EDMONTON -- The Alberta government will be “courting” petrochemical investment with financial incentives like grants worth more than 10 per cent of a company’s capital costs.

New or expanding petrochemical, fertilizer and hydrogen facilities whose capital costs are more than $50 million could receive as much as 12 per cent back through the Alberta Petrochemicals Incentive Program.

The capless program will be looking for applicants that are already operational and headquartered in the province.

Small companies –whose investment is between $50 million and $150 million – will have five years to apply, and larger companies 10 years.

The program’s goal is to offer incentives that are competitive with those offered in Asia, the Middle East, the Gulf of Mexico, and the United States.

The Alberta government, under Jason Kenney’s United Conservative leadership, wants to become one of the world’s largest petrochemical producers.

“As a government, you have to make a decision: Is this an area that you’re going to compete in? Because if it is, this is what that looks like,” Dale Nally, associate minister of natural gas and electricity, told CTV News Edmonton.

“You need to have those incentives. Because if you do not offer incentives, you will not be in the game and you will not be able to attract investment.”

Last year, the Chemistry Industry Association of Canada valued Alberta’s chemicals sector – which is predominantly comprised of petrochemicals – at $12.1 billion.  

Industry and government believe the sector can be grown by another $30 billion, at minimum, in 10 years, creating 90,000 jobs and $10 billion in tax revenue along the way.

The APIP program is part of the province’s natural gas vision and strategy, which aims to see Alberta export hydrogen globally by 2040 and into the Asian and European markets with liquefied natural gas (LNG) projects within 10 years.

When asked if Alberta had the chops to compete internationally, Nally referenced the province’s estimated 300-year supply of natural gas and corporate tax rate, now the lowest in Canada and amongst most American states.



APIP financial details will be reported each year, but the government isn’t limiting the cash it hands out.

The Canadian Taxpayers Federation called the program a blank cheque being signed by Albertans.

“It’s completely unacceptable to have a corporate welfare program rolled out without a cap on taxpayer costs,” said Franco Terrazzano, director of the Alberta CTF chapter.

“The government is taking a really bad turn here with this by adding yet another petrochemical subsidy onto the backs of struggling taxpayers.”

The first program he referred to was created by the previous NDP Alberta government: the Petrochemicals Diversification Program gives companies that make ethane, methane and propane products royalty credits.

While the PDP is still active, Nally said the program was all but useless to the companies – which don’t have to pay royalties – and created a black market of their sales.

The CTF’s criticism is unfounded, he said.

“When you consider that you’re building between a $5 billion and $10 billion petrochemical facility, and during construction phase you can have anywhere between 5,000 and 7,00 jobs… the tax revenue alone on the jobs we create are more than going to pay for the (APIP) grants.

“And the grants aren’t paid out until after the facility is up and running and operational and we’ve generated that tax revenue, so there’s very little risk to the consumer,” Nally responded.

However, he acknowledged Alberta wouldn’t start reaping APIP benefits for a few years, as construction of the 40-year plants could take one to two years at minimum.

Companies that are currently part of the PDP program cannot also benefit from APIP. They will have a six-month window to transfer if they want.


According to the associate minister, APIP is already “creating a lot of interest.”

While he wouldn’t discuss specifics, Nally confirmed one inquiring company is headquartered in Saudi Arabia.

The potential investor is privately owned and does business around the globe, Nally told CTV News Edmonton.

Echoing his party’s victorious election statement, “Alberta is open for business,” Nally commented, “Let’s not pick on just one jurisdiction. We are a province that is open for investment, and that means jurisdictions from around the world are going to look at investing here.”

Premier Kenney has been critical of the Saudi Arabia government, its “predatory dumping” of oil product onto the market, and its human rights track record.

But, Nally said, I’m not sure why we’re going down the rabbit hole of one company that wants to come to this province and build a significant facility. That’s a good news story, and for Albertans that are out of work right now, it’s a great news story.”

APIP applications are open.

With files from CTV News Edmonton’s Dan Grummett