What Alberta can look for in the federal budget

Ottawa is set to unveil its next fiscal plan on Thursday, with a backdrop of economic recovery from COVID-19, high inflation and affordability issues, and a new emissions reduction plan that will put pressure on the oil and gas industry. 

The Liberal government's election pledges on housing, climate change and seniors — plus commitments like dental care linked to the confidence and supply deal with the NDP — will likely lead to billions in new spending. 

It also just unveiled a $9.1-billion emissions reduction plan, which centres heavily on the oil and gas sector. 

Alberta's government is looking for policies that will increase business competitiveness and reduce the cost of living. 

"Alberta's priorities continue to be around productivity, competitiveness and business investment," a statement from Finance Minister Travis Toews's office reads. 

"Canadians already pay a significant amount in federal taxes and are increasingly faced with higher costs of goods and services. We would not support any new federal taxes and are instead looking for some much needed fiscal restraint."

Here are some themes Albertans are likely to see in Budget 2022.

Part of the federal government's plan to hasten emissions reduction is to sweeten tax breaks for fossil fuel companies that use carbon capture, utilization and storage (CCUS) technologies. 

The 2030 emissions plan did not include details on how the CCUS incentive would be structured, but that context is expected in the budget. 

CCUS captures and compresses CO2 for storage underground or to create products like concrete. 

Alberta's government says the CCUS tax credit would need to be at least 50 per cent for it to be effective. The province is looking for any tax credit to be competitive with programs like the 45Q in the United States. Oil and gas companies have previously asked for the credit to cover 75 per cent of project costs. 

Last week, Alberta announced six new proposals to explore developing carbon storage hubs to curb emissions from Edmonton's industrial zones. 

Ottawa's emissions reduction plan is aiming to reduce emissions by 40 to 45 per cent below 2005 levels by 2030. To hit that target, the bulk of the load will rest with the oil and gas sector — which would need to cut emissions by 42 per cent. 

The Oil Sands Pathways to Net Zero alliance, which represents 90 per cent of Canada's total oilsands production, is betting heavily on CCUS.