Premier Rachel Notley unveils carbon tax break for drilling companies

CALGARY – Alberta Premier Rachel Notley is handing out tax breaks for oil and gas drillers along with criticism of Ottawa’s lack of appreciation for how damaging are current price discounts on western Canadian oil.

In a speech at a Canadian Association of Oilwell Drilling Contractors event in Calgary, she announced her government would add oil and gas drilling to a list of trade-exposed industries exempt from the province’s carbon tax.

The exemption, made retroactive to when the tax was introduced at the start of 2017, is expected to provide $750,000 to $1.5 million per year in relief for the drilling industry.

Notley later criticized Wednesday’s federal fiscal report for underplaying Western Canada’s oil price crisis, blamed on insufficient pipeline capacity to take away a glut of crude trapped in Alberta.

She told reporters that if Canada’s manufacturing sector was suffering as much, it would have been mentioned in the first paragraph of the update speech.

The CAODC, meanwhile, says it expects little improvement in drilling activity next year, calling in its 2019 forecast for an increase of 51 wells to about 7,000. That’s down from about 13,000 wells in 2014 before global oil prices crashed.

“Other industries in the same situation would be holding their hands out for a government bailout. Yet instead our industry has only asked for government permission and support to get our products to market,” said association president Mark Scholz.

“The lack of action and attention by the federal government to this pressing issue is deafening.”