Competitiveness and Investment in Alberta: A View from the Chemistry Industry

Alberta is seeing positive signs that the government is serious about attracting investment to the provincereinforcing competition and strengthening the province’s economy.  

The Chemistry Industry Association of Canada (CIAC) sees 2019 as being a good year for the chemistry sector – a sector that contributes $58 billion to the Canadian economy annually and $16 billion of that here in Alberta 

In Alberta, we’re encouraged by the investment that is taking place right now at two propane to polypropylene facilities worth a combined $9 billion along with two other recently announced projects awaiting final investment decisions that are worth a combined $2.6 billion 

Premier Jason Kenney’s government has reaffirmed its commitment to the Petrochemicals Diversification Program which will see $1.1 billion of royalty credits supporting $15-20 billion of new incremental investment in the province, creating jobs and driving economic activity around Alberta. 

And they didn’t stop there, the government has further strengthened the business environment in Alberta by:  

  • Decreasing corporate taxes to help make Albertabased businesses more competitive  
  • Matching the federal treatment of accelerated capital cost allowance allowing for 100 per cent in year deduction of qualifying capital investment increasing the competitiveness of new capital investment in Alberta. 
  • Launching a new TEIR program that places an appropriate price on carbon, protects export-focused sectors such as chemistry and strengthenthe case for low carbon chemistry investments in Alberta.  
  • Starting Red Tape Reduction Program and changing the Municipal Government Act to enable property tax holidays for qualifying investment will help investments get from the C-suite to the construction yard. 

 At CIAC, we see a positive, growing business landscape for Alberta going forward. Given the province’s attractive low carbon resource base, its skilled workforce and a strong business environment we see unlimited potential for new investment in low carbon chemistry in Alberta. 

 Of course, opportunity does not come without challenges and we will continue to encourage the Alberta government to advocate for:

  • Aopen and competitive national rail transportation network required to get chemistry products and other commodities to marketWe urge Alberta to work with the class 1 railways, neighbouring provinces and the federal government to ensure that goods can move efficiently to end markets.  
     
  • New and innovative policies to attract research and development mandates to Alberta. Solving our most pressing problems, from climate change to building circular economy for plastics, will require the ingenuity and products that chemistry providesThe chemistry sector is a knowledge industry and globally is responsible for the second-most patent grants of any sector and in Canada has the second-highest percentage of university graduates in our workforce – in both cases, only following the IT sector
     
  • Gas flows need markets, like that for LNG Canada, to ensure feedstocks are available to support chemistry investments 

 The economy of tomorrow will need chemistry solutions; whether it be for lowering GHG emissions, creating stronger, longerlasting consumer products, or increasing the energy efficiency of our built environment, chemistry is at the heart of innovationWith proper investment and focus, many of these solutions will be researcheddeveloped and manufactured right here in Alberta.  

 This is what happens when governments are serious about attracting new investmentwe have $billion in investments underwaya further $2.6 billion announced in Alberta and anticipate another $20 billion more coming. Other provinces and the federal government should be paying close attention. 

CIAC Welcomes CUSMA Agreement

December 12, 2019

The Chemistry Industry Association of Canada (CIAC) is pleased to see that Canada, the United States and Mexico have concluded final negotiations on the CUSMA agreement – an agreement designed to level the playing field and grow the economies of all three nations.  

While further study is needed to assess the final arrangements agreed upon today, CIAC believes that common environmental and labour standards between our North American counterparts are vital to a successful trading relationship.  

“More than two years of hard work by individuals from all three countries have proved to be a major step forward for trade in North America,” said Bob Masterson, President and CEO of CIAC. “The actions that will be taken to improve regulatory cooperation between Canada, the U.S., and Mexico will deepen the integration that exists in the chemicals supply chains in all three countries which will go a long way to attracting new investment to the continent’s chemistry sector.” 

The chemistry industry is one of the most internationally traded sectors in the world; in 2018 CUSMA partners traded approximately $70 billion worth of chemistry products according to the American Chemistry Council (ACC).  

