The government’s story about its bitumen bubble also has value when it comes to the campaign to build political support for the Keystone XL pipeline, or any other way to get more Alberta bitumen to heavy oil refineries. Better market access next year or the year after, so the argument goes, will boost bitumen prices.

Maybe it’s in the genes of those of us who call “Next Year Country” home to believe this. We might want to look at what next year may bring more cautiously.

What, for example, will the death of Venezuelan President Hugo Chavez and the results of the April 14 election to replace him mean for Venezuela’s oil producing future? What strategy will post-Chavez Venezuela follow to exploit the extra-heavy oil resources that have catapulted it over Saudi Arabia to first place in the proven oil reserves ranking (296.5 billion barrels)?

Will Chavez’s successor follow his predecessor’s socialist approach to the petroleum sector — an approach that hurt production and exports? Or will he try to address Venezuela’s domestic troubles by warming to the multinationals as Venezuela did in the early 1990s and/or pursuing increased Venezuelan heavy oil access to the same U.S. Gulf Coast refineries Alberta hopes will be a destination for our bitumen (these refineries were designed to process Venezuelan heavy oil).

Some version of the latter path would tend to support the pattern of the past 15 years — a glut of heavy oil relative to refining capacity. This would not be good for bitumen prices.

This possibility underlines what we certainly should know by now. Uncertainty rules petroleum markets and it’s long past time we opted for a more sustainable, predictable revenue mix. The following advice rings true: “The first challenge will be building a more predictable, sustainable revenue base to support ongoing programs.” That advice comes from former finance minister Ron Liepert in his 2012 budget speech. What Albertans should be concerned about in 2013 is the likelihood that his statement, like Alberta’s bitumen price history, is one the current government plans to deny.

Ian Urquhart is an associate professor in the department of political science at the University of Alberta

EDMONTON – Federal and provincial agriculture ministers have announced $406 million in new funding for agricultural programs in Alberta.

Alberta Agriculture Minister Verlyn Olson and his federal counterpart Gerry Ritz made the announcement Monday morning in Leduc.

The money comes from the federal government’s $3-billion Growing Forward fund and will be used to create or improve 30 programs that focus on international market development, food safety and agricultural research.

“As the province’s largest renewable resource industry, agriculture holds tremendous potential,” Olson said in a statement. “Through Growing Forward 2, we are providing producers and entrepreneurs with the tools they need to build their businesses and further diversify Alberta’s economy.”

The provincial and federal governments billed the package as a five-year agreement that includes a 50-per-cent increase in cost-shared investment over Growing Forward 1, an agreement set to expire March 31.

Ritz said the money will be available April 1.

“This agreement is an important milestone in our continued efforts to deliver effective programs that farmers need to compete in global markets, while positioning Canad as a strong leader in agriculture,” Ritz said in a statement.

More to come …

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EDMONTON — Alberta should hike its $1,000 electricity price cap three to seven times higher to encourage big consumers of electricity to shut down during periods of short supply, says a report commissioned by the Alberta Electric System Operator.

But a senior AESO official said Friday the recommendation by the Brattle Group is not likely to be implemented anytime soon.

“We will consider it,” said AESO’s director of forecasting, John Esaiw. “It’s not a priority for us, currently.”

He said AESO, an arms-length government agency, would have to analyze the impact of the move on electricity pricing, but it has no plans to look at adjusting the cap this year.

Power prices in Alberta — the only province with a fully deregulated electricity market — are set on an hourly basis through bids from suppliers, but even in periods of high demand and short supply the price cannot by law exceed $999 per megawatt-hour.

But Johannes Pfeifenberger, one of the report’s authors, said raising the cap would bring Alberta more in line with Texas, which has set its maximum electricity price at $4,500 per megawatt-hour and plans to raise it to $9,000 over the next two years.

“This would be a good time to implement something like this because you want some kind of mechanism in place before you need it,” he said.

Pfeifenberger suggested it may have prevented the rolling blackouts that swept through the province last July when several generating plants inadvertently went off-line almost simultaneously.

He noted the system was only short 200 megawatts of supply when the blackouts were initiated.

Having a higher cap, which could only be raised above $1,000 by the system operator when there is a scarcity of supply, would have enabled AESO to gradually raise the price of electricity to encourage large consumers to reduce their energy consumption, he explained.

“With the reserve levels we have today, you would almost never encounter these operating reserve deficiencies … but what it would do is create a safety valve,” he said.

