaker, the Automobile Insurance Rate Board will very, very soon, perhaps today or tomorrow, be releasing the terms of reference for the review. Mr. R. Miller: They announced it. Mrs. McClellan: He tells me that they’ve announced it, so it was today. Mr. Speaker, I don’t think there’s anything that would prohibit anyone from bringing forward information to that review.

However, the review was very specific to deal with the reforms that we put in place in October of last year. Again, I repeat: for all of the criticism that we have heard from across the way on those reforms, they must really think they’re working because they want more included in them, and I thank you for that vote of confidence. The Speaker: The hon. member. Mr. R. Miller: Well, thank you, Mr. Speaker. My third supplemen- tal is to the Minister of Finance. I’m just wondering: would she please enlighten this House as to whether or not she reads her press releases before she sends them out? Mrs.

McClellan: I can answer that, Mr. Speaker. Absolutely. I read everything that goes out of my office. Absolutely everything. Sometimes, though, it has a little XXXX at the top on the date, that it will either be today or tomorrow, and when I read the release, it didn’t have those Xs filled in. There is nothing that goes out of my office that I do not read if I have approved it or signed it. Electrical Permits Mr. VanderBurg: Mr.

Speaker, I’m a licensed tradesman, as are the members for Calgary-Foothills and Grande Prairie-Smoky, and I’ve had calls regarding the proposed changes to the permitting system that would allow journeyman electricians to apply for permits necessary to do electrical installation. Currently only master electricians can apply for these permits. My callers are suggesting that this change would impair the safety of Albertans as a journey- man electrician could have less experience than a master electrician. My first question is to the Minister of Municipal Affairs.

Can the minister assure these callers that this proposed change to the master electrician program will not compromise the safety of Albertans? The Speaker: The hon. minister. Mr. Renner: Well, thank you, Mr. Speaker. I’m pleased to respond to that question. First of all, let me assure the hon. member that nothing within our public safety division is of more paramountcy than the safety of Albertans within their homes, their workplaces, or their places of employment. I also want to advise the member that there is, in fact, an ongoing review that has been under way since 2001 by the permit advisory group.

One of the recommendations that they are considering is that journeyman electricians be allowed to take out permits for low- voltage installations only, such as single-family homes. Mr. VanderBurg: Well, Mr. Speaker, my constituents that have contacted me do not want this change. To the same minister: why are you going down this route? Mr. Renner: Well, Mr. Speaker, let me emphasize that this is not a decision that has been reached yet. It is one that is under consider-

April 20, 2005 Alberta Hansard 905 ation. There is, as I mentioned, an ongoing review of the Safety Codes Act and the permitting regulations. The process is designed to ensure that there is uniformity between the trades and between the policies with respect to the issuance of permits. So this particular consideration is in the context of many others, and the decision as to whether we accept those recommendations or not is yet to be made. 2:30 Mr. VanderBurg: Mr.

Speaker, again to the same minister: given that these proposed changes are being considered by your ministry, will there be an opportunity for further feedback not only from my constituents but other electricians around the province? Mr. Renner: Well, Mr. Speaker, it’s interesting that concurrent with the review that’s taking place, there was also an initiative by the Electrical Contractors Association of Alberta to review the master electrician program. In fact, they have a number of town hall meetings scheduled across the province to do just that.

I would encourage the hon. member and his constituents and any Albertans, as a matter of fact, to find out when one of those town hall meetings is taking place within their community, attend that meeting, and voice their opinion and their concerns with respect to this particular issue and anything else to do with the master electrician program. The Speaker: The hon. Member for Calgary-Varsity, followed by the hon. Member for Lac La Biche-St. Paul. Private/Public Partnerships Mr. Chase: Thank you, Mr. Speaker.

Because this government prefers to conduct Albertans’ public business behind its closed caucus doors under the cloak of FOIP, the restriction of information act, this people’s parliament has the shortest sittings in the country. During question period opposition questions are often ignored and frequently ridiculed. Yesterday I received information that the Ministry of Infrastructure and Transportation had selected a single contractor for a $300 million P3 pr oject to build 25 schools. My questions are to the Minister of Infrastructure and Transportation.

Will the minister for the record either confirm or deny this latest P3 information? The Speaker: The hon. minister. Dr. Oberg: Thank you, Mr. Speaker. I completely deny it. The Speaker: The hon. member. Mr. Chase: Thank you. To the same minister: given this govern- ment’s P3 record, which includes the downsizing of the Calgary courthouse plan although the original $300 million cost remained the same, why will this government not abandon its flawed P3 projects? Dr. Oberg: Mr. Speaker, first of all, in the member’s

preamble there were a lot of things that were, quite frankly, nonsense. For each and every P3 that we will do – and we will be doing more; there will be more P3s in Alberta – we’ll take a specific look at the individual one. We’ll be taking a look at the business case. It will be reviewed by a committee of private individuals. Mr. Speaker, the P3s that we’re going to do in Alberta are exceptional, bar none. There are no other ones that are out there at this particular time. Could there be some? Absolutely. But each and every one is going to be looked upon on its own merits and its own business case.

The Speaker: The hon. member. Mr. Chase: Thank you, Mr. Speaker. Given this government’s past flip-flops, will the minister commit to building Calgary’s southeast replacement hospital in a transparent, publicly accountable, open- bid, non-P3 manner? Dr. Oberg: Well, Mr. Speaker, I think the hon. member has been reading the newspapers again. The bottom line is absolutely. That’s what we’re doing. The Speaker: The hon. Member for Lac La Biche-St. Paul. Railway Container Terminals Mr. Danyluk: Thank you very much, Mr. Speaker.

On April 15 the federal government, the province of British Columbia, and the industry confirmed their support for developing a container handling facility in Prince Rupert. My question is to the Minister of Infra- structure and Transportation. What are the implications of this new project on Alberta? Dr. Oberg: Mr. Speaker, the news that came out of British Colum- bia, with the federal government and the British Columbia govern- ment and CN Rail working together to get the port of Rupert back in the shape that it should be, is absolutely tremendous news for Alberta.

What we have now is another port where we can transport our goods. Mr. Speaker, just for your information, as of today 38 per cent of the goods that go through the port of Vancouver are from Alberta. If there is anything – if there is anything – that shuts down the port of Vancouver, from labour unrest to any technical issues to anything at all, we’re going to see that 38 per cent of our goods being an issue. By opening up the port of Prince Rupert, it enables us to have another, quicker, shorter route to our Asian markets.

It’s approxi- mately 30 to 40 hours shorter from Prince Rupert to the Asian markets than it is from Vancouver. The Speaker: The hon. member. Mr. Danyluk: Thank you very much, Mr. Speaker. My first supplemental to the same minister: what are his department’s plans to assist Alberta to take advantage of this new infrastructure? The Speaker: The hon. minister. Dr. Oberg: Well, thank you, Mr. Speaker. Certainly, we’re working on the rail links that we have in Alberta through our short-line railroads to link onto the rail to Prince Rupert, and that’s probably the biggest thing that we can do.

