June 27, 2017 (Calgary) – News that the Sturgeon Refinery project is $800 million over budget, and that the Alberta government will borrow $481 million through APMC to finance the project, raises serious concerns about the risk to Alberta’s finances, says Alberta Party leader Greg Clark.
“I’ve had questions about the wisdom of risking taxpayer dollars in this project from the beginning, and news that it will be $800 million over budget is another reason to worry,” says Clark. “The full extent of risks to taxpayers has never been examined, which is why I’m asking the Auditor General to look into the project.”
Clark pointed to an analyst report released last week that indicated project costs have grown from $8.5 billion in 2014 to $9.3 billion.
“With projects like this it’s tempting to focus on only on the potential,” said Clark. “But backstopping the project with hundreds of millions of borrowed tax dollars, in addition to the opportunity cost of the bitumen feedstock from the Bitumen Royalty in Kind program, may not be a wise investment of scarce resources.
“Nearly $1 billion per year spent on refinery tolls would buy a lot of healthcare.”
Other risks include a potential credit rating downgrade and the possible sale of the 50% of the project the North West Redwater Upgrading owns.
“Moody’s said in their 2016 downgrade report that further downgrades are possible if project costs increase or if Alberta’s credit rating is downgraded,” said Clark. “Both have happened.”
Clark also noted that Budget 2017 indicated the Alberta Petroleum Marketing Commission (APMC) will borrow $481 million to backstop the project, an increase of 40% over the $344 planned from last year.
“With all of the unknowns on this project it would be grossly irresponsible for the NDP to approve future phases of the project. At the very least they should wait until after the Auditor General has reviewed the project.”
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