Alberta s International Strategy Building Markets

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1 Alberta s International Strategy 2013 Building Markets

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3 Table of Contents Message from Minister Cal Dallas Executive Summary Alberta s Place in a Changing World 13 Alberta relies on international relationships 14 Changing international dynamic 15 Alberta s energy revenues are diminishing 17 More global engagement is the answer Alberta s International Vision and Four Objectives 21 Diversify markets to expand the economy 25 Building Alberta s reputation as a global citizen 30 Preparing Albertans for success in the global community 33 Prioritizing government actions to take advantage of international opportunities Conclusion Appendix A: Alberta International Office Report

4 Minister s Message Alberta s future economic prosperity depends on increasing our market access. It s essential that we continue to expand our international profile, particularly in today s competitive global marketplace. It is my pleasure to launch Alberta s International Strategy. This new strategy will be our road map for the future, helping us to diversify our markets, build and attract international students and labour, while connecting business people, educators and researchers with their counterparts - linking every sector of our economy, to economies around the world. I am proud that the Ministry of International and Intergovernmental Relations will play a critical role in carrying out this exciting and rewarding plan a plan that will be a catalyst for increased trade and investment in key markets such as China, India and the Middle East. I am confident in the ability of Alberta s companies, small and large, to adapt to change and choose our future a future where we will be remembered as the pioneers of Alberta s second century and a leader within Canada and around the globe. Original Signed by Honourable Cal Dallas Minister International and Intergovernmental Relations ALBERTA S INTERNATIONAL STRATEGY 4

5 Executive Summary From the fur-trading posts of the 18th century to the present day, Alberta s success has been tied to strong international relationships that allowed it to attract immigrants, encourage investment and export goods. For the past century, Alberta s success has been tied most closely to trade with the rest of Canada and the United States. If we are to maintain and grow our economy and sustain the social outcomes that Albertans expect, it is clear today that we can no longer rely solely on these markets. Notably, in 2012 the province found itself in an unprecedented situation. The prices Alberta received for its energy products in the United States fell well below those in the rest of the world. As the United States ramps up its own energy production, this trend could continue and potentially worsen, unless Alberta gains access to new markets. Fortunately, strong ones have emerged. Growing economies in Asia and beyond have created demand for energy and also for quality consumer products, including foods and assorted goods. To grasp these opportunities, Alberta must overcome several key challenges. They are: transportation and infrastructure constraints engaging as a responsible partner in the current global conversation on climate change the need for new international relationships limited experience in new markets labour supply constraints ability to rapidly respond to volatile markets and move quickly Alberta s international efforts have never been more fundamental to its future. This is why the Government of Alberta is committed to working with Albertans, industry, and partners throughout the province and around the world to achieve more focused and active global engagement. 5 ALBERTA S INTERNATIONAL STRATEGY

6 The Government of Alberta s new International Strategy focuses on global priorities, articulates strategic objectives, and sets out an action plan that will achieve these objectives. It seeks to fulfill the province s vision to be: a desirable place to live, work, travel, study, and conduct research a safe, secure, and responsible energy producer a preferred supplier of goods and services to the world Alberta s International Strategy advances four strategic objectives. OBJECTIVE 1: DIVERSIFY MARKETS TO EXPAND THE ECONOMY Diversifying markets for our products is the only way to reduce risk as economic strength shifts between regions of the world. Alberta s private sector, large firms and small, will lead the way in creating new opportunities. However, especially in markets where governments play a substantial role in economic management, Government of Alberta action is necessary to forge successful economic partnerships, and open doors for Alberta companies. Attracting new investment from global markets is also critical. In the energy sector alone, it is estimated that companies in Alberta require $43 billion per year over the next 10 years to continue development of the oil sands and conventional oil and gas. State-owned enterprises and sovereign wealth funds are growing in importance and offer significant benefits so long as these investments operate under a consistent and transparent set of rules. ACTIONS 1.1 Support businesses in creating relationships in strategic and growing markets both now and in the future to diversify both products and markets. This support must include better communication with Alberta industry regarding market intelligence, identification of opportunities and enhanced participation of Alberta firms in the government s international activities. Actions include: Taking a Team Alberta approach to involve industry and Alberta institutions in designing and executing international missions that deliver real value in targeted markets. Promoting Alberta within the Canada Brand. ALBERTA S INTERNATIONAL STRATEGY 6