I will say, though, that I think the future is unlimited. If we can expand a pipeline along that same route into Prince Rupert, I think the opportunity is huge for us to export oil through that particular port. Mr. Speaker, again, this is wonderful, wonderful news for the citizens of Alberta, and it opens us up, quite literally, to a whole new world. The Speaker: The hon. member. Mr. Danyluk: Thank you, Mr. Speaker.

My final supplemental, again to the Minister of Infrastructure and Transportation: what assistance might the minister be able to offer in developing a proposed container handling facility in the Grande Prairie region?

Alberta Hansard April 20, 2005906 Dr. Oberg: Mr. Speaker, I was in Grande Prairie probably about four to six weeks ago, and I actually saw the site that they were looking at for this particular container facility. I like the idea. I think there’s certainly a case to be made for the intermodalities of transport, and I think that we can certainly look at it. There has not been a specific business case that has been presented to us. There has not been a specific proposal that has been sent to us. However, I do believe that there is certainly opportunity there.

Again, this is a wonderful site in order to group the product to ship it off to Prince Rupert and subsequently across to world markets. The Speaker: Hon. members, in a few seconds from now I’ll call upon the first of six members to participate, but in the interim might we revert briefly to Introduction of Guests? [Unanimous consent granted] head: Introduction of Guests (reversion) The Speaker: The hon. Member for Red Deer-North. Mrs. Jablonski: Thank you, Mr. Speaker.

I’m pleased to introduce to you and through you to members of this Assembly a very special group of students from River Glen school in Red Deer-North. River Glen school is an anomaly because while it is located in the heart of the city of Red Deer, the majority of its students are from rural Alberta. These are well-rounded students who make us very proud. They’re always enthusiastic and cheerful whenever I’m fortunate enough to visit their school. There are 44 very bright and energetic students seated in the members’ gallery. They are accompanied by their teachers, Mr. Bob Irwin, Miss Tracy Dreher, and Mr.

James Stork, along with two parents, Mrs. Christine Richardson and Mrs. Leora Clutton. I would ask them to stand and receive the warm welcome of the House. The Speaker: The hon. Member for Airdrie-Chestermere. Ms Haley: Thank you very much, Mr. Speaker. It’s a real pleasure for me to be able to introduce to you and through you to members of the Assembly 26 guests from my constituency. They are 20 students from the Meadowbrook school, five parents, and their t eacher. I wanted to tell you that they’re here for the School at the Legislature.

They won the right to be here through an Access TV competition, and I’m very proud of them. I had the opportunity to visit with them last fall in their classroom. They asked brilliant questions, kept me on the hot seat for over an hour. I’d like to introduce them now, please. The parents are Kim Clark, Gary Wilde, Robert Wellspring, Debbie LeVesconte, and Leanne Simon, and the teacher is Mr. Robert Hodgins. I’d ask all of them and the 20 brilliant students to please rise and receive the warm welcome of the Assembly. The Speaker: Hon. members, on that point just raised by the hon.

Member for Airdrie-Chestermere, I really encourage you, when you’re out talking to schools, to encourage them to look at the School at the Legislature program. Although it’s located in Edmonton and it’s very difficult for schools outside of Edmonton to do it, it is possible. That’s the one message in terms of that, and I appreciate that because it’s a treme ndous learning experience for citizens throughout the whole province of Alberta. head: 2:40 Members’ Statements The Speaker: The hon. Member for Lac La Biche-St. Paul. National Soil Conservation Week Mr. Danyluk: Thank you very much, Mr. Speaker.

I would like to rise today in recognition of National Soil Conservation Week, which is April 17 to 23. With the federal government’s directionless Kyoto implementa- tion plan being recently intr oduced to the public and few details available, it looks like the feds will let the eastern industries develop their own standards and force unrealistic standards upon the industries which are primarily located in the west. Here in the prairies conservation, particularly soil conservation, is something that is practised not because it’s what Ottawa wants but because it’s the right thing to do.

Farmers and ranchers are the original stewards of the land, and they pass on their knowledge and respect for the land to the next generation of farmers and ranchers, which is primarily their children. Alberta producers have been leaders in soil conservation and are continually improving their practices by developing the science and technology needed to ensure that our soils are able to continue producing the highest quality crops across the entire globe.

Through the environmentally sustainable agriculture soil quality benchmark program Alberta Agriculture staff work with producers to monitor and assess the quality of Alberta’s soil to keep a strong commitment to one of Alberta’s most precious natural resources. Producers benefit by using direct seeding and other management practices to improve water infiltration, increase seedbed moisture, enhance organic matter, and reduce the risk of soil erosion. I would like to thank all the producers past and present for their work in sustaining and enhancing Alberta’s soil.

Let us leave the land in better shape than when we started. Thank you very much, Mr. Speaker. National Volunteer Week Mr. Strang: Mr. Speaker, many of Alberta’s great successes have been achieved thanks to the dedication and generosity of volunteers. From coaching soccer to building schools overseas, Albertans have always helped others. This week we pay tribute to the voluntary sector through Volun- teer Week. This is a nationally pr oclaimed week held to celebrate the valuable and momentous contribution that volunteers make to our lives.

All across this great province many events and achieve- ments are going to take place to recognize and thank the volunteers who play such critical roles in our communities. The Wild Rose Foundation provides a provincial focus to Volunteer Week activities. This year a record number of 153 Alberta communities representing more than 2 million Albertans are participating in this week-long series of events. It is estimated that the volunteer sector is worth over $1 billion to Alberta’s economy and over $14 billion to the national economy.

The commitment of dollars from Alberta lotteries is continuing to strengthen the efforts of those citizens who are known for their generous spirits, willingness to give, and unfaltering commitment to improving the quality of life for all of us. Alberta leads the way in the voluntary sector, and we can all take pride in the great accom- plishments. I encourage this Assembly to continue its support and encourage- ment of volunteerism in this province. Throughout Alberta our volunteer spirit is contributing directly to the health and well-being of our citizens and communities. Thank you very much, Mr. Speaker.

The Speaker: The hon. Member for Drayton Valley-Calmar.

April 20, 2005 Alberta Hansard 907 Centennial Canoe Trip Rev. Abbott: Thank you, Mr. Speaker. In 1670 King Charles II granted an exclusive charter to Prince Rupert, governor of the Company of Adventurers of England Trading into Hudson’s Bay, for the trading of furs and other commodities on all the lands and streams draining into Hudson Bay. That company became known as the Hudson’s Bay Company, and the land under Prince Rupert’s control, known as Rupert’s Land, eventually became most of what is now the dominion of Canada.

Prince Rupert’s royal charter required the Hudson’s Bay Company to pay as rent two black beavers and two elks annually to King Charles or his su ccessors whenever they should be in Rupert’s Land. Mr. Speaker, now that Queen Elizabeth II will once again be returning to Rupert’s Land for Alberta’s centennial, it’s time to pay the rent. Young voyagers from Saint John’s School of Alberta, located at Genesee in my constituency, will be joining the 1967 centennial race voyagers on a three-day canoe trip along the North Saskatchewan River from Rocky Mountain House national park to the Alberta Legislature Grounds.

