Varcoe: 'Enough time has been lost' — Alberta businesses shift focus to growth, after decisive referendum vote

Let’s get back to business — and more growth.

Ever since the UCP government announced last May that a provincewide referendum would include a question on separation, the issue has loomed over the province’s economy and business leaders.

That cloud of uncertainty has now lifted.

“Enough time has been lost to this referendum. There’s much work to do. Let’s get going,” Business Council of Alberta president Adam Legge said in a statement.

Three-quarters of Albertans voted to remain in Canada in Monday’s referendum, instead of opting to kick-start the process of holding a binding vote on independence.

It removes a thicket of unpredictability, paving the way for future growth opportunities.

“This resounding result to remain in Canada is very good news for the Alberta investment climate,” Joe Lougheed, chair of the Heritage Fund Opportunities Corp., said in an interview.

“Global capital is like water — it flows to where it gets the best return at the lowest risk. And the separation question was creating a question mark on risk . . . With this behind us, I’m very positive about Alberta and its economy.”

For Alberta businesses and investors, Monday’s result follows months of division surrounding the issue, and its effect on major decisions.

After the company’s annual meeting last year, ATCO chief executive Nancy Southern told reporters the separation issue was “absolutely” affecting investments as the company was looking to find partners for offshore projects.

Earlier this month, a survey of more than 600 business operators for the Alberta Chamber of Commerce found 44 per cent said the separation discussion was affecting their companies.

Almost seven in 10 said it was affecting the provincial economy.

The referendum follows years of angst in the oil and gas industry about federal policies embraced by the government of former prime minister Justin Trudeau, from Bill C-69 to the cap on industry greenhouse gas emissions.

“One out of four people think we should separate. I think everyone is frustrated we lost a decade, absolutely lost a decade. And Carney is trying to put that back,” said Bob Geddes,president of Calgary-based Ensign Energy Services.

“We went from a position where Trudeau said, ‘We’re going to phase out the oilsands,’ to Carney (saying) ‘We’re going to expand oilsands.’ So, we’re getting the right vibe out of Ottawa.”

Yet, Albertans also need to see action on building new pipelines, he added.

As oil output in the province averages more than four million barrels per day, there are opportunities for more growth.

Other steps — such as Ottawa introducing the federal productivity mega deduction, and the province expected to incentivize incremental production — are expected to bolster capital spending in the years ahead.

“I’m thrilled with the vote,” said Paul Colborne, CEO of Calgary-based petroleum producer Surge Energy.

“It’s not a blowout victory, but it’s a really solid win for Confederation.”

And that sets the table for more capital spending if commodity prices remain strong.

Despite uncertainty tied to the referendum, Alberta’s economy has continued to expand in the past year, powered by rising oil prices amid global turmoil and a war in the Middle East. Benchmark U.S. crude closed Tuesday at US$101.79 a barrel.

“This (Alberta separation) debate was going on in the context of a lot of geopolitical churning,” Douglas Offerman, senior director with Fitch Ratings agency, said in an interview from New York.

“It’s a robust economy, no question about it.”

Last month, TD Economics forecast Alberta’s GDP will expand by 2.3 per cent this year — the second-highest increase in the country — and lead Canada with 2.4 per cent growth in ’27. On the employment front, Alberta has generated about 80 per cent of job gains in the country over the past year.

It’s unclear how significant the referendum was on dampening investment, although it likely led some companies to delay — but not cancel — hiring and investment decisions, said Charles St-Arnaud, chief economist with Servus Credit Union.

“Alberta’s economy is already humming,” St-Arnaud said. “We’re probably on the cusp of a big increase in investment.” 

Indeed, non-residential investment in Alberta is projected to jump by almost eight per cent this year, according to the province’s latest financial update.

Several major developments are underway, such as the massive data centre being built by Meta in Sturgeon County, and De Havilland Aircraft of Canada’s massive airplane manufacturing complex and aerodrome east of Calgary.

“No matter what industry you’re in, everybody likes certainty,” said Neil Sweeney, vice-president of corporate affairs for De Havilland Canada.

“The certainty now that the referendum — at least the separation referendum — is behind us, is good for everybody.”

Billions of dollars of spending tied to the Pathways Alliance carbon capture project and the proposed Pacific Link oil pipeline could also advance in the next year as part of the energy accord reached between the Carney and Smith governments.

Investors are paying attention.

“It’s been a long road with Canadian energy companies over the last decade,” said Ryan Bushell, CEO and portfolio manager of Newhaven Asset Management, which owns stakes in companies such as Enbridge, TC Energy and Canadian Natural Resources.

“And it always just sort of made sense to me that the size of the resource and the quality of the resource would eventually shine through.”

On the flip side, the future could have been murky with an unclear result on the separation question.

In June, a member survey for the Calgary Chamber of Commerce found nearly half of respondents said they’d be very or somewhat likely to leave Alberta and relocate their business if the vote to start a binding separation process was passed.

“We know the province is in fairly good financial shape in the current environment,” said Travis Shaw, senior vice-president with credit rating agency Morningstar DBRS.

“This importantly does, at least for the meantime, remove an element of uncertainty that has been hanging over the province throughout this period.”

Chris Varcoe is a Calgary Herald columnist.