A strong and open trading relationship with our North American neighbours is the cornerstone of Canada’s economy and for the continued success of the chemistry sectorThe trilateral trade agreement between the three countries will help attract investment and continue to develop an efficient, highly integrated chemicals supply chain across North America.  

We would like to thank our Canadian, American and Mexican trade officials and elected representatives for all their hard work over the last two and a half years.  

CIAC very pleased to see tentative deal reached to end CN strike

November 26, 2019

The Chemistry Industry Association of Canada (CIAC) is very pleased to see the conditional agreement between Canadian National Railway (CN) and Teamsters Canada to renew the collective agreement for over 3,000 conductors, trainpersons and yard workers.

CIAC believes CN and Teamsters Canada came to the correct decision while under tremendous pressure from all stakeholders to reach an agreement and applauds that decision.

“While we are very happy to see the two sides come to a tentative agreement, some difficult days remain ahead and it will take a few weeks before service for our members is fully restored,” said Bob Masterson, President and CEO of CIAC.

“CN is expected to place priority on critical goods such as home and vehicle fuels and water treatment chemicals, for example. Other facilities and industries could be waiting some time before they see full cars leave their facility sites and empty cars return.”

Mr. Masterson pointed out that some facilities will likely need to slow or suspend operations until that occurs, hopefully, without having to furlough workers.

Many of CIAC members are captive to rail – there are no viable alternatives for shipments. This can be because they have service with only one rail shipper, the volume of product or the type of products they ship. Larger companies can ship and receive approximately 80 rail cars per day.

“After three straight years of rail service disruption, it is time to take stock of lessons learned. The major railways, CN and Canadian Pacific Railway are too important to the nation’s economy and safety. It is time they are deemed essential public services so that future such disruptions can be minimized,” Mr. Masterson said.

Chemicals account for nearly 14 per cent of all Canadian rail traffic, with $63 million-worth of industrial chemical products relying on Canada’s rail network to get to their destinations every single day. The impacts of any rail delays or work stoppages are immediate, severe, and long-lasting for CIAC member-companies. The economic impact of a work stoppages averages $1 million per day, per facility.

 

Chemistry industry urges government and CN to work together to get goods moving again

November 19, 2019

OTTAWA – The Chemistry Industry Association of Canada (CIAC) urges the Government of Canada, Canadian National Railway (CN) and Teamsters Canada to work together to prevent serious damage to the Canadian economy and get critical goods moving in Canada again.

“The current work stoppage is extremely detrimental to the Canadian economy and to our member-companies who rely exclusively on rail to ship roughly 80 per cent of their production,” said Bob Masterson, President and CEO of CIAC.

“Fully $38 million worth of industrial chemical products rely on CN’s network to get to their destinations every single day and that the economic impact of the work stoppage is $1 million per day per facility that is shutdown. Some of those goods are also essential to core public services such as water treatment. We urge both sides to consider the far-reaching and urgent economic implications the strike activity and work stoppage at CN is having on industry.”

In many cases, chemical plants are continuous operations that require reliable, uninterrupted rail service to produce and deliver essential products to customers. In the event of an interruption, they quickly run out of storage capacity and incur shortages for incoming raw materials.

The impacts of a CN strike are immediate, severe, and long-lasting as there are no viable alternatives for shipments. Many CIAC members are captive to CN’s network. Even those served by both CN and Canadian Pacific Railway (CP) have been told that CP’s network is not in a position to take on extra capacity.

CIAC believes that a negotiated solution is always the preferred outcome. Should negotiations fail, however, the Government of Canada must be prepared to act quickly and in the national interest to order the parties to return to work and the negotiating table.

About CIAC:

The Chemistry Industry Association of Canada (CIAC) is the Association for leaders in the chemistry sector in Canada; a $58 billion industry. The Association represents more than 60 members and partners across the country. Members of CIAC are signatories to Responsible Care® – the Association’s UN-recognized sustainability initiative.

Canadian plastics and chemistry associations to create new combined plastics division

Advocacy efforts to focus on building a circular economy for plastics

November 13, 2019

The Chemistry Industry Association of Canada (CIAC) and the Canadian Plastics Industry Association (CPIA) today announced they are joining forces to create a new plastics division to be housed within the CIAC. Pending CIAC and CPIA Board and member approval, the division would be operational in July 2020.

