Link Byfield Wants to Debate the Alberta Royalty Report With Me

Link Byfield called me yesterday with an interesting proposition. He wanted me to attend the Wildrose Party shindig at the Pioneers Cabin and to debate the Alberta Royalty Review Report with him. I was very interested but said if I participated I wanted it to be made very clear I am in no way supported the ideology of the Wildrose Party. I am a proud – if not seriously frustrated - Alberta Progressive Conservative Party member.

Yes to satisfy the need for full disclosure and to pacify my friends on the far right disclosure I am a Red Troy. I can’t stomach the Harper Cons and I have voted Liberal federally. I liked Anne McLellan as my MP and have a lot a time for Dion as well. I even joined the Liberal Party to help his leadership campaign.

In a debate with Link I would clearly be pro-report and he would have taken the side of doom and gloom and industry is always good - government is bad. I was keen to take the challenge but had a dinner meeting with clients from out of town last night so the scheduling did not work out.

Based on the Blogosphere and MSM reports this morning I imagine I would have had great time in such a debate. Thanks for the invitation Link – maybe some other time with a bit more advance notice.

A Short History of the Oil Sands Royalty Regime

The old royalty regime for oil sands was a successful public policy for its time and its stated purpose. Some 3 years ago, at a CD Howe briefing I attended, Mr. Eric Newell - the oil sands industry leader who helped negotiate the 1997 royalty regime. He put some realism and perspective into the industry intent and government policy purpose for the original oil sands royalty regime.

He said the deal, done over 10 years ago, was that industry had agreed was to invest $5B over 25 years in oil sands development in exchange for the 1% of gross revenues during construction and 25% of net profit during production as the new royalty scheme. The public policy purpose was to establish the oils sands as a commercially viable industry sector for the long term. Oil was under $20 and production costs were $18 in the 1995-97 period the deal was negotiated.

What happened according to Newell was the industry actually invested $27B over 7 years and one thought since then, until Stelmach won the PC Leadership, to revisit the reality of the regime once it had done its job. The old oil sands royalty regime was an incentive to industry not a birth right to such inducements for ever. The old royalty regime did its job and it is time to revise the royalty regime.

This is not a short term tax grab as the Wildrose Party people would like to you believe. It is a royalty – a payment for economic rents in exchange for access to our resources. It is a rent where Albertans still share the risk with industry because IT IS A ROYALTY REGIME BASED ON NET PROFITS. When do we Albertans, as the constitutionally protected owners of this natural but non-renewable resource, get optimize our revenue realization?

We took on the challenge of debt and deficit so we would not burden our children with our bad investment choices as Albertans in the 1980’s. Will you be able look the future generations in the eye if we don’t optimize the revenues from the oil sands now? This is a resource that is definitely THEIR birthright.

High-Cost - Low Margin Oils Sands Projects Can't Handle Higher Royalites - Is that Necessarily a Bad Thing?

The Experts are getting engaged in the recommendations of the Alberta Royalty Review. Wood Mackenzie issued a news release yesterday projecting some $26B on reduced value in oil sands projects could happen if the Alberta Royalty Review recommendations were adopted. Wood Mackenzie are well respected consultants in area of Energy and Life Sciences. They consult to Alberta Energy and as a result their expertise was used by the Royalty Review Panel as well.

Two different news stories and headlines based on the Wood Mackenzie release are telling and is enough to make one wonder just who you can trust to report on this stuff. A Reuters story in the Edmonton Journal today uses essentially the same headline as the Wood Mackenzie release predicting doom and gloom over a potential for $26B of lost value in the oil sands if the Alberta Royalty Review recommendations are implemented. The Globe and Mail headline based on the same news release says: “Report finds Alberta still a bargain, even with higher royalties.”
The Globe says Wood Mackenzie finds that even with the royalty hike "...Alberta would remain one of the cheaper places to do business in the world even with more money going to the government."

