April 22, 2003 Alberta Hansard 1139 Legislative Assembly of Alberta Title: Tuesday, April 22, 2003 8:00 p.m. Date: 2003/04/22 hea d: C omm ittee o f Sup ply [Mr. Tannas in the chair] The Chair: I would like to call the Committee of Supply to order. head : Main Esti mates 2003-04 Economic Development The Chair: I would ask if there are any questions, comments to be offered with respect to these estimates and budget. The hon. Member for Edmonton-Ellerslie. Ms Carlson: Mr. Chairman, I expect the minister to get up and give us an overview. Mr. Norris: Well, Mr.

Chairman, far be it for me to disappoint the hon. member opposite. I would love to make some comments about what I feel is probably one of the most remarkable departments in our govern ment, and I will open my c omments by giv ing an introduction and a big thank you to some people who have joined us here tonight. In th e members’ gallery we have with us from our department Duane Pyear and Assistant Deputy Minister Rick Sloan, if you want to stand up. Mark Erdman, don’t stand up; you’ll hit the roof. You can stand up. There he is.

Deputy Minister Barry Mehr, and next to him is Anthony Lemphers, our finance; Lou Normand, who’s involved i n our value- added strategy; and of cours e Colin Jeffares. This is part of the team of Economic Development, which is why we’re clearly doomed. Anyway, I would like to give a brief o verview of what our department does and then answer any questions that come forward. I guess tha t i n a nutsh ell, Mr.

Cha irman, w hat we l ook for in Economic Development are ways to continue the program that was put in place by Premier Klein, which is diversifying our economy, and in order to do that, we’ve come with a few strategies. Why do we want to diversify obviously is a simple question. We’re looking for continued prosperity for this generation and every other genera- tion that follows to continue making Alberta the bes t plac e in Canada and certainly the world to live.

In orde r for us t o do that, we’ve taken the resources and energy of this department and come up with a few strategies that I would like to outline tonight and then answer any questions members might have. The first s trategy that I wa nted to touch on ve ry sim ply, Mr. Chairman, is our valu e-added strategy. That was addressed in the throne speech by Premier Klein, and it looks at ways of getting our commodity-based economy to the highest level of export goods.

It’s a way that the g overnment can ass ist not in pick ing winners and losers so much as understanding what industry’s needs are, relaying them back to the government, and making sure that we’re doing the best job we can on behalf of Alberta industries. Of course, we know the key industry in Alber ta is o il and gas. That doesn’t change, and it’s not likely to change in our lifetime, but we’re looking down the road pas t that, Mr. Chairman. Of course, agriculture is a ve ry, ve ry big producer; f orestry, tourism , a nd industrial construction.

So when we talk to industry about ways to make this the bes t busin ess platform to deal with, those are what we’re looking at. We’re looking at listening to them and working on it. The second strategy that we’re looking at, Mr. Chairman, is a rural development strategy. We’re working in conjunction with the hon. Member for Wainwright and the hon. Member for Innisfail-Sylvan Lake, and we’re trying to identify ways to keep rural Alberta healthy.

It’s for a num ber of dif ferent reasons, but m ost obviously is that most if not all of our res ources are extracted from rural A lberta, whether it’s oil and gas, coal, forestry, agriculture, et cet era. W e want to find out what makes rural Alberta strong and keep it healthy so that the inc redible gr owth that’ s going on in the Edmonton/Calgary corridor can be sustained as well as building on that with rural Alberta. We’re working very hard with, as I said, the hon. Minister of Agriculture, Food and Rural Development.

We will have a joint policy hopefully in the next short while to articulate that a bit better. The third strategy we’re working on is an aboriginal framework. For a number of different reasons, Mr. Chairman, this has taken on a great interest and importance to Albertans.

As you know, we are dealing with the hon. minister of aboriginal and northern affairs as well as the chairman of the Northern Alberta Development Council as well a s the hon. min ister of sustainabl e resourc es to try and identify how we extract the resources at the least cost to the First Nations aboriginal s and how to ge t them m ore involv ed in the extraction of these resource s and the de velopment for their own communities and the good of all Alberta. One strategy that I’m particularly proud to say that we’ve worked on, Mr. Chairm an, is our to urism strategy.

As yo u’ll know, we recently announced som e additional funding, re cognition of o ur government’s understanding that there is some work we can do to help p romote this glorious pr ovince of Alberta not only to ot her Canadians, North Americans but to the world. As a result, we want to see our g ross receipts from tourism g row dram atically, and hopefully we’re on the ri ght track with that. We have ide ntified markets around the world that choose Alberta as a destination over and over ag ain, tho se b eing the U nited Kingdom , Germany, and Japan.

So we’ve set up offices or are increasing our presence there to let the message be known, and we’re working with the in dustry itself, Mr. Chairman, to try and understand how we c an get to t he next level wi th them and make that partic ular industry grow a nd flourish. The fin al strategy that w e’re working on, Mr . Chairm an, is international markets, and for obvious reasons Albertans are some of the best exporters of goods and commodities in the world. We do most of our trade with the United States. We’d like to get away from that dependency a small amount.

Of our $150 billion gross domestic product about 87 percent of that is exports to the United States, and we want to identify other markets so that in the event that the United States slows dow n or that ther e are som e challeng es i n their economy, we’re not held to it the way some other provinces are and find ourselves in the position that they find themselves in. Of course, when we do that, we help expose Alberta businesses to the rest of the world, and we do that internally.

As I said, all of this is driven by diversifying our economy, continuing to make it strong, and continuing to make it the envy of the rest of Canada. One of the things that we’ve been working on quite vigilantly, Mr. Chairman, is ways in which we can get th e Alberta advan tage message out and keep the Alberta advantage strong. We define that Alberta advantage as an outstanding place to do business, hopefully low government regulations, broad-based low taxes, identifying why people want to choose Alberta to mak e that thei r home.

A s you know, under Premier Klein and the class of ’93 some 500,000 people have chosen since ’93 to make Alberta their home, and that has taken our population base from 2.6 million to the current 3.1 million. That comes with some challenges, and we want to make sure that we can sustain that kind of growth.

1140 Alberta Hansard April 22, 2003 So those are kind of the main programs we’re working on, Mr. Chairman. We want to make sure that we listen to industry, all of them. We want to identify emerging industries and markets that are becoming available to Alberta companies and the Alberta g overn- ment, and we want to continue to grow what we believe is the best economy in Canada and certainly the world. So I want to close by saying that I’m very, very proud of what I’ve learned in this d epartment, very proud o f how we’ve worked with industry and let them know that we will continue to do so.

I’ll be happy to a nswer any questions now, Mr. Chairman, and thank you for your time. The Chair: The hon. Member for Edmonton-Ellerslie. Ms Carlson: Thank you, Mr. Chai rman. I ’m hoping that we can follow the same format this evening in estimates as we have in other instances, and that’s where we ask a couple of questions, the minister answers them, a nd then we can carry on from there with the first hour for oppositi on and t he nex t hour for e veryone who w ants to engage in the Assembly. First of all, I’d like to thank all of the staff that’s here. They work hard to make you look good, Mr. Minister. An Hon.

Member: Well fed. Ms Carlson: And well fed. Yes. A lot of overtime goes into that I’m sure. But I also know that your staff really likes you for some reason, and everyone I’ve talked to seriously appreciates working for you, so we’ll have to work a little harder to find out why that is, but we’ll keep at it. This is a ministry that used to be known as the cookies and pork ministry, and those were in the ’93 days that you talked about earlier. It got pared down quite significantly.

Now it looks like it might be bloating up a little bit more, so we’ll be keeping our eye on the ball here to make sure that we’re getting good value for our money. It’s interesting to note that during the cookies and pork time, the Member for Edmonton-Glenora was a part of that team, survived the cuts, and that makes him perhaps craftier than we had anticipated as well, so we’ll have to keep an eye over in that corner of the Legisla- ture too. An Hon. Member: That makes him the cookie. Ms Carlson: Makes him the cookie. Doesn’t look like the pork, but he could be the cookie. That’s true.

So we’ll watch what’s happening here as the mo ney gets added. Where we see the most money being added this year is in tourism areas, and I don’t necessarily disagree with that strategy. Certainly we have a huge draw in this province when we take a look at Jasper, Banff, and Calgary, but it seems that we don’t get much of a tourism draw over and above that.

Now, I know that for a decade, at least, people in Alberta have been concerned about the amount of money that has been drawn into those three target areas and the little amount of spillover there is for the re st of the province both in terms of money spent from economic development and tourism and people who actually visit. 8:10 So I’m wondering what the minister has in min d in term s of focusing a little more on northern development and also focusing on something that I’ve noticed in our travels.

When we go to an area that’s new – and I’m usually the one arranging for the touring around the area – what happens is that I look for tourist highlights, and then I look for ways to get to those places. It doesn’t matter if it takes one hour o r t wo days; if it’s interes ting and tra nsportation is readily accessible, then that’s what we do. It seems like when I look at the tour books that are offered or any of the tour guides that you can buy in a bookstore, for instance, what someone from out-of-country would be buying about Alberta, you don’t see these kinds of connections obviously.

When I take a look here in the adver tising that we do, be it through T ravel Alberta or any other kind of venue, the roadside stops for tourist information, I don’t see those hookups re adily. I don’t see a bus to ur that can take me from Jasper to Lake Louise to Banff to Calgary to Drum- heller to Edmonton and then back to Jasper so that I can continue on with whatever my connections are. I’m wondering what kind of a focus the minister is putting on that in addition. So nort hern development.

I kn ow the m ayors in the northern cities are quite happy with the relationship they have with you, but let the Ass embly know how m uch money you’re spending, how much focus you’re putting on that, and if you’re taking a look at making any of those connections at this time. Mr. Norris : Well, I’d like to tha nk the hon . m ember for her comments. I wasn’t around in ’93 when the pork and cookies were being hand ed ou t, bu t by bl oating I pr esume t hat you me an the department and not me personally, so I won’t take any offence to that comment.

I guess, in answer to your ques tion, that when we’re looking at development of any region, it’s not sectored into northern, southern, central, Edmonton, Calgary, et cetera, but we do spend a lot of time on regional economic alliances. The reason we do that is that we’ve found that when you’re marketing a region, it’s far more marketable than if you’re marketing specific cities or towns i n that particular region. So we do ha ve a num ber of al liances t hroughout the province of Alberta that receive support from our department: CAEP in centr al Al berta, G rizzly in northern A lberta, G rowth, Hub.

Palliser I think is in southern Alberta. They’re regional alliances where MDs and towns get together and say: we want your assistance in marketing this region to the wor ld and to other bus inesses who might be setting up here. What I’ve found very fascinating is that there is a large industry of site selectors. Companies no longer take the time to go out and do the work wher e th ey go a nd v isit th e mayors an d the reeves, et cetera, to see what’s available. They get online, or they ’ll go to a conference, and you have to be represented as a region for those site selectors to take interest in your area.

We’ve had a number of good successes, particula rly w ith the inter national region, w hich is Leduc/Nisku/Millet, et cete ra, whe re people s ay: “What’s in the area? Are there good transportation link? Are there good resources? Is there good education, good infrastructure? Are there recreational opportunities? Are there arts?” Things of that nature. When we put all those packages together, that’s where we spend most of our time and energy trying to promote the province.

So as far as northern development, what we look for in conjunction with my colleague from sustainable resources is to identify what the key industries are there now and how we can help them succeed but also what the region has to offer. We found that to be a good solution. With regard to the tourism question that you had raised, what we are trying to do overa ll – and this i s fundamental to our tourism industry – is to be c ompetitive with our biggest competitor to the west, British Colum bia, and our big gest competitor to the ea st, Ontario.

Fundamentally, what we see is that the role of the Alberta government is to market the province, and that’s it. We don’t market hotels. We don’t market malls. We don’t market Calgary Stampedes and Edmonton Klondike Days. We go out to the i nternational

April 22, 2003 Alberta Hansard 1141 marketplace and sa y, “Here’s what you will find i f you co me t o Alberta: pristine lakes, beautiful rivers, mountain vistas, et cetera.” Once we get them here, then it’s the job of the Calgary Stampedes and the Edmonton Klondike Days to draw them in, and they do that through various ways like you talked about: airports, points of entry, border crossings. Where Travel Alberta does ge t involved i s that we do produce three or four different guides, which I’ll be happy to supply to you.