Once they arrive on May 22, they will be presenting the Hudson’s Bay Company’s rent to a prear- ranged recipient in the form of two elk leather signed scrolls and two tartan-backed beaver blankets. Saint John’s school is a residential school founded in 1968. It is known for its focus on academics and out door programming for students from grades 7 to 12. I would like to commend the young voyagers from Saint John’s school as well as the entire delegation who will be making the trek from Rocky Mountain House national park.

These adventurers embody what it means to be Albertan and certainly show that the centennial spirit is alive and well. And, Mr. Speaker, we all know what happens if we don’t pay the rent. Finola Hackett Mr. Lougheed: Mr. Speaker, I rise today to recognize a young Albertan who has once again proven that Albertans rise to the top no matter what the occasion. This past S unday in Ottawa Finola Hackett, a 13-year-old student from Tofield, Alberta, was crowned the first ever CanWest CanSpell National Spelling Bee champion.

During the event 22 competitors, including four from Alberta, competed in Ottawa for the CanWest CanSpell Cup, a $10,000 scholarship, and the opportunity to be flown to Washington, DC, this May to compete in the prestigi ous Scripps National Spelling Bee. In the end it was Finola and Edwin Ho, from Toronto, battling word for word for 11 rounds before Finola correctly spelled otiosity to take the title. Ironically, otiosity, o-t-i-o-s-i-t-y, means producing no useful result. Mr.

Speaker, on behalf of all hon. members I congratulate Finola on her impressive victory, and I also congratulate all of our Alberta competitors: Mohamed El Mais, Matthew Fergel, and Mengya Zhou for their accomplishments. Making it to the national finals was no easy feat, and I commend them for all their hard work and dedica- tion. These young Albertans are an incredible example of the talent that lies within every school in Alberta, and I know that they will all be doing great things in the future. Thank you, Mr. Speaker. The Speaker: The hon. Member for Edmonton-Meadowlark. CKUA Radio Mr. Tougas: Thank you, Mr.

Speaker. The CKUA Radio Network is a true Alberta treasure. Founded in 1927 by a forward-thinking government, CKUA was Canada’s first educational broadcaster and its first public broadcaster, predating the CBC by many years. Now in its 78th year CKUA Radio has evolved from a tiny, low-wattage station staffed by dedicated amateurs devoted to the still-newfangled gizmo called radio to a one-of-a-kind radio station carried by a network of 17 transmitters across Alberta.

The CKUA Radio library is one of the most impressive collections of recorded music anywhere in the world, with a quarter million LPs and CDs containing more than 1 and a half million pieces of music. However, this vast collection was briefly silenced when in 1997 a government-appointed board ran CKUA into the ground and forced its closure. Happily, thousands of Albertans rallied around the silent station and brought it back to life run by a volunteer board of directors and dependent for its survival on public support and thousands of hours of volunteer help.

This approach had never before been tried in Alberta, but it was and remains today a great Alberta success story. CKUA today gets most of its budget from its loyal supporters across Alberta, from Athabasca to Whitecourt, and from around the globe. In a world of rigid music formats and cookie cutter corporate control of the radio dial CKUA is truly an oasis for the ears. From folk to jazz, Alberta musicians to stars of world music, classical, blues, Celtic, and contemporary, CKUA has something for every discerning listener. I urge all members of this Assembly to give it a listen.

If you like what you hear – and you will – please join me in making a donation to CKUA during its current spring fundraising drive. There is no other radio station on the planet quite like CKUA, and it is some- thing that all Albertans can be proud of, and it deserves our contin- ued support. Thank you. The Speaker: The hon. Member for Calgary-Varsity. Volunteer Achievements Mr. Chase: Thank you, Mr. Speaker. The theme of today’s recognition is the importance of volunteers.

The voluntary efforts of a number of dedicated parents and coaches encouraged the Calgary NASA Rockettes to not only win this spring’s Calgary pee wee girls minor hockey tournament but to go on and win the provincial championship. One of the youngest contributors to the team’s success was right wing number 8, Moriah Chaisson. Moriah’s grandmother, a good friend of mine, not only runs a full- time, highly successful business, Gerry’s Hair Design, out of her home, helps with the raising of her grandchildren, but also finds spare time as a volunteer to help adults overcome their addictions.

Last Saturday more than a thousand climbers and their supporters ranging in age from two to 90 participated in the Alberta Wilderness Association’s 14th annual Calgary Tower climb. The members for Calgary-Mountain View, Calgary-Lougheed, and I were there to acknowledge the participants’ efforts. It was my honour to present iron woman, 90-year-young Phyllis Hart with an award for climbing the 916 stairs not once but twice. Among the generous corporate sponsors who participated were EnCana Resources and Shell Canada.

Shell is one of four environ- mentally conscious companies, including BP, Petro-Canada, and Suncor, that have already voluntarily reduced their emissions below the Kyoto requirement. Hopefully, Shell will show the same type of environmental ingenuity in finding an alternative method to dredging in a sensitive Canadian Arctic beluga whale habitat in order to access and transport gas deposits. Thank you.

Alberta Hansard April 20, 2005908 2:50 Vignettes from Alberta’s History The Speaker: Hon. members, by way of an historical vignette for today, on April 20, 1999 – that’s not very long ago – one of the really momentous agreements was signed in this country. It was actually signed here in the province of Alberta. It was not the first time, but it was renewed on April 20, 1999, and it was an agreement between the government of the province of Alberta and the Métis Nation of Alberta, which made it very unique in all of Canada.

This agreement was for seven years, and it basically said that it would focus on projects with positive and measurable outcomes for the Métis people in the province of Alberta. The agreement terminates March 31, 2006, but it’s also a very good time to just recognize that we have at least four members of this Assembly who are of Métis heritage. To the hon. Minister of Aboriginal Affairs and Northern Development, the hon. Minister of Seniors and Community Supports, the hon. Minister of Restructuring and Government Efficiency, and the hon.

Member for Bonnyville-Cold Lake, who all have Métis blood in their veins, congratulations. head: Tabling Returns and Reports The Speaker: The hon. Member for Edmonton-Strathcona. Dr. Pannu: Thank you, Mr. Speaker. I’d like to table five copies of an op-ed piece in the New York Times of April 15, 2005, by Professor Krugman, a respected professor of economics at Princeton University. In this document Professor Krugman describes why the most privatized health care system in the advanced world – that is, the U.S. system – is “also the most bloated and bureaucratic.” Thank you, Mr. Speaker. The Speaker: The hon.

Member for Edmonton-Calder. Mr. Eggen: Thank you, Mr. Speaker. I would like to table five copies of a letter dated April 13, 2005. The letter is from Kerry Barrett, the president of the Alberta Federation of Labour. Ms Barrett is expressing her concern about the lack of consultation with labour in preparing Bill 15 and the serious impact that it has on “important principles regarding worker rights.” Thank you. The Speaker: The hon. Member for Edmonton-Gold Bar. Mr. MacDonald: Thank you very much, Mr. Speaker. I have a tabling this afternoon, and it is the document that I quoted in question period this afternoon.

