Presented By Ultimarii
Enserva’s Provincial Spotlight Series provides an overview of the latest policy updates, regulatory changes, and industry-specific developments in our members’ operating areas. In this edition, we revisit Alberta to explore topics pertinent to the energy services, supply, and manufacturing sectors.
ICYMI: The previous issue, published on February 19, highlighted British Columbia.
Political Insights
In the wake of Prime Minister Justin Trudeau’s decision to impose retaliatory 25% tariffs on $30 billion worth of US goods, Premier Daniel Smith has expressed her full support for the move and will be announcing Alberta’s response today.
Read Enserva’s Member Brief on the Canadian Retaliatory Tariffs here.
The Alberta Legislature started its spring session on February 25, 2025, with the government outlining an ambitious legislative agenda. Key priorities include strengthening Alberta’s energy sector, reducing regulatory barriers, and ensuring economic growth through pro-business policies. The session is expected to focus on provincial autonomy in resource management and strategies to counter federal policies that may impact Alberta’s economy.
The government plans to introduce approximately 20 bills this session, including:
- Agriculture and Irrigation Statutes Amendment Act
- Automobile Insurance Act
- Financial Statutes Amendment Act
- Mental Health Services Protection Amendment Act
- Professional Governance Act
- Public Safety and Emergency Services Statutes Amendment Act
- Red Tape Reduction Statutes Amendment Act
- Wildlife Amendment Act
- Utilities Statutes Amendment Act
The Utilities Statutes Amendment Act may unveil the enabling legislation for the planned redesign of the province’s electricity market. This anticipated overhaul, initiated in 2023, aims to enhance grid reliability and affordability. Key components likely include the introduction of a “day-ahead market”, requiring power generators to commit their energy supply a day in advance, thereby improving grid stability and reducing the risk of power outages.
Additionally, reforms to transmission policies are expected, shifting the costs of building new transmission lines from consumers to power generators. This approach encourages new power plants to be built in locations that utilize existing infrastructure, potentially reducing costs for consumers and businesses. The Alberta Electric System Operator (AESO) has been directed to prepare restructured energy market rules by the end of 2025. This is particularly significant for heavy power users, as changes to the market will directly impact operational costs and planning.
Alberta 2025 Budget
Alberta released its 2025 budget on Thursday February 27th, addressing economic uncertainties, including US tariffs and declining oil prices. Key Highlights include:
- Tax Relief: An 8% personal income tax bracket for income up to $60,000, saving families up to $1,500 in 2025.
- Infrastructure Investment: A $26.1 billion Capital Plan, including $2.5 billion for highways and road safety.
- Economic Forecast: A $5.2 billion deficit, primarily due to a $4.4 billion drop in oil revenue from 2023-24 – though still projecting more than $17B in resource revenue.
- Trade Risks: Alberta’s budget accounts for a 15% tariff on all goods and a 10% tariff on energy exports.
Alberta’s budget reaffirms its commitment to energy security, with continued investment in major projects like Dow’s Path2Zero and Air Products’ Hydrogen Facility. The government is allocating $135 million for skilled trades programs, with an additional $78 million annually to increase apprenticeship seats. Market expansion efforts will focus on clean tech, carbon capture, and rare earth mineral development, reinforcing Alberta’s role in the global energy transition.
Regulatory & Policy Updates
- Response to Federal Emissions Cap: Premier Smith reaffirmed Alberta’s stance against the federal government’s proposed emissions cap on oil and gas production. The province has signaled its intent to use legislative tools, including the Alberta Sovereignty Within a United Canada Act, to challenge any federal measures that could limit provincial resource development. The government maintains that the cap threatens jobs and investment in Alberta’s energy sector.
- Pipeline Expansion and Market Access: Alberta has continued advocating for expanded pipeline capacity to enhance market access for the province’s energy products. Recent discussions with US industry leaders and policymakers have focused on reinforcing cross-border energy trade and mitigating potential trade restrictions. The province is working closely with stakeholders to identify investment-friendly solutions to boost pipeline infrastructure without relying on federal intervention.
- Alberta Energy Regulator (AER) Enforcement Actions: The AER has recently taken enforcement actions against companies for contraventions of environmental regulations. On February 24, 2025, CST Canada Coal Ltd. was penalized for violations under the Environmental Protection and Enhancement Act. Similarly, on February 26, 2025, Pembina Pipeline Corporation faced penalties for contravening the Public Lands Act.
Economic Developments
- New Funding Initiatives: On February 13, 2025, the Government of Alberta announced an investment of nearly $55 million in 15 projects aimed at reducing emissions and enhancing industrial competitiveness. This funding, provided through Emissions Reduction Alberta (ERA) and sourced from the Technology Innovation and Emissions Reduction (TIER) Fund, supports initiatives across sectors such as oil and gas, concrete and cement, pulp and paper, forestry, biotechnology, and municipal wastewater treatment. The projects are expected to achieve cumulative greenhouse gas emissions reductions of over 2.2 million tonnes by 2050, create approximately 1,600 person-year jobs, and contribute $237 million to Alberta’s GDP by 2027.
Indigenous Relations
- The Tilley Solar Project: The Alexander First Nation, in partnership with First Nation Power Development Inc. (FNpower), is launching the Tilley Solar project, a $52-million, 23.6-megawatt solar farm located 200 km southeast of Calgary. Featuring nearly 70,000 photovoltaic panels, the project is expected to be operational this spring, supplying enough clean electricity to power 20,000 homes annually while cutting 14,200 tonnes of greenhouse gas emissions—the equivalent of removing 4,350 cars from the roads. The initiative creates 280 full-time jobs and generates $20 million in labour income, marking a significant step toward Indigenous economic reconciliation and long-term revenue generation for the Alexander First Nation.
Challenges & Risks
- US-Canada Trade Tensions: Trade tensions between the US and Canada pose significant risks to Alberta’s economy, particularly in the energy sector. With the US as Alberta’s largest export market—importing approximately 4 million barrels of oil per day—the tariffs on Canadian oil and other critical exports will impact the province’s industry. Studies indicate that while Canadian oil producers could face a $7 billion tariff hit, US consumers might see gasoline prices rise, with an estimated $22 billion increase in costs. Premier Danielle Smith has strongly opposed these tariffs, calling them unjustified and warning of their consequences for both economies. Amidst this uncertainty, fluctuations in global oil prices further challenge corporate investment decisions and provincial revenue forecasts, amplifying economic volatility.
Upcoming Industry Events: Enserva STARS & Spurs Gala will return on April 12, 2025.
Stay tuned for the release of Enserva’s upcoming Federal Election Toolkit next week!
The Bottom Line:
Alberta’s 2025 budget trumpets economic stability, infrastructure investment, and energy security while also showcasing concerns over US trade tariffs and retaliation. Critical inputs like steel tubular products, oilfield chemicals, and tools face uncertainty, impacting both US and Canadian operations. These risks, reflected in the budget, add to market volatility and policy challenges.