They’re all for different regions – mountain, central, south, north, et cetera – and they do outline what is available for tourism opportuni- ties in those particular regions. What we’ve tried to do is to say that if you’re c oming to Cal gary or E dmonton, which are th e two gateways to Alberta, please don’t go on through Kamloops and into Vancouver or through the Okanagan Valley to Vancouver, which is really what all the evidence says is happening. Stay and go east, and you’ll find remarkable opportunities here in Alberta: Cold Lake, the Lakeland district, Fort McMurray, et cetera.

So we’re developing trails, and we’re doing this in c onjunction with the Minister of Transportation for the signage of those trails. We have the Grande Alberta Trail. We have the Poundmaker Trail, the Dinosaur T rail. What we’re saying is: “Yes , if y ou come t o Calgary, please stay and enjoy the Stampede, but don’t leave. Go east and see what’s in the Badlands area, what’s in Drumheller. Go to Rosebud; check out the world-renowned passion play.” Where we see our role in our guides is talking about those things.

We do it in conjunction with industry, who buy into this and tell us: this is what we really need to be ta lking about in this

part icular region. Your comment is a very valid one. There is no simple way to get people out of the m ain cities and the m ountain regi ons heading e ast in Alberta, but we are making a stab at it, and we are trying to promote those trails quite a bit more. The final comment I’d like to make about northern development – and this ties in with the hon. minister of aboriginal affairs – is that we are looking at some kind of tourism destination that would be done in conjunction w ith First Nations Albertans where it’s an historical camp, for want of a better term, where you would go live a day in the life of 1860.

It’s modeled after the Polynesian theme camp in Hawaii. Unfortunately, we haven’t been able to go over and tour it, but at some point we’d like to. As I understand it, the central hub is the Polynesian people, and then you go to the Maori camp, et cetera, et cetera. What’s really ex citing is that the Fir st Nations elders have now allowed us an insight into a day in their life, so it could take form. We get overwhelming response from German and Japanese visitors that this i s something that they’d like to see, and that would clearly be located in northern Alberta.

So we’re looking at that as kind of a package where you would come into Edmonton or Calgary and then tour a round and have reasons t o go visit and then tie them into the marketing materials. I hope that answers your question. The Chair: The hon. Member for Edmonton-Centre. Ms Bla keman: Thank you very much. [inte rjection] A little friendly competition here. Mr. Norris: Don’t fight, girls. There’s plenty to go around. Ms Blakeman: Oh, dear. That was a mistake, Mr. Minister. This night could be longer than you thought.

There are two issues that I wanted to raise with the minister, both of them around tourism marketing. I listened car efully to what he said about ma rketing the province – in other w ords, the na tural resources of the province, one presumes – and that once people get here, then it’s up to the various sectors to reach out and try and snag that tourist dollar. There are two things here.

When the minister appeared before Public Accounts, I pointed out to him that I felt that in the way some of his programs were set up, the access points and the very criteria and eligibility might be precluding the arts commu- nity from gaining access to tourism points. As I was discussing this later when I droppe d by the Alberta Craft Council, their manager perked up his ears and went: “Well, actually, Laurie, that’s exactly what is happening. Maybe you could ask the minister this.” So here I am, asking the minister.

The Alberta Craft C ouncil at www.albertac raft.ab.ca has been trying to link with the Travel Alberta site at www.travelalberta.com because they have two things on their web site that are of great interest to people. I don ’t know what the minister is interested in when he travels, but I know that a lot of people when they travel are interested in local c rafts, and we have some very fine craftspeople here in the province. What the Craft Council had put together was a map of Alberta showing where you could find fine crafts.

These have been juried in some cases and have a s tamp of approval to them, if you like, but it’s saying: this is good stuff. They have a map on their we b site that shows where you can acc ess these different craftspeople across Alberta, and they also have a calendar of events where there might be craft fairs, for example, or certain days or that kind of thing. So it only makes sense that they could be able to link with the www.travelalberta.com site, and they are getting a big zero. They cannot connec t there, a nd nobody i s returning their calls. Nobody will help them. Nobody will interact with them at all.

I’m thinking: this doesn’t make sense to me. Maybe the minister knows why Travel Alberta is not willing to work with the Alber ta Craft C ouncil in prom oting these fine craftspeople across the province. Certainly, shopping is one of the things that tourists like to do, and here is an opportunity where it’s being provided for them in colour and on a web site if Travel Alberta would just link with them. So I’m going to put that to the minister. I’ll wait f or his respons e, and I ca n send that ba ck to the A lberta Craft Council. I’m hoping we can make this happen because it’s a win/win.

It helps our craftspeople, our artists and artisans here, and that money stays in the com munity. Tha t’s new m oney tha t’s brought into the communities from the tourism dollar and that stays there. So it doesn’t make sense to me why this is going off the rails. 8:20 To mix m y metaphors, not g oing off the rails but going on th e snowmobile tracks, I know t hat the m inister attended the A lberta Snowmobile Association jamboree in I think it was Bonnyville-Cold Lake two years ago and waxed enthusiastic at the banquet and dinner about what a gr eat idea these trails were and the pos sibilities for tourism.

I guess the minister hasn’t heard my speech about tourism dollars in snowmobiling, but that’s big money. There really aren’t enough places t o keep m e in Albe rta. I f ind myself reluctantly – nonetheless, I do it – cros sing the border i nto either B. C. or into Montana, Wyoming with my tourism dollars and my snowmobile on the trailer on the truck, which of course needs to be gassed up. The snowmobiles need gas and sometimes they need parts, and I’m going to stay in a hotel, and I’m going to buy restaurant meals. There are a lot of tourism dollars that are driving either south or west.

There have bee n a number of diff erent sche mes tha t di fferent governments have com e up with ov er time, sometimes allotting I think in the States and maybe B.C. as well a certain percentage of the gas tax. I’ll tell you that I’m not in favour of that, because I think that as soon as you start design ating certai n parts o f taxes, the n everybody wants another li ttle piece of it. When they w ant more, then the taxes start to go up, and that is not a good way to control

1142 Alberta Hansard April 22, 2003 that kind of thing. So I’m personally not in favour of it, but there are a number of different schemes.

I’m looking to see whether the minister is either looking inside his own department for development of a snowmobile trail system or multi-use trail sy stem or wheth er he’ s been w orking w ith his colleague the Minister of Community Development on the multi-use trail system, Alberta Trailnet, wh ich is part of the T rans Canada Trail, or whethe r he’s look ing at funding some of these trail developments, whether he’s looking at promoting it, whether we can get cross-link age on w eb sites, what poss ibilities.

I notice the Minister of Gov ernment Servic es sitting bes ide the Minis ter of Economic Development, and he ha s in his b ackyard phenomenal snowmobiling in the Crowsnest Pass as a tourism destination, which I’ve bee n to, and also Pi ncher Creek . So we ha ve som e pretty wonderful places to snowmobile in Alberta, but we have never really come to terms with it and taken it seriously as a destination even to keep our own Albertans inside of Alberta traveling with their tourism dollars.

Those are my two pet peeves with what’s happening with linkages with tourism in Alberta and the structured tourism that’s under the minister’s department’s steadfast refusal to be flexible enough and to – here I go with that hated cliché – think outside the box, to work with both the arts and snowm obiling. So I’ll leave those for the minister to comment on. Thank you. Mr. Norris: Well, I would like to thank the hon. mem ber for h er questions. I think she knows that I have a specific fondness for the arts. In fact, I was a performer in a musical.

I was Bud, the singing cowboy, in a Grant MacEwan musical, and they were some of the best times of my life. This may come as a big surprise, but I do not disagree at all as to what the arts offer for tourism. It makes me disheartened to hear that Travel Alberta has not been responding to such an obvious opportu- nity, and we will rectify that immediately. In fact, the ADM is here, and we’ll discuss it right after this. B ut you do m ake a very good point.

In certain instances people think you’re coming to Alberta for the Calgary Stampede or West Edmonton Mall or the Rockies, but you know w e have t he Fringe i n Edmonton , that brings in some 800,000 people in a 10-day period. It’s a remarkable ex perience. The Big Valley Jamboree, which started in Big Valley and has since moved to Camr ose, is a remarkable opportuni ty, not only an economic driver but bringing people from Saskatchewan, Montana, Idaho, British Columbia. These are c ultural events; these are not tourism destinations.

You’re right: we must recognize what they can offer and look to Edi nburgh, Scotla nd, as the gra ndfather of all Fringes. The biggest annual tourism draw they have in the country of Scotland is that particular event, and it’s a cultural one. So you’ll get no argument from me that we need to look at t hat. I’m not really sure why there wouldn’t be a link or why we wouldn’t have access to a link. I have not designed the program myself, so I can’t comment on the technology of it, but in principle it’s a very good idea, and we w ill do it. T hat’s a simple commitment I c an make to you.

The other comment I would make on culture is that we find in an awful lot of instances that we’re crossing with Community Develop- ment, so the Minister of Community Development may be working on something that I’m unaware of. We focus on how to make the experience in Albert a that m uch better f or v isitors. If it rega rds shopping or if it’s touring around and seeing different cultural events – I mentioned the Ro sebud Thea tre. You k now, we ’ve got t he beautiful Fort Macleod down in the Crowsnest Pass area. These are remarkable tourism opportunities.

In Lac La Biche there’s the original mission, that is at tempting to be rest ored to its original grandeur. You get the se nse that when they came down the rivers and they stopped and they found this site and they built it, they were very courageous people, and we should embrace that. So we are looking at ways of funding that, and part of the new dollars that we received for tourism are going into product redevelopment and new product development . If it’s a fe asibility study that helps that community get it off the ground, so be it.

If it’s something that they’ve already got – in the case of the Lac La Biche Mission they have the ability to have ba nquets, but thei r kitchen is in the ba se- ment. They have no wa y to get the food up, and they need an elevator. These are simple fixes. Tha t’s not a lot of money, and that’s somewhere we can help in pr oduct development so that the experience is that much better. So I do take your com ment, and I k now that my department is noting it as well. I wouldn’t be surprised if we don’t have that link done, well, clearly before this tourism season. I think it needs to be done.

Recognizing other areas that do such a good job of it: people will flock to the New England states in the fall to look at the trees, one of their biggest tourism seasons, to see the turning of the leaves. They ha ve some term f or it. Well, they recognize that that’s an opportunity, and they hammer on it, and t hat’s something w e’re going to try and do more through tourism. So I support what you’re saying, and you won’t get an argument from me on that.

With regard to the snowmobile program, you are talking about one of my favourite opportunities because I’m a sledder as well and grew up in the Pigeon Lake area doing that and love it. I now live in the west Edmonton part of the city, and nothing makes me sadder on a Saturday when I ’m out w ith my kids than t o see sle ds loaded up heading to Mc Bride and V alemount an d Kaml oops an d taking dollars. They all have Alberta licence plates; they don’t say British Columbia. They’re all leaving here, and they’re leaving here for a number of different reasons. Now, in some cases we have to be quite factual.

The snow there is better at certain times. Last year we had a bit of a light snow season, so that’s part of it, but another part of it is access to trails and the ability to get on those trails. In answer to your question, I know that right now I’m working on a joint ministry initiative w ith the hon. Minist er of Sust ainable Resource Developmen t a nd the hon. Ministe r of Com munity Development to say: listen; we have these remarkable opportunities in the Crow snest Pass, Kananaskis C ountry on throu gh Lac La Biche, Cold Lake, those areas. They’re virtually tied together now through volunteer work.

Volunteers man them. They clean them. They put up huts. T hey do it all voluntarily. They even produce their own maps. So this year f or the co ming season I know that Travel Alb erta is looking at integrating all the good work that they’ve done and making sure that that’s not overlooked. One comment that I think has to be made is that there are steps being taken to get there. The Iron Hors e Trail, as y ou probably know, announced just recently that they ’ve now tied up 300 kilometres of old CN rail track, and that is going to be for sledding.

