Juno News - What does Ottawa’s energy deal mean for Alberta？

00:00:00.000 Welcome to The Fighter with Chris Sims. I am Chris Sims. I'm the Alberta Director for the

00:00:10.760 Canadian Taxpayers Federation. We're always fighting for lower taxes, less waste, and more

00:00:15.300 accountable government. Folks, we have got an amazing show for you. Thank you for kicking off

00:00:20.740 your Newsweek with us. Be sure to like this channel, like this video, and subscribe. Share

00:00:26.660 it with all your friends you need to know. Okay, so some things happened. Here in Alberta,

00:00:32.800 Prime Minister Mark Carney flew out from Ottawa, landed in Calgary, and signed a Memorandum of

00:00:37.840 Understanding, which is basically a framework for future promises and deal-making with Alberta

00:00:43.760 Premier Daniel Smith. Now, when you listen to the MOU, as it's described, it does sound amazing,

00:00:51.740 straight up, from an Alberta perspective, from a taxpayer's perspective. The idea is this,

00:00:56.660 okay, Ottawa will lift the emissions cap, which is a production cap. So that's the stranglehold,

00:01:03.240 okay, on the production of oil and gas, of natural resources here in Alberta. If that happens, that

00:01:09.160 would be huge, okay? Ottawa's also talking about suspending the West Coast tanker ban, which would

00:01:15.960 also be great. It's talking about suspending the so-called green energy requirement, which is

00:01:22.160 currently restricting our ability to build natural gas power plants here in Alberta, okay?

00:01:28.740 It's also talking about, yeah, let's look at green lighting, a pipeline, kind of sort of the same

00:01:35.200 route that Northern Gateway was supposed to take. Now we're hearing from Premier Daniel Smith, hey,

00:01:39.880 why not get Keystone going again, right? So there's a lot of momentum and enthusiasm behind this,

00:01:46.580 but the devil's in the details, okay? So it was a really big deal for them to get together and make

00:01:53.500 this big signing. But then there's always a cost. And we're going to be speaking with economist Jack

00:02:01.760 Mintz, okay? You don't want to miss this interview. Jack Mintz breaks down what he can see as the cost

00:02:08.060 of the industrial carbon tax and the carbon capture system going forward if this deal goes through.

00:02:18.420 After signing the MOU, Prime Minister Mark Carney walked out and talked to the media and he talked

00:02:26.240 about the industrial carbon tax. Listen to this. But at its core is tightening the tier system,

00:02:34.580 which is the industrial carbon price system here in Alberta, to a level of at least $130 with a

00:02:41.120 past price from there. What does that mean? It means more than a six times increase in the price,

00:02:48.640 industrial price of carbon, from its effective level, which is much lower than the headline level,

00:02:53.340 the effective level, to the level that's committed in the agreement.

00:02:56.240 A six times increase in the industrial carbon tax? That didn't go over so well here in Alberta.

00:03:06.320 And also, what was he talking about? Like, how could we get to six times the cost based on where it is

00:03:12.280 right now? Now, for folks who don't know what he just mentioned there, the tier system,

00:03:16.400 that is a provincial form of the industrial carbon tax, basically where industry largely pays it.

00:03:23.420 But the question and concern is how much of that six times increase in the industrial carbon tax will

00:03:30.300 A, be passed down to people at the pump, or B, make it too expensive for companies to produce oil here

00:03:38.140 in Alberta? Now, maybe all of this won't matter. Maybe they'll be able to actually negotiate down a lot less

00:03:43.400 than that. Okay? Like we've said, devil's in the details. These are just, you know, going forward promises

00:03:49.160 right now. The deal has not been signed. But they've got work to do on this because right after this was

00:03:55.880 signed, after the MOU was signed and the interviews were done, the UCP, the United Conservative Party,

00:04:01.880 the Provincial Governing Party of Alberta, had their annual general meeting. And Premier Daniel Smith,

00:04:08.760 very popular within her party, got lots of standing ovations for a lot of these issues. She also threw out a lot of red meat, 0.94

00:04:15.160 by the way. She said that Alberta will not be going along with the federal government's gun confiscation.

00:04:21.160 So that is a huge one. So lots of good red meat during the AGM for supporters of those things.

00:04:27.560 But then she was asked about our relationship between Alberta and Ottawa on stage. And the reaction from

00:04:35.720 the crowd was not unanimous. Listen to this. As you know, I support a strong and sovereign Alberta

00:04:41.640 within a united Canada. I know we might have a bit of a difference of opinion on that. But I hope people

00:04:46.440 today feel a lot more confident than Canada works than they did a couple of days ago.

00:04:50.200 So that wouldn't be great to listen to if you were the premier. But keep in mind, again, Alberta has

00:05:04.040 seen movies like this before, right? We've been close to deals before. We've been burned by Ottawa before,

00:05:11.240 right? And so I think, if I can speak personally, I think a lot of people were booing the idea of

00:05:18.680 it working with Canada and trusting Ottawa, that sort of thing. The MOU, if it actually happened,

00:05:25.160 apart from the carbon tax parts, if they can get pipelines built, if they can get the West Coast

00:05:29.880 tanker ban suspended, if they can get First Nations signing on, if they can get, gosh, that emissions

00:05:34.680 cap thing is huge for industrial investment, okay? If they can get things like that all happening,

00:05:40.600 that would be great. But again, the big question is if, and that's where you heard that kind of tone,

00:05:47.560 that booing, that sense of distrust when it comes to Alberta's relationship with Ottawa,

00:05:54.520 because I was hearing from a lot of people the last few days saying, you know, this kind of sounds

00:05:59.960 like the social license, where then former NDP Premier Rachel Notley, in her own words, was trying 0.89

00:06:08.360 to get a pipeline built. And she was saying that we need a social license from other provinces and other

00:06:15.480 investors. And that social license was a retail level Alberta carbon tax provincially, which people

00:06:23.880 despised. It took more than a billion people from billion dollars from taxpayers. So I was hearing a

00:06:28.760 lot of that language, okay? And I believe the Premier was hearing it too, because after that, after you

00:06:36.280 heard that booing and that sense of distrust, she gave her big barn burner speech the next day, which 0.89

00:06:41.640 goes on for more than 40 minutes. And she mentioned things like not going along with the federal

00:06:47.880 government's gun grab, lots of stuff in there for Conservatives to chew on. But listen to how she

00:06:53.240 then explains her MOU and how she's going to deal with Ottawa going forward.