Both stories are "correct-ish" but let’s look at little deeper at some facts and some context. Wood Mackenzie actually says “…higher royalties will have the biggest impact on high-cost, low-margin projects.” They calculate the Net Present Value of current and planned projects would fall by $26B based on $50 per barrel oil. The Wood Mackenzie news release it self notes that “We predict the worst affected projects would be the most marginal, or those with a start up date furthers into the future, with an average of 30% of value transferred for underdeveloped projects.”

I would like to know some more of the assumptions behind the consultant’s conclusion beyond oil at $50. What interest’ currency exchange and inflation rates did they use? Was this the same assumptions used for open pit and in situ projects and what project assumptions on environment and reclamation costs were applied in the calculations? Did they differentiate between the Fort McMurray, Cold Lane and Peace River sites…they are all quite different realities.

Not all projects are created equal and some will become more marginal as circumstances change – including economic rents, environmental requirements and new technologies are all a natural consequence of the larger concept of the marketplace. An oil sands extraction project is a very long term patient investment. If your project is so marginal at the start that a royalty increment of 8% on your NET PROFITS is untenable – the same could (and should?) be said for the project anyway.

Albertans are strained and arguable unable to cope with the economic, infrastructure and social demands caused by the current oil sands production of 1.2 mbls/day. We are being told we need to triple the production within the next 8 to 10 years. What planning is in place and being done by industry and government to catch up and be ready for the consequence of 3-5million barrels of production?

Wood Mackenzie says only marginal projects may not be economic at $50 oil but that clearly means not all projects are in jeopardy. I can live with that and I am sure Alberta will survive. After all the demand for energy is not going down and the oil sands are not going away.

C.D. Howe Institute Weighs in on the Alberta Royalty Review

I do not usually post news stories verbatim in this Blog. But in this case I wish to make an exception. If for not other reason that I am a Member of the C.D. Howe Institute (by way of disclosure) this piece brings forth some larger questions on the future of Alberta we need to start to discuss. Another quality think tank based in Alberta - the Canada West Foundation has also been posing this question for a couple of years now. I highly recommend the work of both of these organizations.

HERE IS WHAT THE C.D. HOWE HAS TO SAY:

Alberta's Royalty Review Panel released its final report on September 18, 2007, which recommended increases in provincial oil and gas royalties, particularly as they apply to oilsands extraction. In a column in today's National Post, C.D. Howe Institute President and CEO Bill Robson wonders what Alberta would do with even more resource revenue.


Alberta's chronic overrunsNational Post Wed 26 Sep 2007


The release of Our Fair Share by the panel studying Alberta's oil and gas royalties has prompted a loud debate. No surprise, with the panel recommending that the province boost its energy-related levies by almost $2-billion annually. The panel's message that Albertans should get more from their fossil-fuel resources has overshadowed its proposals to rationalize and rebalance energy taxes and royalties, while an industry already struggling with escalating costs in the oilsands naturally views the prospect of higher levies with alarm.

Premier Ed Stelmach has promised a response to the Royalty Review Panel's recommendations by mid-October. Before the provincial government acts, however, it needs to answer a question that the controversy over the panel's report risks obscuring:What would it do with the extra money?

The yo-yoing of provincial spending in Alberta as fossil fuels boomed and busted in the 1970s, 1980s and 1990s underlines this question's importance. It is all very well for the report to emphasize that Albertans own their sub-soil resources. The fact is they can only exercise their rights as owners through their provincial government. While the ways the province might use these extra dollars --further increases in provincial programs, tax relief in other areas, or saving to prepare for a leaner future-- was not part of the panel's mandate, they matter greatly for the report's ultimate larger impact.

Those who recall Alberta's misadventures with its Heritage Fund and its deep fiscal retrenchment of the mid-1990s will know that Alberta has always had trouble handling resource revenues adeptly. Experience since the mid-1990s provides a fresh lesson. In successive budgets since 1996, the provincial legislature has voted spending increases averaging less than 2% annually. But the final figures for each fiscal year showed actual spending increases averaged almost 7%. These chronic overruns had a huge cumulative effect. Rather than the cumulative spending increase of $4.5-billion anticipated in budgets, provincial spending ballooned more than $15-billion over the period. The cumulative overrun of $10.5-billion is equal to all of the province's budgeted health care spending last year.