That means that you can start at 10 o’clock in the morning and finish at 6 o’clock in the afternoon and not go down the same route twice. It’s glorious. W e did it las t yea r with the hon. M ember for Bonnyville-Cold Lake and the hon. Me mber for Lac La Biche-St. Paul. It’s a remarka ble experience. Wha t they ha ve done is all volunteer, so now we’re working with them to get to the next level. Again, I said: maybe it’s a feasibility study; maybe it’s saying how many dollars are needed for signage. That’s a big part of it. Where do you stage? What do you have for staging?

Then the town starts to see the economic ben efits that are remarkable. They really are. But it’s Albertans spending money in Alberta. Where we have to take the next ste p, quite fran kly, is into

April 22, 2003 Alberta Hansard 1143 Wyoming, Idaho , Montana, where it’s a hugely popular pastime. They’re going to othe r places, and we’re trying to say : you don’t have to. I know that I met with the hon. Member for L ivingstone- Macleod’s group dow n there. I believ e they’re called the Crow Snow Riders, a great volunteer group, and they’re doing exactly the same thing as the Iron Horse does.

In theory you could start in the Crowsnest Pass, through K Country, and all the way up into Cold Lake uninterrupted on a sled, which would take three or four days at a minimum, and think of the economic spin-offs of that. So it’s just a matter of tying all the pieces together, and we are committed to it. Fortunately or unfortunat ely, t he mon ey for that kind of project doesn’t fall under my department. As the hon. member noted, it had a significant budget before. We target more investment and trade. Tourism is one major part of it.

With the additional funding we’re hoping to get to t hat level and start building what we see as great opportunities in Alberta. 8:30 The Chair: The hon. Member for Edmonton-Ellerslie. Ms Carlson: Thank you, Mr. Chairman. I just want to follow up on some comments the minist er m ade. H e’s talked no w abou t two cross-ministry initiatives, one being the aboriginal theme park and now the snowmobiling. So could you outline f or us what other cross-ministry initiatives you’re involved in and the indicators that you’re using to measure the results of those initiatives?

Then just to go back to the aboriginal theme park for a moment, you’ve talked about this before, and we expected by this budget year to see it really up and running. Given the amount of unemployment, another disadvantage that this particular community has, we would like to see some inroads made here through a number of ministries, including your own. So if you could talk about a time line for that and any other initiatives you might have on the aboriginal side. Mr. Norris: I can answer the first question. I’m sorry; I didn’t quite catch the second.

With regard to cross-government initiatives that we’re working on right now, I outlined that one of the major ones is a value-added strategy. There are nine other departments that ar e involved in that. Our ministry takes the lead. I can list them for you: Energy, Sus tainable Res ources, Env ironment, Innovation and Science, Finance, Revenue, Agriculture, and Aboriginal Affairs. As I said in my opening comments, that’s one where we’re looking at not shipping out commodities in the raw form anymore, and how do we do that in any industry? It’s not specific to any specific industry but all industries in Alberta.

Another cros s-ministry initiative we’re w orking on is a rural development strategy with the hon. Minist er of Agriculture, Food and Rural Development. I alluded to that earlier. The hon. Member for Wainwright and the hon. Member for Innisfail-Sylvan Lake are heading up that committee, and we hope to have a strategy within the next six months, as I outl ined, looking at rural de velopment and ways that this government can make sure it ensures its livelihood. Another cross-ministry initiative we’re working on is with the hon. Minister of Innova tion and Sc ience.

H e heads up a body called ASRA, which is the Alberta Science and Research Authority. I head up a body called AEDA, which is the Alberta Economic Devel op- ment Authority. We have got to a point in Alberta where we have some of the best research and development in all of Canada. There’s no surprise about that. I think the University of Alberta was number one in receiving research dollars both publicly and privately, and the University of Calgary came in second. We are developing a number of new technologies every day. There’s great news coming out of those research institutions. How do we commercialize on it?

I know the hon. member is working on our cross-ministry initiative to come forward with a strategy that says: here’s how we think we can do it with government playing a role. So those are the three major ones we’re working on. If there are others, I’ll take it under advisement and get you the information on them. The second question I didn’t hear. Ms Carlson: The second question was how you’re measuring your performance there. If we take a look at what you’ve talked about in terms of diversifying value added, it’s a great goal, but it’s the same goal Peter L ougheed won the election with 33 years ago.

So, you know, we need some results. [interjection] Well, I hear some desk thumping, and, yes, it was a g reat idea. I believe his campaign at that time was: we’re going to do it now. Yet we’re still sending raw logs out of the c ountry, we’re still sending wheat that hasn’t been refined into value-added products, and we’re still sending crude oil. So we need some performance measures, and I think we need some reporting back on how successful you are. So if you could just tell us what it is that y ou’re using to meas ure th e resu lts of y our initiatives. The Chair: The hon. minister. Mr. Norris: Yes.

Thank you, Mr. Chairman. Well, obviously, like any small-, medium-, or large-sized business we do have methods of measuring our results . Clearly , they’re open to va rious forms of scrutiny, and we do produce documents on a regular basis. We have a monthly document that goes out about Alberta ex ports, and we have a yearly document on our international offices called AIMS, the Alberta international marketing strategy, that outlines what we are trying to do and trying to accomplish. One of the methods that we use is the volume of exports. Have they increased or decreased?

I’m very proud to say that because of some brilliant poli cies put in pl ace in 1993, the y have inc reased every year since then. Our GDP volume has virtually doubled since 1993. It was some $85 billion. It’s now $150 billion. So that’s clearly an indication of some success. The number of jobs that have been created in Alberta since 1993 are in excess of 350,000. That’s people coming from out of province looking for an opportunity in Alberta. So that’s clearly a measure of success. The average income for Albertans is the highest in all of Canada.

There are a number of indicators that we look at to say, “Are we successful?” the same wa y a business w ould. Do I hav e more customers or less? Is my volume of sales grea ter or le ss? Is my bottom line better? We translate that to the same methodology for the government. I heeded your comment about our former Premier Lougheed, who embarked on a program of diversification, and woul d respectfully disagree that it hasn’t happened. It’s happened in spades.

There was a time here in Alberta not so long ago when we would ship carcasses down to Toronto an d have them dressed and sent back to Alberta because it was just more convenient to do so. Well, now we have three or four of the best pa cking plants in all of Canada operating here in Alberta. That was a specific initiative to say: “Why are we doing it? Why are we sending the raw goods out?” A lot of it is market driven. We recognize that it’s always going to be that way. It’s the industry that’s going to tell us what they want to do, but we have made a huge amount of headway.

Our petrochemical industry, for sake of example, is now some $9 billion. Joffre and Fort Saskatchewan are , of course, there for a reason. They didn’t just happen. It dovetailed on to the fact that Alberta is blesse d with natur al gas a nd oil, and we sa id: “ Well, what’s the next ste p? What’s the next log ical step?” We’re not

1144 Alberta Hansard April 22, 2003 going to send it down to the Gulf coast, where it’ll be transformed into goods. We’re not going to ship it over to Taiwan, where it can be transformed into goods. So there have been successes, but they’re measured against what I believe is a market economy, and under the market economy we allow businesses in Alberta to determine where they want to go. I think our job, then, quit e simply is to say: well, we would like you to look at this because where value added is is where the dollars are, and it’s where the job s are, an d it ’s the l ong-term sustainability.

Once the raw goods are shipped out, you get a certain dollar value for it. Once you start upgrading it, you get significantly more. So I’d say the program – you’re probably correct. Has it worked a hundred percent? I don’t know. I wouldn’t say yes or no, but I would say that it gave us a great platform. You mentioned earlier about some of the trips that we take to promote the province. One recent one was to Minnesota to talk to C argill, and Cargill’s next step will be to get the store-ready. They’re not at that point r ight now, so they’re producing in-bulk boxed goods.

We’re saying get to the next stage of value added, which is store-ready. So we aren’t there yet, but I don’t know when that cycle will ever end, because there are always new technologies coming onstream. So I guess in an swer to your question, what Premier Lougheed started was a brilliant plan. Was it as successful as he might have liked? I’d have to ask him. I don’t have that answer, but do we see where we can contin ue on growing it ? Oh, absol utely, and that’s what we’re really looking at. So it’s not that it’s stalled or it’s not happening.

It’s just that government isn’t going to intervene because that’s not the way this g overnment operates. O ther governments might do that. If you look to our neighbours to the east, you’ll see intervention in every single industry, and you’ll see it propped up by huge taxation dollars, and you’ll see a bloated debt that they can’t support. Well, if you look at Alber ta, you don’t see that, because we’re letting business drive the economy. The Chair: The hon. Member for Edmonton-Ellerslie. Ms Carlson: Thank you, Mr. Chairman.

When I take a look at the business plan, there’s a big focus this year on the film industry, and it isn’t one of the things you talked about in terms of a cross-ministry initiative, yet I know the Minister of Community Development likes to take a lot of credit for what happens in that particular field. We know that your department operates the Alberta film office and that it was created in August of this past year.

So can you tell us how the opening of the new office has helped the film industry and what kinds of returns Albertans can expect on their investments in the film industry now and any other detai ls you may have, like how ma ny films were made last year or what the projection is for this year and how that differs from other years? Mr. Norris: At the outset, Mr. Chairman, I’d like to thank the hon. member for such excellent questions. I believe that at the heart of it we’re talking about economic development and diversification. The film industry is a real jewel in Alberta’s industries, and you’re right.

There is a cross- ministry – it’s not an initiative. It’s an ong oing arrangement with t he hon. Minister of Co mmunity Development. Under his d epartment sits the Alberta film development fund and under our department sits the commission, two very distinct operations. The fi lm fu nd is obviously the grant ing body.

The commission is the marketing arm of Alberta film in conjunction with the Alberta producers. 8:40 What we saw happening was that in other jurisdictions, regarding the film industry, there w ere a num ber of dif ferent g overnment interventions: tax cre dits, flow -through shar es, l abour credits, et cetera. Well , the gov ernment of Alb erta d oesn’t do that , so we established a diffe rent kind of fund that is a leve raged fund with industry. That fund started in 1998, I believe – I could stand to be corrected, but I believe it’s 1998 – and at that ti me film in Alberta had hit an all-time low in revenues.

I think it was some $75 million. The industry calls what we have in Alberta God’s backlot, and I agree. There’s every single form of setting im aginable that you could find, from the badlands to the Rockies to the Cold Lake area to the lakeland country. We have everything that’s required for film shooting. We also have a remarkable industry through places such as NAIT and SAIT, where they get their training and then, of course, through the local TV stations, where they earn their wings. So what we determined that w e would try and do is w ork with them in conjunction with the hon.

Minister of Community Develop- ment and our depart ment to not direct the industry but to help i t grow. Since that fund’s inception I’m proud to say that the gross sales have risen from about $75 million to I think just under $400 million this year. It employs a staggering amount of high-tech jobs, which is very, very good for Alberta, and we are getting more and more productions. I think that a t this point the re are s ome seven major motion pictures either being filmed here or under way. The most recent, of course, was White Coats, that was sh ot in the old Charles Camsell hospital.

I understand that Kevin Costner is now going to be signing on to do his sequel to Dances with Wolves in the Canmore-Cochrane area. So we’re very excite d about wha t’s happening in that regard, and we see it as assistance to an industry that is putting it on a level playing field with the other jurisdictions in Canada. That’s the most recognizable way to describe building this industry. Where do we see it going? We’d like to see it as a billion dollar industry.

We’d like to see that the people who are employed here don’t have to go seasonally to Vancouver when work wraps up on series and short television shows here. We’d like year-round work, taking advantage of everything that we have in Alberta, to keep the people employed here and continuing to live here in Alberta. The Chair: The hon. Member for Edmonton-Riverview. Dr. Taft: Thanks, Mr. Chairman. We could go on and on on this.

