The government's announcement yesterday is truly historic, and marks a new beginning in Alberta's stewardship of its natural resources. We Albertans owe a great debt of gratitude to the citizens who served on the panel and the various consultants, advisers and Alberta government administrators who helped them.
The final decision of the Stelmach government decision on the royalty review recommendations is historic. Part of the historic nature of the decision is how very closely it aligned with the major themes of the “Our Fair Share” Royalty Review Report recommendations. For example the province decided to implement the 20% recommended royalty rate hike but in a slightly different mix than suggested by the government appointed Expert Panel.
Overall, the government changes vary little from the goals of the Expert Review Panel. The new Stelmach framework will boost government take for natural gas from 58% today to 60%, rather than 63% as recommended by the panel; for conventional oil, government take goes up 5% to 49%, which is what the panel proposed; for oil sands, government share increases to between 57% and 66%, when the panel was recommending an increase to 64%."
The move to a price sensitive base royalty is largely the same thing as the Panel’s recommendation for a Severance Tax with a slightly different trigger price and a few other technical differences.
The months of intense research, review, revision and rehashing and yes I expect lots negotiation between the panel members would not have been easy. They researched, wrote and presented a comprehensive frank and forward thinking document. It is an esay read, full of clarity and sound analysis, and in the end it proved to be a quality piece of work reflecting a great deal of collective wisdom.
Another historic event was when Premier Stelmach immediately released the report upon receiving it. That early non-traditonal report released pioneered a new and novel openness to modern democracy and enabled an informed debate in Alberta. That unprecedented move fueled a province-wide discussion and dialogue amongst Albertans in all walks of life about the future of their province.. It empowered people and encouraged them to become informed. It created a wave of citizen engagement amongst Albertans in their democracy that you don’t even see at election time.
However, the “Our Fair Share” Royalty Review Report obviously spoke volumes to the people of Alberta and the Government of Alberta. The Stelmach response shows he accepted the essence, pith and substance of the Royalty Review Report findings and made only minor modifications to the final recommendations.
Even the opposition Liberal party came out endorsing it. In addition, virtually unanimous agreement on the key issue outlined in the report amongst all of the political parties of note in this province. That range of political support is historic too.
So, as one Albertan to the Panel, I what to say thank you to all those who worked so hard, long and effectively on the “Our Fair Share” document and especially the six experts who lead the effort. And thank you Premier Stelmach for embracing the concepts and adapting them so effectively for the future prosperity of Alberta. In my mind almost equally as important was the way Premier Stelmach openly enabled and encouraged the inclusion of Albertans and how we Albertans became informed and engaged so effectively in the future of their own province.
I smell some real democracy in the clean fresh Alberta air again...and it is about time.
With all due respect, I am not as charitable to the Royalty Review Panel and their primary consultant, Pedro van Meurs.
ReplyDeleteLet's take a look at the scorecard:
1. Oil Sands Severance Tax on gross revenues set at $40 WTI Canadian (far below break even)--rejected
2. Post pay-out of 33% (not based at all on price and costs)--rejected
3. Pre-payout of 1%--rejected
4. Upgrader royalty tax credit--rejected
5. Elimate option to elect oil sands adminstration status for primary wells in certain areas--rejected
6. 6% flat tax on freehold mineral right-- rejected
7. Implement recommendations by July 2008-- rejected
8. Eliminate deep gas royalty holiday program (who knows that the Panel said here, since they can't get their story straight)-- rejected
Those are just the big ticket items that were rejected by the government.
Seems to me that establishing a price sensitive, sliding scale, pre-payout and post-payout was a "no-brainer". Why didn't the Panel figure that out. They wanted to implement a 33% post payout with no floor at all, and an OSST with no link to breakeven costs.
I find it amusing that you would thank the six experts, after you had questioned Ms Dwarkin's judgement just a few days before.
As for Mr. Hunter's acceptance of the government's response, I guess he knows where "his bread is buttered."
I'm with you Anon.
ReplyDeleteAnd you've jumped ahead of yourself Ken. Nobody knows exactly what this means. The gov't has been sadly lacking in many, many details on how this will affect the industry.
Contrary to the Premier's claims - the uncertainty continues.
I'd sure like to know how much we paid van Meurs. He should have paid us.
ReplyDeleteKen, you've been blogging constantly on this - How is this not your feared mushy middle ground?
ReplyDeleteRandy
Randy - good question. I am reviewing all the documents and talking to people and taking some to reflect.
ReplyDeleteI will have a reply to your question shortly.
Anon @ 11:59 - I may be ahead of myself on some aspects and I am reviewing and reflecting and will have more to say.
ReplyDeleteAs for thanking the Panel I am not ahead on that. Now that the government has made a decison they are finished their work. The focus now shifts to the Stelmach documents.
We'd have a referendum on the issue if you wanted the real scent of democracy.
ReplyDeleteStelmach bowed out to the special interest groups of the oil companies.
It is time Alberta had a real leader - Stelmach, like Dion, is proving to be no leader at all.
Anon at 5:58 - define leadership for us...my bet is you are not aligned with what the majority of Canadians want in a leader these days.
ReplyDeleteIn fact you guys are so out of touch with what leadership is that you are insensate about the concept.
I am going to be blogging on leadership extensively in the next weeks. Stay tuned
Cheap shot comments on leadership with no back up or substance will be likely be published and eviscerated on this Blog.
And since they are always anonymous they will be presumed to be CPC sourced.
Cheap shots are the stock in trade of you guys who have taken to drinking the Harpercrite Kool - Aid.
Define and give examples - not events but real substantiated examples of Harper's leadership and how it has advanced democracy and citizenship and community.
Ken, you have avoided blogging about federal politics for awhile and, thus, there has been no opportunity to directly critique Dion's leadership.
ReplyDeleteYou sure have a short memory - remember, Cdn soldiers in our streets with guns OR the ads saying that Harper would ban abortions, etc. Politics is a blood sport - it seems like you can give it but not take it.
Federal politics in Canada is pointless and boring these days. I recently declined to do a national CTV interview on the passing of the Throne Speech just because it was so boring. Harper trying to goad an election with artificial lines in the sand that are not designed to make parliament work as he claims…nor to serve the best interests of Canada. He merely wants persona power and is now trying to bully people into an election.
ReplyDeleteI say let him govern until Nov 09 like he undoubtedly wanted when he set the election date by law. By then the Liberals can regroup, the Greens can get organized, Quebec will come to realize Harper is not their best Anglo hope. In any event any legislative damage he does between then and now – and seeing his agenda it will not be much, can all be easily reversed after the next election.
Harper proved that “strategy” is possible last year when immediately upon getting elected he killed what he thought were Liberal-biased social, cultural and environment programs. He then realized they had an important place in Canada and that Canadians wanted them. So he reversed his stupid approach and put them all back in place.
That original stupid partisan policy decisions were all subsequently reinstated at great expense because he had also dismantled all the program infrastructure and staff that supported those programs. So we can do the same to stupid Harper legislation he might pass in the next 2 years.
The federal scene is so boring and aimless that there is nothing of significance to talk about. Alberta is a much more interesting political place these days because we are actually going to have an election soon. And the royalty issue is now at the political starting line with Stelmach’ decision last Thursday.