00:06:57.960 This agreement includes a clear path to the construction of a one million barrel per day

00:07:02.280 bitumen pipeline to Asian markets, so that our province and our country are no longer dependent on

00:07:07.480 just one customer to buy our most valuable resource. This agreement also allows for needed exemptions

00:07:18.600 to the oil tanker ban, an overhaul of the known new pipeline law, C-69, and ensuring our energy

00:07:24.520 companies are able to advertise their environmental leadership and efforts without fear of penalty.

00:07:30.040 And this agreement also means that Alberta can show the entire world that the solution to our

00:07:35.400 environmental challenges does not entail capping productivity and growth in the oil and gas

00:07:40.760 development. Rather, it is to leverage the profitability of a strong oil and gas sector

00:07:46.680 to invest in the very technologies that will solve the environmental challenges that we face. Now, my

00:07:52.520 friends, I am under no illusions. This agreement is just the first step in this journey. There is much

00:08:00.440 hard work ahead of us, and the federal government must earn back the trust of Albertans as we move

00:08:06.280 through the next stages of this process. After all, the people of Alberta have, of course, had the rug pulled

00:08:17.960 out from under them too many times to count over the past 10 years. So I will take the advice of a great

00:08:22.840 U.S. President Ronald Reagan who said when dealing with a former adversary, trust but verify.

00:08:28.760 So a bit of a different tone there. What did you think of it? Let me know in the comments what you

00:08:34.680 think about this memorandum of understanding between Ottawa and Alberta. Now optimists, and I know the

00:08:41.240 Premier Daniel Smith is definitely an optimist, will say we're a lot better off now walking forward than we

00:08:47.720 were even a few months ago. And definitely than we were under Prime Minister Justin Trudeau. Look,

00:08:53.160 Stéphane Guybeau quit cabinet over this, right? So that's what you'll hear from folks like that,

00:08:58.520 saying, you know what, this is a step forward. We have to keep working. We have to play with the hand

00:09:03.160 that was dealt to us in Ottawa with this government. I'm hearing from skeptics saying, yeah, these are just

00:09:09.640 words. I'll believe it when I see it. And what about that big industrial carbon tax? Is this going to

00:09:14.840 make it too expensive to do business? There's going to be so much to negotiate between now

00:09:20.520 and April 1st. We're going to hear from Dr. Mintz in just a moment on that. But first,

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00:10:02.200 to know. You can learn more by visiting unsmoke.ca. Okay. As promised, Dr. Jack Mintz, okay,

00:10:09.080 he's an economist in Canada. He's at the University of Calgary. He wrote this piece in the Financial Post

00:10:15.720 where he breaks down, in his view, how much this agreement, if it went forward, could add to the

00:10:23.880 cost of producing oil here in Alberta. And will it still be worth it? Can they make this work for

00:10:32.280 Canadians, for Albertans and for taxpayers? Let's find out. Joining us now is Dr. Jack Mintz. He is

00:10:39.000 of course an economist with the School of Public Policy at the University of Calgary. I am thrilled

00:10:45.240 to have him on the show. Dr. Mintz, thank you so much for joining us. I read this piece that you did

00:10:52.040 in the Financial Post. It was shortly after the MOU was announced. And what alarmed me there is where

00:10:58.680 you did the calculation and you said, ah, this carbon capture slash carbon price, I would call it a

00:11:05.880 carbon tax, could inflate the cost of producing a barrel of oil. In your own words, in the same way

00:11:13.000 that you explained it in the article, how would it make producing oil in Alberta cost more? Can you

00:11:19.560 explain that for us? Well, okay, there's really two different carbon policies that are involved.

00:11:26.360 The first one is the so-called industrial carbon tax. This is one paid really by big emitters. It's

00:11:33.720 not all industries. If they don't emit many emissions, they don't pay the tax. But what they do is

00:11:39.560 that if they pay, if they have emissions that are more than a certain free allowance, then they have to

00:11:45.720 pay a tax on those emissions. They can buy credits. In fact, right now, the credits that are available

00:11:51.880 in the market are kind of low. Even though the official carbon price is $85 per ton, carbon ton,

00:11:59.000 the credit prices are actually down to $25. And of course, that's what the federal government and the

00:12:05.000 Alberta government probably have agreed to, is to try to get rid of all these excess credits that are

00:12:11.880 available that have kept the price too low. And also the agreement is going to suggest that the

00:12:18.760 price will rise to $110 per carbon ton. So the question, what does that mean in terms of per

00:12:25.080 barrel costs? And of course, what my article goes through is that, at least in terms of the marginal

00:12:32.280 cost, which economists always like to talk about, because pricing is at the point in which margin,

00:12:37.320 you know, prices are equal to marginal cost of production, that the cost with the marginal cost

00:12:44.680 would go up, I'm just checking the number here, that I calculated US dollars about $5.20.