7 Working and partnering with interested organizations to enhance store-front business incubators employing market specialists to assist Alberta-based businesses in establishing themselves internationally. Strengthening Alberta s position on the ground in priority international markets by opening new offices and adding new capacity to better support Alberta companies. Creating a Small and Medium-Size Enterprise Export Council to create direct lines of communication between business, government and other stakeholders, and to serve as a forum to review opportunities, trade negotiations and policy developments. Support new bilateral and regional trade agreements to allow Alberta better access to targeted markets, especially in Asia. The government will participate fully in negotiations to advance Alberta s interests. 1.2 Diversify international investment. While Canadian and United States investors will continue to play an important role in building Alberta s economy, we will reach out to investors in new regions to make them aware of the significant opportunities available in Alberta. Actions include: Sending missions to the Middle East and Asia to attract targeted investment and engage more with the financial communities of these regions. Building capacity in Alberta s international offices to engage potential investors, making them aware of the opportunities in our province and the rules governing foreign investment. 1.3 Work with the federal government to create certainty for investors. Recent steps taken by the federal government have set out new guidelines for investment, specifically in the oil sands. As owners of the resource, Alberta cannot afford loss of foreign investment due to uncertainty over rules for investment. Alberta has a stake in decisions made by the federal government, and we must ensure the interests of Albertans are understood. Actions include: Seeking a formal framework for active engagement in the federal government s foreign investment review process to provide more detailed information regarding Alberta s industry and the priorities of Albertans. Pursuing greater clarity on how exceptional circumstances will be defined within the federal review process for foreign investment in the oil sands. Alberta will also continue to push for maximum input on decisions that impact the province s resources. 7 ALBERTA S INTERNATIONAL STRATEGY

8 1.4 Support other Government of Alberta strategies to expand market access. As a key priority of Premier Redford, various ministries across government are working on important strategies to support expansion into new markets and minimize key barriers in obtaining that objective as well as attracting tourists and individuals to our province. Alberta s international efforts will support these strategies. OBJECTIVE 2: BUILD ALBERTA S REPUTATION AS A GLOBAL CITIZEN Awareness of the oil sands as a global energy resource has brought many benefits to Albertans. It has attracted billions of dollars in new investment, created opportunities for Alberta firms and entrepreneurs and highlighted Alberta s commitment to innovation. It also offers Alberta an opportunity to engage in the international dialogue on the future of global energy development and environmental leadership to an extent that is largely unavailable to other sub-national jurisdictions of Alberta s size. Along with these benefits come increased responsibilities and greater pressure to show leadership on critical issues facing our world. Unfortunately, some international audiences perception of our province is one-dimensional, equating Alberta with irresponsible energy development, specifically in the oil sands. These perceptions must change if we are to build the province s reputation as an engaged and responsible global citizen. Alberta stands ready to showcase its environmental leadership and work with others to share best practices. ACTIONS 2.1 Highlight a broader set of Alberta s strengths in order to benefit from international opportunities. Alberta must showcase its many dimensions as a vibrant jurisdiction and convey our shared values with our international partners. Actions include: Broadening the focus of international missions to communicate Alberta s place at the forefront of agriculture, forestry, education, culture, and innovation. 2.2 Build long-lasting, dynamic relationships with partners around the world. Alberta has many opportunities to engage international partners through forums, agreements and active relationship building. A challenge is to discern which are of maximum benefit to Albertans. Actions include: Identifying governments and organizations within priority regions and sectors to pursue active partnerships delivering tangible outcomes that advance the interests and reputation of Alberta. Reviewing existing international agreements, including bilateral and multilateral agreements, to ensure they are aligned with the priorities of Albertans. ALBERTA S INTERNATIONAL STRATEGY 8

9 2.3 Build Alberta s reputation for its commitment to transparency and responsibility in resource development and environmental leadership. For many years, Alberta has communicated with international audiences regarding the importance of our resources. We must continue to deliver this message, but broaden our audience and highlight our commitment and progress toward greater openness and transparency within an integrated resource management system. Actions include: Proactively engaging civil society organizations in other jurisdictions with an interest in Alberta s environmental performance and resources. Welcoming delegations to oil sands sites and offering opportunities for international audiences to engage with Albertans across the province. Seeing these operations as well as other opportunities in person is the best way to make an informed decision on issues such as oil sands development. Sharing our expertise, especially with respect to the regulation of extractive industries and the environment, with other parts of the world. 2.4 Establish an International Development Office to coordinate the complete scope of Alberta s work in international development and maximize the benefit to the province and international partners. Actions include: Supporting businesses pursuing international development funding. Coordination and support of cross-government initiatives. OBJECTIVE 3: PREPARE ALBERTANS FOR SUCCESS IN THE GLOBAL COMMUNITY As economies become more integrated, people around the globe are preparing to go beyond their borders to make their mark and build their future. Alberta already has benefited greatly from the determination and skills of those who come here to work, study and live. The Government of Alberta must be ready to continue to attract and support these individuals. As new markets become more important for the province, Albertans will need to be ready to go out and engage with the world. This preparation takes many forms, from practical skills like language training, to the more nuanced cultural understanding that comes from interacting with people from other nations. The Government of Alberta is committed to helping Albertans as they prepare for success in the global community. 9 ALBERTA S INTERNATIONAL STRATEGY

