Tristone Chair Calls Royalty Review Panel "Uneducated"

It is interesting to see the newspaper report in the Globe and Mail today where the Chair of Tristone Capital Inc. is apparently calling the Premier’s hand picked Royalty Review panel members “uneducated.” They panel is reported to include two PhD Economics form Alberta Universities, a professional industry based economist, a retired oil industry senior executive, a technology entrepreneur with a law degree from Columbia and a Chair who recently retired as President and CEO of the largest single line pulp mill in the world with a forest management area the size of New Brunswick…”hardly uneducated.”

Again the angst and aggression of an industry sector that has not been subject to sufficient scrutiny in the past is now showing in this name-calling reaction. This name-calling is not isolated – I am apparently a “Commie” according to one anonymous commenter.

I am reading the Tristone review with interest and will post my reaction to it soon. I trust it will have more substance than the media reported comments on the Tristone Chairman's opinion about the capabilities of the “Our Fair Share” Royalty Review Panel.

Hunter and Dunn Have Fixed the Blame - Stelmach Has to Fix the Problem

The story is coming out and the narrative is unfolding. The picture we are seeing from the “Our Fair Share” Royalty Review Panel’s findings and recommendations and now the Auditor General’s Report is not reassuring that we have been governed well or competently for some time now.

I take this narrative back to an earlier Auditor General Report outlining the incompetent land dealings in Fort McMurray where highly developable land was given away and later “justified” with a trumped up post-sale valuation. The conditions imposed on the appraiser's scope and terms of reference on the lands were so limiting that there was no way he could not have come up with a “vindication” valuation that sanitized the administrative and governance incompetence.

I was disgusted then and I am even more disgusted now. There is a serious issue in our society around the public’s confidence in our institutions, including government. It is hard to think of a single institution in our society that has not let us down, misled us or breached our trust in the past 15 years or so. That goes from church to state and from business to regulators - and I could go on!

It is looking more and more like Klein is doing to Stelmach what Mulroney did to Kim Campbell. Klein has obviously left a legacy of poor governance coupled with an incompetent and complacent political culture. The federal PCs under Mulroney went from the largest majority in the history of the country to only 2 seats in the next election under Kim Campbell.

Shift happens Mr. Premier. You best get ahead of this mess and right away. Your reponse in a couple of week to the "Our Fair Share" and the AG Report will signal to citizens exactly who you intend to serve.

Politics is a confidence game (sic and yes - every pun intended). At its best it is about earning trust and respect and having the confidence of the citizens as expressed in their vote. It about being worthy of the citizen's consent to be governed.

Too many people in politics today are about power and not about public service or good governance. They see the matter of confidence as a game – yes a confidence game. They seem intent on swindling citizens who are persuaded to trust them and then we become victims of the politicians.

It gets worse, because too many times we see this confidence game played out “in confidence” meaning behind closed doors. That was too often the modus operandi of the Klein government as it drifted and diverted attentions from many serious issues.

That has to change and Premier Stelmach has to make that change happen. He has often said since becoming Premier that you get for form government by having the confidence of the people, by earning their respect and being worthy of their trust.

Truer words were never spoken. Now we have to see if Ed Stelmach’s political and governance actions ring true as well. My advice is to take some time to get it right Ed. Make some wholesale changes in the PC government and ask the party membership for some help and advice on how to clean this up too.

Do all this well in advance of going into an election. In fact announce now that the next election will not be until the fall of 2008. That will get your government out of the “red zone” that it has recently fallen into and where nothing happens without a cynical political filter. Right now we need some good governing and not petty politics or electioneering

The “Our Fair Share” Review and the Auditor General Report has fixed the blame. You need to fix the problem.

AG Says the Dept of Energy and Former Ministers Have a Problem

I thought is a worthwhile exercise to post and highlight some comments from the Auditor General’s Report released today on the royalty issues and the Department of Energy.

Page91: says the Department (Energy) has identified critical issues that have not been addressed publicly and they relate to higher oil and gas prices outside the range anticipated by the old royalty regimes. The Department has know for at least three years royalty revenue were not meeting government's targets. The Department, (meaning the bureaucrats) estimated that it could collect an additional $1B or more per year without stifling industry profitability. The AG notes that "...neither this information nor the reasons why changes have not taken place have been made public."

Page92: says "Readers will ask 'Why have these issues not been addressed?" The AG says those "...questions must be directed to those responsible for the royalty regimes." The AG then clarifies the point by saying "The Minister of Energy has final responsibility and is accountable for these decisions."


In those two paraphrased statements the AG has identified problem and who is to blame…various past the Minister’s of Energy! He then makes five key recommendations and they are interesting.


First the Department of Energy should clarify it royalty objectives and make them public. The current objective to "optimize Albertans' resource revenue share" is code to accept what ever we get as the target.


The Department's "technical review work" needs to be improved in terms of planning, coverage and reporting and it needs to expand the topic and issues it considers.


The Department needs to improve its annual performance measures related to the effectiveness of the royalty regime beyond the current "share the profit" measure. Again this smacks of accepting whatever shows up as royalty payments is deemed to be the target. The Department's performance measures indicated satisfactory performance of the royalty regimes FOR SEVERAL YEARS while a detailed analysis in the Department "indicated otherwise. What gives?


The Department should periodically report in greater detail on the status of the provinces' royalty regime. The AG says with better information, Albertans can ask better questions about the management of their resources.


Finally the Department needs to "improve controls for its monitoring and technical review." They need to document complex processes, reviewing and signing off key outputs and referencing final results to source documentation." This tells me the Department does not know what is actually happening in terms of records, controls and monitoring of resource revenues...and if they did they can't prove it.


Very strong parallels between the AG and the "Our Fair Share" Panel recommendations. Some past Energy Ministers have got some serious Explaining to do by the looks of it.

What has the Auditor General Said About Government's Handling of Our Royalties?

I will be reading the Alberta Auditor General Report as it relates to the Department of Energy and its capacity and competence around the royalty issues and will post my comments on it later today.

In the mean time I recommend you read the excellent piece by U of C political scientist Doreen Barry entitled "Will Alberta's Tory Government Be Able to Protect the Public Interest?"

It was published in today’s Edmonton Journal. Take your time and reflect on what she is saying. It is very important stuff and very well written.

Thank You Joe Handley: Its Election Day in the NWT

It is Election Day today in the North West Territories. That is one of the most exciting places in Canada and is home to some of the most interesting characters you will ever meet too.

I often describe the NWT as another Alberta in the making but North of 60. They can avoid and even learn from the mistakes we are making down here – if they are careful.

Thanks to retiring NWT Premier Joe Handley – a great guy who did a great job for the NWT. He also made the south aware of the northern people and its potential. In the process he taught us to appreciate Canada in a different - and better way.