While all Canadian governments have had trouble living up to their budget commitments over the past decade, the record of Alberta's legislative assembly is uniquely bad. The tendency for resource revenues to outpace projections, and for in-year or end-of-year spending surprises to absorb most of the extra money, has been a driving force behind this breakdown of fiscal accountability. The 2007 budget anticipated no less than a 12% jump in spending for the
current fiscal year -- even before overruns, that would make provincial spending almost double what it was at the beginning of the decade. Raising the province's take from the energy industry by one-fifth, as the panel recommends, amid an energy boom will add fuel to the fire, increasing the prospects for yet another sizeable overrun -- and for a painful mix of tax hikes and spending cuts as demographic pressures and the resources boom's inevitable fade squeeze Alberta's budget in the years ahead.

This prospect highlights an obvious point: Some potential uses for any extra energy revenue are clearly smarter than others. Lower corporate income-tax rates would enhance Alberta's attractiveness to all kinds of business -- and mute the impact of new levies on the energy industry. More personal income-tax relief would help Alberta attract and develop the human capital that can sustain growth beyond the current energy boom. Saving the funds and investing them in a diversified portfolio outside Alberta would also prepare the ground for a future with less resource revenue.

None of these options, however, is likely to appear as compelling as more spending. The resource boom has created many legitimate needs for more infrastructure and public services in the province. Less happily, it has also fuelled a sense among many Albertans that resource wealth entitles them to the best of everything. Pumping more government money into a red-hot economy will further push up costs and inflame expectations -- setting Alberta up for an even more painful fall when the cycle inevitably turns.

For this reason, the provincial government should make a fiscal plan for any extra revenues resulting from the panel's recommendations a precondition for their implementation. Although a long delay would be terrible for energy investment in the province, no long delay is needed: another panel will be making recommendations on how Alberta might set resource wealth aside for the future before year-end. A few extra weeks would help in sorting out some individual royalty and tax recommendations -- not to mention explore some of the panel's more difficult proposals about long-term stewardship and upgrading incentives. And importantly, it would set the royalty-review recommendations in a vital wider context -- as a step toward ensuring that the current energy boom reinforces Alberta's future economic and fiscal base -- and alleviate the pressure to take more revenue now, and think about how to spend it later.

Those who think the debate's "fair share" rhetoric demands faster action should take a fresh look at the numbers. The Royalty Review Panel put the revenue impact of its recommendations at just under $1.9-billion annually through the end of the decade. Even if the depressing effects of the new levies themselves reduce the take, we are talking a lot of money. Yet spending overruns since 2003 alone have absorbed three times that much! When extra money vanishes so quickly, how strong is the case for more?
-William Robson is president and chief executive of the C.D. Howe Institute.

C.D. Howe Institute67 Yonge Street, Suite 300, Toronto, Ontario M5E 1J8Phone: 416-865-1904; Fax: 416-865-1866http://www.cdhowe.org/

Please CBC - Talk to Some Real and Representative Albertans

I know it’s late and I know you’re weary. But this Blogger (thoughtinterrupted) captured so much of what I saw and felt with Mr. Levant’s guest spot on Don Newman’s Politics show yesterday.

Not all of us Albertans - in fact the vast majority of us are not anything like Mr. Levant in terms of view and values. He sure does fit the bill for the wetsuit wearing Stockwell Day model of what too many in the central Canada media likes to portray as the “typical Albertan.”

Expand your Alberta based Rolodex Mr. Newman and do the province - and the country a favour.

A Reality Check on Oils Sands Costs and the Impact on Albertans.

Let’s get something straight about oil sand project costs. The oil sand project developers total project costs are paid by the citizens of Alberta in forgone royalties. This is under the current regime and would continue under the recommendations of Royalty Review Report. Only 1% of gross revenues are due as a royalty until all project construction, financing and operational costs during a project build and prior to plant production.

