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Friday, 21 November, 2008, 23:00 GMT | more >>

Alberta earmarks Fort McMurray funds



By Upstream staff 

Alberta's government will plow C$396 million ($341 million) into the oil sands hub of Fort McMurray to help the struggling city deal with strains on health care, affordable housing and other services, Alberta Premier Ed Stelmach said today.

Stelmach stopped short, however, of using regulatory means to rein in the pace of oil sands development in the Western Canadian province, site of more than $100 billion in current and planned investments.

"We are worried about the kinds of messages we send to different parts of the world," Stelmach told reporters in the provincial capital of Edmonton, Reuters reported.

"We are the only really secure supply of oil and I'd like to make sure that as a province, we maintain our reputation of always having a predictable investment climate."

Stelmach made the Fort McMurray funding announcement as his government predicted a budget surplus of C$7 billion for 2006-07, which would be the second biggest surplus in Alberta's history.

In a third-quarter forecast, it raised its revenue expectations by C$1.5 billion from the last quarterly outlook to C$36.6 billion, citing higher-than expected corporate taxes and strong returns from investments.

Over the next decade, oil sands production is expected to more than triple from about one million barrels a day currently as a raft of projects around Fort McMurray starts up to meet growing demand for secure supplies, especially in the US.

That has meant a flood of dollars into the north-eastern Alberta region, but also strains on public services, infrastructure, housing and the local environment as the population has ballooned more than 50% in the past decade to over 60,000.

And despite an influx of Canadian and overseas workers, a tight labour market has caused major cost overruns and delays in the oil sands projects.

Stelmach's predecessor as Conservative leader, Ralph Klein, conceded when he retired last year that his government did not plan for the robust economic growth in the province.

The strains, as well as record oil industry profits, have spurred calls from various quarters in Alberta to charge companies higher royalty rates to control the pace of oil sands development.

Of the C$396 million that the Alberta government will invest in Fort McMurray over three years, C$206 million will go toward health care, C$103 million for water and waste water treatment, C$53 million for affordable housing, and C$34 million for other items.

Monday, 26 February, 2007, 23:35 GMT  | last updated: Monday, 26 February, 2007, 23:35 GMT

Wing and a prayer: Fort McMurray is feeling the strain of rapid expansion amid Alberta's oil sands boom
 

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