A new 10-year grant program will attract a wave of investment to the province’s petrochemical sector, diversifying the economy and getting Albertans back to work.
The Alberta Petrochemicals Incentive Program, part of Alberta’s Recovery Plan, will bring multi-billion dollar investments to petrochemical projects throughout Alberta, helping to strengthen and diversify the province’s economy and create new jobs for Albertans.
The current global health crisis has highlighted the importance of petrochemical manufacturing around the world. Petrochemical facilities make the building blocks required for everyday consumer and professional items like medical equipment, computers and cellphones, personal protective equipment like rubber gloves and masks, car seats and tires, and fertilizer for agriculture and home gardening.
Alberta is already among Canada’s largest hubs for petrochemicals manufacturing, and with global demand for petrochemicals expected to continue to increase, there is a significant opportunity for Albertans and the province to expand this sector. For example, Alberta’s Industrial Heartland Association estimates there could be a further $30 billion of private-sector investment in the province’s petrochemical sector by 2030.
“While Alberta is already a Canadian leader in petrochemicals manufacturing, the sky is the limit for this sector’s benefits to our province. Over the last 10 years, petrochemical investment in the United States reached $250 billion, more than 10 times what was invested in Canada. With our affordable 300-year supply of natural gas, technically skilled and educated workforce, and respected innovation and research sectors, Alberta is ready to seize the opportunity to become a global destination for petrochemical manufacturing, benefiting all Albertans.”Dale Nally, Associate Minister of Natural Gas and Electricity
Compared to previous government petrochemical programs, the Alberta Petrochemicals Incentive Program will cut red tape and increase certainty and flexibility for investors, attracting more financial investment into Alberta’s petrochemicals sector. Key features include:
- A 10-year program period during which eligible projects must be built and operational.
- Adopting an open and transparent funding process, whereby every project that meets the program’s criteria will receive funding once built and operational. Government will no longer pick winners and losers through a private evaluation process.
- Grants – instead of royalty credits – to be issued to companies after eligible projects are operational. In the current economic climate, grants are the most effective way to attract investment. Grants allow companies to better account for the full value of the incentive provided when calculating their project’s return on investment.
- Making the funds available throughout the program’s duration once the facilities are in service, in order to align with typical business investment cycles.
“The Alberta Petrochemicals Incentive Program will have a significant impact on enhancing the competitiveness of Alberta when attracting large-scale, value-add investments, relative to other global jurisdictions. This program, coupled with the other tremendous competitive advantages that Alberta’s Industrial Heartland has to offer, including world-leading carbon capture and storage infrastructure, will stimulate job-creating economic activity that will benefit all Albertans and all Canadians.”Mark Plamondon, executive director, Alberta’s Industrial Heartland Association
“Alberta is leading the way on economic recovery. The Alberta Petrochemicals Incentive Program shows that the province understands how to win global-scale chemistry sector investments. In this time of uncertainty, these actions signal confidence in Alberta’s future prosperity and will attract investors to the province.”Bob Masterson, president and CEO, Chemistry Industry Association of Canada
“Resource Diversification Council member companies commend the Government of Alberta for its bold action introducing a broad-ranging jobs creation program that is intended to attract significant new investment to the Alberta economy, including in the petrochemical sector. Government support is critical to level the playing field with other economic competitors that are aggressively courting investment, especially during these challenging times. Other jurisdictions are doing all that they can to attract investment and the RDC is encouraged to see Alberta sharpen its competitive focus to bring long-term benefit to Albertans.”David Chappell, board chair, Resource Diversification Council
Government will work with industry over the summer to finalize the program guidelines. More details about eligibility, process, governance and reporting requirements will be available when the program is officially launched in early fall.
Alberta’s government is helping create thousands of good jobs for Albertans by building schools, roads and other core infrastructure that benefits Albertans and communities. It will further diversify our economy by helping sectors grow and succeed and return investment to our province by ensuring we have the most competitive tax environment in Canada.
- Alberta has the most established and potential growth for petrochemical manufacturing centres in Canada through Alberta’s Industrial Heartland, Grande Prairie, Joffre and Medicine Hat.
- Every day, people around the world use dozens of products that are made with petrochemicals, including:
- Medical supplies, such as computers for X-rays and MRIs and personal protective equipment, including disposable masks and gloves
- Polyester fabric couches, HD televisions, phones, bicycle helmets, coffeemakers and computers
- Car tires, engine hoses, gasoline, radio components and AUX cords, and car seats
- Desks, chairs, computers, carpets, cellphones and other office supplies
- Food packaging that keeps food fresh and safe during transport and storage
- According to the Chemistry Industry Association of Canada, Alberta’s chemicals sector, comprised predominantly of petrochemicals, was valued at $12.1 billion and employed about 58,400 people directly and indirectly in 2019.
- According to Alberta’s Industrial Heartland Association, there is an opportunity to grow Alberta’s petrochemical sector by more than $30 billion by 2030, resulting in more than 90,000 direct and indirect jobs over the construction and operation periods of new facilities, and more than $10 billion in revenue for the Government of Alberta from corporate and personal income taxes.