Sure government get taxes on the industry activity from personal income taxes on citizens who earn a living from working on are with the various projects. They get corporate taxes on net profits again – after all expenses are paid.

With that deal from Albertans why would project developer’s care about cost over runs? They end up being paid 100% by deferred royalties by Albertans in any event. Even after project costs are recovered and the royalty kicks in, the current 25% and the proposed 33% royalty of oil sands is only on NET PROFITS. Again all developer operating and related costs of a plant are deducted before royalties are calculated and charged. If a project has a net profit of 10% ( a modest assumption) that is the amount the royalty is calculated against - nothing more.

Besides project costs are management decisions in the hands of the corporations. If they are too high then management of the corporations needs to control them or make alternative arrangements. Like howabout spreading out the projects so they do not all chase the same workforce and suppliers at the same time and drive up prices for labour and materials.

When an oil sands project has a doubling of costs (and that seems to be the norm) they don’t even have to go back to further approvals from the EUB to have the impacts reviewed again. Those increased costs change the essence of the approvals and are not neutral on the rest of the Alberta economy nor the economy in the rest of the Canada. The project managers don’t have to consider the increased cost and accelerated project approvals might have on cumulative impact on housing prices, inflation, wage escalation and competition with other sectors or if municipalities can afford to compete for steel and concrete for public infrastructure.

At at high oil prices they can absorb the cost increases handily so they don’t seem to worry about the implications to other on such decisions. They get to unilaterally turn the entire province into what Fort McMurray has become...thank to the benign neglect of the Klein regime to the regional needs. IN fairness it was the oil sand companies working in conjunction with the municipality that did the calculation and delivered the needs assessment to the Klein government - only to be ignored at the political level. I know because I was on the team with industry and the regional government that wrote and presented the Wood Buffalo Business Case to the Alberta government in 2005.

To say high costs for project is a barrier and royalties are to be kept as they are is rich given who makes the decisions and that the rest of us end up paying the pipers. If that is not infuriating enough, I understand the oil companies have had record sustained profits in the recent past. Here is the kick in the head. Apparently senior people in some companies have had seven figure annual bonuses AND those costs are seen as project costs as well so the rest of us get to pay for them too.

Please you scions of the Alberta energy industry - say and prove this bonus bulls##t ain’t so. Inquiring minds want to know.

Stelmach Heckled at the Empire Club in Toronto

Premier Stelmach was heckled at the Empire Club speech in Toronto today over environmental concerns. My friend, crisis management and media relations specialist and fellow Blogger Allan Bonner was there and here is what he has to say about what happened.

The Edmonton Sun has a piece on the Empire Club - Stelmach event too.

Stelmach Wants More Royalty Review Input and Analysis

The Government of Alberta just issued a news release indicating that “While the formal consultation is over, we have not stopped listening. We want to make sure that people how have comments send them to the right place so we can consider this input as part of the review process.”

Nothing wrong with that per se and this initiative may be an obvious admission by the Alberta government that the old style of public consultation is not as effective as it should be at getting authentic citizen input. So citizens of Alberta here is your contact channels for your further input into the Royalty Review Report findings and process...www.alberta.ca and 427-0265. Get at ti and have your comments and concerns over the Royalty Review Report known to the powers that be. And you don’t even have to register as a Lobbyist to do this.

If you do not engage and the powers that be may very well make these decisions behind closed doors (again). If citizens of Alberta value accountability from their government to be reality not rhetoric they better start making those expectations known…loudly and clearly.

It looks like the energy industry gets their very own separate channel of continuing input and communications through the very capable Deputy Premier. He is said to “be the lead minister liaising with the energy industry.” This was the same approach used with the Mayor of Calgary and we saw how the municipal funding formulas were biased against Edmonton at the end of the day.

