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Canada's oil capital Calgary to be swing city in Alberta election

By Nia Williams

(Reuters) - Canada's corporate oil capital Calgary will be a crucial battleground in Alberta's provincial election on Monday, with the latest polling suggesting Rachel Notley's left-leaning New Democratic Party (NDP) holds a slight edge in the city.

The closely-fought race reflects the increasing diversity of Alberta's largest city, home to the headquarters of nearly all of Canada's oil and gas companies.

Calgary, home to 1.4 million people, has traditionally been a conservative stronghold, but recent polling suggests some moderate voters may be deterred by the ruling United Conservative Party's (UCP) shift to the right under Premier Danielle Smith.

The outcome of Alberta's election will have a huge bearing on Prime Minister Justin Trudeau's ambitious climate agenda, with Smith's conservatives opposing most of his policies on the issue - in contrast to the NDP, which is more supportive. As Canada's largest oil-producing province, Alberta also produces the most emissions.

A poll from ThinkHQ Public Affairs released late Thursday shows 49% of Calgarians support the NDP, versus 43% for the UCP. In the last election, the UCP won 23 of the city's 26 seats.

The NDP would have to convert that polling lead into a landslide victory in Alberta's largest city, adding at least 15 Calgary seats to have a chance of winning the provincial election, said Marc Henry, president of ThinkHQ.

"Calgary is going to be a battleground...," Henry said. "The NDP is going to pick up some seats, it's just a matter of how many."

Smith has opposed many of Trudeau's climate policies, saying they threaten Alberta's economy. Notley is more supportive of federal emissions-cutting measures, while still promising to protect the oil and gas sector.

Tim Pickering, founder and chief investment officer of Calgary-based Auspice Capital Advisors, said the local industry is generally supportive of Smith's UCP. But he cautioned that there has been some frustration over policies like Alberta's Sovereignty Act - a law allowing the province to refuse to enforce federal laws it deems unconstitutional - that risk deterring investment in the province.

"Industry is cautious, not so much about Danielle Smith, but with politicians in general making statements and missteps that hurt the province," Pickering said, adding that many companies still saw the UCP as the only option.

Outside Calgary, the NDP is expected to clean up in the provincial capital Edmonton, while the UCP is tipped to sweep most rural ridings and smaller cities.

In 2019, the UCP's decisive victory in Calgary helped topple the NDP government, but the oil and gas industry, long seen as firmly supportive of Alberta conservativism, has become more wary of Smith's populist stance on Albertan sovereignty and a string of controversies since she became premier in October.

These include a report from Alberta's ethics commissioner this month that said the premier breached conflict of interest rules by discussing a pandemic-related prosecution case with her justice minister.

Lori Williams, a political science professor at Calgary's Mount Royal University, said the oil industry itself is increasingly diverse.

"The big oil players and the companies investing in research and production of cleaner energy would probably like a government that is seen as credible on the environment," Williams said. "They can live with either (party) but they want a government that's competent and stable."

Earlier this year, the-then CEO of Cenovus Energy said friction between Alberta and Ottawa was making meaningful discussions on funding decarbonization technology difficult.

Many companies would like to see more collaboration with all levels of government from whichever party wins on Monday, said Deborah Yedlin, CEO of the Calgary Chamber of Commerce.

"They expect more collaboration, whoever wins the election, to make sure the policies being put forward can be agreed on in a way that is constructive," Yedlin said.

(Reporting by Nia Williams, editing by Deepa Babington)