10 ACTIONS 3.1 Encourage a more global perspective through Alberta s education system. Alberta s vision of education for the next two decades, articulated by Albertans in Inspiring Education, calls for the education system to develop students who are ready to engage with the global community. Alberta s post-secondary institutions are also at the forefront of creating global opportunities and linkages for students and researchers. Actions include: Supporting implementation of Inspiring Education in the education system to help prepare Albertans to be engaged thinkers and ethical citizens with an entrepreneurial spirit. Implementing the Alberta Abroad Program to support graduates as they work in specific markets to gain experience and perspective. 3.2 Attract international students and labour to assist in growing our economy and enriching our society. Actions include: Developing a highly targeted domestic and international labour marketing strategy to help meet Alberta s labour challenges. Attracting students, researchers, graduate students, academics, entrepreneurs, and other professionals with specialized skills and knowledge to the province. Better using Alberta s international offices to proactively engage those interested in coming to Alberta to work and study. 3.3 Communicate Alberta s international efforts to Albertans on a regular basis through stakeholders such as local chambers of commerce and economic development authorities. OBJECTIVE 4: PRIORITIZE AND INTEGRATE GOVERNMENT ACTIONS TO TAKE ADVANTAGE OF INTERNATIONAL OPPORTUNITIES The Government of Alberta must be prepared to identify, analyze and respond to new realities and opportunities. This will not be done in isolation. The government will rely on the expertise and experience of industry, on strong coordination across government departments and on ongoing linkages with other governments and institutions. ALBERTA S INTERNATIONAL STRATEGY 10

11 This work must also acknowledge that success internationally is only possible if Alberta works collectively with the Government of Canada and its provincial counterparts in dealing with intra-canadian issues. It cannot be certain about the shape of the future, but it is certain that Alberta will require stronger analysis to identify opportunities and greater coordination to move ahead of global competitors. ACTIONS 4.1 Enhance internal expertise and coordination. This will require information sharing, shared governance, and clear direction, as well as investments to address gaps in capacity. Actions include: Developing new performance measures to better track qualitative outcomes and report to the public. Developing and applying regional strategies that are aligned with the priorities of the International Strategy. Key markets in the United States, China and Asia will be prioritized, as will the key areas of the oil, gas, forestry, and agricultural sectors. This will help guide planning and the allocation of resources for government action and missions in the coming years. Investing in policy capacity to provide investment, trade negotiations and economic analysis and follow-up. Building corporate strategic market intelligence and analysis capacity within government to ensure opportunities are identified and acted upon in a timely manner. Ensuring clarity with stakeholders on the roles and responsibilities within government between International and Intergovernmental Relations and other departments as it relates to international trade, investment and advocacy. 4.2 Enhance collaboration with partners and stakeholders, including the federal government, postsecondary institutions, municipalities, businesses, and cultural groups. Actions include: Working in cooperation with Alberta stakeholders to align opportunities and strategic engagements, agendas, priorities and incoming/outgoing missions. Engaging the Asia Advisory Council as a catalyst for understanding the opportunities and overcoming the challenges Alberta faces in this key region and becoming an advocate for Alberta. 11 ALBERTA S INTERNATIONAL STRATEGY

12 Engaging federal and provincial governments in developing collaborative international approaches. Examples include working with the New West Partnership to highlight Western Canada s importance as a trading partner with Asian countries and working with consulates on joint outreach to state-level decision makers in the United States. Maintaining a more consistent dialogue with the Government of Canada through the new Alberta Ottawa Office at all levels to ensure alignment, shared understanding, and joint actions when appropriate. Developing a new intergovernmental strategy that will strengthen Alberta s engagement efforts with its Canadian partners. The government recognizes that global dynamics will require adjustment to these priorities in the future, and the government will review this strategy on a regular basis to ensure that its global priorities reflect Alberta s needs and the global situation. It is also important to note that the government will take steps to ensure that it can support Alberta entrepreneurs and firms working in any sector that are looking to move into international markets. Alberta s history shows that we have never shied from the next opportunity. As international dynamics shift, new opportunities are emerging around the world. It is time to work together towards global success that builds and sustains Alberta and its communities for decades to come. ALBERTA S INTERNATIONAL STRATEGY 12

13 Alberta s Place in a Changing World ALBERTA RELIES ON INTERNATIONAL RELATIONSHIPS From the establishment of the fur trading posts in the 18th century to the present, Alberta s economic success has been inextricably linked to the ability to establish effective trading partnerships and to attract people and investment. Generally stated, the province s success has depended on its ability to build relationships often taking years of effort to establish. In recent times, leaders like Premier Peter Lougheed expanded those relationships into new lands and created opportunities that were global in scope. Alberta s international program aggressively advanced trade, tourism, culture, immigration and government relations within the parameters of a strong and united Canada. Alberta s international program has been a clear recognition that its success has depended on its ability to engage the global community in a direct and meaningful way. Through successive governments and initiatives, Alberta has welcomed the world, and it has been rewarded with unprecedented immigration, investment and growth. 13 ALBERTA S INTERNATIONAL STRATEGY

