West at a Glance - November 2016 Issue

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Inside this issue

• Provincial Government Developments
• News and Opinion Highlights
• Key Economic Indicators
• Upcoming Events

Provincial Government Developments

British Columbia

• BC Tech Fund to be managed by Toronto's Kensington Capital Partners – Toronto-based Kensington Capital Partners has been selected by the BC government to manage the new $100 million BC Tech Fund, and will also take over management of the older $90 million BC Renaissance Capital Fund. Investment dollars are limited to BC companies. Kensington is establishing a Vancouver office that will be led by Dr. Gerri Sinclair, who chaired the federal Telecom Policy Review Panel. Four sub-sectors will be targeted for funding: digital media, information and communications technology, life sciences and clean technology. The fund's first investment will be in Mojio, a Vancouver-based company providing an open platform for connected cars.
   
• Canada and BC bilateral agreement for water and wastewater upgrades – The governments of Canada and BC signed a bilateral agreement that will make more than $450 million in combined funding available under the Clean Water and Wastewater Fund. The provincial government will invest 33 percent of the funding, while up to 50 percent will come from the federal government. This enable local governments to contribute as little as 17 percent of project costs instead of the typical 33 percent. The funding represents the largest local government infrastructure program in over 15 years in BC. The agreement is part of Phase 1 of the federal government's $120 billion, 10-year Investing in Canada plan.
   
• BC Premier urges Ottawa to fix tech talent gap, promises funds for education – In response to a talent shortage in BC's high tech sector, BC Premier Christy Clark is pressing Ottawa to increase the number of high-skilled tech workers immigrating to Canada. The Premier's call echoes those made by tech companies across Canada who have said the current immigration process is too time-consuming and that Canadian companies are in danger of losing out to other countries in the search for talent needed to grow their businesses. In addition, the Premier has promised that her government is set to make significant investments in postsecondary technology education to help address the chronic talent shortage in the BC tech sector.

Alberta

• Alberta Energy Diversification Advisory Committee – The Government of Alberta has announced the members of the province's Energy Diversification Advisory Committee. The committee's role will be to help diversify Alberta's energy sector and explore opportunities for adding value, including through partial upgrading, refining, petrochemicals, and chemicals manufacturing. The panel is co-chaired by representatives from GE Canada and the Alberta Federation of Labour; other members represent organizations like the Association of Professional Engineers and Geoscientists of Alberta, Building Trades of Alberta, Oak Point Energy, Edelyn Gower Consulting Limited, and the Alberta Indian Investment Corporation. The committee will present the Minister of Energy with recommendations by the fall of 2017.
   
• Alberta-Mexico energy meetings – Minister of Energy Margaret McCuaig-Boyd travelled to Mexico City September 29–October 3 to promote Alberta companies and investment opportunities. The Minister signed a Memorandum of Understanding with the Mexican Energy Secretariat in order to share best practices on emissions reductions, renewable power, development of heavy oil and unconventional resources, and value added developments and trade. From October 4–5, more than 20 Alberta mid-stream energy companies participated in a Mexico Midstream Mission to discuss opportunities for the development of energy infrastructure across North America.
   
• Alberta tuition freeze – The Government of Alberta will continue to freeze post-secondary tuitions for the 2017-18 academic year while it reviews the current model with Alberta stakeholders. The review is intended to set the future direction of post-secondary cost increases while providing predictability to students. It will also include discussions about mandatory non-instructional fees, international student tuition and supporting students through student aid. The Government of Alberta estimates that 250,000 full and part time students and apprentices will save $16 million per year through the freeze.
   
• Alberta solar energy Request for Information – The Government of Alberta has posted a Request for Information seeking advice on the potential costs and best approach for procuring solar power to produce 135,000 megawatt hours a year for government operations. Currently, there are three electricity contracts that provide approximately 250,000 megawatt hours per year to more than 1,500 government-owned buildings and sites. Replacement of two of these contracts with solar power would result in approximately ten times the current solar energy production in Alberta, which could create an opportunity for the province's first solar farm.
   
• Alberta Indigenous renewables pilot programs – The Government of Alberta has launched two small-scale pilot programs for First Nations and Métis Settlements to undertake renewable energy projects and energy efficiency audits in their communities. The Alberta Indigenous Solar Program (AISP) and Alberta Indigenous Community Energy Program (AICEP) will receive a total of $2.5 million in funding, with up to $200,000 per project under AISP and up to $90,000 per audit for AICEP. The Government of Alberta will also work with successful applicants to develop educational programs for students and community members.
   