“There are a lot of studies that say that customers are just not responding at $1,000 a MWh, but once you get into $2,000 to $3,000 a MWh, you see more customers responding.”

The recommendation was immediately slammed by industry watchers as unnecessary and likely to encourage manipulation of Alberta’s deregulated market.

“It would be an incentive to manipulate,” said Wildrose electricity critic Joe Anglin.

“All of these costs are eventually passed on to consumers. They will see prices take off in leaps and bounds.”

Electricity consultant Sheldon Fulton said he didn’t see any value in the proposal.

“It brings back the argument that we should have a higher price cap and even the generators say no to that,” he said.

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Spring might not have come early to Alberta — but Easter has. At least it has to the Alberta legislature.

The legislative session is taking a two-week break that straddles the Easter long weekend. I’m not sure even the new Pope could make Easter stretch into two weeks, but he is merely a papal monarch, after all, and not an Alberta MLA.

On Thursday, as government MLAs headed off to their constituencies, or perhaps to fields farther south that are greener and warmer and golfier, they received an email from Premier Alison Redford.

“We know the opposition enters the constituency break dispirited and frustrated. They should be,” Redford says in a missive that sounds like a coach’s pep talk at half time. “We know that they’ll come at us harder than ever in two weeks.”

Redford’s letter manages to be simultaneously defensive and offensive, which sort of reflects the government’s posture during the first three weeks of this legislative sitting. The government is on the defensive over the new provincial budget and is facing labour unrest, particularly from physicians. At the same time, it is going on the offensive against the opposition parties.

“We knew this session would be tough,” Redford says in her letter. “We have taken firm control of the agenda and are forcing the opposition to respond to us.”

Well, yes and no. The government is performing better than it did last fall when it was beset with a series of scandals. So far this sitting the government has indeed been setting the agenda but that’s mainly because the whole session is focused on the new budget.

The letter takes another dig at the opposition: “While we’re standing on the side of the families who elected us to lead, they’re resorting to cheap gimmicks and fearmongering.”

Well, yes, but it’s not as if the opposition has the monopoly on gimmickry and the mongering of fear.

Earlier Thursday, for example, the government opened up a new tactic against the Wildrose Opposition by using — or perhaps more accurately abusing — question period. Question period is supposed to be 50 minutes each day of the legislative sitting set aside for MLAs of all parties to hold cabinet ministers to account. Opposition members, of course, use the time to attack the government with questions along the lines of “Why is the minister so incompetent at everything?” while backbench government MLAs are notorious for asking puffball questions of ministers along the lines of “Would the minister tell us what a wonderful job you’re doing?”

This week, Progressive Conservative MLA Mike Allen took the puffball question to a new low by inviting Transportation Minister Ric McIver to attack the Wildrose over its suggestion to trim $1.7 million from the transportation department’s information technology service.

“Last night, the Opposition proposed cutting the department that provides Alberta’s important transportation infrastructure,” said Allen, before asking, “Will this cut-and-slash approach of the Opposition influence the government’s commitments to keep transportation infrastructure safe for Albertans?”

It was a ridiculously partisan comment posing as a question and it allowed McIver to break into a partisan rant of his own: “I was shocked, frankly, that the Opposition would propose to impair our ability to monitor and repair bridges and roads, threatening the safety of Albertans while they travel around Alberta. This clearly shows the Wildrose Opposition’s lack of regard for the safety of Albertans.”

And so it went with Allen using his three “questions” to set up McIver to bash the Wildrose. All opposition parties were predictably and rightly outraged at the Allen-McIver exchange that not only unfairly accused the Wildrose of deliberately wanting to “sacrifice the safety of Albertans” but also undermined the tradition and intent of question period.

All of this might sound esoteric. After all, the opposition routinely uses question period to roundly attack the government, not simply to hold it to account. However, there is an important parliamentary issue here. There is also an interesting political sub-text. The Allen-McIver exchange makes the government look thin-skinned and frightened of the Wildrose.

It might be a little frightened of the NDP too. Redford has used question period of late to attack the NDP, at times out of the blue. On Tuesday, responding to a question from the Wildrose, Redford declared: “There is only one party in this legislature that wants to take jobs out of Alberta, and that’s the NDP.”