00:12:52.920 Just for that alone. And of course, the question who ends up bearing that cost, who ends up paying for

00:12:58.840 it? Well, in a small open economy like Canada, it'll be likely shifted forward to consumers to a large

00:13:05.320 extent. But also, it means that to the extent that it does raise costs, it will mean that imported oil,

00:13:13.800 let's say whether it's coming from Nigeria, or it's coming from, let's say, you know, United States,

00:13:20.440 which it does to some extreme, will come in at a lower price. So that's going to be an additional cost

00:13:27.560 of production, that's going to be on on the oil oil companies. And of course, when it comes to the export

00:13:34.120 market, they won't be able to shift forward that cost, they'll have to absorb it because the export

00:13:40.120 market is one in which Canada cannot influence as easily the the for you know, the prices at which

00:13:47.640 particularly US consumers end up paying because they end up importing Canadian oil. And of course,

00:13:53.080 it will have some, they'll maybe bear some of that cost, but to a large extent, it's going to be

00:13:58.840 affecting the industry. And so that that will discourage investment and production here in

00:14:02.920 Canada. Now, the other aspect of the carbon policy, of course, is, is the agreement to go ahead with

00:14:09.240 carbon capture and storage. And that's a cost that is going to have to be borne, not only by the

00:14:15.800 producers, but also the governments currently, the federal government and the province that has

00:14:22.360 of Alberta have agreed to provide grants to offset the cost of carbon capture and storage,

00:14:29.720 which includes not only the operations, but also the transportation, which goes over a relatively

00:14:35.000 long distance, you know, from, you know, from, you know, northern Alberta, down to, down to

00:14:42.280 metal, the center part of Alberta. So you're going to, in order to store carbon, and so that will be an

00:14:48.680 additional cost that's associated with it. And the governments are going to cover roughly 60,

00:14:54.200 right now agreed to about 62% of that cost, which is going to leave 38% for the, for the producers to,

00:15:02.040 to pay. In their case, there's really not a well known cost of CCUS. I have seen numbers as high as,

00:15:10.760 you know, $180 per carbon ton, which translates into almost 85 or $80 per barrel, which is huge,

00:15:22.520 of course, in terms of total cost and what the, and if the producers have to, let's say pay for,

00:15:29.000 you know, roughly, you know, 38% of that, and that's going to be, you know, you know, $40. But then costs

00:15:35.560 seem to be not a number of people in other studies have shown maybe it'll be $85 per ton or $90 per

00:15:42.440 ton. I don't think we really know the full number yet. But when you start calculating, let's say if you

00:15:48.680 base a calculation on that, then that estimate would suggest to me, we're talking about an additional

00:15:55.320 in US dollars, $6.4 to, sorry, $3.6 to $4.8 just for CCUS expenditures. Add it all up, we're talking

00:16:07.080 about potentially additional production costs in Canada of $6.4 to $10 per barrel, which means that

00:16:15.560 we're not going to be very competitive in export markets with that kind of additional cost associated

00:16:20.840 with the two, with the two objectives. And I can see already that Daniel Smith, the premier has

00:16:28.280 already quite wisely said, well, we're not going to be able to have an industrial carbon tax. It's

00:16:33.240 going to be so high that it's going to end up discouraging any investment here, here by the

00:16:38.760 oil industry. And of course, you can't build a pipeline if you're, if people are not willing to

00:16:43.320 produce more oil. And you can't build it if people aren't willing to buy it at that higher price

00:16:49.640 that it's being sent to the export market with. So am I fair in saying that these measures could

00:16:56.840 cost upwards of around $10 US per barrel for production costs? Is that fair? That's just one

00:17:04.920 estimate. It could be even higher or it could be lower. It also will depend on the final agreement.

00:17:09.720 I mean, the whole thing about the member and memorandum of understanding between Alberta and

00:17:15.400 the federal government is it really just describes a process. It doesn't have an agreement.

00:17:19.160 There's no agreement on what the industrial price will be finally, you know, carbon price will

00:17:23.720 finally be and how tight the credit market will be made in order to enforce that price.

00:17:30.360 There's no clear estimate yet of what the cost of pathways is going to be. There's an estimated

00:17:38.920 amount of $16.5 billion, which in Canadian dollars, as one person has suggested,

00:17:47.400 is we are talking about a pretty expensive project, you know, that in terms of the actual cost per tonne,

00:17:55.640 of which is, you know, let's say almost two thirds will be covered by the public, by taxpayers and not

00:18:01.240 by consumers. And of course, we have to remember government's going to be taking on a new expenditure,

00:18:06.760 which means it's going to crowd out some other things, you know, whether it's healthcare in Alberta,

00:18:10.600 or whether it's at the federal level, it could be social policies or other things,

00:18:15.880 unless the federal government just simply adds it to its already growing deficit.

00:18:19.640 I don't think we have any room there to add more to the deficit. Do you believe that if they went

00:18:28.200 ahead, say this MOU did materialize into an actual agreement, say they did wind up with,

00:18:34.200 I was seeing $130 per tonne for this industrial carbon tax or carbon price, whatever they were trying

00:18:40.600 to call it? Will that raise the price at the gas pump for gasoline and diesel? Here in Lethbridge,

00:18:47.400 it was $1.16 over the weekend, it was great, you saw people lined up filling up a lot of people able

00:18:52.120 to save money there. Would this actually increase the cost of the pump? To some extent, maybe,

00:19:01.080 you know, because the big emitters who are producing oil have to, you know, have to include it in

00:19:08.200 their costs. And the question is, will we try to recover it through higher gasoline prices?

00:19:14.040 But we have to remember that, you know, there's other things, you know, diesel and other products

00:19:18.360 that are used, you know, by the producers. And of course, that could lead to higher costs for other

00:19:24.200 companies that are using those inputs, you know, that, you know, are based on the energy that they

00:19:29.640 receive from whether it's natural gas producers or oil producers. And so therefore, some of that cost is

00:19:36.200 going to be showing up in other consumer prices as well. So, you know, how to predict that, I'm not

00:19:42.360 quite sure. And then of course, the producers themselves are going to absorb some of that cost

00:19:46.920 and getting lower rates of return on their capital. I heard from Prime Minister Mark Carney,

00:19:52.680 and I've been in the game for a while. And it looked like Minister Prime Minister Carney was speaking

00:19:58.200 to the media rather quickly after he signed that MOU. And that's where he gave that quote, where he said

00:20:04.600 that the in his words, the carbon price will wind up being around six times higher than it is right

00:20:11.240 now. How did he get to the six times? Is that because he was talking about the lower credit price

00:20:18.280 that you were mentioning there before, where it was floating around the $20? Is that where he is that

00:20:23.240 what he's talking about there? I suspect that that's what it is. I don't know what the current credit

00:20:28.440 price. The last time I looked, it was around $24 per carbon ton, which, you know, was quite a bit

00:20:35.320 less than 110. But if you, let's say if it's $20, and you multiply by six, you get close to the $110

00:20:42.520 that's in the agreement. And the question is when that $110 per carbon, carbon price is going to come in.