I am very wary about this approach. I expect everything that the industry says and presents to the government in this further consultation process will be fully disclosed by the government as the original inputs were done in public. This ahs to be part and parcel of a new spirit of an open, accountable and transparent government. I don't understand why doesn’t the government use the new all-party Standing Committee on Resources and Environment and have Industry make their cases there – in public and televised? The next scheduled meeting is October 2 so it is timely.

The Royalty Review Reports has some good advice in this regard too. At page 18 of the Executive Summary the Panel says:

“The government of Alberta must implement means to gather and assess the workings of all aspects of revenue policy and collection associate with energy resources in the province. This must be done on behalf of the citizens of Alberta, and its findings must be made public and have the highest degree of credibility. It must not be a confidential exercise internal to the government.”

Here is the strangest development of all. The Royalty Review Panel used Department of Energy data, senior staff and their advisers in determining what was going on with the industry-government relationships on resource revenues. The Department of Energy was chastised in the Royalty Review Report. The news release says the Minister of Energy is to “lead a technical analysis of the report.”

None of this fiasco is the current Minister’s fault but why on earth do they need a technical analysis of the report findings when it was the DOE data that was used with assistance of departmental staff and advisers who helped the Panel do the review in the first place? Surely they would not let any inaccuracies of a “technical” nature be included in the final document! What is this all about? If industry has a rebuttal on the figures and analysis – let them put it forward. Let’s not have another Melchin kind of faux Royalty Review when we were told “Don’t Worry – Be Happy – Your government has it all under control.”

The mandate of the Royalty Review did not allow for infrastructure, growth pressures and environmental issues to be considered in the public consultation. Too bad but understandable! Since the government has “…not stopped listening” Albertans ought to feel free to use this invitation to have input into the government at “the right places” so it can consider this input as well.

If industry gets a second kick at this – so should citizens. Wake up Alberta and get engaged. The opening sentence of the new release quotes Premier Stelmach: “The decision on the royalty report will affect Alberta and our energy sector for decades to come.” He can say that again - but the final decision his government will make will affect all Albertans in all walks of life and future generations too.

Hunter's Royalty Review Is a Tipping Point for Political Change In Alberta!

The Hunter Royalty Review Report is catching fire in the media and in the consciousness of Albertans, with industry and now with politicians. It has captured the attention of Albertans and is about to reach a tipping point where it commands and dominates the primary focus and attention of the Alberta citizenry It will not be the ballot question in the next election but it will be the context setting concern around which the ballot questions are decided in the pending spring election.

Albertans want see some serious changes…including in their government, how it operates and what it pays attention. That is partly the reason Stelmach won the PC Leadership last December. That desire for change has not yet crystallized or coalesced behind an issue or an event that usually tips the politics of change a swell.

I have been waiting to see what will be or moment that captures essence of the concerns of Albertans. Would it be around the quality of life, managing growth or the ecological angst that is raging just below the surface of so many Albertans?

I think we have this political changing tipping point/crystallizing moment with the release Hunter Panel’s work on the royalty review. As proof consider the MSM and Blogosphere response, the letters to the Editors and the open-line radio show coverage. Then realize that in the almost 6 months of the RRR consultation they had 56000 hits on their website. In the four days following the report’s release they had 210,000 hits…and it is still growing. That is not an indication of a merely passive interest by Albertans.

The last such crystallizing moment that triggered massive political changes in Alberta was in 1993. That was when Laurence Decore as Leader of the Opposition stood up in the Legislature in Question Period and held his wallet high above his head. He asked the then rookie Premier, Ralph Klein, when the government was going to get its spending under control? The emotional context was if we did not do this we would not be able to face our children and grandchildren because of the crippling financial burden we would have left them. The political result was not if and when cost cutting would happen. It was about if the cuts would be “massive or brutal.” They were both - and done way too fast for effective planning and sustainable development – which Klein has admitted – was non-existent in his tenure as Premier.