CIAC and CPIA have a history of working collaboratively on projects and issues throughout the years. In 2018, CIAC and CPIA and their members jointly announced ambitious waste reduction targets of 100 per cent of plastics packaging being reused, recycled, or recovered by 2040 and 100 per cent of plastics packaging being recyclable or recoverable by 2030. Additionally, they agreed to a broader commitment to Operation Clean SweepÒ.

“CIAC and CPIA have very complementary strengths and mandates,” said Joel Rudolph, Vice President Strategy and Business Development, Farnell Packaging and Chair, CPIA Board of Directors. “Combining those strengths will increase our share of voice about urgent plastics issues with important stakeholders at a time when our sector needs the clearest and most unified national voice possible.”

“The chemistry and plastics sectors have a long history of innovation to solve society’s most pressing needs by developing new processes, solutions and products,” said Ed Bechberger, President, ERCO Worldwide and Chair, CIAC Board of Directors. “Our Boards agree that the time is definitely right to come together and facilitate the shift to a circular economy.”

The Boards of the two organizations are continuing their due diligence, with the intention of finalizing agreements and recommending confirmation of the transaction by members in Q1 of 2020, with a target closing date of Canada Day 2020. There will be change for each organization should the realignment be approved, and the details of those plans will be developed in the next few months. As part of the process, CPIA will be wound up and dissolved.

About CPIA:
Since 1943, the Canadian Plastics Industry Association has served as the national voice for and leader in plastics industry sustainability across Canada, representing the interests of plastics value chain including resin and raw material suppliers, processors/converters, equipment suppliers, recyclers and brand owners.

About CIAC:
The Chemistry Industry Association of Canada (CIAC) is the Association for leaders in the chemistry sector in Canada; a $58 billion industry. The Association represents more than 60 members and partners across the country. Members of CIAC are signatories to Responsible Care® – the Association’s UN-recognized sustainability initiative.

Ontario Fall Economic Statement addresses business competitiveness

The Chemistry Industry Association of Canada (CIAC) congratulates the Ontario Minister of Finance on delivering the 2019 Fall Economic Statement. We are very pleased with the steps taken so far to address business competitiveness and that the province recognizes that more work remains to be done to win new business investments. CIAC firmly agrees that Ontario must remain vigilant in eliminating the budgetary deficit.

Among the initiatives contained in the 2019 Fall Economic Statement, CIAC is very pleased to see the province:

  • Establish the Premier’s Advisory Council on Competitiveness to determine the essential elements that will help Ontario win large scale business investments and more well-paying jobs.
  • Continue the commitment to eliminate unnecessary red tape that adds cost, time and complexity that do not serve a public interest.
  • Relaunch of the Eastern Ontario and Southwestern Ontario Development Fund programs.
  • Lowering the small business corporate income tax and employment payroll costs.
  • Review existing power generation contracts to find saving opportunities.
  • Official Annual Day of Action on Litter beginning May 12, 2020.

Ontario’s $24-billion chemistry industry is the third-largest manufacturing industry and second largest exporting sector in the province. The sector is a key employer in the Sarnia-Lambton, GTA/Niagara and eastern Ontario regions and directly employs 46,000 Ontarians in well-paying jobs and supports another 220,000 Ontario jobs. Our sector provides important inputs to a range of key manufacturing sectors in the province including automotive, forest products, construction, and food and beverage. The chemistry sector is a key source of innovation and is an indispensable solutions provider to address the challenges of climate change, clean air and water and waste recovery. Ontario’s chemical manufacturers must compete globally both for market share and investment.

The chemistry sector is the fastest growing manufacturing sector in the United States. Over C$300 billion in investments have started or have been announced in the current business cycle, principally in the U.S. Gulf Coast and Midwest. Ontario has an opportunity to benefit from this investment wave.

CIAC is pleased to continue to work with the Ontario Government on the many priorities to create a prosperous Ontario that is once again the economic engine of the country.