00:20:50.200 And, you know, will it start in 2026? Will it come in 2030? It's a little bit unclear exactly.

00:20:59.320 And, you know, in terms of the actual timing, because that's still up to a future agreement

00:21:04.520 between the Alberta and the federal government. In fact, that's the whole thing about this memorandum.

00:21:10.520 It's a memorandum. It's not an actual agreement, in the sense of actually all the bells and whistles

00:21:17.640 that are tied down to say, you know, in terms of actually how it's going to be implemented. So

00:21:23.000 there's still a lot of discussion that's going to be needed between the two levels of government

00:21:28.200 about how the implementation will take place. It sure will. I have a few more questions for

00:21:32.680 you, Dr. Mintz. First off, I'm hearing from two different sides. I'm hearing from, I'm the Alberta

00:21:39.880 Taxpayers Federation representative. I'm hearing from a lot of our folks saying, we're very worried that

00:21:44.920 this is going to be passed on to consumers. It's going to raise the cost of things like gasoline

00:21:49.240 and diesel. And when you raise, as you would say, an input cost for something like gasoline or diesel

00:21:55.080 or fertilizer, things like that, you're going to raise the costs of things. So that's what I'm

00:21:59.640 hearing from the taxpayer side of things. I'm also hearing from some industry types here in Alberta,

00:22:05.800 who are saying, no, no, no, this is, this isn't a real carbon tax. This is basically a closed circle

00:22:12.360 of monopoly money that we're all passing back and forth to each other in credits and all this other

00:22:17.800 stuff. And it doesn't actually wind up increasing costs of things. Where are we with this? Is the

00:22:24.840 truth somewhere in the middle? Well, I think first of all, public finance economists like myself

00:22:33.320 will simply talk about economic incidents of taxes. You know, there's a legal incidents, which yes,

00:22:39.160 the legal incidents is actually the industry will be having to pay this tax. It's not, it's not

00:22:44.760 directly paid by anybody else. But legal incidents doesn't mean a lot. And, and what economists focus

00:22:51.960 on is economic incidents. And any tax is either shifted forward to consumers or those that buy the

00:22:58.280 product, and or will be shifted back on producers. And it all depends really on the strength of the

00:23:05.400 market, and etc. The, I think the basic point is that when you have a small open economy like Canada,

00:23:15.080 where, you know, we cannot influence international prices very much, it's more likely that the

00:23:20.280 producers are going to be, will be at least on the, that's why I said about export markets,

00:23:24.840 they're going to be, they're going to have to eat the tax themselves, because they won't be able to

00:23:29.400 shift it as forward as easily. They have some monopoly, I wouldn't say, you know, some market

00:23:35.880 power in the United States, in the heavy oil side, although it'll be very interesting if someday

00:23:41.240 Venezuela ends up becoming open to, to world markets, because that's going to have a huge impact on

00:23:49.000 Alberta, because that would be a major competitor for Alberta. But assuming that away, you know, you can,

00:23:56.520 you can make some argument that maybe the producers can shift some of that tax forward in the US market,

00:24:03.000 but it's highly unlikely that in a very long, long term basis, when it comes to domestic consumers,

00:24:08.760 of course, they can import oil to some extent from other jurisdictions. And we know right now in Eastern

00:24:14.680 Canada, all the oil is imported. And in, and then, and I don't mean Ontario, I mean, you know,

00:24:22.040 like the Atlantic and, and parts of Quebec. But when it comes to, but there is some oil that is

00:24:28.520 imported, gasoline, particularly in diesel from United States, from producers there,

00:24:34.520 and there is a highly integrated market in North America. And so the implications is that some of

00:24:40.520 that tax could end up paid by emitters could end up being shifted forward to consumers. Although again,

00:24:46.040 some of it will, I suspect will end up being eaten by themselves. But that's not necessarily a good

00:24:51.240 thing. Because what it means is, though, they'll get a lower rate of return capital, the incentive to

00:24:56.440 build new oil sand plants are highly marginal already. In fact, as I mentioned in my article,

00:25:02.840 you know, when you look at the cost of doing Greenfield oil sand plants, it's, they're going to need,

00:25:08.840 you know, 60 to $70 a barrel. And that's basically what the, you know, what the market is. And I mean,

00:25:18.120 in US dollars. And basically, they can, the Greenfield investments currently aren't really,

00:25:25.080 really that competitive to start up. And so, you know, if you add on these costs, it's going to be,

00:25:33.400 it's going to be highly unlikely that new Greenfield investments will come in in the oil sands.

00:25:39.080 And of course, the old, the current plants, which are highly capital intensive,

00:25:45.080 they can continue producing at pretty low levels of low prices, because their costs are, can be as

00:25:51.720 low as $20, $18, although some are higher at the $40 level. But still, there's a lot of them that have

00:25:59.400 lower prices, because they've already spent a lot of that money on capital, which has already sunk.

00:26:03.960 And so they can, they can, they can, they can probably withstand it a bit better, and continually

00:26:09.640 to produce. But the main point is, can you get more production to fill up a pipeline? And if you can't do

00:26:15.960 that, then there won't be a lot of incentive to build a lot more, you know, expand pipelines much more.

00:26:22.680 We have gone to 4 million barrels per day, in terms of production in, in, in, I think in Canada,

00:26:30.200 or at least in Alberta. And, and I think, you know, the question is, I know the Alberta government said,

00:26:36.760 we'd like to go to 8 million barrels per day, but you have to have a lot more investment going on in

00:26:42.360 order to produce more oil to make that feasible. And of course, you have to be competitive to do that.