To be fair there was a long term Strategic Plan prepared and presented to Caucus and for full disclosure I had a hand in its preparation. But Klein was a one-man show leader (kind of like Harper today). As Premier he not prepared to engage and push it through...so we ended up with drift and decline to the point the PC Party had to push him out of leadership.

IN the early 90's Albertans knew uncontrolled government spending was a serious problem and at that wallet raising moment the politicians finally caught on too. Today we Albertans know uncontrolled growth is a problem. Now we also have the Royalty Review Reports as evidence that the government has not been doing its most fundamental of jobs. Our government has breached its trustee role where we expect it to protect the best interests of Albertans. We can see form the Review findings that our government’s trustee role both in collecting and accounting for resource revenues and the responsible sustainable development of our non-renewable energy resources is wanting…very wanting indeed.

Will the rookie Premier Stelmach catch on and be as decisive, determined and disciplined as the early days of the rookie Premier Klein was in dealing with this fundamental concern of Albertans?

Whose government is it anyway? Albertans are about to let the political class - regardless of partisan affiliation - know in, no uncertain terms, the unequivocal answer to that question. Changes could once again be massive or brutal - or both and fast.

Memo to Minister Lunn - Firewalls Will Not Stop Pine Beetle.

Federal Natural Resources Minister Gary Lunn is reported to have said his goal is to stop the mountain pine beetle from moving east beyond Alberta. The MPB is already well established in Alberta by the way and is moving east quite effectively. The methodology Lunn intends to use is burning larges segments of the forest instead of letting the beetle eat it. Mighty clever Mr. Minister! Mighty clever!

Lunn is reported to being “committed” to spending another $50m “…to keep the beetle out of B.C. boreal forest,” (WHAT!!!) The MPB has already devoured 40% of the BC forest and conservative estimates indicate the tipping point has passed and likely 80% is gone. This is like watering the lawn after the tsunami has hit the house.

Mr. Minister burning “firewalls” will not stop the beetle. They migrate on air currents so they will just leap over your stupid firewall and continue on. The beetle rides on air currents and that is how they got into Alberta from BC in the first place. They managed to cross the Rocky Mountains on air currents for God’s sake…how is a firewall going to make any difference in the face of that reality?

Firewalls are effective at one thing, controlling the spread of forest fires. That is what they should be used for. The beetles leave vast areas of standing dead dry trees that are prefect for a lightening strike and a massive size and number of forest fires. Given that reality burning firewalls around forest related towns like Banff, Jasper, Grande Cache, Hinton, Edson and Whitecourt would make sense. Firewalls are needed to protect these towns from forest fires NOT to stop the spread of the beetles.

B.C dropped the Beetle-ball and now it is obvious the Feds are being stupid about what to do about the infestation. Mother Nature is not happy and she is showing it. Our species like all others in the forest have one intelligent and responsible response to the beetle…ADAPT.

Here is a Great Blog on the Alberta Royalty Review - "King Ralph Shilling for Big Oil."

I can’t say I always agree – or even agree very often - with fellow Alberta Blogger Eugene Plawiuk. But Boy oh Boy I have to admire his work on the post he just did on the Royalty Review Report and reaction to it.

This post is an example of the Blogosphere at its best. Great piece of work Eugene – I will read it carefully and with great interest - once I finish the report itself.


For those outside of Alberta - I suggest you will want to read the Royalty Review Report too. 60% of the billions being invested on oil sands development gets spent outside Alberta in the rest of Canada.

Claims of Oil Royalty Review Causing Market Meltdown is Bogus

Another update on oil patch stock market fear mongering from the Hunter Royalty Review Report is in order. The Royalty Review Report came out on Tuesday and the next day business press was rife with quotes and claims of a draconian disaster and a “tumbling” market for the energy sector

Yes there was a dip in some stock prices reported for companies like CNRL and Suncor. Well by Friday, in the face of a $.51 cent drop in oil prices the G&M reports that CNRL and Suncor were ranked #3 and #4 in the Market Lifter Index. The TSX was up 101.64 points on Friday and these two companies were jointly responsible for about 16 of those points.