CIAC pleased to see chemistry as an integral part of Alberta’s climate and emissions management strategy

The Chemistry Industry Association of Canada (CIAC) is pleased to see that with the tabling of Bill 19, the Technology Innovation and Emissions Reduction Act (TIER), the Alberta government continues the province’s history of leadership on carbon pricing frameworks.

Alberta was the first jurisdiction in North American to apply a price on industrial greenhouse gas emissions in 2007. Now, TIER will create certainty for industry – including the chemistry industry – regarding carbon pricing which is critical for companies looking to invest in the province.

“The TIER program establishes an appropriate carbon pricing framework for our sector. One that acknowledges the energy-intensive, trade-exposed nature of Alberta-based chemical manufacturers,” said Greg Moffatt, CIAC’s Senior Director, Business and Economics. “It creates the conditions to drive new technology and innovation to reduce emissions while at the same time continuing to attract new investments and jobs while adding value to Alberta’s world-class, low-carbon natural gas resource.”

Federal and provincial governments are seeking low-carbon solutions as they confront the impacts of climate change. Canada’s chemistry sector and its highly skilled workers are uniquely positioned to provide innovative solutions in the fight against climate change. Since 2004, CIAC members have invested heavily cutting their carbon dioxide emissions by 18 per cent. Technology and innovation are key pathways to addressing climate change and managing emissions and we will continue to seek opportunities to improve on our record of reducing greenhouse gas emissions.

The most important emerging technologies moving the world to a low-carbon economy use chemistry to do so: green buildings and insulation; transportation innovation such as lighter vehicles, synthetic fuels and batteries; energy advancements in wind and solar; more efficient food packaging and chemical fertilizers; and air conditioning and refrigerant sectors. Alberta and Canada’s chemistry sector are a world leader in low-intensity carbon chemical production.

CIAC congratulates the government on moving forward with TIER. We will continue to work collaboratively with the Alberta government in developing its Climate and Emissions Management Strategy.

CIAC applauds further Ontario government actions to cut unnecessary red tape

The Chemistry Industry Association of Canada (CIAC) congratulates the Ontario government and the Honourable Prabmeet Sarkaria, Associate Minister of Small Business and Red Tape Reduction, on the release of its latest regulatory burden reduction action.

“CIAC firmly supports the Ontario Government’s commitment to streamline duplicate regulations that impact the competitiveness of the chemical manufacturing,” said Don Fusco, CIAC Director, Government and Stakeholder Relations, Ontario. “These measures that affect the chemistry sector will eliminate unnecessary cost, complexity and time, while protecting our health and the environment.”

Among the initiatives contained in the Better for People, Smarter for Business Act, 2019, CIAC is very pleased to see the province:

  • Repeal Section 34 of the Occupational Health and Safety Act, eliminating duplicative federal notification requirement for introducing new chemicals.
  • Revoke outdated acetone reporting requirements while maintaining stringent local air quality regulations.
  • Create an electronic system to allow businesses and governments to better track and report on hazardous wastes.

CIAC member operations are governed by Responsible Care®. The UN-recognized initiative compels member to innovate for safer and greener products and processes and continuously improve their environment and community protection, employee health and safety, product stewardship and social engagement.

Ontario’s $24-billion chemistry industry is the third-largest manufacturing industry and second largest exporting sector in the province. Overall, the chemistry sector directly employs 46,000 Ontarians in well-paying jobs and supports another 220,000 jobs in other sectors. The sector provides important inputs to sectors such as automotive, forestry, construction, and food and beverage.

CIAC is pleased to continue to work with the government on the many priorities to modernize business regulations to be outcome-focused and evidence-based while continuing to protect the public interest.

CIAC welcomes Alberta Government’s announcement to continue building on the success of the Petrochemicals Diversification Program

October 23, 2019

The Chemistry Industry Association of Canada (CIAC) is very pleased that the Alberta Government has confirmed its $1.1 billion commitment to the second round of funding for the Petrochemicals Diversification Program (PDP2).