00:26:47.400 Dr. Mintz. Lastly, I just finished listening to an interview with Premier Smith, and we're hearing

00:26:53.960 from her team. They're very enthusiastic. They're very excited. They're trying to be very hopeful.

00:26:59.880 They're saying things like, well, this MOU is getting rid of things like the emissions cap,

00:27:04.360 which is a de facto production cap. It's suspending the West Coast tanker ban. It's suspending a lot of

00:27:10.120 the provisions of Bill C-69. So they're, they're saying, you know, if we'd been told this months ago,

00:27:15.160 we'd have all these things, we'd be delighted with this. And so I think they're trying to be

00:27:19.880 hopeful saying that they want Northern gateway, or at least the same area. They want even Keystone,

00:27:25.400 they were throwing that back on the table. They want multiple pipelines coming out of this deal.

00:27:30.440 And I think they're thinking that that kind of enthusiasm and allowing for this kind of stuff to

00:27:36.280 happen here will get more capital coming into Alberta. Are you saying that the devil's in the details

00:27:43.480 here and that because of these carbon pricing layering mechanisms, it may not be worth it

00:27:48.920 for companies to come here and put that, put the oil in those pipes?

00:27:52.840 Well, I'm thinking about the international companies, you know, the Exxon's Chevron's

00:27:57.880 totels, and they have to make capital allocation decisions around the world for, for investment.

00:28:04.280 There are only really two countries that require carbon capture and storage,

00:28:07.960 as part of their, you know, as part of their requirements, and that's in the United Kingdom

00:28:13.640 and Norway. And I don't think that's our competitors when it comes to oil. In fact,

00:28:18.520 our vitamin oil is really in a very different market anyway. But when you're Exxon or you're

00:28:26.440 Chevron, you're making choices, or to tell, you're making choices, do I put my money into Brazil and

00:28:33.320 Guyana? Or do I put, or in the case of Totel, they're now doing Suriname? Or do I do maybe

00:28:42.040 African countries or, or whatever? Or, or if I was Chevron and the Venezuela opens up, you know, 0.78

00:28:48.440 I can really go, go big on, you know, on Venezuela, where they, where none of these countries,

00:28:54.440 none of these major oil producers require carbon capture and storage. Also, the carbon prices that

00:29:01.160 are currently in place in Norway and UK, they're, they are relatively high, they're about equal to

00:29:07.560 what Canada is right now, under the European trades trading system, roughly equal. And of course,

00:29:15.400 they may go up, maybe not as high as 110. That's a question mark. But the question is, you know,

00:29:21.400 to what extent will these will the will the final agreement actually impose in terms of these

00:29:27.640 additional costs, it may be that if you have a lot of allowances, and, you know, and the carbon

00:29:34.040 price, you know, even the carbon price may not be as as high as it, you know, the, you know, the

00:29:40.360 actual effective carbon price may be much lower than what I suggested as the marginal one, then, then,

00:29:46.360 then actually, that may not hurt production as much and investment. And in the case of carbon

00:29:55.480 capture and storage, I think the industry already is kind of recognized, they're going to be going

00:29:59.080 in that direction. Of course, the big debate is how much does the government's pay for it relative

00:30:03.800 to the industry. And, and the industry really wanted about seven, three quarters of the cost to

00:30:09.320 be covered by the government. Right now, the government has only agreed to 62%. So, so we're still,

00:30:14.920 there's still some margin there. And so, my point is that those costs have to be recognized. And I agree

00:30:22.760 with the industry, they're, they're probably happy that we're now starting to get some regulatory

00:30:27.640 changes that are going to go in favor of building a pipeline. But it's not a done deal, as we know,

00:30:32.520 and we know that BC is opposed. And we know that the First Nations have to sign on. And the government

00:30:38.120 said, we're not going to go ahead without their approval. And somehow, although I'm a little less

00:30:42.600 concerned about that, mainly because I've seen this before, when I've been in Ottawa, that the federal

00:30:49.000 government has an immense amount of opportunities and resources that they can get provinces to come

00:30:55.000 on side. And in fact, we saw that with TMX, eventually did get built, even though nine First

00:31:01.880 Nations were opposed, and the BC government was still opposed, but in the end, they couldn't block it.

00:31:08.120 Should Smith fight to get those carbon mechanisms, carbon prices and taxes as low as possible?

00:31:13.800 She's got time between now and April 1st. Should she fight to make sure that's as low as possible?

00:31:18.840 Yes. And I think she's already indicated that on the industrial carbon taxes, she's going to do that.

00:31:23.880 So I think she should do that. I think the question is, on carbon capture and storage,

00:31:29.640 how much will the federal government be willing to put into it, as well as the province? Are they

00:31:35.800 going to stay at 62%, leaving 38% to the producers or not? But we've got to remember that it's also a big

00:31:42.920 cost to budgets at the federal and the provincial level. And taxpayers, in the end,

00:31:47.800 are going to be covering that cost.

00:31:49.000 And we don't have the money. We're in major debt. Dr. Mintz, anything I have not asked you

00:31:54.520 that you wanted to make sure you got out there in regards to this MOU?

00:31:57.880 Yeah, no, I think we've covered the ground. Thank you.

00:31:59.880 Wonderful. Thank you so much for your work, folks. Make sure you go check out his article.

00:32:04.120 He explains all of this very thoroughly, so much that I could understand it in the financial post.

00:32:09.720 Dr. Jack Mintz with the University of Calgary. Thank you so much, sir.

00:32:12.600 My pleasure.

00:32:13.720 Once again, that is one of Canada's leading economists. And I really appreciated his candor

00:32:22.920 because it was right after signing of the MOU, there were fireworks everywhere. Everybody was

00:32:28.200 excited saying, oh, look, they're moving on things like, well, maybe you will get pipelines. We will

00:32:34.520 lift the production cap, which would be huge. We will suspend the green energy regulations so that you can

00:32:41.400 build natural gas electricity plants. And yeah, maybe we'll suspend the West Coast tanker ban.