As for CNRL –it shed 5.9% of stock value on Wednesday and on Friday the stock was up $1.64. Meaning it had recovered all but 1.5% of that pre-Royalty Review Report value decline in only two trading days and it is trading at $76.84 - only $3.14 off its 52 week high.

Some melt down.

Does Harper Have Any Sense of Humour?

Jane Taber of CTV and the Globe and Mail notes in her Hot and Not column this morning that Prime Minister Steve is rumored NOT to be attending the annual Press Gallery Bun Throw…AND in the PMO best Faux Fascists form, he has ordered all his Cabinet Member NOT to attend either.

Guess what all the dinner jokes are going to be about now. Guess which political leader will bear the brunt of the most barbs. Expect CPAC to tape it and rerun it more times than the Cons ever did for their paid for negative TV ads on Dion. No doubt the MSM media will run clips and the caricatures too.

Harper has been PM about 2 years now. He should know by now the “Parable of the Press” is that they giveth and they taketh away. The Cons being a total no-show at the Press Gallery Dinner is definitely Not Hot Steve. The Gallery will be sure to get even if you don't come out and play with them.

Besides a bit of humorous self-deprecation about now would be good for The Steve don’t you think? He may need it when Jack Layton sends him a reminder since their by-election win in Quebec the Dippers now have enough votes to save or cave the Cons. I wonder what Jack wants to see in the upcoming Throne Speech. I wonder if Harper shares my curiosity?

Oil Patch Fear Mongering is Very Removed From Reality

Business writers have been hyperventilating over the market impacts of the Hunter Royalty Review Report on oil sands share prices. Globe and Mail today has an example of an over reaction quotes: “Oil companies’ share prices have tumbled on investor concerns that incomes will be adversely affected and make future project less viable.”

A decrease in the TSX in the past day has been blamed on the Royalty Review Report recommendations as well. Horsefeathers! The Globe Index Drags today shows the cause was mostly by Research In Motion, three big Banks and Suncor was the only oil company reported. BTW, the smallest of these stock market "drags" only has a capitalization of over $31B.

Well yes some of the oil stock declined – more of a dip than a “tumble and only for a day. CNRL shares dropped 5.9% on Wednesday and the Chairman is leading the pack from the oil patch against the Royalty Review. BTW he is reported to own about $830,000,000.00 in CNRL stock so a 5.9% hit in one day hurts, "technically" but he is hardly homeless.

For the record CNRL stock rose $.21 or 0.2% yesterday and so far today it is up $1.73 or 2.29%. It has traded in a 52 week range between a low of $40.29 and $78.90. Still trading in spitting distance of its 52 week high is hardly a disaster for the company and its investors.

Albertans need to be sure the oil patch rhetoric over the veracity of the Royalty Review Report calculations tempered and evidence based. The facts need to be protected from the fantasies and the tenants need to start rethinking their roles and responsibilities to the resource owners…and show the owners a little respect too. They are citizens and therefore - voters. come to think of it, these same citizens may be shareholders in Alberta-based oil companies where they are voters too.

Please Premier Stelmach - Do Not Delegate Royalty Issue to Energy or Finance

The news out of Banff today reasonable notes that Premier Stelmach says the oil industry representatives will be able to take their issues with the Royalty Review Report up with the Finance Minister and the Minister of Energy.

Then Stelmach says “… the two Ministers will bring that forward to caucus.” It is the latter comment that scares me.

It would be prudent for the Premier to be personally in on any and all meetings with the oil industry. He needs to hear first hand what they have to say. It would also be appropriate for the details of the oil industry problems and presentation materials to be released publicly too…ideally in advance so the resource owners can know what the industry has problems with and why.

This is not the stuff of deal making behind closed doors, In fact as a show of good faith it would behove the oil industry representatives to go a step further and act as if the Lobbyists Act was already in force and make every effort to voluntarily comply over their issues.