14 Exports per Person 2012 $30,000 $25,000 $28,924 $20,000 $15,000 $10,000 $5,000 $0 Canada $ $6,834 BC $24,421 AB SK $8,718 MN $ ON $7,693 QC $19,595 NB $3,961 NS $5,759 PEI $21,953 NL Figure 1: Exports per Person in 2012 Alberta is one of the highest provincial exporters per capita in the country. At $24,421, it is well above the Canadian average of $12,201 per person. CHANGING INTERNATIONAL DYNAMIC Today, Alberta must once again pursue new relationships as events around the world provide both challenges and opportunities for Alberta. The growth of domestic energy supply in the United States could diminish demand for Alberta s oil and gas. The growing middle class in emerging markets is creating demand for higher quality products like food and household goods. As a result, issues like food safety and security are increasingly demanded in China, India, and the Middle East. As a producer of such products, Alberta has an opportunity to supply these markets. ALBERTA S INTERNATIONAL STRATEGY 14

15 Other significant trends include: Nations such as Australia are aggressively entering emerging markets and seeing success. This creates increased competition for Alberta in key markets. Increased information and communication are opening up opportunities for capital investors all over the world. Alberta competes in real time with hundreds of jurisdictions to attract capital and labour. World consumers are more conscious of environmental and sustainable development issues than ever before. Consumers want assurances that their products are being produced in a safe, responsible manner. Albertans share those expectations, and Alberta will need to increasingly respond to the challenges of growing its economy in a sustainable manner. The federal government is looking to liberalize trade between Canada and the rest of the world, and Alberta strongly supports these efforts. If Canada and Alberta are not successful in these discussions, our products and services will be at a disadvantage in many markets around the world. Natural disasters such as the 2011 tsunami in Japan have consequences that are still unfolding. That particular disaster has caused Japan to look to new energy alternatives to power its economy and society. As a world-class supplier of energy products and services, Alberta could supply the Japanese market. ALBERTA S ENERGY REVENUES ARE DIMINISHING In 2012, Alberta exported $95 billion worth of goods worldwide. Energy was Alberta s largest export sector, accounting for 73 per cent of that total. Alberta s largest trading partner was (and still is) the United States, which accounted for 87 per cent of Alberta s total exports in 2012 and 99 per cent of Alberta s crude oil and natural gas exports. 15 ALBERTA S INTERNATIONAL STRATEGY

16 Alberta s 2012 Exports by Product Natural Gas 7% Other Energy 5% Other 3% Crude Oil 61% Other 27% Metals & Metal Manufacturing 7% Other Manufacturing 20% Plastics & Petrochem 26% Agriculture 35% Forestry 8% Figure 2: 2012 Exports by Product Alberta s 2012 Exports by Destination Other Europe 3% Middle East 6% Latin America 7% United States 87% Other 13% China 29% Japan 15% Other Asia 22% EU 10% Mexico 8% Figure 3: 2012 Exports by Destination ALBERTA S INTERNATIONAL STRATEGY 16

17 In 2012, the province found itself in an unprecedented situation. The prices Alberta received for its energy products in the United States fell well below those in the rest of the world. This trend could continue indefinitely as the United States ramps up its own energy production, expecting to be self-sufficient in oil by Energy provides a good example of the risks associated with relying heavily on one customer. Other sectors would also benefit from expanded and more diversified markets for their products. It is estimated that the agriculture sector could gain $1 billion per year and the forestry sector could gain up to $2.4 billion per year. These additional revenues would directly contribute to the standard of living of all Albertans. They would help fund Albertans infrastructure priorities building the schools, hospitals, roads and other services that will support the growth of the province s economy for decades to come. In addition, these potential export revenues would directly support industry and promote further investment throughout Canada in education, transportation, research, innovation and more. MORE GLOBAL ENGAGEMENT IS THE ANSWER It is critical to the core economic interests of the province that Albertans understand these developments, their potential impact on the province and our quality of life, and why we need to act with urgency today to see benefits in the decades ahead. Alberta needs to establish a purposeful presence in regions that offer opportunity for Alberta s products, services, and people. Premier Alison Redford has set six focused agenda items: one of them is market access. Its objectives are to increase exports of commodities to countries outside the United States and to increase the revenues Albertans receive for their exports. Under this scenario Albertans will capture international market prices for the province s exported goods and services, thus enhancing programs, services and infrastructure for Albertans. To achieve these outcomes, government must address the market barriers (listed in Figure 4) that limit the value of our products. Some of the challenges are associated with Alberta being a 17 ALBERTA S INTERNATIONAL STRATEGY