00:32:47.640 Like these are all very big things. And if they actually happened, that would be great. The

00:32:53.080 Taxpayers Federation has been fighting most of these things, including in court now for years,

00:32:59.000 alongside of the Alberta government. However, there are catches in this thing and the Alberta government

00:33:06.680 has got to be aware of them. And Dr. Jack Mintz breaks it all down in that article, especially

00:33:12.920 things like the industrial carbon tax and carbon capture technology. How much will this add to our

00:33:21.160 costs as consumers? How much will it add to our costs as taxpayers? How much will it add to the costs of

00:33:27.880 producing oil so that investors may or may not be interested in coming here to do that work?

00:33:35.000 That's something that they really got to focus on and make sure that that is as low as possible.

00:33:39.560 So this thing actually works. I want to shift gears here now because we have got some huge news on the

00:33:47.160 First Nations accountability front. Remember when Prime Minister Stephen Harper had what was equivalent of

00:33:54.200 a First Nations Government Transparency Act? Basically, First Nations governments run like small town

00:34:00.200 governments. And what Harper had done was saying, yeah, and you also have to have fiscal and financial

00:34:06.200 accountability. You have to be able to be audited. You have to submit all of your financial information

00:34:11.640 to this office so that it can be proactively disclosed. All of the things that one would expect from a small

00:34:17.560 town. In fairness, most First Nations governments already do that. They already do. You can already look up

00:34:24.440 all their financials. However, there are some that don't do that. And their own residents, their own

00:34:32.840 citizens demand transparency and accountability. Well, one gentleman stood up to his own local First

00:34:41.560 Nations government. He said, I want your financial information. The federal government tried saying no

00:34:48.600 to releasing that information. But we went to court. The Canadian Taxpayers Federation tagged in on this

00:34:55.960 fight. And we got a huge win. What does this mean going forward? Let's find out. Joining me now are

00:35:02.920 two of my colleagues from the Canadian Taxpayers Federation, Devin Drover. He is our Atlantic Director.

00:35:08.840 He's also our in-house counsel. So I get to say when I'm getting in trouble, let me talk to my lawyer. But

00:35:14.200 I know Devin doesn't want to hear that. And Gage Halbrick. Gage is our Prairie Director with the

00:35:19.480 Taxpayers Federation. Fellas, you guys were working really hard on this issue where it is the Frog

00:35:26.200 Lake First Nation, which is a First Nation basically in the northeast right near Lloydminster, right,

00:35:34.280 to situate it. And what was going on there? There were some financial accounting practices some of the

00:35:40.040 members of the members of the nation weren't happy with. They were trying to get information and then

00:35:44.360 they couldn't as far as where their money was going. What was going on there? Go ahead, Gage.

00:35:49.560 Yeah, exactly. So all the way back in 2022, we were made aware that Frog Lake First Nation, as you said,

00:35:56.520 northeast of Lloydminster, so a little bit of oil country up there, had a trust fund for that First Nation

00:36:03.640 that was fueled by revenues coming from natural resources located on banned lands. And the important

00:36:09.960 part there is in 2013, that trust fund had more than $100 million in it. But by the end of 2024,

00:36:18.440 some of the latest numbers, it had less than nine. So of course, ban members were wondering,

00:36:24.520 where did this almost $100 million go? And unfortunately, the local chief and council weren't

00:36:31.080 answering questions from ban members about where all that money went. So we partnered with an

00:36:36.280 activist named Hans McCarthy to file access information requests with the federal government

00:36:41.480 to get the ban council resolutions. Essentially, the chief and council signing off saying, hey,

00:36:46.200 this is how we're going to spend this money. Please send it over from the feds. But then the feds

00:36:51.240 also decided that they weren't going to give hands or us the answers. So we filed a court application

00:36:57.640 to release these BCRs to get the information for Hans and all the other members that were looking

00:37:03.000 for that money. And, you know, we're happy to say that the court agreed with Hans's arguments and

00:37:08.520 decided that he's going to get the documents that show where the money went within 30 days.

00:37:14.040 Wow. Okay. And to be clear, this is about money. This wasn't like, you know, really personal,

00:37:19.880 sensitive, private information of individuals. Like, it was surprising to me that the government tried to

00:37:25.480 say no, that they weren't going to give up this information. Devin, can you walk us through some

00:37:31.400 of the legal wrangling that we had to do in order to get this decision from the court?

00:37:36.680 Absolutely. And I just want to point out, too, this was a long process and just shows

00:37:41.720 how frustrating our justice system can be when we have, you know, government governing bodies,

00:37:47.240 whether it's municipalities or provincial governments or federal governments or in this

00:37:50.200 case, a ban council refusing to follow the law. So this information, these BCRs are supposed to be

00:37:56.120 publicly disclosable to ban members like Mr. McCarthy. However, the ban refused to follow the

00:38:03.000 law that's in place, the Financial Transparency Act, the First Nations Financial Transparency Act,

00:38:07.720 and instead made us try to get this information through another means, which was the access

00:38:12.040 information request through the federal government. They refused disclosure, essentially stating that,

00:38:17.640 you know, it's not information that should be, you know, we were provided this in confidentiality

00:38:23.080 from the ban. They treat it, the ban council treats it as confidential, so we should do so too.

00:38:30.040 You know, essentially trying to stonewall us, which brought us to have to file an application

00:38:35.320 for judicial review, which in itself took years to get dealt with. We finally had our court date in

00:38:42.040 September, the beginning of September in Vancouver. I was proud to be there as counsel for that court action.

00:38:47.560 And now just a few months later, we finally have the decision. So it was a long process. I'm very

00:38:53.320 pleased with the outcome. Happy to talk about some of the takeaways from the decision as well.

00:38:57.320 Let's hear from Hans directly on this. You guys did quite a bit of media out of this,

00:39:01.960 and credit where it's due, CTV did cover it, along with, of course, Juneau News covered it,

00:39:06.200 Rebel covered it. We also saw really good coverage from APTN, and we have a couple of clips where Hans was

00:39:12.360 speaking alongside you gentlemen, after this decision. Let's listen.