It’s, as the minister I’m sure agrees, a fascinating topic for discussion and one that the Member for Edmonton-Ellerslie has said has been at the core of political debate in Alberta for more than 30 years. My first question is a structural one about the o perations of the government. Just sitt ing here, I made a note about t he number of different departments and related organizations involved in w hat I would consider e conomic d evelopment. Of course, the re’s the Minister of Economic Development, the Minister of Innovation and Science.

We have Aboriginal Affairs and Northern Development, the Northern Alberta Development Council, under the chairmanship of the Mem ber for P eace River. There’s Sustainable Resource Development, Community Development, which i s responsible for the museums, which are some of the most important tourist draws, Agriculture, Food and Rural Development. Then there’s a depart- ment like Learning, which is responsible for the universities, which are drivers of the high-tech industry in Alberta.

It strikes me that there are too many players here, that it’s a very fragmented st ructure, and f rankly there ar e a lot of governm ent departments. There are more now than there have been in several years. Of course, the risk in that – I think, for example, of people in my constituency doing high-tech work at the University of Alberta, and they end up dealing with many dif ferent organizations. They might have the heritage medical foundation. They have the univer-

April 22, 2003 Alberta Hansard 1145 sity itself, the Depar tment of Learning, and on and on it g oes. I would be interes ted in heari ng the m inister’s thoughts and his awareness of issues and solutions to the situation in which there are probably just under provincial jurisdiction 10 or a dozen significant players in economic development. The Chair: The hon. Minister of Economic Development. Mr. Norris : Thank you, Mr. Spea ker.

Be fore I a ddress y our question, I do want to touch on on e th ing yo u said that I agree wholeheartedly with: education bodies being huge economic drivers and the amount of economic activity that takes place at the Univer- sity of Calgary, Mount Royal College, SAIT, which just got a new $12 million aviation facility, the University of Alberta. Certainly all of these things are very, very important to the local economies, and it is something that we have to look more strongly at because as a knowledge-based economy grows, you’ re go ing to need those institutions to thrive.

It’s one of the corne rstones of a ny good economy, so I appreciate you identifying education. It’s something that I think we both agree on. I guess I’d take you back to 1993 and answer your question. At that point, we found ourselves with deficits on an annual basis and a debt of about some 22 billion dollars. Decisions were made at that point to say: we’re going to get these departments focused, and we’re going to get them focused in a way that they’re going to drive their industries specific to their departments.

Economic Development at that point had some 1,200 employees, a $200 million budget, as I recall, and was pared down to focus on marketing: marketing Alberta industries, marketing the province, marke ting tourism, and as you note, the tourism department was also wrapped up into Ec onomic Development. So the po wers t hat be at t hat time identifie d that econom ic development is not a role o f a government to i ntervene, it’s not picking winners and losers, it’s not giving loan guarantees, but it is a job to help industry market itself to the world.

If you think about it, when you have a company, you’re identifying your markets and you’re looking to grow your business. When you want to step out and you get bigger, you look to where you can grow and you look to maybe where the government can assist you in that program. So I think that was the decision that was made at that point. Where we end up now is we have the departments that you referenced working solely on developing those industr ies.

For ins tance, Sust ainable Resource Development works hard with the forestry indust ry on their FMAs, how to make them better, what’s good about them, what we can change. Mr. Cardinal: About seven days a week. Mr. Norris: And sometimes eight. That’s th e ro le of the ministr y. The Economic Developm ent ministry then takes whatever information, strategic and other, that these departments feed in and works through our department to go and market that word, and we determine that that’s the best way to do it. So i f you will, compare it to a large company, say Ford fo r sake of example.

You’re going to have a department that’s responsi- ble for research and development, you’re going to have a department of human resources, and you’re going to have a marketing branch. We are deemed to be the marketing branch of the Alberta govern- ment in that sens e of the word. S o we work very closely with the Energy department for obvious reasons, Agriculture, and we go out and talk about what’s going on there and what the advantages are of being in Alberta. I don’t see it as duplication in any way, shape, or form.

I’m very proud to say that the re lationships we do have w ith the econom ic driving departm ents such a s Energy , Susta inable Resources, Agriculture are very good ones, and we feed off each other rather than duplicate work, and that allows us to be a smaller department, use less resources, but get the message out in what we feel is a more effective way. So I gu ess in the old Tom Peters book, you know, we’re sticking to our knitting. We do what we know, a nd we let them do what they know, and hopefully when we work together, the message gets out loud and clear.

I think that’s really the respons e to you r question that I w ould give. We are not trying to duplicate . As a matter of fa ct, we’re trying to eliminate layers to continue to grow the economy. The Chair: The hon. Member for Edmonton-Ellerslie. Ms Carlson: Thank you, Mr. Chairman. I want to spend a little bit of time talking about the hotel tax now, Mr. Minister. In the early part of this m onth we sa w a couple of intere sting articles in the newspapers where you talked about in one case that was reported an additional levy on the ho tel ta x, but it se ems like the main theme running through these

article s was just dedica ting the 5 pe rcent provincial tax on hotel rooms now to marke ting industry. I know that’s something that the industry has been asking for for many years and certainly as long as I’ve been in this Legislature. So I would like to ask y ou how that’s going. W e didn’t see it in the bud get, so obviously you didn’t g et the gr een light t his year. D o you think you’re going to in the future?

Can you talk about that tax relative to other jurisdictions in terms of how much they charge, what others do, and what you may be projecting as the impact of reduced travel with things like SARS happening and other kinds of risks in terms of distance travel these days. If you could comment on those items. 8:50 The Chair: Hon. minister. Mr. Norris: Thank you, Mr. Chairman. Well, the first thing I would like to clarify: the additional tax that you were talking about came out of a comment that was made in Red Deer. That was never part of our prog ram, nor is it my personal desire to do that.

There i s a hotel tax in Alberta. It’s 5 percent, and it generates anywhere from $45 million to $55 million depending on the kind of year we have. That money goes into general revenues, which is then used for other programs. We had the hon. Member from Edmonton-Glenora st rike a committee, and he wor ked exceptionally hard. The hon. Me mber from West Yellowhead was on it. I’m looking around for others. An Hon. Member: Did he work hard? Mr. Norris: Very.

Anyway, the end result of the committee is that they came back from industry with recommendations, and one of the recommenda- tions was to convert the hotel tax to a marketing levy. That 5 percent would then mean a sustainable amount of money that would go into tourism marketing, in around the $45 million to $50 million range. Now, why did we want to do that? We have ex amined very carefully our tw o biggest competitors, British Columbia and Ontario. They have methodologies of doing this. British Columbia’s method is part general revenue, part hotel tax.

Ontario’s is part general revenue, specific destination taxes – the city of Toronto, for sake of example. We wanted to have a very cohesive plan. Wha t we f ound they’ve had happen in Briti sh Columbia – and I talk to my co unterpart, the hon. m inister of

1146 Alberta Hansard April 22, 2003 competitiveness, in dustry, and tourism, on a regular basis. They have four tourism regions now. They have Whistler/Blackcomb, the city of Vic toria, the city of Vancouver, and now the Okanagan Valley, and they ar e f inding that the y’re getting an e xtremely fragmented tour ism message. T he mes sage c oming out of the Okanagan Valley is clearly different than that of Victoria, Vancouver very different from Whistler. So we eliminated that as an option.

What we came back with through the process of our government was to say that we would lik e to take the 5 perce nt hotel tax and phase it out and phas e in a m arketing levy , which the industry supported a hundred percent, and turn that over to them to market. What that would do is put them on par with British Columbia, which spends about $50 mil lion, and Ontar io, which s pends about $6 0 million. Currently our spending was $18 million a year, and with the additional funding that we are very grateful to have got, it’s now $25 million.

I don’t think the answer to problems is throwing money at it in any way, shape, or form, but in this particular instance, we’re talking about marketing the province of Alberta in competition with British Columbia, Ontario, and to a lesser degree Saskatchewan and Manitoba. So where we ended up was with an approved program all the way through our process – standing policy, cabinet, and caucus – subject to Treasury Board approval.

Treasury Board came back and said – and I think rightly so this year – that our demand for infrastructure, our demand for schools, the ever, ever increasing demands on health care and education, which we hear about daily in this House, take precedence over this particular industry, but the $7 million is a way of showing support for that industry, and we’ll continue to try and make that program work. As I said, it’s subject to Treasury Board approval. Will we bring it forward again? I can ’t say at this time. We’re going to consul t with indus try. I know the hon.

Member for Edmonton-Glenora is going to stri ke his committee again at some point after session and go talk to industry and find out. It’s not our way to go back to industry and say: this is what we’re going to do; what do you think? So we’re going to ask them, and we’ll find out what they’d like us to do, and we’ll take it from there. With regard to the comment y ou made about some of the crises facing tourism, I don’t know if you noticed today , but Toronto is now taking even more of a hit because of SARS.

It’s not so bad that people aren’t coming into Toronto; now they’re not allowed to book tourism opportunities on c ruise ships and the lik e. A v ery, very strange situation. So part of our campaign right now is goin g to be aim ed at the Pacific Northwe st. We’re using s ome of the additio nal tou rism dollars that we got to talk to our Am erican cousins and sa y: “It’s safe; it’s secure. You can drive here. It’s very simple.

The Premier was unequivocal on his support during the conflict, and we are your friends, so come visit us this summer.” You’ll see those ads coming out very soon, and we hope to have a good effect from that. The Chair: The hon. Member for Edmonton-Riverview. Dr. Taf t: Thank y ou, Mr. Chairm an. Tw o questions f or the minister. One just comes out of his immediately preceding response and one from his response two questions ago. On your response just now, I just missed it.

You referred to a committee being chaired by the Member for Edm onton-Glenora, who is the very capable chairman of several committees, and I didn’t catch which committee it was, and if you could tell us the name of the committee and who’s on it, that would be great. I just missed the detail. My other question goes back to your reaction to my comments on the number of different departments and bodies involved in eco- nomic development in Alberta and my concern that there co uld be unnecessary fragmentation or complexity there.

You had indicated that you regarded Economic Development as the marketing branch for the Alberta economy or words to that effect, which is fine, which is good. But it leaves me with a question like this. And I see that the Minister of Energy is here. I don’t know if he wants to jump in or not, but fundamentally and over and over – and there was another study released today which drives this home – Albert a is heavily, heavily reliant on the oil and gas industry. If we are to, as this study says, ensure that the tiger’s roar doesn’t fade, we need to continue to diversify beyond the oil and gas sector.

Now, my question is: who is the lead m anager, who is the lead m inister, f or that kind of process? Is it you in Economic Development? Is it the Minister of Energy? Who is it? I need to get some clarity here on that sort of issue. I want to know the point man. Thanks. Mr. Norris: Well, that’s a pretty broad question, so I’ll answer your first question. The committee I was referring to, chaired by the hon.

Member for Edmonton-Glenora, is a tourism marketing committee and it was struck in September of 2001 spe cifically to re view all aspects of this industry, our fourth largest, employing over 120,000 people and generating some $5 billion in gross revenues, about $650 million worth of taxation to the province of Alberta. That committee had – and I’m going by mem ory, but I’ll get the exact committee structure for y ou – the hon. Mem ber for C algary-Bow, the hon . Member for Spruce Grove-Sturgeon-St. Albert, the hon. Member for Vermilion-Lloydminster, the hon. Member for St. Paul-Cold Lake, the hon.

Member for Whitecourt-Ste. Anne, and last and c ertainly not least the hon. Member for West Yellowhead. That committee toured for the summer, as I recall, and into the fall looking at all aspects of how we market tourism, how we respond to the demand for tourism, what we are doing to develop new tourism product, all aspects it was charged with doing, and came back with those recommendations. I believe that the committee wrapped up its work in December of 2001, so that puts us where we are now.

We then took that information, put it into a ministerial report, worked it through the system, and put it in for the budget cycle of 2003-2004 and were successful in getting some additional funding, and we’re very grateful for that. So the committee now I understand – we’ve already talked about it – is going to be struck again to go back to industry and say: “This is what came out of our work. What do you think? What would you like to see us try? Where would you like us to take this? Should we go back to square one? If that’s your desire, then that’s what we’ll do.” That’s where we’re at on that one.

