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Wednesday, September 26, 2007
Adios 'Alberta Advantage'
Cyril asks, below, whether a royalty hike would hurt the oil patch. I believe that today's Financial Post answers the question quite definitively with this story. The piece quotes an international energy research firm, Wood MacKenzie, as saying a 20% boost would knock US$26 billion off the value of 28 projects.
A graphic accompanying the story also shows that the royalty hike would make the Alberta oil patch the second most heavily taxed jurisdiction in the world, behind only South Africa.
Posted by Terry O'Neill on September 26, 2007 in Current Affairs | Permalink
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Comments
The graph beside Claudia Cattaneo's story kinda tells all.
Current tarsands royalties rates are among the most favourable in the world.
Alberta's conventional oil rates are higher than West Texas.
A wholesale adoption of a new regime as recommended would not be competitive.
As Speller points out on another thread, the feds are taking even more than Alberta is.
Posted by: set you free | 2007-09-26 11:44:51 AM
It is high time for The Republic of Alberta to take centre stage in the international array of nations.
Posted by: obc | 2007-09-26 11:49:02 AM
So how did all the lesser taxation oil bearing jurisdictions accumulate such humungos 'trust funds'?
Posted by: rockyt | 2007-09-26 1:28:04 PM
What did I told you Set You Free...
Let's booo those guys out.
Posted by: Marc | 2007-09-26 1:35:03 PM
The "jurisdictions" you speak of are not provinces, but countries.
As Speller has pointed out 25% now goes to the Federal government.
If Alberta could keep all its wealth here we would be awash in cash even more than we are now.
Alberta, like the rest of Canada does not have a taxation problem, we have a huge spending problem.
Why aren't we addressing that?
Posted by: deepblue | 2007-09-26 1:41:15 PM
Because values are different from coast to coast, mon ami. The only thing that rules that are: The Feds. You beleive that having a strong economic Quebec would result as a "Perfect Canada"...?
Posted by: Marc | 2007-09-26 2:12:03 PM
It is way past time to remove the federal government from all provincial jurisdiction. The result would be positive all the way round including a much smaller federal government and returning the accountability to where it belongs.
Posted by: Alain | 2007-09-26 4:02:25 PM
Much more than that Alain...
Each times the provincial premiers are regrouping by their own willingness to discuss issues, I see progress and respect. Each times it's the feds who called the shots, I see incomprehension, rants and way too much control to impose things that dosent concerns each cultures.
Now imagine a group of countries working hands in hands...
With all our ressources, exchanges, respect of different values, and natural cooparation if WE are willing to do so, we would be greater and better. That's how I see it.
Posted by: Marc | 2007-09-26 4:19:08 PM
With all that free trade era and the realities of this new millenium, I see no other appropriate ways than having everybody "Maitres chez nous".
Posted by: Marc | 2007-09-26 4:27:17 PM
This would be the only credibile "open federaralism" acceptable, not the present "who's fukn who" they present to us.
Posted by: Marc | 2007-09-26 4:37:07 PM
it seems premier stellmach is more progressive than conservative. this two billion dollar shakedown of the oilsands companies looks like something right out of hugo chavez's playbook. talk about killing the goose that lays the golden eggs! any economist worth his salt would tell mr. stellmach that raising taxes kills new investment and decreases government revenue in the long term. leave the royalties alone and EVERYONE will benefit for decades to come. alberta has been a beacon for entrepeneurs(?) and individualists amongst a sea of pablum puking socialist know-nothings in the rest of canada for as long as i can remember and it galls me to see her being smothered from within now as well as from the feds and the other jealous provinces. as to the federal government taking a 25% bite out of the province's oil resource revenues, i hope albertans tell the feds to go pound their own sand.
Posted by: robert | 2007-09-26 4:40:06 PM
George W. Bush proved it, just like JFK and Reagan did - drop taxes and the government income INCREASES - not raise taxes to get more money.
Raise taxes, and people invest less, make less profit and pay less taes.
But socialists cannot accept this painful (for them!) fact, so they expand programmes, increase taxes and then can't understand why the economy stalls. The French PM this week admitted that France is on the brink of bankruptcy. What further proof is needed?
Posted by: obc | 2007-09-26 4:47:10 PM
And what's better to save a country from bankruptcy than going to war, right obc...
Posted by: Marc | 2007-09-26 4:55:27 PM
France can't go to war. Their supplies of white flags are gone.