00:39:16.760 I've always known that the community was not functional, because I have uncles and aunties,

00:39:23.800 and we're all related in the community. We all talk, we know, we know what goes on in our community.

00:39:28.360 But the thing is, is that we didn't have the documentations, because Chief and Council never

00:39:32.840 shared that. There's a lot of corruption in First Nation communities, and that's one of the things that 1.00

00:39:39.160 are messing up what's going on in First Nation communities to pursue this sets a precedence for,

00:39:44.600 like you said, activists and people wanting to know what's going on with our monies and our

00:39:48.840 communities. What was it like after we heard about the win? How was Hans feeling? It looked like he

00:39:53.480 was pretty happy to hear this. Yeah, I mean, he was ecstatic, right? Right after we got the email

00:39:58.760 showing that these documents are going to be released, he called me right away. And he was super

00:40:02.600 excited because, you know, as much as we've been working on it for these past almost four years,

00:40:08.040 Hans has been doing this for a long time, right? He's been looking at his community,

00:40:11.880 trying to get accountability in financial transparency on a number of issues. So this

00:40:16.760 is a great first step to trying to get him and his local band members that information

00:40:21.160 that they need. And I think the big part there is it really shouldn't be this hard,

00:40:24.920 right? We shouldn't have to go to court every time. When I've talked to Hans about it before,

00:40:28.520 he says, you know, if I was someone living in Cold Lake or someone living in Lloyd Minster,

00:40:33.240 all I have to do is go to the government website and I can look at their budgets,

00:40:36.760 I can look at everything they're spending. But just because he's living on a First Nations band 0.99

00:40:41.960 on a reserve, he doesn't have that easy access to transparency. And that's simply all he's looking

00:40:46.600 for, right? It's the same type of transparency and accountability that every other Canadian gets

00:40:51.160 from their governments as well. Yeah, that's why I likened it to a small town,

00:40:56.120 but they don't have the same kind of transparency and governance as a small town would. Like, you know,

00:41:01.080 if I want to go find out if I were in Claire's home, which is just near Lethbridge here,

00:41:05.080 I'd just look on their website for this stuff. And if it was missing from their website,

00:41:09.080 I'd send them an email and you better believe they'd be sending me that data right away. There'd

00:41:14.040 be none of this, none of your business stuff. Can we just touch on for a minute here? Because,

00:41:19.240 you know, I grew up, I grew up around First Nations, all around hope. And I find that the courage of

00:41:25.480 someone like Hans really speaks volumes here because he's living there and he's dealing with stuff like

00:41:30.760 this all the time. As he pointed out, in some cases, he's related to folks who are talking about

00:41:35.800 all this stuff. So this isn't just some, you know, faceless bureaucracy that he's having to deal with.

00:41:41.000 He had to dig in for years and years and demand transparency, didn't he?

00:41:46.680 Yeah, I mean, everyone knows that in a small town, everyone knows everyone. And that includes

00:41:51.880 everything. So Hans really stepped up on this. And for years, he's been courageous. Because as he said,

00:41:58.280 when we were talking to the media at the beginning, he didn't think that he had a lot of support from

00:42:01.880 the community. But once he kept working at it, kept working so hard, trying to show how important

00:42:06.440 this financial transparency is, I think he said, you know, 95% of the community was behind him

00:42:11.800 by the end. And that kind of shows how important it is to do this work, because you're shedding light

00:42:16.120 on things that otherwise wouldn't get shed on, you're getting that transparency for his community.

00:42:20.920 So Hans is a huge, courageous guy working on this. And it's great that he's finally getting the results

00:42:26.760 that he needs for his local community. But as Devin can definitely talk about

00:42:30.200 on the legal section, this decision is doesn't just help Frog Lake First Nation, it can also help

00:42:36.360 other First Nations communities across the country try to get access to these types of information

00:42:40.760 as well. Devin, can you talk about that? They said it was precedent setting. What does that mean

00:42:46.280 in lawyer people talk? Yeah, so there's a few things here. So a legal precedent is essentially

00:42:52.680 something that, you know, it sets out the law so that future people applying the law, whether it's

00:42:58.920 judges or information commissioners, they know what the law is, and they're in almost all circumstances

00:43:04.120 required to follow it. So, you know, we set out arguments, for example, that band members have a

00:43:08.680 legal right to access BCRs, and other records showing how community trust money is being spent. And

00:43:16.040 we were successful in that. So next, you know, the next Indigenous activist that tries to file for this 0.61

00:43:21.640 type of information, they won't have to go through this grueling legal process that costs thousands

00:43:26.360 and thousands of dollars and, you know, a lot of mental anguish and time to get these answers.

00:43:32.520 So it's a huge victory in setting precedent and setting, you know, in developing the law towards

00:43:39.320 transparency for First Nations individuals. And, you know, it really shows that, you know,

00:43:45.480 the federal government can no longer treat BCRs as automatically confidential, simply because

00:43:51.640 you know, a band council may may say they are may want them to be, ultimately doesn't matter.

00:43:56.120 So it really does create, you know, precedent in this country that band members have a right to

00:44:01.480 access these funds. And, you know, it's just to talk on the on the, you know, the impact of that on

00:44:08.040 hands, you know, to go out and be a public advocate for something that may be unpopular, and to do so for

00:44:14.360 years, and to put your name on a court case, right, where that is public record that anyone can see,

00:44:20.120 you know, it takes a lot. And very pleased to see him and other, you know, other activists we work

00:44:27.400 with who are willing to put their name on a paper and sue the government. It's such an honor to work

00:44:32.600 with them. Very happy to see this, you know, we dealt with a lot of retaliation in the community as

00:44:36.920 a result of putting his neck out. So very pleased. And the best thing about this, I think, in the long

00:44:42.760 term is that now, when other Indigenous activists are fighting for information from band councils,

00:44:48.600 councils, they'll be able to cite the McCarthy case as the decision that supports them. So very

00:44:53.960 pleased to see that.