With regard to who’s running the show, ultimately the Premier, who most Albertans seem to think does a remarkable job and keeps getting elected with bigg er and bigg er ma jorities. So if y ou’re looking for a structur al plan, what I referenced at the beginning of the night was our value-added program, and this was referenced in the throne spee ch. The v alue-added program is our d epartment’s responsibility. We’re the umbrella, and unde r the umbr ella feeds those eight or nine ministries.

With regard to the developmen t of particular industries, that clearly falls under the Minister of Energy or the hon. minister of sustainable development to work with those industries on a day-to-day basis with the experts in their department. But, again, I get back to the same role that we have : taking that strategic information and then marketing the various industries to the rest of the world. So I think it should be very clear. If it’s not, I can give you a written answer. 9:00 The Chair: The hon. Member for Edmonton-Glenora.

April 22, 2003 Alberta Hansard 1147 Mr. Hutto n: Thank you, Mr. Chairman. I hav e a couple of comments. Then I have a question for the minister. First of al l, a poin t of cla rification to the hon. Me mber f or Edmonton-Ellerslie: I did not make the c ut; I was whack ed. I believe that in th e early d ays – I gu ess it would be ’95-96 – the former hon. Member for Edmonton-Glenora submitted in this House a list of patronage appointments in the D epartment of Ec onomic Development. I was on that list, and I was whacked. But he is no longer the hon. Member for Edmonton-Glenora; I am.

So that is just a little point of clarification. I spent many enjoyable y ears at the d epartment of econom ic development and tourism, as it was when I was there. We did a lot of good things, I believe, but the lean, mean fighting machine that they have now and under great leadership – it’s great to see some of my former colleagues up there. I think you’re doing a fabulous job, Minister, out there promoting this province far and wide. The boss obviously knew what he was doing when he selected you. I want to move to international offices. An Hon. Member: Which one do you want to move to? Mr.

Hutton: Let me rephrase that. My question is r elated to the international offices, and I also want to add a com ment to that. I think it’s gre at that the ministe r has looke d at locally engaged people, rather tha n setting up large, c umbersome of fices, and actually finding people that we can inform about Alberta that know the marketplace. When I was in tourism back in the ’80s, we had an office in New York, and we had a tourism representative. I mean, in those days at the Statue of Liberty they’d say: “Don’t be a baby, lady. Just be a lady, baby.” Those w ere wi ld times in tourism .

Is there any opportunity for the ministry to go back into that marketplace from an investment standpoint or look to use it as a lis tening post f or Economic Development? That’s my question. Mr. Norris: I would like to thank the hon. member for his comments and inform him that his cheque is clearly in the mail. Thank you for that. It is an honour to work in this department. I appreciate your comments, hon. member. I would reference the international offices this way. They play a very significant

part i n our diversi fication strategy. It’s not good enough to produce some of the best goods in the w orld if nobody knows about it . What we have foun d through those international offices is the abil ity of the Albe rta government to open doors, no more and no less. I think you hit the nail right on the head: they’re very lean operations. Our Premier has directed that they be collo- cated with the Canadian embassies, which we found to be a remark- ably good opportunity not only f or saving s in rent b ut t o share strategic information with that level of government, and it works out extremely well.

Wher e we see these offices going is i dentifying market o pportunities a nd relay ing back to those m arkets the opportunities coming from Alberta. [Mr. Lougheed in the chair] Obviously, trade and investment is a big part of how we grow our economy. We do need foreign dollars to come into Alberta and help develop some of our great r esources, and they are com ing at a remarkable pace. Mos t recently we were in Japan vi siting with a Japanese petroleum company who has i nvested some 300 m illion dollars in Hangingstone in SAGD technology to get oil sands out.

They were very proud to tell us tha t their prog ram ha s worke d. They’re going to now invest some 300 million more dollars to go from I think 5 ,000 barrels a day to 20,000 barrels a day on the ir program of economic self-sufficiency. That’s a great thing that took place through the Department of Ener gy and through the interna- tional office in Tokyo. So they do play a very significant role.

What we do to keep them as strategic and lean as possible is we have a government of Alberta employee who has to have a minimum of five years of trade and investment experience and must speak the language if it’s a country that is forei gn to us. Then they go and employ one or two locally engaged people to work with them in that office. We found it’s a very successful model. It’s the one we use in Germany, in Mexico City, in Japan, et cetera. Some of the offices are a little bigger than the other offices for obvious reasons.

Japan is one of our big gest markets, so we f elt th at we would need a bit more suppo rt staff. We’re hoping that Germany and Mexico City will grow to that, but we didn’t start them at that level. I thank you for the question, because the international offices do play a very significant role in our continued efforts to get the Alberta advantage message out a nd promote t his grea t province of ours. Thanks. The Acting Chair: The hon. Member for Edmonton-Highlands. Mr. Mason: Thank you very much, Mr. Chairman.

It’s my pleasure to stand to addr ess the e stimates of the Department of Ec onomic Development, and I have a few comments and a few questions to direct to the minister. One of the concerns that I’ve raised before – and I’m not the only one who raises the concern – has to do with the export of natural gas in its raw form a nd essentially the impact that that has on the petrochemical industry. I’m thinking particularly of the Celanese plant, which is jus t acro ss the river fr om m y const ituency of Edmonton-Highlands. Many of my constituents are employed there.

A number more had been employed there in previous years. Now, the policy has been changed with respect to the Alliance pipeline. Where previously the liquids, I believe, had to be extracted from the natural gas before it was exported – so what was exported was more or less pure ethane for heating purposes, and the chemicals useful for plants such as Celan ese had to be extracted – that policy changed with the Alliance pipeline.

The other aspect of the Alliance pipeline that’s troubling is that it exports natural g as at a very high rate from the province , so a number of years of proven reserves of natural ga s in this province have declined precipitously. The las t figures I saw wer e that we have in the order of nine years of proven natural gas reserves left in the province. Now, of course, that’s offset by the rate of new discovery and so on. Maybe the minister can enlighten me on that. But particula rly the concern is: what about industries for which natural gas is a key feedst ock? What is the prospect for those industries?

I would assume that those industries in particular have a treme ndous value -added potential, and the decline of those industries ought to be of great concern not only to me, Mr. Chair- man, but obviously to you and to others who have those industries located i n or near the ir constitue ncies as well. T hat’s really the concern. What’s the future for the pe trochemical i ndustries in Alberta that are based on natural gas? A second question that I’d like to have the minister address is the impact of risi ng el ectricity prices on small and m edium-sized businesses.

I know that when we do ask q uestions in questi on period, the minister is quick, when he gets a chance, to jump to his feet and enumerate all of the other advantages that exist in Alberta for business. I will acknowledge at the outset that there are some, in the hopes that the minister will concentrate on the aspect that I’d like to address, which is the p rice of energy and particularly electrical energy for small and medium-sized businesses.

1148 Alberta Hansard April 22, 2003 I have here, Mr. Chairman, a report from the Canadian Federation of Independent Business, and it’s called Still in the Dark. It’s a look at the impa ct of el ectricity deregulation and pricing on A lberta’s small and medi um-sized businesses. Now, it’s interesting. This report indicates that a majority of the companies who responded to the survey, slightly more than half, used less than 250,000 kilowatts per year. Only a small fraction, 2 per cent, consumed more than a million kilowatt-hours.

Interestingly, most of them used a regulated rate option, and the second greatest number used th e fixed price contracts. Now, the dissatisfaction was very hig h in rural areas among firms responding: 28 percent were very dissatisfied, and 31 percent were somewhat dissatisfied. In urban are as it was a litt le better: 17 percent were very dissatisfied; 24 percent were somewhat dissatisfied. It found, f or exam ple, that the di ssatisfaction was highest in central and southern Alberta, that it was lowest in Calgary.

Dissatisfaction was pe rsistent i n a ll sectors , the highes t being manufacturing, then wholesale, then agriculture, then construction, retail, and down to educational and social services. 9:10 According to th e study rate increases were higher in at lea st 65 percent of the busi nesses. On the ma gnitude of cost in creases, a majority, just about 50 percent, were 24 to 49 percent higher, 27 percent were 25 to 49 percent higher, 17 pe rcent were 15 to 9 9 percent higher, and in 7 percent of the cases electricity costs were 100 percent more than they had been.

So the small businesses, at least those responding to this survey, indicated a fairly high level of dissatisfaction with electricity prices and felt that it was a significant impact on their costs. Has the minister identified the extent to which electricity prices are hampering the competitiveness of small business in this province relative to other jurisdictions that have retained a regulated model?

I know that this minister is not responsible for electricity, but I am interested to know w hether or not his d epartment receives com- plaints, concerns, whether it monitors that situa tion, whether it’s done any analysis of the impact on small business, and whether it has any programs to offset the impact of those increases. With that, Mr. Chairman, I’ll take my seat and await the minister’s response. The Acting Chair: The hon. Minister of Economic Development. Mr. Norris: Thank you very much, M r. Chairman.

I would h ave expected shorter que stions from the hon. member, but I’ll try and muddle through that dissertation an d give so me answers. It really did tend to ram ble, so I f ound mys elf eng aged in othe r t hought processes. I’ll try and do as well as I can. I think his first topic of discussion was natural gas and the export of natural gas, if I’m not mistaken. I g uess I’d have to say at the outset, Mr. Chairman, that like everything this government does, it’s market driven. We’re not going to intervene. We’re not going to set up regulations.

We’re not going to make rules for producers in order to either hamper or grow that industry. That is exactly the same for the natural gas industry. What I think the hon. member is alluding to is that he believes the Alli ance pipeli ne was put in with the blessing of the Alberta government to export natural gas w ith valuable liquids through to the Midwest of the United States. What the hon. mem ber i s not r ealizing is that a lot of that natural gas comes from British Columbia, where it’s not our jurisdiction to do anything anyw ay, and travels throug h Albe rta in the Alliance pipeline into the Midwest.

But having said that, this government would never, ever mandate to the produ cers where they have to s ell their g oods, whether it’s natural gas, whether it’s agriculture, whether it’s forestry. It makes no difference what the industry is. That’s not a principle we operate on. What we do operate on is setting up the best business environ- ment for those operators, and they’re some of the best in the world. The hon. member has allude d to the riding of Clove r Bar-Fort Saskatchewan. You’re right: they are some of the best in the world. They are working i n that are a because of som e fores ight.

The Hardisty hub comes to mind, where a lot of the natural gas and oil that’s extracted from this province ends up, and then it’s a market- driven cost. Now , is it che aper in the Louisiana gulf? Yes, it is. They don’t have the transportation costs. It’s a spot price commod- ity. It goes cheaper. But in Alberta we’ve taken away the provincial sales tax. We have a low, broad-based corporate tax.

We have low income taxes, a highly skilled workforce so tha t they c hoose to operate in Fort Saskatchewan and Joffre and the various p laces around the province on a market-driven model, and that’s what we’re going to support. Now, how are we goi ng to ensure t hat those industries keep growing? That ties into the hon. Member for Edmonton-Glenora’s question: our international markets. Currently we are producing by- products from natural gas that are shipped by the trainload to Taiwan to be processed into the final commodity, which is clothing, and then shipped back in many ca ses right to Alberta.

So our value- added strategy is say ing: why are y ou doing that? Why w ould we not convert those polymers and chemicals into the products that we can make here? Plastic bottles come to mind. We want to identify why that’s happening. It’s not for the government of Alberta to go to the producer of the commodity or the end user and say: this is how you will do it. That’s not what we’re talking about. We’re saying: why aren’t you doing it? We feel that that’s a better model.

The natural g as liquids tha t you are talking about are sit ting in huge abundance in Alaska, and our understanding is that that will be developed when it’s economically feasible. Now, that means that the $10 billion or $12 billion that it costs to bu ild that pipeline, which will come right into the Hardisty hub, northeast of Alberta here, will happen, and it’ll happen in our lifetime, and that is where we believe the sustainability of that industry will come from. Also from the tar sands.