18 landlocked province, hence the need to gain access to tidewater. Others involve increasing public understanding and building political alliances to influence the development of new infrastructure that requires multi-year approval and construction. Different sectors and industries face different market access challenges. The following chart identifies some of the challenges for industries in export markets. ALBERTA INDUSTRIES MARKET BARRIERS Crude petroleum Natural gas Agricultural products Forestry products Transportation and infrastructure constraints (ie, rail, pipeline, ports & air access) Social license challenges Lack of effective key relationships (Provincial, federal and/or international) Regulatory and policy challenges Volatile markets/ markets that can discount our products High production cost/limited human resources Limited knowledge of new markets/ limited access to international marketing tools Estimated annual value of exported goods if market access is gained $8 billion $2-6 billion $1 billion $ billion Figure 4: Market Barriers LEGEND Major Some Little or none To overcome the market barriers listed above, Alberta businesses and government need to collaborate more effectively to create relationships that are strategic for Alberta. The collaboration must extend to national and sub-national governments. Alberta s International Strategy details additional measures to help achieve this. ALBERTA S INTERNATIONAL STRATEGY 18

19 Alberta s International Vision and Four Objectives Our international vision The vision of the Government of Alberta is that Alberta will be regarded internationally as: a desirable place to live, work, travel, study, and conduct research a safe, secure, and responsible energy producer a preferred supplier of goods and services to the world The vision is that Albertans will succeed whatever the future might bring. Four objectives and outcomes While no one can predict the future, it is anticipated that changes will come at a faster pace than ever before and on a global scale. To achieve our vision, we will work towards achieving the following four objectives and outcomes: 19 ALBERTA S INTERNATIONAL STRATEGY

20 Diversify markets to expand the economy Build Alberta's reputation as a global citizen Prioritize government action to take advantage of international opportunities Prepare Albertans for success in the global community Figure 5: Four Objectives of the Strategy 1. Diversify markets to expand the economy. While further developing our current markets and investment sources, Alberta will export new goods and services to new markets and attract investment and labour from new sources. This will help to create new jobs, wealth and opportunities for citizens; sustain our quality of life and improve the level of public services for future generations. 2. Build Alberta s reputation as a global citizen. Alberta will be recognized and trusted internationally as an engaged and responsible global citizen and producer. 3. Prepare Albertans for success in the global community. Albertans will have an international mindset; be equipped to compete in the global market place and able to capitalize, engage and succeed in a dynamic global environment. 4. Prioritize and integrate government action to take advantage of international opportunities. International actions coordinated by the Government of Alberta will be aligned with the direction set in Alberta s International Strategy. Alberta will build effective partnerships that support economic development, tourism, cultural engagements, and promote trade and investment and attract labour. ALBERTA S INTERNATIONAL STRATEGY 20

21 OBJECTIVE 1: DIVERSIFY MARKETS TO EXPAND THE ECONOMY KEY INITIATIVES 1.1 Support business to create relationships in strategic and growing markets 1.2 Diversify international investment 1.3 Work with the Federal Government to create certainty for investors 1.4 Support other Government of Alberta strategies to expand market access 1.1 Support business to create relationships in strategic and growing markets Alberta has unique advantages in international markets, but opportunities are not always recognized due to a lack of focus and capability. To start with Alberta uses a number of technologies within its various industries, including energy and agriculture. These technologies form a large part of Alberta s competitive advantage in international markets. Many of these technologies are not being connected to international opportunities simply because there is no consistent effort to identify, facilitate, and follow up on them. To facilitate international trade, the Government of Alberta establishes and fosters long-term relationships in markets where there is demand for Alberta s products and services. These relationships are established at different levels political, government and business, as well as through post-secondary and other stakeholder groups. Each level plays a role in creating the links, growing the points of contact and circles of influence, and ultimately developing an effective network. When export opportunities are identified, communication is key - market intelligence must be shared and action taken. All parties must work together to capitalize on market opportunities in a Team Alberta approach. The Team Alberta approach applies equally when a mission of foreign dignitaries or customers visits the province. Working in conjunction with stakeholders, the Government of Alberta will increase its efforts in inviting the global community to Alberta. Each mission will have different needs requiring the right information and experience. The agenda will consider opportunities to meet with political representatives, visit trade shows or cultural events, tour Alberta businesses and 21 ALBERTA S INTERNATIONAL STRATEGY

