Business

Imperial Oil CEO concerned about government cuts to Alberta Innovates

Alberta Innovates, the province's largest research agency, is shedding nearly 20 per cent of its workforce after its funding from the provincial government was slashed by the provincial government.

Rich Kruger concerned about disruptions to research efforts in the oilpatch

Imperial Oil chief executive Rich Kruger said he's concerned about cuts to Alberta Innovates. (Kyle Bakx/CBC)

The outgoing chief executive of Imperial Oil is disappointed by the Alberta government's recent cuts to a prominent research body in the province.

Alberta Innovates is shedding up to 125 jobs, which represents nearly 20 per cent of its workforce, after its funding from the provincial government was slashed by $76 million as part of the budget announced in October.

Alberta Innovates is the province's largest research agency and receives the bulk of its funding from the provincial government.

On Wednesday, Imperial Oil CEO Rich Kruger expressed dissatisfaction about the cuts by pointing out how new technologies take a considerable amount of time to develop, and that reduced funding at Alberta Innovates could be problematic in the future.

Kruger spoke met with journalists for the final time on Wednesday. He is retiring later this month and will be replaced by Brad Corson (left). (Kyle Bakx/CBC)

For instance, Imperial Oil and other energy companies have developed new technology to use solvents in oilsands production as a way of reducing costs and greenhouse gas emissions. Alberta Innovates played a key role in developing that technology in the province.

"Research is an area where continuity and focus tends to be of a longer-term nature," said Kruger.

"When we collaborate with other organizations, those research organizations are much the same as ours. They take continuity, they take expertise, they take collaboration. Anytime that's disrupted, of course we would have concerns about it," he said.

Research funding is important for the oilsands, since there isn't a resource quite like it in other places around the world, said Richard Masson of the University of Calgary. (Kyle Bakx/CBC)

There is a significant need for research spending in Alberta's oilsands in particular, said Richard Masson, an executive fellow at the University of Calgary's School of Public Policy and the former head of the Alberta Petroleum Marketing Commission. 

"Our largest resource is the oilsands and it's a pretty unique resource. There's really nothing like it in other places in the world," he said. "For us to improve performance, we need to have that innovation happen here."

Masson said technological innovation in the oilpatch often involves collaborations between private companies, universities, and other research groups like Alberta Innovates.

"That's probably what is concerning him, that some of that [collaboration] gets disrupted and it can slow down the pace of innovation," said Masson, responding to Kruger's remarks.

Alberta Innovates provides a range of grants and programs to assist entrepreneurs and researchers in a wide variety of industries. The agency had more than 3,600 active projects, according to its annual report.

A spokesperson for Soyna Savage said the Alberta energy minister did not have time on Wednesday for an interview about the funding cut to Alberta Innovates, nor to discuss the remarks by Kruger.

This slide, from an Alberta Innovates presentation in June, shows how developing the use of solvents in the oilsands involved many different researchers and companies. (Alberta Innovates)

ABOUT THE AUTHOR

Kyle Bakx

Business reporter

Kyle Bakx is a Calgary-based journalist with the network business unit at CBC News. He files stories from across the country and internationally for web, radio, TV and social media platforms. You can email story ideas to Kyle.Bakx@cbc.ca.

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