There is a massive amount of by-product from that mining extraction process, and there’s a good possibility to use the liquids that are produced there in the production that you’re talking about. So there are a number of opportunities, but not one of them will be mandated by the provincial government as a way you must operate. That’s the simple answer to your question. I think your second question went on to electricity deregulation, and I want to take you back to a preregulated model to answer this question.

The overwhelming evi dence was that with a regu lated model and a fixed profit, et cetera, there was no ne w generation coming onstream. There was some expansion to existing plants, but the real need for Alberta, which ranged from about 7,500 kilowatts to 9,000 at that time, was not being met. As a matter of f act, lik e you’re seeing in Ontario and other provinces, there were chances of brownouts and, indeed, blackouts. So the government recognized that to get new power gen eration, there have to be incentives, and since the dereg ulation has t aken plac e, we’ve see some 2,200 megawatts come onstream.

The really exciting part of this – and I’m sure the hon. Member for Edmonton-Highlands will appr eciate this, given his philosophical bent – is tha t a lot o f it is g reen. A lot of it i s not done fr om extracting carbon-based resources. It’s done through wind. It’ s done thro ugh biomass. It’s done through the use of wood chips. People are starting to say that if there’s an economic incentive for us to get involved in this business, which there is because they can now plug into the grid, which they couldn’t do on a regulated model, they

April 22, 2003 Alberta Hansard 1149 can produce enough energy to support what they’re doing and sell power into the grid. The absolute best example of this – and I know the hon. member will want to go out and tour this with me because of his love for agriculture – is a pig farm in the Viking area. T hat farmer has gone with worldwide technologies and is now trapping all his pig manure and putting it into a vat, heating it up. Methane rises out of that. It’s trapped in a bubble. He fires a generator, powers up all his needs for his farm, and puts enough back into the grid to get $300,000 into h is jeans.

So he’s gone from a net user to a net contributor, and he’s paying for the thing i n four y ears. T hat all happened because of deregulation. So has it bee n as wonderful as it could’ve been? Probably not. When you say statistics in business like 28 to 31 percent dissatisfied, to me, when I had my own business, that’s standard. You’re going to have five guys that really like what you’re doing, you’re going to have two or three that are okay with it, and you’re going to have two that don’t. That’s just standard. What we have to d o is get to the next level.

When the deferral accounts come off in December – and I k now you know all about this because you talk about them routinely – we hope that natural gas, which is a world commodity price which is used to driv e a lot of our power g eneration, comes down, and it will. Those things combined will see power bills get lower.

But what we cannot forget that’s happened in the meantime is that the new generation – and I know the Minister of Energy will know more about this than I’ll ever forge t – has allow ed Alber ta to consider when all our needs are met and the costs come down maybe being a net exporter like British Columbia, Manitoba, and Quebec, who make several billions of dollars a year exporting their power because they’ve gotten to that point. It’s clean power. It’s hydro- power. Alberta is not as blessed with the hydropower that we’d like, but we are dealing with it. We’re looking at new ways to do it. [Mr.

Tannas in the chair] 9:20 The final comment I’d like to make to the hon. m ember – and I know he’ll love this – is that the Alberta government just signed an agreement that now, I believe, and I could stand to be corrected, 90 percent of the power that the Alberta government uses – and we are a huge power consumer, as you can imagine, with all the buildings around the province – is now produced by green. That’s something that I don’t think would have happened under a regulated model. The Chair: The hon. Member for West Yellowhead. Mr. S trang: Thank you, Mr. Chairman. I’d like to pose a few questions to the hon.

Minister of Economic Development. First of all, I must compliment him on his passion for the way he carries out his business in Economic Development. I guess the one thing I’m wondering about is your goal 3. Then if you look a t the different impact measures that you’re having, in light of wha t’s transpiring now w ith the SA RS episode a nd the increase in our tourism dollars of the $7 million, how do you profess that we’re going to uphold some of these numbers? I guess the one that I look at i s on page 116, 3.2, where we hav e the aspect o f Europe, Asia-Pacific, United States.

I think we would more or less concentrate on that beca use what’s transpiring now w ith a lot of wonderment, especially in one of my areas – namely, the municipal- ity of Jasper – is they’re really concerned with the aspect of what’s going to transpire this summer. Of course, you know, they’ve really worked hard on the Br itish ma rket t o b ring them over because they’ve proved to the British that they can ski in Jasper cheaper than they can go to the Alps, and the experience is just as great.

So I’m just wondering how he’s going to change those factors or how those factors in his performance measures are going to work out in light of what’s transpired in the world today. I guess the other thing that I wanted to talk about was the added value, especially in the lumber business and what we’re doing now with the softwood lumber embargo that we have with our neighbours to the south.

I’m just wondering what aspects he’s looking at within his departm ent to m ake sure tha t we’re looking at some ni che markets that we can review and try to hel p some of t hese other companies now that are trying to get into new products to ship down to the United States or to other markets. I guess what I really look at is: how are you working with the secondary manufacturers?

As you realize, for anything that they buy, they have to pay the full price from the primary manufacturers to make any commodities that they are looking at to enhance or value-add to move into other places within Canada or within the United States or abroad. So if you could answer those few questions, I’d certainly appreci- ate it. Thank you. The Chair: The hon. minister. Mr. Norris: Well, thank you. I would like to thank the Member for West Yellowhead for his questions and also his endless and enduring passion for not only tourism but for coal.

Rec ognizing that his riding is in the heart of both the major parts of the coal industry and tourism in Alberta, he has his hands full and does a remarkable job. What we are trying to do with the added dollars that were granted to us in the last budget go-round is to identify the markets that we have been b uilding o n. Yo u righ tly det ermined that the United Kingdom is one of the m. We also know Germany is a huge destination for ove rseas visitors, as is Japa n. Our message quite simply is that Alberta hasn’t changed.

The experience you’ll get is a friendly one, a hospitable one, a very, very value-conscious one, and experiences that you will not find in any other part of the world. When we talk about what’s happening in the world right now, I want to make one thing abundantly clear: Alberta is not in a vacuum as to what’s happening w ith tou rism. SA RS is a w orldwide epidemic. The campaign on terror ism is worldwide. So it’s not limited to Albert a.

While I sym pathize greatly with the to urism operators in Albert a – an d we ar e doing ev erything we ca n to mitigate these sit uations – it ne eds to be sa id that it’s not Albert a alone that will suffer. So have we in response to that taken our numbers down, taken our goals down? No, we haven’t, and we haven’t done it for a couple of reasons. I know that the hon. Member for West Yellowhead is a big fan of the Olympics, like me, and I know that he probably gets as frustrated as I do when athletes say: well, we’d like to finish in the top 15. Well, that’s to me not the way to do it.

Either you’re going to get a medal or don’t show up. So we acknowledge that in Alberta our targets are very high – they’re remarkably high – but we know that we have the best tourism operators in Canada, and we know that we’ve got a program that we believe will work. So we’re not going to adjust down. We’re going to keep the goal high, recognizing that there are many forces in the world right now that may affect that. So our overall program quite simply will be to keep going straight ahead. We’ve now taken some money out of the budget that was not allocated pre viously for our Pacifi c northwe st campaign.

W e’re hoping t o levera ge that w ith the Cana dian tourism council and industry to get a significant amount of money to target that to help offset some of the cancellation of the tours that are happening but recognizing that that’s not a problem specific to Alberta. The other part of the equation, too, is that we continue to diversify

1150 Alberta Hansard April 22, 2003 our market to where we’re going. We have campaigns going now in Illinois, in the Houston area, and in Los Angeles. We found that while they might not have direct flights into Alberta – in most cases they do – those are really good markets. Minnesota is another one, and that was part of our trip recently, to talk to some of the airlines and say: do you know that if you have a direct flight from Minnesota to Edmonton, for sake of example, it will more than likely be sold out on a regular basis, three times a week?

We’re hoping that they’ll take heed of that and bring in new tourists so that while one market, who are international travelers, might be decreasing, hopefully the rubber traffic and the direct flight markets will increase. Do I have the answer as t o whether that’s going to mitigate the loss? No, I don’t. My gut feeling tells me that we’re going to have to work ver y hard, a nd I know our departm ent is sitt ing here listening with much anticipation because we are going to do it as a team. With the industry in Alberta I think we’re going to get ove r the hump, but we are in for tough sledding.

There’s no doubt about it. With the response to your value-added question regarding lumber, the hon. minister of intergovernmental affairs is obviously the lead on that file. I know that’s a more Canadian issue because of all the lumber that is produc ed. I belie ve 67 perc ent of i t comes from Quebec and British Columbia, and Alberta a ccounts for some 12 percent of the national total. So as go Ontario, Quebec, and British Columbia, so goes Alberta. That’s the common wisdom. Could we have a made-in-Alberta strategy?

That doesn’t work in industry-specific areas such as forestry, so w e’re hopeful that the issue will be resolved by the federal government, who is dealing with this file. It’s gone on longer than anybody would want. There has been a lot of pain in the Alberta industry. We know that, and part of the reason we’re going down to Washington at the end of this week is to address those issues with the people there.

We’re trying to get meetings with, I believe, the secretary of industry to talk about this from an Alb erta perspective and mayb e let t hem know that these tariffs are not only not right, but they’re hurting an industry when their belief system is incorrect. They b elieve they have to do thi s because they think the A lberta government and others a re unduly subsidizing that industry. Well, I think the hon. Member for West Yellowhead and others who are involved in the forestry indust ry know that’s not true.

It’s a very fair commodity price, but they have targeted that, and I think that in some responses to antiquated mills in the North Ca rolina/South C arolina reg ion they don’ t want to upgrade. As a result, they’re trying to protect that industry, which is wrong, but it goes thr ough a proce ss with the World T rade Organization, and it’s very lengthy.

What we ar e doing, how ever – and I ’m very proud of this – through Forintek, which is a federal/provincial and industry-driven body that operates out of Vancouver, with an office here in Edmon- ton, is looking at new ways of taking wood products and taking them to the ne xt level of val ue-added so t hat products t hat used to be maybe waste would now be good for particle board or any number of things, orie nted strand bo ard. We’r e doing that through a granting mechanism through our department, through the department of western diver sification thro ugh t he fed eral go vernment, and industry.

They ’re doing s ome re markable things, and they ’re becoming industry leaders in saying: you don’t need to do this with wood specifically; you ca n treat it this way or that w ay. And it’s working very well. The other thing that I’d like to point out – and, again, it ties back to our internati onal offices – is that we are trying to identify new marketplaces, like China, for sake of exa mple, and Ja pan, who typically do not use stick-built homes but are now looking more to that. As the ma rket e conomy of their country e xplodes, the y’re looking for housing.

The traditional cement and cinder block won’t do, so they’re looking at other ways, and they’re now saying: well, maybe wood is one way to go. If we can target that market and get out there first, which I think we’re doing a fairly good job of through our offices, and there does become that demand, then you diversify away from the United States and you get those new markets and you start growing that business.

So that’s really how we’re dealing with that situation, hon. member. 9:30 Ms Carlso n: I would lik e to rem ind the Ministe r of Econom ic Development that it’s been a Liberal policy for at least a decade that the hotel tax should be dedicated marketing dollars for the industry, and we’ve always supported that. So we would be very supportive of that com ing forward in so me future budget, and we’re looking forward to having seen that happen this time. I just want to go back to the regional development strategy for a moment of two .

You have generally talked about it and talked around it a little bit, but we se e that in your business plan you talk about that as a focus. I would like to know how the va lue-added program fits into this. Do you actually have a copy of the regional development strategy, or is it just something within the department? Are there regional goals and priorities, and is there an action plan? So if you could just expand on that a bit. Mr. Norris: Well, at the outset, Mr. Chairman, I would like to thank the hon. member in advance for her, no doubt, positiv e comments when we are successful with the hotel tax.

It’s now on record, so I can only assume that it’ll be a joyous day for all Albertans when that takes place, and thank you for that. With regard to the regional development strategy, yes, that is part of our business plan, and w hat we l ook at is g rowing the regions with the particular areas. I referred to so me of the group s that are ongoing.