22 meet with industry leaders. All Albertans, industries and stakeholders have a role in representing Alberta to visiting groups. How they interact will reflect on the entire province and this will determine the success of the resulting networks. Government will collaborate with industry and stakeholders in developing the specific agendas and experience to ensure a positive story is told when the visitor goes back home. A Team Alberta approach however will be undertaken in the context of Team Canada. One of Alberta s most valued assets internationally is the ability to promote ourselves within the Canadian identity and showcase our province as part of the greatest country on earth. People around the world know Canada and Alberta will make every effort to build on that positive understanding by working closely with our partners in the Federal Government. In support of individual businesses, the Government of Alberta will continue to facilitate trade but in additional ways. Two new tools that will advance the Strategy are: A Small-and Medium- Size Enterprise Export Council will establish direct lines of communication between business, government and other stakeholders, as recommended in the Alberta International Offices Review Report (provided in Appendix A). The council will serve as a forum to review opportunities, trade negotiations and policy developments. Partner with store-front Alberta business incubators that employ market specialists to assist Alberta-based businesses in establishing themselves internationally. This will be done in collaboration with other ministries, boards and agencies. To establish this initiative, important models like Tec Edmonton will be examined. Initiatives such as these demand that Alberta s international offices become the primary points of contact within our international markets, providing a more robust level of service. It is recognized that the network will need to be expanded to new locations and be supplemented with increased capacity on the ground. For the past several months, the Government of Alberta has been reviewing the operations of its international offices. One of the key recommendations of the review is to increase the presence of Alberta in a number of locations including the United States, China, India and other emerging markets (the international office network is discussed further in Appendix A). Also critical in this endeavour is the recognition that bilateral and regional trade agreements between Canada and our key trading partners are critical for facilitating and supporting business relationships between trade-oriented Alberta firms and their foreign business partners. Alberta has consistently supported the elimination of barriers to international trade as a key means to ensure the widest possible range of opportunities are available to Alberta firms and to preserve the high standard of living in the province. Over the past several years, the federal government has pursued the reduction and elimination of barriers to trade through the negotiation of numerous bilateral free trade agreements. These agreements have helped open new doors into new markets for Alberta s exporters. As tariffs and other border measures that affect trade in goods have already been lowered through a range of trade agreements over the past 50 years, there has been an increased focus in more recent trade agreements on lowering ALBERTA S INTERNATIONAL STRATEGY 22

23 non-tariff barriers to trade and facilitating trade in services. In the Canadian context, these behind the border elements of free trade agreements affect areas of provincial jurisdiction. For example, trade agreement obligations may cover regulatory harmonization, mutual recognition of professional qualifications and government procurement, all of which are within provincial jurisdiction in Canada. In the negotiation of international trade agreements, the Government of Alberta participates with the federal government, and other provinces and territories where possible, to ensure that the priorities of the province are reflected in any final agreement. Alberta will continue to advocate for a federalprovincial-territorial agreement which would ensure that the province has a consistent and predictable ability to participate in Canada s future bilateral and regional trade negotiations. The negotiation of the recent Canada-EU Comprehensive Economic and Trade Agreement negotiations serve as a model, where Alberta and other provinces and territories have been full participants in the negotiations. 1.2 Diversify international investment Attraction of foreign investment is vital to the economic health of this province. The Energy Resources Conservation Board (ERCB) reports that between 2000 and 2011 a total of $224 billion of capital investment was put into Alberta s conventional oil and gas sector and an additional $137 billion into the oil sands. Over the next decade the ERCB is forecasting the need for considerably higher investment $240 billion into conventional oil and gas and $194 billion into the oil sands, an average of $43 billion per year for ten years. These large amounts would be difficult to supply by Alberta alone or even by all of Canada. Canadian investors already own 65 per cent of oil and gas extraction and support activities (compared to 47 per cent in the manufacturing sector) and would be cautious about overconcentration in this sector. American investors have traditionally been the largest source of foreign investment, but this source could be diverted into their own new domestic energy projects. European investors have had to cope with their own economic struggles in recent years, as well as anti-oil sands lobbyists. Alberta needs to reduce the risk of running short of capital by diversifying sources of investment. Most recently Alberta has been looking beyond traditional sources in the U.S. and Europe. The Government of Alberta will continue to promote Alberta as a good place for international companies to invest. It will identify opportunities to set up business in Alberta, either alone or in partnership with Albertans, and it will show international financial institutions how investing in Alberta can maximize their returns, while making clear what are the rules for foreign investment. The government will also identify, engage and recognize export-driven, internationally successful private sector firms to advance Alberta s interests in international markets, and establish the Alberta brand by leveraging their pre-existing relationships. Its activity in this area 23 ALBERTA S INTERNATIONAL STRATEGY

24 will also include increased targeted outreach of missions to new financial communities in the Middle East and Asia. Much like trade facilitation, investment attraction is based on building relationships with international companies and establishing networks to identify opportunities. The Government of Alberta will strive to improve its market expertise and analysis through better use of the networks already established through its international offices, ministries and trade representatives. It will also improve its efforts to acquire and disseminate key market intelligence and business information to Alberta stakeholders. 1.3 Work with the federal government to create certainty for investors One recent issue of note is related to investment by state-owned enterprises and sovereign wealth funds. A study by the Canadian Energy Research Institute reports that fully one-third of foreign investment in the oil sands since 2003 has come from such Chinese companies. This is equal to the amount of U.S. investment and does not include the $15 billion acquisition of Nexen by CNOOC. Both the provincial and the federal governments believe the CNOOC-Nexen deal will benefit the entire country and any issues that arise can be mitigated. At the same time, both recognize there are exceptional considerations to an investment by a state-owned agency. As owners of the resource, Alberta has a stake in decisions made by the federal government. The Alberta government will seek clarity on how exceptional circumstances will be further defined by the federal review panel. It also will continue to push for maximum input on decisions and policies that impact the province s resources, for example, a formal framework for active engagement in the foreign investment review process. 1.4 Support other GOA strategies to expand market access As a key priority of Premier Redford, various ministries across the government are working on important strategies to support Alberta s expansion into new markets and minimize key barriers in obtaining that objective. Work is underway in a variety of fields including transportation, infrastructure, forestry, tourism, energy, and air access. Alberta s international efforts will support these initiatives as they are implemented. ALBERTA S INTERNATIONAL STRATEGY 24