It is from the Federal Energy Regulatory Commission library in Washington, DC, and it asks the question, “Did Enron undertake generating projects in Canada?” Thank you. The Speaker: The hon. Member for Edmonton-Manning. Mr. Backs: Thank you, Mr. Speaker. I’d like to table a further five copies of another letter from Kerry Barrett, the president of the Alberta Federation of Labour, asking for a delay in Bill 15 until there is proper consultation with all stakeholders that could be affected by this bill. Thank you. Mrs. McClellan: Mr.

Speaker, as I indicated earlier in question period, I would table a letter that was written to our Auditor General, Mr. Fred Dunn, regarding his audit of the Alberta Securities Commission. head: Orders of the Day head: Committee of Supply [Mr. Marz in the chair] The Chair: I’ll call the Committee of Supply to order. head: Main Estimates 2005-06 Energy The Chair: The hon. Minister of Energy. Mr. Melchin: Thank you, Mr. Chairman.

I’m pleased to take the opportunity this afternoon to review with members of the Assembly the business plan and budget for the estimates for the Ministry of Energy as outlined over the next three years and, as certain members have certainly echoed here, the source of much of the money for this province and this government. I’d like to introduce, if I could, a few of the members of the executive of the Department of Energy.

We are very fortunate to have some very talented, excellent professionals, with great backgrounds, a tremendous source of expertise that is provided by officials in the government and this department in particular to the Department of Energy. I have Ken Smith as Deputy Minister of Energy. He’s up in the members’ gallery. We also have John Giesbrecht with the Energy and Utilities Board. We have David Breakwell, assistant deputy minister, and Kellan Fluckiger, who’s head of the electricity division of our department.

Others are I know participating, and we welcome them here and thank them for their excellent work on behalf of the people of Alberta. Some opening comments. It’s an interesting time for the business of energy in this province, very exciting times. A tremendous amount of activity happening across the province: from one end to the other end all across this province the energy sector has reached record levels of activity in 2004 and is expected to increase in the foreseeable future.

Ensuring that Alberta’s energy resources are competitive, attractive to investors, nurture Alberta’s growth, and create employ- ment well into the future are the Ministry of Energy’s most impor- tant responsibilities. Albertans recognize the hard work that it’s taken for our province to become deficit and debt free. This prosperity depends in large part on the sustainable development of the province’s abundant energy resources. We are entering an exciting time in this innovative and knowledge-intensive sector as around the world energy demand continues to rise steadily.

In fact, sometimes very highly underrated is the level of technology that’s involved in this industry, a very high high-tech industry itself, and it spawns a lot of other offshoots in the high-tech industry in the province as a result of the expertise that is demanded and needed to extract and manage these resources. In today’s world the energy sector is certainly worth a lot given the price and demand of that commodity. That is why Alberta has to continue to build the capacity and capability needed to support an innovative and globally competitive energy sector.

Alberta’s oil sands, conventional oil reserves, and natural gas are all tied directly into the continent’s best energy infrastructure. As the energy industry strives to meet demand, the ministry will continue to ensure that Albertans receive their fair share of resource revenues through royalties, taxes, bonuses, and rentals. Independent royalty regime assessments, including one by van Meurs and Associates of Calgary, suggest that Alberta has some of the toughest royalty terms in the world, and industry sources would concur and

April 20, 2005 Alberta Hansard 909 support that assessment. It is important that we work towards receiving our fair share, and I believe we have achieved that right balance in Alberta. We still must remain attractive to investors. Conventional oil and gas and oil sands investment in Alberta alone in 2005 is forecast to be over $20 billion this next year, considerably up from previous years. Albertans can expect ongoing benefits thanks to the bounty beneath our feet.

In the Department of Energy’s business plan the province targets Alberta’s fair share between 20 and 25 per cent of industry’s annual net operating revenue through the royalty system. In our forecast for this past year, ’04-05, the province received over 8 and a half billion dollars in nonrenewable resource royalty revenues. In 2005-06 in the estimates before us resource revenues are forecast to make up almost 30 per cent of government revenues, about $7.68 billion.

These revenues pay for critical services, and of course Albertans reap the rewards of lower taxes, higher employ- ment, and greater business opportun ities as a direct and indirect result of the oil and gas industry. 3:00 On the utility situation we continue to monitor and are currently reviewing the restructured electricity market. Ensuring that markets are operating in the best interests of Albertans and bringing on new generation to serve our needs are key priorities. That means periodically reviewing and considering options that may be impor- tant in fine-tuning the system.

Natural gas consumers also have the protection of the monthly natural gas rebate program, which has just ended the second year of a three-year program. Rebates were activated when consumer rates exceeded $5.50 per gigajoule during the high-demand season, November through March. With respect to our energy price forecasts our current commodity prices remain very high in historical terms and have fluctuated significantly over this past year.

This is due to a number of factors, including robust global economic growth, particularly in China, concerns regarding supply disruptions in Iraq, Nigeria, and Russia, and the high price of oil supporting above average prices for natural gas. The Department of Energy benchmarks its oil forecasts with those of a number of private-sector analysts. Over the past few years the budget estimates were low compared to the nonrenewable resource revenues that were realized.

For our 2005-06 for ecast our Budget 2005 is based on an oil price of $42 U.S. per barrel west Texas intermediate, which is between the low and average private-sector analysts’ forecasts. Budget 2005 assumes that the natural gas price will average about $5.60 Canadian per gigajoule in this fiscal year. As with oil, the natural gas forecast is benchmarked with those of a number of private-sector analysts. Another consideration is the general economic outlook provided by Alberta Finance, which projects increased demand for natural gas.

But Albertans’ share of resource development is more than just royalties calculated on volatile market prices. Bonuses and sales of Crown leases and licences are forecast to generate $886 million in the forecast year coming up. I would certainly recommend that we continue in our estimates of forecasting. No one can project the future. It’s impossible to know for certain. We have seen the cycles in the past. Just when you expect that everything is going to do nothing but increase, markets can decline, and other factors enter into the equation that would see a slackening of demand and price.

In that light, I think it’s impera- tive that we do continue an approach of estimating conservatively that price forecast, that we not put at risk the ab ility to finance programs such as health and education, very vital, infrastructure- related questions of this province, based upon taking an aggressive or high forecast on oil and gas to support that.

Alberta Energy’s business plan contains a new vision for energy development in Alberta; that is, Alberta is a global energy leader using its world-class knowledge, expertise, and leadership to develop the vast energy resources of the province and to market these resources and abilities to the world. Alberta w ill build upon its strength in resources, knowledge, and innovation to become a world- class energy leader, delivering value-added products to North America and offshore countries.

Our knowledge, our expertise, our skills and proficiency, our leading-edge approach to energy research, and the vast resources themselves are all of the things that set us apart and set us up as a world leader. This will require an increased investment in infrastructure, research and technologies, co-ordinated planning, and new ap- proaches to ensure that we can develop these resources to their maximum value in an environmentally responsible manner for the benefit of all Albertans first and foremost, of course, and then to others around the world.

In the coming three years our ministry will focus and prioritize a few areas that I’d like to just touch on, that being Alberta’s energy advantage as providing us with being the global energy leaders. I think it’s imperative that we develop an integrated energy strategy that looks at not just the production of our natural resources but how it is that we can achieve a greater value-added and the maximum potential for that resource, beyond just being hewers of wood. We have tremendous expertise.

