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Alberta Premier Ralph Klein appears in his address to the province.

Klein announces $1B boost to rainy day fund

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Alberta Premier Ralph Klein's provincial address
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Date: Wed. Feb. 22 2006 6:16 AM ET

EDMONTON — Alberta will pump $1 billion of windfall energy revenues into its Heritage Savings Trust Fund, the first cash infusion into the rainy day account in two decades.

The announcement was the highlight of Premier Ralph Klein's annual TV address to Albertans on Tuesday night.

Klein promised to "save some of today's prosperity for future generations" by topping up the fund, currently worth $12.2 billion.

Peter Lougheed's government created the fund in 1976 as a hedge against economic misfortune and the inevitable decline of Alberta's energy reserves.

But six years later the province began siphoning cash from the fund. Within another 10 years the province stopped transferring money into it altogether.

Recently there has been increasing pressure from Lougheed and others to revitalize the fund, especially now that Alberta is debt free and swimming in record energy revenues that could reach $14 billion this year.

Lougheed could not be reached for comment Tuesday.

Klein's 25-minute broadcast was mainly a feel-good message about Alberta's growth potential, including hints about spending more money on cancer research.

"I can't think of a better gift to give future generations of Albertans, Canadians and people around the world than the hope of a cure for cancer," Klein said.

Specifics are expected in this week's throne speech, but there have already been media reports of a $500-million endowment fund for cancer research.

The broadcast included vignettes from a dozen Albertans, including Dr. Tony Fields with the Alberta Cancer Board.

"Alberta has the wealth to scale up our efforts and make great things happen," Fields said.

"Our vision is that by 2025 we will reduce the rate of new cancers in Alberta by 35 per cent and reduce the death rate by 50 per cent."

Klein also spoke enthusiastically about so-called "clean coal" technology and the need to expand research "to unlock coal's massive potential."

"We already use clean coal to meet more than half of our electricity needs," the premier said.

"The coal beneath our feet contains twice the energy of Alberta's conventional crude, natural gas and bitumen combined."

But Klein's statement about how much power is being generated from "clean coal'' was immediately challenged.

Mary Griffiths, with the Alberta-based Pembina Institute, said the province's coal plants have significant emissions, so there is no clean coal generation.

"They have emissions of sulphur dioxide, nitrogen oxide, mercury and other heavy metals, and very large emissions of carbon dioxide which causes global warming," she said.

"I don't understand where the premier got his information from."

David Lewin, chairman of the Canadian Clean Power Coalition, also confirmed that Alberta has no coal-fired plants that meet the latest definition of "clean coal."

"We're a fair ways away from having zero emission coal-fired plants. That technology doesn't exist," said Lewin, who also gave a testimonial in the broadcast.

Alberta's newest coal-fired plant uses emissions technology from 2000, while most of the province's coal generators use 20-year-old technology, he said.

But Energy Minister Greg Melchin downplayed the premier's use of the term "clean coal."

"If you're trying to get into defining clean coal then probably we're confusing terms," Melchin said.

"The premier talks about clean coal in the sense that we have some of the cleanest coal in the world because it's lower in sulphur."

The premier also used the broadcast to repeat plans to:

_ pass a law allowing the province to seize kids from drug addicts and traffickers.

_ create new standards for long-term care.

_ develop a new labour force strategy to curb a dire shortage of skilled workers.

_ to consult Albertans on a new land use framework.

Health care reform, the most contentious issue facing Klein's Conservative government, was barely mentioned.

"We are going to transform health care from a cause of concern into a source of confidence and hope," he said.

A spokesman for the premier estimated the total cost of the broadcast, including air time, production and advertising, was about $170,000.

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