25 OBJECTIVE 2: BUILD ALBERTA S REPUTATION AS A GLOBAL CITIZEN KEY INITIATIVES 2.1 Highlight a broader set of Alberta s strengths 2.2 Build long-lasting and dynamic new relationships 2.3 Build Alberta s reputation for its commitment to transparency and responsibility in resource development 2.4 Establish a new International Development Office to coordinate projects and maximize benefits 2.1 Highlight a broader set of Alberta s strengths Unfortunately, some international audiences perception of our province is one-dimensional, equating Alberta with irresponsible energy development, specifically in the oil sands. These perceptions must change if we are to build the province s reputation as a responsible global citizen. Alberta must engage international stakeholders and governments to ensure they have a complete understanding of our people and events and the pride we take in the land we call home. As important, Alberta must be diligent in collecting and analyzing information about developments in other parts of the world, recognizing the increasingly sophisticated ways in which the global community is becoming interconnected. Issues from around the world affect our province and news from Alberta spreads worldwide in minutes. Alberta must be able to communicate effectively, knowledgeably, and quickly to reach its international audience. Moreover, Alberta s advocacy efforts should not start and end at discussions on energy. Alberta has a lot to be proud of and is much more than the sum of its natural resources. We have a natural heritage that is the envy of the world. We have a vibrant and welcoming culture that brings people together in safe and caring communities. These are the values and advantages that we bring to our conversations and our relationships. Alberta s future success depends on its ability to access international partnerships and individuals in areas such as research, innovation, immigration, and education. In its missions, it must promote international engagement beyond economics to include cultural, artistic, student and alumni exchanges. 25 ALBERTA S INTERNATIONAL STRATEGY

26 2.2 Build long-lasting, dynamic relationships Over the years, Alberta has diligently built relationships through a variety of bilateral and multilateral institutions and organizations. One type of relationship that Alberta enters into is multilateral. All of Alberta s international multilateral relationships are in the United States or U.S.-Canada organizations. Alberta is active in a number of them, including: National Governors Association (NGA) National Conference of State Legislators (NCSL) Western Governors Association (WGA) Pacific Northwest Economic Region (PNWER) Council of State Governments (CSG) Council of State Governments Midwest (CSG-Midwest) Council of State Governments West (CSG-West) Energy Council Interstate Oil and Gas Compact Commission (IOGCC) Canadian-American Border Trade Alliance (CAN/AM BTA) Ports-to-Plains Trade Alliance (PTP) In July 2012, CSG West held its annual meeting in Edmonton. Hundreds of U.S. state legislators from across the Western United States were exposed first hand to world-leading Alberta facilities such as the Edmonton Waste Management Centre, the University of Alberta Hospital, and the oil sands. Many of the policies or decisions that most affect Alberta arise in the U.S. And while many policies might be national, the individual states have a lot of influence in their outcomes. Often Alberta can have more impact on U.S. decisions when interacting at the state level rather than the national level. Because states are smaller, it is possible to get to know decision makers personally. States also are more likely to understand Alberta s concerns as a fellow sub-national jurisdiction. Membership or participation in these organizations gives Alberta exposure to a large cross-section of U.S. decision makers. Premier Redford is able to meet with her counterpart governors, and MLAs are able to build critical relationships with their counterpart U.S. state legislators. Alberta s memberships in U.S. multilateral organizations have been extremely valuable for Alberta, providing direct access and relationship building opportunities with U.S. state-level decision makers and influencers. Opportunities for such types of relationships in other countries or with international organizations may be limited because of Alberta s status as a sub-national jurisdiction, but such opportunities will be investigated and pursued where they may exist. ALBERTA S INTERNATIONAL STRATEGY 26