• Wildfire relief funding ending – Emergency wildfire relief funding, used to cover immediate housing and day-to-day purchasing needs for northern Alberta wildfire evacuees, ended October 31, 2016. Approximately $100 million of relief funding went towards 96,000 evacuees from the Regional Municipality of Wood Buffalo. Long-term supports will continue to be available through the Red Cross and Alberta Works Income Support program.
   
• Alberta Advisory Panel on Coal Communities – The Government of Alberta has created a three-member expert panel to meet with key community, labour and industry stakeholders in regions affected by the transition away from coal-fired electricity. Through consultations, the panel will gather information regarding challenges and opportunities facing communities, provide information to stakeholders about available supports and programs, and generate ideas for new training opportunities. A report with options and recommendations for the provincial government to support transitioning communities is anticipated in early 2017.
   
• Alberta Heritage Fund investments – Alberta Investment Management Corporation (AIMCo) has announced nearly $100 million in investments on behalf of the Heritage Fund, including $45.9 million to TransAlta Renewables for clean energy, $46.4 million to Calfrac Well Services to support innovation and environmental stewardship in the oil and gas industry, and $6.1 million to Pine Cliff Energy to consolidate natural gas assets. In the October 2015 Budget, the Government of Alberta instructed AIMCo to invest up to three percent of the Heritage Fund ($540 million) in Alberta companies with strong growth potential.

Saskatchewan

• Premier Wall outlines Saskatchewan plan for Climate Change – On October 18, 2016, the Government of Saskatchewan released a White Paper on Climate Change outlining recommendations to the federal government with the aim of changing Canada's policy response to climate change. The White Paper recommends abandoning plans for a national carbon price, suggesting that the federal government should instead support development and commercialization of clean technology, in particular, carbon capture and storage. Carbon pricing policies, which include taxes on greenhouse gas (GHG) emissions as well as cap-and-trade systems, have widespread support among climate scientists and economists, but would impose a burden on provinces with high per-capita GHG emissions, like Saskatchewan.
   
• Joint consultation on long-term transportation plans – Saskatchewan Agriculture Minister Lyle Stewart met with federal Transport Minister Marc Garneau to discuss the importance of moving this year's crop to market and the actions required to ensure a reliable transportation network is in place. Access to rail, adequate levels of service and a fair price for freight is important to the success of Saskatchewan's producers and the agriculture industry. Stewart also requested long-term changes to the transportation system to accommodate future growth.
   
• Keeping trained doctors practising in Saskatchewan – The Government of Saskatchewan is making progress in keeping more locally-trained family medicine graduates in the province with the retention rate increasing by 17 percent over the past three years. Because of the Saskatchewan government's recruitment and retention initiatives, the province has 650 more physicians currently practicing than there were nine years ago.

Manitoba

• Manitoba eliminates senior positions in government – The Manitoba Government announced on October 6 that it will eliminate 112 senior management positions through attrition, retirements and workforce reductions. The cuts will take effect over two phases, ending March 31, 2017 and December 31, 2017, respectively. When fully implemented, the measures are expected to result in an annual cost savings of at least $10 million.
   
• Province releases labour market consultation results – Provincial officials toured Manitoba over the summer to discuss employment and skills training with a variety of stakeholders. Priorities identified by participants include a desired focus on Indigenous skills and training, accessibility for a variety of groups including youth, newcomers, and older workers, and better and more accessible labour market information.
   
• 2017 Budget consultations begin – Finance Minister Cameron Friesen is hosting several in-person consultations to hear citizens' opinions on provincial budget priorities. Citizens can also use an interactive website that features an interactive tool allowing individuals to build their own provincial budget. Participants are asked a series of questions about their provincial budget preferences on topics ranging from health care and red tape to infrastructure and innovation.
   
• New funding for Indigenous training – Municipal Relations Minister Eileen Clarke announced a new multi-year funding agreement with Winnipeg-based Frontier College to ensure that Indigenous students have summer learning opportunities. The province will provide over $160,000 to the college to operate summer literacy camps in ten First Nations communities across the province.