Posted by: obc | 2007-09-26 5:27:17 PM
To get back to the topic, those of us who were hurt by the NEP and then had to 'tighten our belts' under Ralph's regime have had just about enough of Alberta Progressive government here.
I'm going to vote Wild Rose Party next time around and "Unsteady Eddie" the Radical Pro-Feddi can go back to oblivion where he came from and take his bloated creeping Statism along.
Liberal/Tory same old story.
Progressive is as Progressive does.
When Mr. Stelmach went to the First Minister's Conference he said, "Hands off Alberta."
I'll bet once he got behind closed doors he told them he'd be taking an axe to Alberta's economy himself.
Conservatives shouldn't have to fear for their livelihoods from the Alberta government.
Posted by: Speller | 2007-09-26 5:37:29 PM
speller, i agree with your decision to give your vote to the wildrose party in the next election 100%. it's pretty obvious that the players in the progressive conservative party feel that they are so entrenched in government that they're "entitled" to act like a bunch of federal liberals in quebec rather than the practical, down to earth people of alberta they were elected to represent. just like reform transformed the way politics was played in ottawa in its time, hopefully wildrose can do the same for alberta. having common sense as a main platform to run on has got to resonate with the majority of voters in alberta who i hope will hand stellmach and the lazy, bloated p.c.'s their asses come election day
Posted by: robert | 2007-09-26 6:13:24 PM
What the Alberta government is not telling you is that the Alberta infrastructure sucks. We cannot afford to twin the highway to Fort McMurray. Our roadways are in a sorry state (pun intended). We need more hospitals and schools. Our 2 technical schools had to turn away about 17,000 potential students due to lack of facilities. We need more affordable housing.
If Alberta had collected a fair royalty for the last 20 years we would have these things and would not need 2 billion a year more. In actuality we probably need 5 billion a year more to "catch up".
The politicians have really got the people of Alberta between a rock and a hard place, so to speak. The Oil companies just keep taking and taking and taking and taking.
Posted by: Paul | 2007-09-26 6:56:24 PM
Oh dam that's right, I forgot that Alaska was a country.
Posted by: rockyt | 2007-09-26 7:20:37 PM
It was called "Confederation". That is what we signed on to and it is long gone. We no longer owe Canada anything. What does Ottawa do with its share other than feed an ever expanding and voracious bureaucracy?
Posted by: DML | 2007-09-26 8:54:02 PM
"Oh dam that's right, I forgot that Alaska was a country."
Ah, I see, now your trying to compare the socialist country of Canada to an actual democrat republic.
Alaska being in a country which actually sees each state in control of their own resources, and their own destiny, are not required to send any royalties to the federal government.
Alaska puts, guess what, 25%, or the amount that flows to our federal government, (as stated by Speller) into a fund, and that is where their famed rebate program comes from.
Posted by: deepblue | 2007-09-26 9:26:51 PM
OK, this notion of Speller's is driving me crazy. The Alberta government does not send any royalties to the federal government, nor does the federal government collect them for Alberta. A government can only collect royalties if it is the owner of the resource and that is Alberta, not the federal government. Really, the only money that the federal government gets from the oil industry is corporate taxes (which is still a lot).
Posted by: austin | 2007-09-27 9:20:48 AM
austin,
Maybe you can explain this:
"Williams provided chapter and verse of his battle with Ottawa for a bigger share of the wealth generated by offshore oil. He passionately advanced the idea that this is his province's last, best hope to become a have rather than a perennial have-not. And he delivered a shot across the Prime Minister's bow that had the crowd buzzing and reporters scribbling furiously. At the darkest point in the election campaign last June, he reminded the crowd, Paul Martin came to St. John's and promised the people of Newfoundland and Labrador 100 per cent of the oil royalties. "If he doesn't honour that commitment made to us during the election, then you have to decide if he will honour any commitment in any future election." Williams then took his seat, looking suitably serious, if not downright angry."
FROM>
http://thecanadianencyclopedia.com/index.cfm?PgNm=TCE&Params=M1ARTM0012696
http://www.cbc.ca/canada/story/2004/12/22/offshore-williams041222.html
Alberta is, in fact, forced to give about 25.5% of it's Royalties to Ottawa.
It isn't just high taxes on the Energy Companies in Alberta.
Posted by: Speller | 2007-09-28 7:47:52 PM
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