27 From twinning agreements to trans-boundary partnerships, these relationships have allowed Alberta to explore cooperation and determine areas of mutual interest. These arrangements have strengthened Alberta s position in international markets, and have the potential to do even more if Alberta improves the coordination of the resources allocated to them. Moving forward, the Government of Alberta will review and identify governments and organizations within priority regions and sectors to pursue active partnerships delivering tangible outcomes that advance the interests and reputation of Alberta. 2.3 Build Alberta s reputation for its commitment to transparency and responsibility in resource development and environmental leadership. Alberta s advocacy efforts focus on influencing public policy in jurisdictions where such policies might have a negative impact on Alberta. Alberta advocates by educating decision makers and those who influence them and, to a lesser extent, the public. For example, during the softwood lumber dispute with the United States, Alberta made efforts to counter the lobbying efforts of the U.S. lumber industry. Alberta officials, both elected and non-elected, connected with their U.S. counterparts and demonstrated how protectionism was increasing the price of housing in the U.S. and hurting consumers and the construction industry. Premier Redford has identified challenges to Alberta s social licence to develop the oil sands as a key market barrier. Those opposed to oil sands development are trying to constrain development by curtailing access to markets. Campaigns have developed along proposed pipeline routes; boycotts have been threatened against companies that do not swear off the use of oil sands derived fuels; and campaigns have focused on curtailing investments in the oil sands by portraying them as unethical. In some areas, regulations have been proposed to discriminate against the oil sands. The consequences of curtailed development of the oil sands could be significant for both the Alberta and Canadian economies. Alberta must advocate for itself as an engaged and responsible global citizen, in a manner that reflects its values. To date, advocacy has focused on educating decision makers and influencers about the oil sands resource, its strategic and energy security value, its economic impact, environmental impact, and the regulations in place that govern 27 ALBERTA S INTERNATIONAL STRATEGY

28 its development. Alberta must stand by and promote its record: it is a leader in climate change legislation, being the first jurisdiction in North America to regulate and price carbon emissions from large industrial sources. It is a leader in creating open, transparent and efficient regulatory systems that govern the responsible development of our natural resources. It is also important that Canadians understand the contribution of the oil sands to the Canadian economy. Canada currently imports 45 per cent of its crude oil. Alberta could supply much of the oil being imported, but this will require support for new pipeline access to eastern Canadian markets. Alberta is currently co-leading the Council of the Federation (COF) work on the development of a Canadian Energy Strategy which will define common principles and objectives for energy development. Under the strategy, provinces and territories will be better positioned to build energy infrastructure, improve development of sustainable energy, protect the environment, and expand production to help meet global demand and drive domestic growth. Beyond Canada, Alberta s advocacy efforts must be broader than narrowly focused issue-by-issue engagement with legislators in other jurisdictions. Rather, there needs to be an ongoing and consistent dialogue to expand international trust in Alberta. One of the most valuable tools in advocacy is welcoming delegations of decision makers to Alberta. Here they can visit the oil sands and see Alberta s commitment to scientific research and development and to environmental regulation, not just on a theoretical basis, but in practical application. These missions also present an opportunity to show visiting delegations other aspects of Alberta beyond the oil sands. Outward missions by Alberta leaders are also an effective means to engage with businesses leaders, financial institutions, foreign government officials, academics and media. They can present scientific information and data to counter misinformation. Alberta will proactively engage organizations in other jurisdictions with an interest in Alberta s environmental performance and resources. Effort must also be made to engage Alberta business and non-government leaders to help carry Alberta s positive message to their respective counterparts. These individuals are important ambassadors for the province around the world and effort will be made to better utilize this important resource. Because of the important strategic value of the oil sands, advocacy efforts must be made in a variety of locations around the world including the United States, Europe and Asia. There is a need to prioritize these efforts based on current and future potential as sources of investment or markets, ALBERTA S INTERNATIONAL STRATEGY 28

29 Alberta government ministries have valuable sector expertise that can be shared with other parts of the world. For example, Alberta Justice has helped Vietnam reform its judicial system. likelihood of the region to undertake policies detrimental to Alberta, susceptibility of corporate consumers and investors in the region, and general public perceptions of Alberta and the oil sands in the region. Through both incoming and outgoing missions, Alberta will explore opportunities to share our expertise and experience with other parts of the world, especially with respect to the regulation and management of extractive industries. 2.4 Establish a new International Development Office to coordinate projects and maximize benefits Albertans have a community spirit that encompasses others around the world. Through their participation in various international development projects and programs, Albertans have improved the lives of thousands of families in various parts of the world. The Government of Alberta has various individual programs that comprise Alberta s considerable international development work. These programs represent a broad spectrum of support on various levels, from supporting individuals and the private sector to working with international financial institutions and foreign governments. For far too long, these programs have operated in isolation of one another, missing an opportunity to leverage and work together to more fully understand the complete activity of Alberta in key regions of the world and advance Alberta s broader strategic interests. Alberta will establish a new International Development Office that will coordinate and guide the full scope of Alberta s international development work and provide critical assistance to a variety of projects. This office will work with stakeholders such as the Department of International Trade and Foreign Affairs and internal ministries to ensure alignment towards opportunities for cooperation. It will focus on support for businesses pursuing international development projects and manage requests for Government of Alberta expertise in various governance projects. 29 ALBERTA S INTERNATIONAL STRATEGY