Much of this is starting to occur, but when we see various projects that could come in the oil sands taking a very heavy, heavy oil, we should look at: how can we take those in the producing, those in the pipeline industry, those in the refining industry, the petrochemical industry, and work co-operatively to realize the potential that could be had in taking that raw bitumen to synthetic crude oils or refining that to even refined gasoline products or potentially using bitumen as a feedstock for the petrochemical industry?

We could use the expertise and the advantage of the Alberta hub to build upon those strengths and ensure that we can provide that product to not just ourselves in Alberta but to Canadians and, clearly, to the markets in the world.

We have the knowledge and the technology available for integra- tion of that whole approach of focusing our research, focusing the curriculum and the work that’s done in our universities and technical institutions to ensure that we have a highly trained and skilled labour workforce that’s required now and for the future generations along with the research that we do targeted towards those areas of highest potential and value, given that the technology is at the source, really, of the opportunity, all parts of a further integrated energy strategy.

Secondly, we will continue to focus on and highlight even to a greater extent the oil sands in particular and the heavy oils. We hear about the vast resource likelihood and the 1.6 trillion barrels in place. Proven today are 176 billion barrels of oil, probable in the range of 311 billion barrels. Our resource in proven terms is second only to Saudi Arabia, not much lower than theirs, but in size of resource potentially much greater than any other around the world. It’s this world-class resource.

We see and hear about much of the development that is starting to occur, the billions of dollars that are being invested annually, the variety of stakeholders that are being involved in that development. We will need to more aggressively, I would say, focus our energies toward ensuring that we realize the opportunity that’s before us. How is it that we can see that the infrastructure is in place as

Alberta Hansard April 20, 2005910 needed? That could be everything from the roads to schools, hospitals, housing, land available. How do we ensure that we have the right regulatory environment in place that can manage this resource for the benefit of all Albertans? Thirdly, I’d just like to touch on the other huge challenge today. That would be the continued access to the resources, that are vast. I mentioned the oil sands. Natural gas is far too much considered as having been a declining industry. We really are only beginning to realize some of the potential in that area as well.

With just improved measures of technology in conventional sources, we leave about 73 per cent of the oil in the ground and 40 per cent of the gas. Just a marginal improvement in technology and we’ll realize a whole new Alberta right below us just in our conventional sources. Then we add to it the nonconventional sources of natural gas in coal. Potentially, 500 tcf of natural gas is available in the coal seams that are there. Just a huge, huge opportunity. We’ve got this next year likely 3,000 wells that will be drilled just in natural gas in coal.

We are just beginning to understand the scope and the size of that resource, and the investment is coming. In many cases this is going to have a large footprint on vast areas of this province. So when you overlay the oil sands, our conventional sources that span this province, the natural gas in coal, then we can overlay the coal itself, hundreds of years of supply in coal, 800 years in particular, and with the continued improvement of the management of the resources, these will last even longer, I suspect. Our challenge in Alberta is that we have the world-class size of resources.

We have the opportunity to be the world leaders in the extraction of those, both for the development of it but also to show how you sustainably work through a life cycle. How do you ensure that Albertans continue to support that we gain access to the lands to do the work that would benefit all Albertans?

So the access will become a third and very important part, that we continue to work with Albertans on to gain their acceptance of temporary disturbances on the surface, to then reclaim and put back to those original conditions, through a life cycle approach, for all the benefits of those vast resources that lie beneath the ground. 3:10 With respect to the Alberta Energy and Utilities Board, they will continue to act on recommendations of the Provincial Advisory Committee on Public Safety and Sour Gas.

Significant progress has already been made on the 87 recommendations of that study that was conducted a few years ago. Often we might be asked: why would we develop sour gas around this province? Clearly, it’s a lethal substance. You wouldn’t ever undertake such an activity unless you could safely manage that product. We have had over 50 years of a very good track record in this industry. It’s not without some serious accidents in the past, but no one of the public itself has ever been seriously injured as a result of sour gas.

There has been a tremen- dous improvement in technology, in engineering, with respect to even our own regulation and control and management of the procedures so that safety is paramount. Last year in particular we had around $2 billion in royalty revenues off the sour gas. A third of our gas in this province is sour. That funds a substantial portion of the benefits that Albertans receive. It provides a clean fuel for the heating of their homes.

I don’t know about you, but in the middle of the winter it’s nice to go to that thermostat and turn it up and have some warmth in the home, and that sour gas adds to the great value of being able to have a reliable, good, safe commodity in our homes. You take a substance that’s dangerous and turn it into one that is very manageable and controllable and very worth while, in addition to the substantial economic benefits of jobs, employment, opportunity, and royalties that we derive.

With respect to the ministry’s budget this year we’ll collect, we’re estimating, $7.68 billion in revenues for the upcoming year, over $6 billion in the following year, ’06-07, and just under $6 billion in ’07 and ’08. I would like to point out that the Department of Energy’s budget has basically been flatlined for a number of years, yet some of the expenditures propose a net increase in funding of about $13 million, or about 6.4 per cent, for the Department of Energy and the Alberta Energy and Utilities Board.

It is vital that we make these investments in order to continue to do our business effectively, and the increased costs in the EUB w ill also translate to manage the increased activity in the energy industry overall and reflect the need of additional resources within. With respect to a breakdown of those increases, the document shows a request of an additional $7.634 million.

That’s a little under a 5 and a half million dollar grant to the EUB: $1.2 million of that is for salary increases, a million due to increased activity in the oil sands, a million for information technology, and a decrease of just over a million dollars due to amortization. Of the $5.466 million grant to the EUB, $2 million will be used for public safety, a million and a half for market salary adjustments, $500,000 to oil sands, another $466,000 to monitor Turtle Mountain, and a million for information technology. Those are some of the details of the specific increases in the ministry’s budget over last year.

As you can appreciate, it takes resources to collect the billions that we receive annually in revenues, resources of people, systems, and infrastructure, and it’s vital that we make these investments in order to continue to do our business effectively. I thank you for the opportunity to introduce the estimates of the Ministry of Energy and look forward to entertaining the questions of the members. The Chair: The hon. Member for Edmonton-Gold Bar. Mr. MacDonald: Thank you very much, Mr. Chairman. It’s a pleasure to get an opportunity to participate in the Energy estimates debate or discussion this afternoon.

Certainly, I would agree with the hon. minister that the golden goose has to be maintained. The golden goose is aging. Our conventional crude oil production is declining. I would like to hear later on what incentives, if any, we’re going to implement to ensure that we recover maximum amounts of oil and gas from our maturing fields. I’m watching what the Americans are doing in the lower 48 states. I’m certainly not happy with their initiatives. I’m not happy with some of these royalty reduction programs that we have here now, but we’ll get to that later.

The Auditor General certainly has some concerns about that, some of which were discussed the other day in Public Accounts. I’m pleased to see the difference in opinion from this minister to the previous minister in regard to thermostats and sweaters. I’m glad to hear that the hon. minister doesn’t think that Alberta should have their own provincial sweater. I don’t know what it would be, Mr. Chairman, whether it would be a cardigan or a pullover.

