Alberta government a sucker for come-ons
Taxpayers shoulder the burden of multiple failures to conduct due diligence
EDITOR’S NOTE: The Alberta government must be delighted a federal election is being called today. Perhaps it will distract attention away from a litany of provincial fiascos, like the decision to dissolve the Alberta Health Services board the same day it was to receive a report on whether some of its business deals were subject to “improper activity.” Let’s not allow that to that happen.
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The poor Alberta government. Sometimes, they seem like a hapless group of hayseeds who are ripe for the picking by any P.T. Barnum huckster who finds their way to our doorstep.
The highest profile and most cringeworthy recent mistakes include:
The embarrassing purchase in 2022 of a Tylenol substitute from Turkey by the UCP government under Premier Danielle Smith. The government paid $70 million upfront but has received only $21 million worth of product. Hospitals stopped using it in 2023 after it was ruled the substance posed health risks to infants.
The $1.3-billion taxpayer-funded backstop of the Keystone XL pipeline in 2020, mere months before TC Energy Corp. abandoned the project in the face of numerous court challenges. Former premier Jason Kenney wears that one.
The decision to support TV star Kevin O’Leary’s plan to build “the world's largest” artificial intelligence data centre near Grande Prairie in northern Alberta. It turns out there has been no consultation with Sturgeon Lake Cree Nation, which alleges the project infringes on Treaty 8 rights. O’Leary, whose investments don’t always succeed, likes Donald Trump and supports “economic union” with the U.S.
Smith, Trump and O’Leary: the company you keep. (Photo; Smith X account) And now – although the story has yet to be fully revealed – the clumsy courting of Australian coal-mining firms. The on-off-on rescinding of a moratorium on coal mining in the Rocky Mountains has triggered several lawsuits, with damage claims (arguably inflated) reaching $15 billion. Taxpayers would be on the hook for whatever award might be granted or negotiated.
The first of the lawsuits is to go to trial April 25, and involves four foreign mining companies: Cabin Ridge Holdings Ltd. and Cabin Ridge Project Ltd.; Atrum Coal Ltd., along with its subsidiary, Elan Coal Ltd.; Black Eagle Mining Corp.; and Evolve Power Ltd., formerly Montem Resources Ltd.
The Alberta government opened up mountains to more mining in 2020 by rescinding the Coal Policy imposed by then-premier Peter Lougheed in 1976, but later reimposed restrictions in the face of public outcry. The mining companies allege Alberta’s 2022 decision to change coal mining rules cost them financially and resulted in a “de facto expropriation” of their coal assets.
The claimants are seeking damages not only for millions they say they have invested but also for lost potential lifetime revenue, had the mines gone into production.
A fifth company, Northback Holdings, launched a damage claim in June 2024, which will be heard separately.
Smith admitted in January that the government lifted a ban on new coal exploration and development on the eastern slopes of the Rocky Mountains because of the pending lawsuits. “We have to make sure that the taxpayers are protected,” Smith told reporters.
It is a curious move that suggests the government is in effect conceding it would lose the lawsuits. Some have even questioned whether the government wishes to avoid a trial because there could be potentially embarrassing revelations about promises made to the coal companies.
Too often, the UCP government has become an easy mark for players from a much larger league. In a baseball metaphor, it’s like pitting the Okotoks Dawgs against the Los Angeles Dodgers.
Consider, for example, what they’re up against in the legal squabble with Northback, proponents of the controversial Grassy Mountain project near Crowsnest Pass in the southwest corner of the province.
Northback Holdings Corporation was formerly known as Benga Mining Limited, a subsidiary of Hancock Prospecting Pty. It is owned by Gina Rinehart, a billionaire Australian mining magnate, who inherited the company from her dad.
Rinehart grew the company during the iron ore boom of the early 2000s, and is today Australia's richest person and one of the 10 richest women in the world, with a current worth of US $29 billion, according to Forbes magazine.
Over the years, Rinehart has been highly litigious, embarking on a protracted lawsuit in 2000 with her stepmother Rose Porteous.
Rinehart claimed Porteous married Rinehart’s father, Lang Hancock, only for his fortune, and that Porteous had nagged Hancock to death with repeated tantrums. Porteous denied the allegations. Court was told that in the last few days of Hancock's life, Porteous had attempted to pressure him into changing his will, forcing Hancock to take out a restraining order against her.
The lawsuit took 14 years to settle, with Rinehart’s company, Hancock Prospecting, retaining the mining tenements Porteous had sought.
Litigation seems to be a way of life for Rinehart. In 1988, Lang Hancock – Rinehart’s father – established the $5-billion Hope Margaret Hancock Trust, nominating Rinehart as trustee and his four grandchildren as beneficiaries. In 2011, the children sued to have Rinehart removed as trustee over her conduct in the role. After a four-year legal battle, daughter Bianca was named trustee in 2015, but the legal wrangling over billions of dollars worth of mining royalties and assets continues to this day.
Nor is Rinehart known as a friend of the environment. In Australia, she has been a leader in the fight to expand mining rights. She founded the lobby group ANDEV, (Australians for Northern Development and Economic Vision), and has sponsored the trips of prominent climate change denier Christopher Monckton to Australia.
A proponent of western Australian separatism, Rinehart in 2012 opposed a federal government tax of 30 per cent on the “super profits” from iron ore and coal mining in Australia (the tax was repealed in 2014). She also joined with a group of mining magnates to oppose a cap-and-trade emissions trading scheme for greenhouse gases.
Rinehart’s reputation as a lawsuit-wielding, anti-environment brawler is widely known. And yet the Alberta government blithely courted her company, Northback, with little apparent concern for what might happen if the deal went sideways.
Now the Smith government, and ultimately taxpayers, must live with the consequences of the province’s amateur business dealings with a shark. In effect, the government must allow the Grassy Mountain mine to proceed or prepare to spend years in court and possibly shell out a massive financial penalty as a consequence of its own naivete.
As provincial fiascos pile up, we look forward to the day this foolish government can be held to account.
©DougFirbyUnfiltered
Reprint with credit to dougfirby.substack.com
This would be a great time for a group of electors in Danielle Smith’s Medicine Hat constituency to launch a recall petition! A petition could overlap with the federal election and given her recent statements to Breitbart that her allegiance is with MAGA and not team Canada there are many reasons for people to support the petition. The 40% threshold is high but worth a try.
Given D. Smiths' demands on the next Prime Minister that waas delivered last week, maybe the citizens of Alberta can make some demands on the UCP. As one example clean up the backup in the Orphan Well Association inventory. Funding? Dip into the Heritage Saving Trust Fund. It may require an adjustment to the legal document setting up the trust. Maybe a referendum to approve this change and how funds are to be spent.
There are other demands we could make - drop the idea of getting rid of the RCMP, opting out of the CPP and forming a APP. There many others where we could make demands.