Her mini-broadside was no doubt in part prompted by the recent anti-Keystone comments of federal NDP Leader Thomas Mulcair — but Redford was also targeting Alberta NDP Leader Brian Mason. And he couldn’t be happier. Mason gleefully counted six mentions of the NDP — all negative — by Redford during question period on Tuesday alone.

That’s a badge of honour for Mason, who has a deep understanding of what Oscar Wilde meant when he said the only thing worse than being talked about is not being talked about. And he thinks it reinforces a recent public opinion poll showing the NDP gaining strength in Edmonton.

Despite what Redford might say, not all opposition MLAs are entering the Easter break “dispirited and frustrated.” And if government MLAs continue to abuse important legislative traditions such as question period, they deserve an opposition that returns from the break reinvigorated and ready to take on the government “harder than ever.”

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EDMONTON – Premier Alison Redford and her ministers on Wednesday defended the impact that recent budget cuts will have on rural Alberta, including the decision to eliminate grants for bridges and resource roads.

At a meeting of the Alberta Association of Municipal Districts and Counties, Redford focused on stable funding for the Municipal Sustainability Initiative but acknowledged that other rural programs were cut.

“Under budget 2013, MSI funding will remain stable at $896 million. I know that there were expectations that MSI funding would rise, but the circumstances just didn’t leave us room to do that,” Redford said.

“Government is maintaining its commitment to municipalities by shielding the money that you count on … from the reductions that we’ve had to make elsewhere.”

She acknowledged the government cut other grant programs, saying no area was immune from budget pressures.

“I understand that municipalities will feel pain,” Redford said.

Redford was referring in part to the government’s decision to cut funding to the Strategic Transportation Infrastructure Program grants, known as STIP, which prompted multiple questions during a session with ministers Wednesday.

Since April 2011, the program has funded construction and repair of local bridges, community airports, resource roads and local municipal initiatives like the City Special Transport Grants.

In 2011-12, the province spent $88 million on the program, in 2012-13, the government spent roughly $119 million. In the 2013-14 fiscal year, funding drops to zero.

AAMDC president Bob Barss said rural municipalities can probably manage airports and resource roads without provincial help, but fixing local bridges is expensive and cancellation of the STIP program may force them to close roads or raise taxes.

“It was a pretty big hit to rural Alberta,” Barss said. “I think the feeling was that maybe rural Alberta took more of a hit than other parts.”

He said AAMDC members understand that cuts were necessary, but feel the cuts to STIP grants combined with cuts to agriculture programs means rural Albertans have shouldered the brunt of the province’s fiscal burden than others.

On the positive side, Barss said the province left the STIP line in the budget, a recognition that the funding is necessary and may return in future years. He also said the province will continue to fund bridge inspections.

Transportation Minister Ric McIver was unapologetic.

“I don’t expect people in this room or municipalities to be happy,” McIver said. “Even though I don’t expect you to be happy with the STIP grant being zero-funded, we didn’t do it without thought.”

McIver said the STIP grants were project-based and that the government decided it would be better to “unfund” that program rather than the Basic Municipal Transportation Grant, which is a formula-based grant given to all municipalities based on population.

McIver said municipalities will have to use money from the Municipal Sustainability Initiative or the Basic Municipal Transport Grant to fund key bridge work and other priority areas.

“That’s part of the tough decisions we have to make to live within our means,” McIver said.

Redford also reiterated there would be no additional provincial funding for the proposed Edmonton arena.

Speaking to reporters after her speech, she said she remains hopeful that provincial school boards will accept the tentative deal the province reached with teachers Friday.

The four-year deal covers approximately 40,000 teachers and settles issues around teachers’ salaries and workload. It also freezes teacher salaries for three years.

The Edmonton public school board on Tuesday rejected the agreement, and the Calgary Board of Education rejected it Wednesday.

Asked if a major school board’s refusal to back the deal would kill it, Redford said: “I don’t think so. We have the opportunity to negotiate with teachers at a provincial level and then to have teachers who are employed by their local school boards to accept the terms of that deal.

“It’s not an either-or. It’s disappointing, it certainly would be, but we’re still speculating right now,” Redford said.

Redford told reporters she would miss question period Wednesday because he has lost hearing in her right ear and had an appointment with a specialist, for which she waited more than a year.

She missed a historic day in Alberta’s legislature.

Red Deer North MLA Mary Anne Jablonski, deputy chair of committees, stood in Wednesday for Speaker Gene Zwozdesky, making her the first woman in Alberta history to do so.

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