If it was the former Minister of Energy and we were to name it after him, well, I think we’d have to have a pullover because he was trying to pull over electricity deregulation on Albertans all the time he was minister. So perhaps we could have the pullover sweater in honour of the previous Minister of Energy. In that we have limited time and I do not want to waste any of it, there’s one question that I would like to ask before I forget in regard to tar sands development.

I understand that the oil sands royalty regulation, this OSR 97, is the reason for the significant develop- ment in the Fort McMurray area for heavy oil development or

April 20, 2005 Alberta Hansard 911 synthetic crude production development. Now – and this has been discussed in the Assembly here in the past – if we were to transfer some of that development over into other areas of the province, like the Peace country, where there is not nearly the amount of tar sands and it’s at different elevations, if there was to be a development there of synthetic crude production, would that royalty regime or holiday be applicable, or is it just applicable in the Fort McMurray region?

Certainly, as the roads and everything get congested in Fort McMurray, perhaps it’s time to have a look at having investment in another area of the province where some of the same resource may be available, and it may be available under the proper economic schedule. Now, I appreciate the hon. minister’s opening comments, but certainly whenever we look at the fiscal plan and we look at what used to be in this book and what’s not in it now, we always have a

chapter on low operating costs for businesses and households. In the past we would always have a chart on electricity prices, and we’d have convenient comparisons. But this year again it has been omitted. We have business cost index. We have annual labour costs. Edmonton has the lowest labour costs whenever you compare us to places like Houston, Texas, Chicago, Toronto, Vancouver. Even Winnipeg is slightly higher. We have all these charts talking about low operating costs, gasoline prices, natural gas rates, but no electricity rates like we used to have in this report.

That to me is a real indicator that this government is ashamed of their electricity deregulation policies because they know that they haven’t worked. They know that if they do that cost comparison, it’s going to be really, really high. 3:20 Now, the Department of Energy also has you know received fairly stable funding over a long period of time. We are requesting this afternoon a total supply of $121.5 million for operating expense and equipment/inventory purchases.

The ministry will be spending a little over $200 million, and that’s just a wee increase of 3 per cent, as has been previously stated, from last year’s forecast. There are no major spending initiatives or cuts in this year’s energy budget. However, I do see where there is an increase in the number of full-time equivalents, or civil servants. There will be an increase of 67 civil servants, and I would like to know where they will be working and what they w ill be doing.

Are these sort of contractors that are employed, or advisors that have contracts, with the department considered in this number, or are they in a separate category? Hopefully, a person will have a chance, Mr. Chairman, to talk about one of those contractors in particular a little later. I see all kinds of line items in this budget, but what I don’t see is what I would like to talk about first, and that’s certainly Enron’s Project Stanley. I don’t see any money or resources allocated for a full, independent public inquiry into the Enron scandal or the Enron behaviour in this province.

Why has this government never, ever considered launching a full, independent public inquiry into the Enron scandal in Alberta? Some of the documents I’ve had the opportunity to acquire from the Federal Energy Regulatory Commission library in Washington, D.C. I wonder if the former Minister of Energy is actually going to maybe grab a sandwich some day and trot from his office to this office of the Federal Energy Regulatory Commission and ask where the library is and have a cruise through their electronic version. There are some people there that are really helpful and will guide him if he needs assistance.

We could get him researching Enron’s involvement, Mr. Chairman, into their activities in Alberta. Now, again to the Minister of Energy: has the executive director of Alberta Energy’s electricity division ever looked into the evidence showing that Enron manipulated Alberta’s electricity market to drive up prices or price gouge Alberta consumers? This is an ongoing topic of discussion.

Given that the federal Competition Bureau is only investigating Enron’s activities for a period in 1999, for just this little wi ndow in 1999, but new evidence indicates that Enron was gaining Alberta’s electricity market also in 2000 and again in 2001 before the outfit went bust, will the hon. minister launch an investigation, a public inquiry, to investigate these years? It’s fine and dandy to say that the Competition Bureau is going to reopen this investigation from 1999, but what about the other years when these rascals were operating in this province?

I’m not confident in the limited mandate that the Competition Bureau has. I don’t know what sort of authority they’re going to have as a result of the manipulation that was going on with our tie- line to B.C. and the accusations and the allegations that are made there. I don’t know exactly how the Competition Bureau is going to be able to do this. Also, consumers are starting to phone our constituency office, Mr. Chairman, and ask: is the provincial government going to try to get some of this money back on behalf of consumers?

Montana – it’s hardly a year ago that the Attorney General there made an effort to get some money back for consumers. And the state of California, they’re looking at it there, and other jurisdictions are also looking at this as well. How will Albertans know how much money they’re owed by the companies who unethically manipulated the loopholes in the market? How will this money ever be returned to them? We’re at the will of the department here to get a refund – not a rebate, a refund, a refund on electricity deregulation.

I bet there would be a lot of money involved in this because if we had stuck to that other system, the regulated retail system that we had, we wouldn’t be having this discussion today. Now, also, I realize that I have a FOIP application in, but we could save a lot of time and a lot of trouble here by someone on that side of the House explaining to not only members on this side of the House but to consumers of this province how often, where, and when Alberta government officials met with Enron in the setting up of all this deregulation.

There are people that phone, again, and they tell me about the Enron jet and its frequent arrival and departure from the Calgary airport. There are the e-mails that are in existence that indicate that there was communication. Certainly, the last FOIP request that I put in some years ago indicates that there are at least 5,500 documents that were relevant between Enron and the provin- cial government here. We know that when the power purchase arrangement press release was put out in the fall of 2002, the top ten list there, Mr. Chairman, one of the people was a gentleman by the name of Eric Thode.

The phone number doesn’t work, but it’s in Houston, Texas. I looked that up. He was an Enron public relations individual, and he’s featured on our own Alberta government press release. Yet people are saying, “Oh, no. We had no contact with these people.” I would be in trouble if I put someone’s name on one of our press releases without permission. Someone had to be talking to Enron. Now, I know the hon. minister was occupied with other things at that time, but someone has to accept responsibility for these rascals and their involvement in our unfortunate experiment with electricity deregula- tion. Now, Mr.

Chairman, the business plan on page 209, the energy resource portfolio diversification. There’s a chart here, and it shows Alberta’s electricity generating capacity. A recent report, and it’s a 10-year study – the government, I believe, is obligated to do this by regulation – on the Alberta electric systems operator, and there is an

Alberta Hansard April 20, 2005912 indication that demand for electricity in Alberta will outstrip supply in 2006. We’re hearing all these sp eeches from government members that “Oh, everything is so great. We had this 3,000 megawatt boost in generation capacity and everything is fine.” Yet we have this report indicating that we could have demand exceeding supply as soon as next year. 3:30 I think we need to have a good look at this. We need to know what we’re keeping in reserve. What’s it going to be? Are we going to have to reduce reserves in order to have the system operate?

Right now it can be anywhere between 18 and 15 per cent in reserve depending upon whom you talk to. We have to be very, very careful about this. This is not the su ccess story that everyone is talking about. We need to know what this government is planning to address this alarming situation. What solutions do they have? Does the government have plans to compensate companies or provide some kind of financial incentives to companies in order to encourage new generation capacity in Alberta?

