Finance Minister Joe Ceci seems to think that Alberta is a lot like Norway, but he’s completely off base.
When it comes to the oil and gas industry, the two regions couldn’t be more different.
Norway has access to pipelines, while pipelines are protested with foreign money in Canada. In fact, Eastern Canada would rather import oil from unethical sources instead of building a pipeline and obtaining their resource from their own countrymen. We've spent over $26B in oil imports in the last year alone.
And although Norway has a trillion dollars stashed away, there’s a reason why – they don’t have to make equalization payments to have not provinces. In 2013 - 2014, these provinces received over $16B in transfer payments. Norwegian citizens also pay ridiculous amounts of taxes. This makes it easy for Norway to bank all of that money, since the people pay for all of their social programs. In Alberta, the government has the responsibility of paying hefty sums for education and healthcare.
When it comes to government, Alberta is just a branch of the federal system while Norway has a national governing body. This means that they have much more control over taxation and the economy – the state owns the majority of the oil and gas companies and controls the economy. More control also means no infighting with other provinces to get pipelines built.
Norway’s oil resource is also light sweet crude which comes with a higher price tag, so overall they get a higher Brent pricing. Alberta oil is heavier and is subjected to a different refining process, plus there are issues with transport due to lack of pipeline infrastructure. This causes bottle necking in the US, which drives the price we acquire for our resource down. This means our heavier resource garners Western Canada Select pricing, which is lower than Brent.
When it comes to the oil and gas industry, Alberta couldn’t be any more different than Norway.
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