At this point there ar e som e seven that have now gone through the process, which is forming a corporation, defining what their parameters will be, submitting to us a business plan, and then signing on with us in the form of a grant that is used to implement their business plan. In the case of the international region, which is Leduc, Nisku, Millet, et cetera, their business plan called for getting a world-cl ass we b site that access es eve ry

part icular piece of property and opportunity there. W e were in Nisku la st week to launch it. It’s a brilliant opportunity, and it works very well. So each region has different opportunities and goals, but they set them out in their business plans in conjunction with our department. We don’t go to CAEP, the central Alberta partnership, for sake of example, and say : this is w hat you mus t do in the Re d Deer and central Alberta area. They come to us with a business plan and say, “Does this fit in with the overall strategy?” and we say yea or nay . As I said, to d ate there are a number of the m.

There’s Grizzly in northeast Alberta . The re’s GROWTH in north-central Alberta, PREDA in the Peace River area. There’s a new one forming in the far northwes t part of Alber ta calle d REDI. Pallis er in souther n Alberta. On and on it goes. There is a stra tegy to get the province sectored into marketable regions, and once we accomplish that, then the marketing of those regions becomes very simple. We say: “What are you looking for? What is it? Lots of sunshine for growing? Is it access to water? Is it rail link s? Is it close to the Canamex corridor? What a re your needs? What are your parameters?

What kind of property are you looking for? Is it large , small, et cet era?” And that’s the whole process, but it’s not so much government driven as it is government assisted with the regions. Working with the municipalities has been rem arkable. At the

April 22, 2003 Alberta Hansard 1151 outset of this program there was a lot of fierce rivalry, as there is, for sake of example, between Edmonton-Calgary over sports, et cetera, and what we’ve seen happen over the period of time is that these towns and villag es are put ting aw ay those rivalrie s and say ing: “Yeah, we ag ree. It’s better to market this region, so that’s what we’re doing.” Our e ventual goal is to have the whole province sectored into regions that they determine, not us.

The most unique one that we signed on recently was Wetaskiwin- Millet, and it’s unique because the riding is Wetaskiwin-Camrose. As you would imagine then, you would think the economic region would b e Wetaskiwin-Camrose, but it was determined by those people, not my department, that Wetaskiwin had more in common with Millet, and that’s the region. We let them determine it. We let them sign it on. It’s an ongoing thing. It’s a business plan that’s reviewed, and it’s working. The Chair: The hon. Member for West Yellowhead. Mr. Strang: Thank you, Mr. Chairman.

I’d like to just question the minister on the aspect of coal. As he realizes, the coal industry in Alberta has changed dramatically, and as we realize now, we only have a couple of players. Basically, in t he thermal co al we have Luscar Ltd. and She rritt Inter national, a nd of course the Ontari o teachers’ pension plan is looking at the aspect of thermal coal. What transpired in my region just recently is in the neighbourhood of 495 people being laid off before the f irst w eek of May, and I’m just wondering what his department is doing about looking at markets in the area.

I realize that we have strong competition from China now. Then on the metallurgical side, of course, we’ve got new players there too, and the big thing w e’re looking at now is with Cominco Teck as th e op erating comp any, an d then we have the aspect of Fording Coal/Canada Trust holding the rights. I’m just wondering what we’re doing with these corporations to sort of overall look at trying to merchandise their products with the different international offices we have now in the di fferent area s.

As y ou realize , it’s certainly helped, especially in West Yellowhead, but I know that my colleague from Livingstone-Macleod has people in the Crowsnest Pass area that have been hit quite hard. So I’m just wondering how we’re working that type of a mechanism so that we can sort of give an upper hand to them to try and look at helping these companies merchandise and possibly open some doors so that we’re able to merchandise these two types of coal.

The other th ing, too, is that w e’re working with Grande Cache Coal Company in Grande Cache to reopen the old Smoky River Coal mine there, and I’m just wondering if we’ve done any preliminary work there on the aspect of worki ng with them in looking at metallurgical coal. Then that would be the only one now in Alberta that would be ab le to b e in operation. As you realize, the other consortium of Fording Coal/Canada Trust dec ided to shelv e the Cheviot project for now, and basically they’ve stated that it’s not if Cheviot is going to go; it’s when.

So basically what we’re looking at is only on e metallurgical coal operation that ca n operate in our province. So if you could give me some insight on what we’re doing in that line, I’d greatly appreciate it. Thank you, sir. Mr. Norris: Well, I g uess I w ould at the ou tset say to the hon. member that his premise that the coal market has changed is indeed correct, and it comes with a lot of challenges and a lot of heartache.

Quite frankly, there’s a changing industry, and there are people that are not working in the industry where they used to work, and that’s of grave concern not only to this department but this government as whole. As you know, the target of full em ployment is really what we’re looking for in any industry, and the sad reality is that in some industries you can’t find labour and in other industries it’s changing dramatically, and this happens to be one of them. At the out set a lo t of o ur ma rket was d riven b y r equirements overseas. Cert ainly, Japan was a huge user. Two thin gs have happened to that.

Obv iously, J apan’s ec onomy ha s suf fered immeasurably over the last few years – whether they’re going to get it back or not is anyone’s guess – and we were undercut by Austra- lian markets, who developed their markets and went and targeted our clients, and because of the cost of shipping and the closeness and all those things, we lost out in that marketplace. We do hang in there because we still have some of the best meth coal going, but it is a challenge; there’s no doubt about it.

I guess what I’d like to direct your attention to, in our e fforts to deal with this, would be under our value-added strategy to look at clean coal. I think the market has changed remarkably. If we’re not supplying the mills and the coking and the producers with the coal, what are we going to do with it? Well, as the hon. Member for West Yellowhead knows be tter than I ever will, the supply of coal in Alberta is some 700 years based on current market demand, and we are fortunate to power a lot of our electricity through coal. So that demand is going to stay strong, but that’s for a specific kind of coal.

I think what we have to look at as the Alberta government – I know the hon. Minister of Innovation and Science has put some money into this, as has ASRA and AERI – is to get to a stage where we do have clean coal, where we get to a technology where it is acceptable to talk about coal as a source of efficient, Kyoto-friendly power. Our department now, under our value-added strategy, is working with the Minister of Innovation and Science to get t hat process sped up. I believe that is going to be one solution. It’s not going to go away. That resource is still under our feet.

It’s still going to be required for the generations out at W abamun and Sheerness and Keephills, et cetera, but you’re talking about a more global situation, and it has to be dealt with with the reality that the global marketplace for coal is not that great right now, and what do we do about it? 9:40 As I said, I think clean coal is one soluti on, and I know that our department, through a m an you’ve work ed with a n awful lot, is looking at other markets and trying to increase our penetration back into those markets.

But as I said, if it’s competing with Australia or China, which is coming on great gangs and the cost of transportation and the distanc e of tra nsportation is that much less, we have a problem. One bright spot in that, though, of course is the port at Prince Rupert.

We are now doing some work with the government of British Columbia and the federal gover nment to s ay, “Listen; that’s one of the last deepwater ports on the west co ast, and it’s totally underutilized.” It’s completely underutilized, and the Alberta government has a good stake in seeing that utilized more so that we can cut shipping time and costs down, and maybe that’s part of the solution as well. The Chair: The hon. Member for Edmonton-Riverview. Dr. Taft: Thanks, Mr. Chairman. I need t o first of all respond to some of the minister’s comments on electricity deregulation.

It’s fundamental to the econ omic w ell-being of this prov ince, to our economic development. Alberta’s low electricity prices used to be trumpeted, in fact until 1999, I think, or even 2000, by the Depart- ment of Economic Development as a reason for businesses to locate in this provinc e. We ha ve lost tha t advantage. The minister ha s cited some examples of benefits from electricity deregulation, but I just need to challenge his history before I move on to my question.

1152 Alberta Hansard April 22, 2003 Alberta developed a fabulous supply of power generation under a regulated syste m through the ’70s, w hen annual dem and for electricity was rising at 10 perc ent a year, double what we’ve seen in the last few years. A regulated system responded very effectively, ensured adequate supply and competitive price. We had an entire power generation and distribution system that worked extraordinarily well, was pro fitable for t he ut ility comp anies, lo w cost, high reliability under the re gulated system. There were problems with regulation. There are problems with deregulation.

I w ould argue vigorously and I’m sure that the minister would a rgue back vigor- ously that the costs of deregulation have far outstripped the benefits. Our own calculations suggest that at least $5 billion has been lost to Alberta consu mers t hrough far higher pow er costs because of deregulation. C heck your histo ry. There were very good th ings happening under regulation. My strong suspicion is that improving the regulated system would have been far preferable than what has happened. My question to the minister is not on electricity however, but it is on related s orts of things.

It’s on the theme that I star ted at the beginning, which is responsibil ity and the lead players, the lead ministers for different areas. I am referring again to a report that I think should be mandatory reading for every MLA, the one released today by TD Economics. Lots of good news in it, absolutely. But there are warning signs in it.

On e warn ing sign he re, page 19: “Shortages of natural gas and ethane pose a major challenge to the Corridor’s recently-burgeoning petrochemical and refining indus- tries, as well as related-services businesses.” My first question to the minister is: am ong all the different ministers in th is government, including the Premier, who is the minister responsible for the Public Affairs Bureau – but let’s not pass the buck to the Premier – who in the government is responsible f or watc hing in the long term on behalf of the welfare of all Albertans the supply of feedstock for the petrochemical industry?

Is it an Economic Development issue, is it an Energy minister’s issue, or somebody else’s? My second ques tion is on the same the me. I refe r to t he same report, this time page 24, and I’m going to quote a c ouple of paragraphs. The province’s high pro ductivity perf ormance has be en a major driver of living standards in recent years. But, a closer look reveals that it rests on a shak y fou ndation.

Specif ically, if the highly-efficient oil and gas sector is s tripped away, average productivity in Alberta is only slightly higher than in ot her Cana- dian jurisdictions and below levels recorded in the United States. The same kind of que stion again, and all I’m trying to do from an organizational perspective is make sure that the tail is pinned on the right donkey here. You like metaphors, Mr. Minister. So who in the government is, if not leading the charge, at least minding the issue of productivity? Is it Economic Development? Is it somebody else?

I want to k now that s omebody over th ere goes to bed at night thinking: I’m the lead person with that problem, and I better focus on it. Mr. Norris: Well, you know, when you talk about pinning the tail on the donk ey and y ou talk about bloating and a ll these k inds of things, I’m going to get hurt feelings h ere. I’m not sure w here you’re going with this, but, you know, where’s the love? What’s the deal here? You had, like the hon. Member for Edmonton-Highlands, a rambling bunch of comments, so I’ll try and pick through what I thought I heard you say and answer the questions as best I can. Electricity.

Your comment was that you would disagree with my premise, and your premise was that under a reg ulated model we would be better off. Well, we’re not going to have that discussion because we’re not under a regulated model anymore, and we’re not going back to it. As Minister of Economic Development one of the joys that I have on a daily basis is seeing the untold success stories of Alberta, and I always ask the question when people say that, and I did when I had my own business: if it wasn’t here, where would you be? Why have 500,000 Canadians since 1993 chosen to make Alberta their home?

Why has our small business rate and our big business rate risen faster than anywhere else in C anada? I ’m not going to go on because you’ve heard me do this before, but you have to ask y ourself: fund amentally, w hy are people choosi ng this jurisdiction? Now, is e lectricity one part of that? Sure it i s. Nobody would deny it. But does it put Alberta ns and Alberta companies at an unfair disadvantage the way it is now? No, it doesn ’t, because you’re not fac toring in having no provincial sales tax.

You never factor in the fact that we have the l owest capital gains tax, lowest corporate taxes, and lowest payroll taxes. So you add those things up. I talk to industry on a daily basis. I travel around and I ask them, and they say: boy, are you guys in Alberta getting it right. Are we getting everything right? No. Who does? I go home every night and I’m told how much I get wrong. That’s just the way it is, but that’s my wife, and that’s a different story. Anyway, the bottom line is w hen you a nalyze things in thi s context, when you pick out one piece of it and say: what about this? Yeah, you’re right.

