Friday, April 10, 2009

Cambridge Strategies Commentary on Alberta Budget 2009

Here is a link to the Cambridge Strategies Inc. commentary on the 2009 Alberta Budget written by my business partner, Satya Das. I will be sharing my thoughts and doing some more specific issues based posts on the budget in the near future.

In the meantime here is a provocative take on where Alberta is and some ideas of what can be done with our fiscal strengths and challenges. One thing that we at CSI find disturbing is around the Royalty Regime. The new royalty policy that came into effect January 1, 2009 and that delay gave industry more than a year to adapt.

The only ones who seem to have really "adapted" are the provincial politicians. They are the one who have chipped away at the new Royalty Rates as the energy sector presses them behind closed doors. It now seems that the energy industry in Alberta is intent on making royalties the new NEP as see them as the major cause of all their woes.

There have been many expensive concessions made since then to encourage drilling activity and conventional energy plus commodity price sensitive royalty rates. The reality is everything in the new royalty regime that was to get a fair rent to Albertans for our energy resources has been given back to the industry. That is playing Albertans for chumps and taking away the providence of future generations as we will never again be able to collect proper rents for these non-renewable resources.

Satya talks about this and some other serious shortcomings in our pubic policy models in resources and other sectors of our economy.