PDP2 supports privately funded large-scale projects by providing royalty credits to companies that build facilities to turn ethane, methane, and propane feedstocks into products such as plastics, fabrics and fertilizers. Royalty credits are issued once projects become operational.

“We are very pleased that Alberta is committed to moving forward with this program. The first round of PDP provided $500 million-worth of royalty credits that resulted in over $9 billion of new chemistry investment now underway in Alberta. This announcement will allow Alberta to sustain the momentum, attract billions more in much-needed investment and create good-paying jobs while adding value to Alberta’s world-class, low-carbon energy resources,” said Bob Masterson, President and CEO of CIAC.

Under PDP2, Alberta received 20 additional applications, totalling close to $60 billion in proposed investment. In continuing the PDP2 program, Alberta stands to realize more than $20 billion in incremental investment.

“CIAC congratulates the government on moving forward with PDP. We will continue to work collaboratively with all stakeholders, especially the Alberta Government, to develop a long-term framework in Alberta of transparent and predictable investment supports that levels the playing field for new investments in Alberta,” Mr. Masterson said.

CIAC welcomes new members Cabot and Wanhua Chemical as well as new associate members Bagwell Supply and Lexon Projects

October 22, 2019

On October 17, the Chemistry Industry Association of Canada (CIAC) was pleased to welcome new members Cabot Canada Ltd. and Wanhua Chemical, as well as new associate members Bagwell Supply Ltd. and Lexon Projects Inc.

“We are delighted to have Cabot Canada and Wanhua Chemical join our CIAC family as full members and Bagwell Supply and Lexon Projects as associate members,” said Bob Masterson, President and CEO of CIAC.

“These are companies with safety, sustainability and innovation at the heart of their businesses. We hope to be able to further their goals for continuous improvement and leadership in Canada’s chemistry sector and look forward to strengthening our association through their expertise and knowledge.”

“Wanhua Chemical is honoured to join the CIAC and we look forward helping provide a responsible and sustainable future for the Chemical Industry of Canada,” said Jacob Sturgeon, President of Wanhua Chemical’s North American business. “Wanhua Chemical is deeply committed to providing Canada with advanced chemicals that will help transform the efficiency and sustainability of Canada’s construction and automotive industries, enhancing the quality of life for Canadians for generations to come.”

Cabot Canada Ltd. Is a carbon black manufacturing facility in Sarnia, Ontario, that produce carbon blacks for elastomer reinforcement for customers in North American, Europe and China. Cabot Canada is committed to upholding the highest standards in safety, health and environmental practices, while also striving to make a positive and lasting impact in the local community.

Wanhua Chemical is a global company with Canadian resale operations located in Guelph, Ontario and Calgary, Alberta. The company’s main business lines focus on Polyurethane, Petrochemicals, and Performance Chemicals and materials. As members of the American Chemistry Council, Wanhua has been Responsible Care® certified, a commitment that is reflected in the company’s mission statement: Advancing Chemistry, Transforming Lives; and, in their vision to become an innovative, world-class chemical company.

Bagwell Supply Ltd. is a leading Canadian supplier of bulk bags and packaging solutions. Founded in Vancouver, BC in 1997, Bagwell has over two decades of experience supplying companies across many industries in North America, including the chemicals sector, with safe, reliable and effective packaging solutions. In addition to standard bulk bags, Bagwell provides a variety of specialty bags, including filtration bags and UN-rated bulk bags, and offers full product customization.

Lexon Projects is a design, general construction, civil, mechanical contracting and engineering firm. For the past 27 years, Lexon has constructed and renovated facilities across Canada such as: chemical process and storage facilities; mud, sand and cement plants; tank farms; rail and truck load facilities; chemical containment structures; offices; testing laboratories; maintenance shops; manufacturing facilities; warehouses, and other facilities.

To learn more about Cabot Canada Ltd.: www.cabotcorp.com/company/worldwide-locations/north-america/canada-ontario-sarnia

To learn more about Wanhua Chemical: https://www.whchem.com/en/

To learn more about Bagwell Supply Ltd.: https://bagwell.ca/

To learn more about Lexon Projects Inc.: www.lexonprojects.com

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