Now, while I’m talking about that, I also have another question, and that is: is this government, as a result of the regulation that was passed last year, putting a tax on coal-fired generation in the area out around Lake Wabamun? The reason I ask this is that in the regula- tion I thought I saw – and I could be wrong – where there was going to be, I believe it was, a $400,000 per megawatt tax on a generating facility if it was located in an area that had surplus generation capacity already in existence.

I took one look at that, and I thought: is this regulation trying to incent coal-fired generation, say, in the Brooks area or somewhere, maybe, on the edge of the growth load in Calgary? If this is not a tax, I would appreciate an explanation from the hon. minister in regard to that because certainly there is lots of generation around that area of the province, Lake Wabamun. We talked earlier in question period about the transmission system, and we’ll get there, time permitting, to talk about the transmission system. What plans, also, does the hon. minister have for a capacity market?

Also, on page 209 – I’m going back here to the business plans – the department is committed to establishing a competitive market framework for electricity and natural gas. Considering that energy deregulation has been an $8 billion failure, an $8 billion boondoggle, why is this government still clinging to such a huge public policy mistake, that this can actually work? Consumers aren’t convinced. The silent consumer advocate knows what he’s doing, what that office is doing. Consumers don’t have confidence in this policy.

Now, considering the pressure the minister is getting to keep the regulated rate option going indefinitely, will the hon. minister commit to keeping the RRO as a permanent option for consumers? Consumers that are contacting our office do not want this flow- through pricing for electricity. Again, if they want to gamble, they’re going to go to a casino. They don’t want to gamble with their utility costs. Now, in the estimates on page 126 the budget of energy and utilities regulation has increased to $46.5 million this year from $37.7 million in fiscal year 2003-04. This is a 23 per cent increase.

In a department that stresses deregulation, why has the cost of the energy and utilities regulation increased by 23 per cent since 2003- 2004? Now, Grid West. This is another . . . [Mr. MacDonald’s speaking time expired] I’ll get to that later. Thank you. The Chair: The hon. minister. Mr. Melchin: Thank you, Mr. Chairman. I’ll attempt to answer a number of those questions now. If we miss some of it, then we’ll respond in writing to the balance. You started off with any incentives to recover the most we can from our resources.

Our royalty structures are actually built upon a production rate that would be subject to volume of production and price. In that sense, you try and make sure that you’re recovering in the appropriate economic rent, that smaller volume producing wells would have a lower royalty rate to encourage that they could also retain some of the profits. We’ve also, as you’re probably aware, put in a $200 million royalty technology credit program to encourage specifically things like enhanced oil recovery.

Fifteen million dollars has been put into carbon dioxide sequestration to both deal with climate change and look at how we turn that into an opportunity. Using carbon dioxide is already a proven technology, so how can we see that the econom- ics work for that project? So there continue to be various projects that are looking at technological improvements in addition to the research that we’ll help correlate, since this industry is very heavily dependent upon it, on more technology and improvements to technologies to recover a greater quantity of the resources under the ground.

You mentioned the oil sands royalty regulation, OSR 97, with respect to the Peace area in particular. That regulation, the generic royalty regime, does extend to all heavy oil, so it does extend into the Peace area itself. There are actually a few projects already ongoing in that area. Clearly, there’s a good, sizable deposit. We talk about the Fort McMurray area, but clearly there are substantial deposits even further west of that, toward the Peace River area.

What is happening first is that some of the most easily accessible surface minable areas have started s ooner, and some of the in situ kinds of opportunities, the deeper resource, are starting to occur later. But that does also apply to the Peace area. You mentioned no chart on electricity prices. I can’t speak so much for the past, but I can say that it would be actually a great idea for us to continue to inform Albe rtans that today they receive the least expensive non-hydroelectricity rates of anywhere in Canada. A number of surveys have been done by various other provinces recently.

I don’t have those at my fingertips, but they continue to put Edmonton, as one of the cities that was surveyed out of about 21 cities around North America, in the top five. The only ones above it were jurisdictions that had a s ubstantially higher percentage of theirs hydro based versus other forms of electricity fired such as coal and cogeneration and natural gas as a primary portion of our electricity generation in Alberta. So we are very fortunate. Consumers today are reaping substan- tial benefits even in a marketplace where they’re getting the commodity at below replacement cost of those industries.

Quite contrary to this being a substantial problem to residential small consumers, they are reaping huge benefits today. They are truly seeing the opportunity of lower prices that have come in relation to new generation. Many of the regulated models, you have to remember, came with a whole host of other high-cost structures because of guaranteed returns, no forces to actually drive the efficiency. As an example, when Genesee 1 first came on back in the early ’80s, it was about trying to time the markets. It’s an imperfect forecast, really.

No one can know for certain, but a plant was built under a regulated model and had to actually be held off the grid until such time as the growth of the economy caught up to it. There was a r ecession that hit Alberta at that stage. Consumers paid in those dollars at that time $650 million in interest costs spread over a long time, but it was under those models that we the consumer paid substantial costs for the risks associated.

April 20, 2005 Alberta Hansard 913 3:40 Today what you’ve seen is that unlike all the other regulated jurisdictions around us, some of whom have had no growth – Saskatchewan and Manitoba. Well, it’s pretty easy to manage no growth. You don’t have to contemplate your ever running out if you don’t grow. In a fast, high-growing area like ours, this marketplace has responded faster and better than any jurisdiction in North America. Thirty-three hundred megawatts of new supply coming in in a relatively short time is unparalleled in North America. That’s from a variety of innovative sources.

This isn’t just from the few monopoly providers who provide something in the traditional format, maybe a coal-fired plant. It has been able to come from coal, Genesee 3, the very latest of technology that has come in. Some of these come in with higher costs because of the higher standards of environment: carbon dioxide emission, cleaner burning. Those other provinces. Take B.C.: starting to run short of power. Ontario substantially has huge issues of generation of power. Quebec, even with all the hydro, is actually reaching some issues of supply.

Those markets, without the substantial growth that Alber- tans have faced, still are now about to realize more on their con- sumer bills the cost of having to produce and generate new electric- ity under the rules and regulations of today. When you look into things like Enron, you know, there was a period of time – and these aren’t in our estimates, so I’m not going to go forward too much on this. Th is is in the past. Our estimates are to be looking forward in our budget. In that period of time we had a tight supply, and clearly that drives price. It has been a volatile market. It was early in its design.

Substantial improvements to regulations, to the market surveillance administrator’s authorities, new regulation and legislation brought in in 2003: a whole host of things done to continuously improve the rules around transparency and the like that will help ensure that the rules provide for greater behaviours and better protection of the public. Any market produces some volatility. You wouldn’t say that in oil and gas prices. We see all the time the volatility of it. We see that in interest rates, your mortgages on your homes. We’ve seen tremendous volatility. So we are looking at designs.

If people want stability and predictability, how do you provide options for them to have stability and predictability? There are ways to do that in a deregulated model as well. There’s a variety of products that are being offered, and it’s under a review that we are actually engaged in at the present time, looking at the wholesale and retail rules. Those would be under consideration when you ask things about: would we consider the regulated rate option being continued perpetually?