Ha s it chang ed? Sure i t’s changed. Has th e Alberta advantage been diminished by it? I would say no. I would argue that it hasn’t, and I will undertake to give you statistical data that backs up what I’m saying because I see it on a daily basis. But I’d also ask you, hon. Member for Edmonton-Riverview, who I presume owns a hous e there, a nd Edmonton-Ell erslie and Edmonton-Centre, have you seen your property value go up? Have you seen your wages go up? Well, we’ve all changed jobs recently so that might not . . . All the indicators that we look at that nobody ever talks about.

You’re building a life for yourself here in Alberta that’s better than anywhere else in Canada. A re there concerns? Yes. We’ve never denied it. Has the Minister of Energy ever said that it’s been a smooth road? No. I think his term is that there are midcourse correcti ons. But at t he end of t he day I keep a sking myself when I hear these things: why are people coming here if it’s so bad? So I’ll leave you with that comment.

With regard to the lead player on who’s watching the store, I think you said, or w atching the future, I don’t think you understand the process of this government, so I’m going to try and share that with you. The process of this government is team, and I’m not going to be aggressive or abusive and say there’s 74 of us and seven over there. We don’t operate with me saying: “I’m in charge of this, so nobody else look at it. I’m in charge of signage, so, Ministe r of Transportation, don’t come looking at it.” We don’t do it that way.

That’s why I was trying to explain that under our overall structure in Economic Development we touch all departments because, really, they all have something to do with it. 9:50 Who’s the lead on looking after feedstock? Great question. If you want me to s ay that I am, I will, but I know that our departm ent works on a daily, if not hourly, basis with the Minister of Energy’s department to ascertain where t hings are going . I know that the Minister of Energ y works with the Ministe r of Financ e to predict where the prices are going.

I know that Sustainable Resources works with Environment to find out our policy. It’s a ques tion, hon. member, where I could make up an answe r and say, “Wel l, he’s Minister of Tra nsportation re sponsible f or roads; the Minister of Sustainable Resources is responsible for forests,” b ut t hat’s not accurate. But it’s a lso not a ccurate to say that we don’t work

April 22, 2003 Alberta Hansard 1153 together. If you’re worried about feedstock, I can tell you that there are at least three departments that work on it. If you wanted to point to a lead department, you couldn’t, but that’s not a bad thing. That just says that our departments are talking to each other. On the other comment that you made, about the TD Waterhouse report that came out today, I would respectfully disagree. You said that it was good news. I read the report. I thought it was absolutely great news on so many different levels.

What it did do was reaffirm that the class of ’93, which deserves our respect, and Premier Klein went on the right course and created a business environment that’s second to none in Canada, and the growth of that corridor that they were referring to is mirrored all over all Alberta. There’s no denying it. Now, what it did po int out is that if you were a business owner and you had a consultant come in and say, “Where are you going 10, 20, 30, and 50 years down the road?” these a re some things y ou would look at. Your labour force is getting old. Well, fine; I’ll look at ways to address that. And we have.

We’ve increased spaces in SAIT an d NAI T. We ’re looking at increa sing spac es in Gr ant MacEwan. I know the hon. Minister of Learning is w orking o n programs with apprentices hips. W e’re dealing with that, but y ou have to ident ify t he concern before y ou can find the solution. Otherwise, it doesn’t work. So what I t hink I woul d comment to you is that th e TD re port confirmed what we th ought was ri ght an d po inted ou t where we might get better. That’s not a bad thing. What we have to do with that report, if we take it under advis ement – there are a number of reports.

The Pembina Institute comes out with a report every other week lately, so we could factor those ones in. What do we do with them? Do we listen to everybody, or do we stay the course? I think as a government we’re going to stay the course because we’re on the right track. The Chair: The hon. Member for Edmonton-Ellerslie. Ms Carlson: Thank you, Mr. Chairman. This question is one that I would like answered in writing. Then I’m hoping that the minister will agree to ac cept the re st of the questions w e didn’t get to in writing, and afte r putting this on the recor d, we’ll call for the question.

This one has t o do w ith the busine ss plan ag ain wher e the department talks about supporting Alberta companies pursuing capital projects financed by Interna- tional Financial Instituti ons (IFIs) by promoting an aware ness o f Alberta within [these] IFIs, providi ng mark et intelligence on IFI opportunities, and building . . . awareness of IFIs’ role in investment and trade.

We’d like to know those IFIs you’re dealing with – there must be a list that you’re targeting specifically – and the strategies you’re using to promote t hem to A lbertans and also any support that y ou’re supplying to the companies in terms of coaching them on proposals or whatever you might be doing. If you could give us that informa- tion and why you chose that route i nstead of taking a look a t developing a local v enture capital mar ket. If w e could ge t that. Then I’ve got some other questions we didn’t get to, to be answered in writing. I would call for the question.

The Chair: The question has been call ed. Af ter considering the business plan and propose d est imates for the D epartment of Economic Development for the fiscal year ending March 31, 2004, are you ready for the vote? Hon. Members: Agreed. Agreed to: Operating Expense $54,934,000 The Chair: Shall the vote be reported? Are you agreed? Hon. Members: Agreed. The Chair: Opposed? Carried. The hon. Deputy Government House Leader. Mr. Zwozdesky: Thank you, Mr. Chairman.

I would move that the committee now rise and report the estimates of Economic Develop- ment and beg leave to sit again at a later date. [Motion carried] [The Deputy Speaker in the chair] Mr. Lo ugheed: Mr. Speaker, the Committee of Supply has had under considerat ion certai n resolutions, reports as follows , and requests leave to sit again. Resolved that a sum not exceeding the following be granted to Her Majesty for the fiscal year ending March 31, 2004, for the following department. Economic Development: operating expense, $54,934,000. The Deputy Speaker: Does the Assembly concur in this report? Hon.

Members: Agreed. The Deputy Speaker: Opposed? Carried. head : Government Bills and Orders head: Second Reading Bill 18 Energy Statutes Amendment Act, 2003 [Adjourned debate April 16: Ms Blakeman] The Deputy Speaker: The hon. Member for Edmonton-Centre. Ms Blakeman: Thanks very much. I’m glad I was able to be here to continue debate on second reading of Bill 18, the Energy Statutes Amendment Act, 2003.

I have a number of hesitations with this act, and I’m unsure if I c an support this in second r eading, in which we’re looking at the principle of the bill, because there seems to be a number of things that are being ventured here without clarity. So I’m looking f orward to the debate in Comm ittee of the Wh ole because I am hoping that there would be some additional explanation that can be prov ided. I hav e gone back and read the in troductory remarks from the sponsoring member and am looking f orward to additional background.

Essentially what I see here is additional power being given to the minister, and I’m a little c autious about that be cause it’s around energy statutes and, based on experience with Bill 19 and Bill 3, that hasn’t been a particu larly happy experience, I think, for people in Alberta. So I’m cautious about m ore power and more r egulatory power being placed in the hands of the minister. Part of what I’m sensing from this, but it isn’t so much spelled out in it – and I didn’t hear it from the introductory comments from the sponsoring member – is that this is about some uncertainty or trying

1154 Alberta Hansard April 22, 2003 to create some uncertainty without actually doing it around coal bed methane. There’s too much being left behind the usual closed doors. “Trust us, and we’ll do everything behind closed doors, and it’ll all work out.” I don’t have a lot of reason to trust the government. So I’ve got a couple of questions. How exactly is it anticipated that this act w ill improv e how m ines and m inerals r oyalties are collected? I’m interested in how the government views that.

We also see a number of amendments, particularly sections 38 and 39 of the Mi nes and Minerals Act, that provide for changes to the calculation of royalty rates, but it’s not clear how these changes will improve the royalty regime, and of cour se that’s really the royalty regime that benefits all Albertans. 10:00 Now, as everyone here knows, I am an avid reader of the Auditor General’s report and in fact keep a second copy underneath my desk for handy reference. The A uditor General has made a number of recommendations with respect to the royalty reduction programs that are offer ed by the Departm ent of Energy .

In particula r, he is claiming that the Department of Energy does not disclose the costs of these programs. So anothe r of my questions to be answered is: how will Albertans be able to det ermine if the r oyalty calculation

section proposed in this act is fair? How do we know it’s fair before we support the bill? I want to know that it’s Albertans that are really going to be gaining from the changes that are being proposed here. I’ll come back to the coal bed methane later. Why do I see the minister being given the power to determine the application of payments? Under the current Mines and Minerals Act the order in w hich the m oney is received from the Crow n will be applied. The current system provides clarity and fairness for all of the stakeholders, but tha t same clarity and fairness are not carried forward into the proposed

section 11, so it is making it difficult for stakeholders to plan an d to bud get accordi ngly if the order of payments is left to the minister’s discretion. Now the coal bed methane. Why is co al b ed metha ne being included in the Mines and Minerals Act when the department, as far as I’ve seen – I’ve seen no press releases; I’ve seen no reports; I’ve seen no traveling MLA reviews – has not completed a plan for coal bed methane? Now, this is new. This is not something that we have a long history with. We have some examples that we can look to in the States.

We know that there are a num ber of proble ms around coal bed methane. We know that there are issues around the high density that’s required, the number of wells that are r equired in a small land mass to draw this up. There are questions about wat er use: how much water is used, what’s done with the water that comes out, how much water is going to com e out and whether it’s saline water or fresh water, how to make sure that the two kinds of water are not mixing in the aquifers.

There is a whole issue around water and coal bed methane and long periods of flaring that ca n precede the commercial capture of the methane gas. So there are a number of issues here around coal bed methane that are new issues, if I can call them that. I haven’t seen a plan from the government on how they anticipate dealing with any of this. Therefore, why is it being included in this act when we don’t have a plan anywhere else? This doesn’t make sense to me. I think we need to see what’s being anticipated here or what the plan is before we put it into legislation like this.

I would like to see a n action plan from the gover nment ar ound this new technology before i t’s incorporated into leg islation i n basically a piecemeal fashion, e ssentially ad hoc, a little bi t here, a little bit there. I’m not seeing an over all appro ach to this, and it needs an overall approach. I guess that having said all of that, the answ er i s that I’m not willing to support this act in principle because t here are too many questions outs tanding.

Now, o bviously, with t he ove rwhelming majority the gover nment is going to pass this through sec ond reading, so I’ll just be sensib le and say that I w ant to hear the answers to these questions when in fact we come back to revisit this bill in Committee of the Whole, when there’s more of an opportunity for a give -and-take and some longer explanations or repeated explanations from the mover of the bill. So those are my concerns on the record around this bill. I am not willing to support it, a nd I look for ward to further a nswers being supplied by members of the government. Thank you.

The Deputy Speaker: The hon. Member for Edmonton-Ellerslie. Ms Carlson: Thank you, Mr. Speaker. Happy to have an opportu- nity to add my comments on Bill 18, the E nergy Statutes Amend- ment Act, 2003, at second reading. I, too, read what the sponsor of this bill had to sa y and read the bil l, took a look at it, and decided that this is exactly the kind of bill that I most det est seeing in this Legislature and one that t ends to have me hold this government in less than high regard.

It’s another one of these bills that slides in as kind of a package deal where the government is positioning them- selves to take a power gr ab, where we’re going to s ee a lot m ore regulations made behind closed doors, where the sponsor of the bill can say: “Oh, you know, it’s just minor. There are just a few little things, legislative clarity, effective rules, and enhancing collection practices.” That sounds very nice, but in fact that isn’t what’s going to happen her e when yo u scra tch b elow th e surface.

So far we haven’t seen any of our questions answered, so there’s absolutely no way that I can support this in principle, particularly around the coal bed methane process that’s now being included in here. I will absolutely support any coal bed methane recovery process that is environmentally friendly, that uses state-of-the-art techniques, and that is subject to a reasonable taxation process. Ms Blakeman: How would you know that based on this bill? Ms Carlson: We would never know that based on this bill. That’s very true, Mr. Speaker. Those are the ki nds of questions that we need answered.

This bill is prem ature when it comes to coal bed methane. We know that there are a c ouple of te st cases happening now in the Minister of Environment’s riding, but that has just started to happen. It’s not six months old in terms of a process. There’s a great rush to the botto