News and Opinions Highlights

• Canada-US softwood lumber uncertainty continues – The deadline to reach a new Canada-United States (US) Softwood Lumber agreement expired in October, and it is widely expected that the US industry will pursue countervailing and anti-dumping tariffs which could take effect as early as spring 2017. Restrictive trade measures would hurt the BC forest industry, which has already seen significant mill closures and job losses resulting from the expiration of the previous agreement. The industry has worked to minimize these risks by making gains in other markets, most notably China, and by acquiring US mills.
   
• Quark Venture and Chinese firm launch $656 million life sciences fund – Vancouver-based venture capital firm Quark Venture announced in October that it was partnering with GF Securities Company, a Chinese investment bank with a Canadian subsidiary, to launch the Global Health Sciences Venture Fund. The $656 million fund, based in Vancouver, is the largest of its kind in Canada, and plans to invest in a global portfolio of biotechnology and health sciences companies.
   
• UBC partners with University of Toronto to help tech startups – The University of British Columbia's (UBC) Sauder School of Business is launching the Western arm of the Creative Destruction Lab (CDL), a seed-stage program based at the University of Toronto's Rotman School of Business, to help high-tech ventures driven by university research to maximize their commercial impact and benefit to society. CDL-West will support scaleable startups by providing advice from technical experts, coaching from entrepreneurs, and access to venture capital. The program will serve ventures originating from UBC and other universities across Western Canada.
   
• Saskatchewan economy to post modest growth – BMO Financial Group is forecasting Saskatchewan's economy to grow a modest 0.5 percent this year before rebounding to two percent growth in 2017. The forecast is part of BMO's Blue Book, a report on Canada's provincial economies. The oil sector in the province is expected to decline further due to weaker prices impacting business tied to the sector. The outlook for other commodities is mixed, with weakness in potash as production rises but with lower prices, while agriculture is having a strong year, albeit with lower prices.
   
• Hylife to invest $95 million – Hylife, a major Manitoba-based pork producer, plans to invest $95 million on the expansion and modernization of their hog-processing plant in Neepawa, a town in south-western Manitoba, over the next three years. Construction is slated to begin in 2017 and is expected to create over 80 local jobs. Hylife currently employs 1,200 people in Neepawa, recently constructed a feed mill in Randolph and owns a restaurant in Tokyo. As Canada's number one fresh-chilled pork exporter to Japan, they are looking to expand their brand presence to capture more of the Japanese pork market.
   
• More Job Loss in Manitoba's North – The IGA grocery store in Opaskwayak Cree Nation, near The Pas in northern Manitoba, is set to close in the coming weeks, leaving 47 people unemployed. Sobeys West representative, Keri Scobie, released a statement blaming the current economic situation and the underperformance of the store for the closure. The Pas Mayor Jim Scott is worried this will not be the end of the bad news for the 5,000 people in The Pas and 3,000 living on reserve after previously announced closures at the Tolko paper mill and employment reductions due to reduced rail service to Churchill from The Pas by OmniTRAX.
   
• Group seeks funds for machine learning technology – About 200 business and government leaders met in Winnipeg to show support for a not-for-profit Enterprise Machine Intelligence and Learning Initiative (EMILI) that is looking to create a centre of excellence in Winnipeg for research, commercialization and training with respect to machine learning technology. The group is hoping that the federal government will contribute $100 million over five years towards the project. Supporters of EMILI include Brian Pallister, Premier of Manitoba; Jim Balsillie, co-founder of Research in Motion; and other prominent Manitoban entrepreneurs and business leaders.
   
• Alberta Surface Rights Board Claims – The Alberta Surface Rights Board (SRB), a quasi-judicial tribunal that resolves compensation disputes between landowners and oil, gas, and coal operators, has experienced a significant increase in claims against oil companies in 2016. In 2015, the SRB received a total of 764 recovery of rental applications under the Surface Rights Act from landowners who had not received payment from oil companies leasing their land. Between January and August 2016, the number of applications totalled 1,501, worth approximately $3 million. In response, the SRB has streamlined its procedures for recurring applications, bringing total processing time down from six months to three. Companies that fail to make payments following two written notices from the SRB are stripped of their rights of entry to the site and the provincial government is then responsible to pay the outstanding amount to the landowner through the General Revenue Fund.

Key Economic Indicators

Upcoming Events