Those are all questions that are being examined at this stage and are part of the business plan, the ongoing part of the Department of Energy, to ensure that we continue to mature and develop a very good market for a reliable supply of electricity: affordable and delivered when you need it and where it’s needed. I will say that when you look to some of the issues of the past, there were protections put in place.

While there’s no need to conduct a major investigation into the past, there were many legislated hedges put in place that would prevent the volatility of the marketplace being passed on to any one person before the power purchase arrangements were sold. After that, there was quite a tightening of some of the rules around how power would be brought in and out. But in particular, no, we’re not going to conduct an inquiry into a company that is bankrupt and that has certainly been proven guilty of some things that were wrong in their behaviours.

We don’t condone, and we’ll be very vigilant in always enforcing the rules that are here. You mention an increase in a number of the full-time equivalents in the budget. I think it was page 136 of the estimates. Those are both for the Energy and Utilities Board and for the department in particular. With the department there is an increase from 557 to 597. There’s a conversion of about 20 contractors to full-time equiva- lents, and there is also an increase of another 20 personnel full-time equivalents for the department with respect to industry activities.

The growth in the oil sands is one of the areas where we have added more staff. There’s a tremendous increase in volume of activity in the oil sands. We’ve seen record years in the sale of Crown leases. Over $1.1 billion was the forecasted am ount that came in last year off our bonus payments. That’s just one indication of the tremendous increase in activity. You do need the resources both in the depart- ment and in the Energy and Utilities Board to ensure that you can be out and you can do the proper enforcement, that you have the ability to provide the right systems and technology in place.

It’s a response, really, as a result of the magnitude increase in the industry; there- fore, an increase in both the Energy and Utilities Board and the department staff to accommodate that. You talked about the electricity-generating capacity on page 209, the demand exceeding supply by 2006. I mean, there’s a variety of forecasts out there. I’m not certain which one you may be referring to. We have in place a bout 12,100 megawatts of supply that’s available. The peak this past year was – I can’t remember the exact number – somewhere in the 9,500 megawatts range.

Just even a normal growth will allow you to go well past 2006. You might get to 2007-08 under the worst-case scenario. We know of numerous options and projects that are being planned. I can’t say which ones may all come forward at which time, but what has happened is quite a creativity of people bringing on not just the large projects themselves, the large plants, but everything from the small cogeneration that might bring on a few megawatts of power has continued to add on the ability for the marketplace to bring on the supply as needed.

With respect to capacity markets and the like, those are things that are being looked at with respect to the wholesale market review at the present time. Likewise with the regulated rate option. All of those things in market design are on the discussion. We’ll be bringing those back for policy decisions in fairly short order. I’m not aware, in particular – and we’ll have to get back in response to one question – about a regulation that said $400,000 tax per megawatt in the Wabamun area, trying to encourage generation somewhere other than the Wabamun area. We’ll have to respond to that one in writing.

The last question was on page 126 I think he said, and I can’t remember in particular what the question was, so we’ll respond to that one in due course as well. The Chair: The hon. Member for Edmonton-Calder. Mr. Eggen: Thank you, Mr. Chairman. I rise with some interest to ask a number of questions to do with the Department of Energy budget for this year. First of all, I would like to just make some general comments. I would like to, you know, offer some praise to the minister for putting together a very concise and straightforward budget.

It’s refreshing to be able to see with some degree of transparency where the money is going in this particular department. Of course, we have to remember that, in fact, the Energy ministry is more like the engine that generates the funds for many other departments and, indeed, royalties and benefits for all Albertans. 3:50 With that in mind, I guess I’m going to approach my comments and questions around a number of different themes. So I will lump the questions together similarly, as a group, and then the hon.

Alberta Hansard April 20, 2005914 minister can make his comments as he sees fit, either verbally or in writing. I was just looking that the Ministry of Energy first of all is forecasting $8 billion in revenue for this next fiscal year, which is a substantial amount of money.

But given that the energy prices are hovering at near-record levels within some small deviation here, and it’s expected that these levels will be maintained over the long term – most estimates from different experts from around the world suggest that we are in a new era of high energy prices – I would like to perhaps ask the minister when the government will start to have its forecasting more accurately reflect this new reality, this new platform of revenue that we seem to have found ourselves on, generally to the benefit of most Albertans, although it is a problem- atic situation because, of course, we do consume energy here as well.

So we are paying these high prices along with reaping the benefits of these high royalty rates. But, again, to perhaps have the Department of Energy revisit the royalty structures to more accu- rately reflect the windfall profits that the energy sector is enjoying at this juncture in our history. In fact, without addressing this, not just here in Alberta but right across the country and around the world we’re seeing a major shift or a sort of migration of capital throughout the world to energy companies because of these massive profits, and it creates an imbalance.

You know, part of the best practices of economics, regardless of what ideology you might subscribe to, is to look for certainty and to some degree of regulation in the movement of goods and services. The second point that I would like to address is in regard to coal- bed methane. According to the Orphan Well website, industry pays for all of the costs incurred with this program. I quote from the website. Industry funds all of the costs incurred by the OWA, mostly through an Orphan Fund levy.

This levy is based on the abandonment and reclamation liabilities held by each company and it is collected annually by the EUB and then remitted to the OWA. My question is then: will the government be hiking the orphan well fees as it moves towards the fuller realization of coal-bed methane production, which I think the minister knows requires a much higher density of drilling than more conventional forms of extraction? Indeed, we are seeing the licence for thousands of new coal-bed methane wells, which are all sort of lumped, somewhat curiously, under an experimental sort of grouping, I think.

We’re seeing thousands of these together. It signals a new reality, I think, in energy extraction in our province. With each move forward we have to keep apace with this in terms of regulations, so I would like to have some new information about this well structure. Again in regard to the coal-bed methane extraction it’s important to look at how other jurisdictions might have addressed this new energy extraction process as it’s affected their areas.

I know, looking to the states of Montana and Idaho to the immediate south of us, that they have committed themselves or are in the midst of a full environmental review of coal-bed methane extraction, and I would like to ask if our government would be willing to commit to a similar full-scale study on the environmental effects of coal-bed methane extraction in our own province here. Again in regard to coal-bed methane extraction, of course, water use is also a concern.

This industry’s appetite for water is well known, and there are potentially serious environmental concerns associated with the use of water not only with coal-bed methane extraction but also, of course, the oil and gas industry. So I would like to ask the minister: what sort of integrated study and focus is the Department of Energy looking at in regard to water use in the energy industry in general and the coal-bed methane extraction specifically? We had the opportunity to discuss this in a short sort of way in Public Accounts, and I’m curious and interested to hear more. I believe the hon.

Member for Edmonton-Gold Bar did touch more elaborately on electricity and specifically the early years of deregula- tion in our industry, so I will speak less to that. But our caucus is also very interested in a public or judicial inquiry into Enron’s activities in Alberta through the late ’90s and the early 2000s. I think it’s important. I know that we want to be forward looking in our budget development, but, you know, deregulation as an experi- ment is still in its early stages, and we’ve seen a lot of bumpy spots along the way, especi