The provincial government must act now on diversifying the economy before the bottom falls out on oil and gas, the head of a nonpartisan research group said in Red Deer on Monday.
Ricardo Acuña, executive director for the University of Alberta-affiliated Parkland Institute, criticizes the long reigning Progressive Conservatives for continuing to rely heavily on the energy sector to drive the economy.
“We face a situation 10 years down the road where no one will want what we are selling,” said Acuña, prior to speaking at the Red Deer chapter’s Council of Canadians annual general meeting.
“We’ll be scrambling to find something to replace it. We could be more visionary, so when we’re selling less of it or none of it, our economy is sustainable.”
Currently, about 28 per cent of Alberta’s economy comes directly from the energy sector, Acuña said.
Seven per cent of Alberta’s workers work in oil and gas, with another seven per cent in construction directly related to the energy industry.
According to the government’s own statistics, the best places to invest money for job creation are in non oil-and-gas related sectors, Acuña said.
“We have tremendous expertise and knowledge in the energy sector, so why not transfer that into sustainable energies,” Acuña added. “It would be silly for us to start investing money in manufacturing vehicles because it’s something we don’t have the expertise in.”
Alberta could be an international leader when it comes to wind and solar power.
During boom times, the government could have used its plentiful coffers to invest in green energy or more sustainable fuels. But it hasn’t, Acuna said.
“In fact, in the mid of this latest boom, we have been more dependent on oil and gas than during the Lougheed years,” said Acuna. “We’re actually going the wrong way in terms of diversifying our economy.”
Acuna hailed Peter Lougheed, premier from 1971 until 1985, for starting the Alberta Heritage Savings Trust Fund so it could create long-term financial benefits from Alberta’s rich non-renewable resources.
But Acuna said the province has failed to invest as much as it should have.
It’s currently around $14.5 billion whereas Norway’s petroleum fund, which started 10 years after Alberta’s, is valued around $300 billion.
“If the oil and gas sector stopped providing money tomorrow to the provincial government, we’d have this great huge fund that’s generating enough interest every year to replace the amount of money we were getting (from the energy industry),” Acuna said. “That’s the vision that Norway has had in terms of making sure their economy isn’t dependent on oil and gas.”