00:44:55.880 What happens now? So does the band council and BCR, does that stand for band council record? Is

00:45:02.600 that what that is?

00:45:03.320 Resolution.

00:45:04.360 Resolution. Okay, so now, does the band council, which is essentially the government of Frog Lake,

00:45:11.560 does it now have to produce these records and give them what directly to Hans in like,

00:45:17.320 paper format, electronic format? Do they have to give it to the court? Like, what happens now?

00:45:22.040 So there, the court ordered, so essentially made the final decision that the documents need to be

00:45:28.040 provided to Hans as the applicant within 30 days of the decision. The reason for that 30 days notice is,

00:45:34.040 is, you know, that you have a right of appeal. So there's a chance that the federal court could

00:45:38.040 appeal this. We don't think it, one, we don't think it would be wise for them to do so. We think the law

00:45:43.880 is on our side here, as the, um, as the, the initial federal court justice rules. So we're very

00:45:50.680 confident in, you know, that, um, and they have to do this, right? If they've refused to, if they've refused

00:45:58.040 to follow the order, um, you know, the government would be breaking the law. So, you know, the federal

00:46:02.840 government will produce the documentation, uh, directly to Hans, um, or through council, I suspect

00:46:08.120 we'll receive it electronically. Um, and, uh, I suspect we'll receive it, uh, very soon. And I

00:46:14.040 suspect as well, we'll have, uh, an update on what we'll find in those records as well.

00:46:18.920 Yeah, no kidding. So the information then will be coming from the federal government to Hans.

00:46:23.880 It doesn't technically have to go through bank council.

00:46:26.200 Yes. So the, the, or the federal government already has copies of the records. Um, so that's,

00:46:31.640 that's kind of the issue here, right? Is, is, you know, all of this should have been able to be

00:46:36.200 avoided by when Hans sent that initial request to the band council for this information, they should

00:46:41.400 have provided it. We had to go around the band, uh, because they were breaking the law to get these

00:46:45.640 records from the federal government and even the federal government didn't want to give it to us.

00:46:49.080 So, uh, we're happy that we've, you know, won this fight against Ottawa here and have, uh, you know,

00:46:54.760 we'll get transparency to Hans, uh, for these documents.

00:46:57.480 Uh, Gage, uh, what are you seeing here going forward? What are you expecting in the next few

00:47:03.240 weeks and months when it comes to Hans's fight for this accountability and transparency?

00:47:07.080 Yeah, I think the most important thing is kind of Devin highlighted there is we'll have more of

00:47:11.800 an update once he gets his hands on the records and actually check out what's going on in there.

00:47:16.360 But I think the most important part is also what Devin was talking about is that precedent

00:47:21.000 so that every single other indigenous activist who's looking for similar answers

00:47:25.240 in their community doesn't have to go through a three-year court fight to try and get

00:47:29.400 the most basic documents possible. And, uh, that's why I think overall is so important. I mean,

00:47:35.160 Hans is getting the answers that he wants in his community, but by getting those answers,

00:47:38.840 he's helping others get the answers that they need as well. Um, and that's something that Hans

00:47:42.600 has talked about a lot in the victory. Like he's like, this is really great for me, but it's also great

00:47:47.080 for everyone else. So I think that's another courageous part because he realizes how much he's

00:47:51.320 trying to help the community there. And when they get this basic financial transparency,

00:47:55.240 it just makes it easier for band members to hold their elected leaders to account.

00:47:59.080 And hopefully that results in some better governance.

00:48:01.080 Devin Drover and Gage Hawbrook, thank you so much for your time today, gentlemen.

00:48:05.880 Thank you so much. Thank you.

00:48:07.160 Once again, those are two of my colleagues from the Canadian Taxpayers Federation,

00:48:11.080 the Atlantic director, he's also our in-house counsel. So he gets silly phone calls about

00:48:15.240 lawyers from us all the time and very serious ones too. As you can just see,

00:48:19.720 this is a precedent setting case. So next time someone is trying to get information,

00:48:25.800 financial information, governance information from their local band council, which is a form

00:48:30.920 and a layer of government, they will be able to go back to the McCarthy decision. So that's a really

00:48:35.720 big deal. And that's what we try to do at the Canadian Taxpayers Federation. We're always fighting

00:48:40.520 for lower taxes, less waste and accountable government. And folks deserve accountable government,

00:48:47.080 no matter where they're living in Canada. So hopefully Hans, great job, sir, will be able to

00:48:53.800 get his hands on that information from the federal government. Isn't it wild that we had to go to

00:49:00.200 court, not just with the local First Nations government, which was trying to not release this,

00:49:04.440 these documents, but then we had to fight the federal government too. That's bizarre. Folks,

00:49:10.120 this was an action packed show. Please let me know in the comments, what do you think? What do you

00:49:14.760 think about Dr. Jack Mintz saying, ah, MOU sounds good, but there's a lot of devil in these details.

00:49:21.880 What's going to happen with the carbon taxes, the industrial carbon tax? What's going to happen

00:49:26.840 with the cost of this carbon capture system? From a taxpayer perspective, that sounds pretty darn

00:49:33.880 expensive. What's going to happen with Premier Danielle Smith fighting to get those cost elements 1.00

00:49:39.800 down so that we can get the good parts of the MOU actually rolling? So much going ahead. Let me know

00:49:46.200 what you think in the comments. Also, let me know what you think in the comments about fighting for

00:49:50.600 transparency and accountability at all levels of government, including First Nations levels of

00:49:56.040 government. Folks, we are so happy to have you joining us here today for this special episode

00:50:01.160 of the fighter. Be sure to head on over to Juno News, subscribe to Juno News, because we're the

00:50:08.520 ones that pull back the curtain. We talk directly to the newsmakers and we get to celebrate our

00:50:14.200 victories together with independent news gathering. Thank you so much for watching.

Juno News - December 02, 2025

What does Ottawa’s energy deal mean for Alberta？

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