There are indications in the Royalty Review Report that the Department of Energy had difficulty being forthcoming with the Review Panel because their data was seen as unreliable. The Royalty Review Report is reported as saying the Department of Energy is in a difficult conflict position because it wears so many hats. For those reasons alone it would be advisable for the Premier to keep control over this file and not delegate it to Energy but keep them involved.

As for delegating it to Finance that too would be a mistake. One has to merely remember the current Minister was once kicked out of the PC Caucus for making up stories about knowing where there were alleged "skeletons." Has he even kept his promise to disclose his leadership campaign contributions – and it has been 10 months. The Premier would be legitimately cautious about the credibility of any briefing from that Minister about such a critical aspect of Alberta’s future.

I hope you proceed with caution Mr. Premier and hear out the industry concerns. They better are based on facts supported by current evidence and not on a 1997 report like in the earlier presentations of some industry submissions to the Royalty Review Panel.

And please Mr. Premier, what ever you do, get your information on this critical issue first hand.

Whose Oil Is it Anyway?

I have been harping on Albertans to read the recently released Royalty Review Report for 2 days now. Here is the link to make it easier.

Hunter Royalty Review Reaction Shows Some in the Oil Patch Just Don't Get It!

What is it that some oil executives and certain investments brokers in the oil patch do not understand about the natural resources belonging to Albertans? Based on media reported comments in the past two days, since the release of the Hunter Royalty Review Report, it appears that some of them don't understand anything around that reality.


The Hunter Royalty Review Report evidence indicates oil industry types seem to think that they are the one who control and dictate the provincial energy resource policies...from top to bottom. From some of the Hunter Royalty Review Report findings, it looks like that has essentially been the way things have been operating in the oil patch with the Klein government apparently just going along with it. I hope the former Premier and his Ministers of Energy will be able to prove to Albertans that this is not - and has not - been the case.

Someone in the Calgary-centric energy investment community is also reported as saying in an
E-mail to clients entitled “Caracas on the Bow River” that if the Hunter Royalty Review Report "is enacted investment decision will be impacted." Duh! Isn't that is what this is all about? The impact is about the appropriate rents and rates Albertans should get from granting a social licence to oil companies to operate in OUR resource base and who is most appropriate to be trusted to develop those resources. This broker claims the Hunter Royalty Review Report “…reads a bit like a Chavez-style manifesto.” Boy is this attitude off base and out of touch with reality.

Then we have news reports of some energy CEOs meeting in London calling for a new National Energy Program demanding an increased federal role in their industry. Interesting timing in the face of a royalty review don't you think?


It was the NEP that killed the Liberals in Alberta 25 years ago and the myths remain. If that were to ever be seen as a possibility then Peter Lougheed’s predictions of a constitutional crisis that would make the old NEP look like a picnic would actually come to pass. Harper needs to win Quebec and not lose Alberta in the process. It is not going to be smart politics for Harper to be revisiting the NEP of Trudeau times especially since he is an old-style Reformer at heart. Stranger things have happened. Harper has flip-flopped before - think Income Trusts!

The oil and gas industry, the Alberta Department of Energy and past Energy Ministers since 1995 have a lot of explaining to do about how they calculated, accounted for and ensured the right royalties have been paid. That reassurance is something that needs to be done in addition to settling the question of how the rates should change and how much they should increase.

Perhaps the Auditor General Report on Royalties due in mid October will shed some more light on this or at worst point to more clouded mystery of perpetually poor accountability that needs to be fixed.

In any event this situation will either lead to Stelmach's finest hour as Premier or his final hour as Premier. Everything is at stake. Stepping up to the plate and hoping to hit a single will not cut it.


Stelmach has to step up to the plate and point to the fence and then swing for a home run. Nothing less will do. Hunter has given him a perfect pitch with this report. Over to you Ed - and here is a tip - keep you eye on the ball!


All eyes in Alberta are soon going to be watching the Premier. They ready to cheer or boo - depending on how well he deals with this. No pressure Ed...it is just about good government and appropriate politics.

C.D. Howe Institute Ranks the Best and Worst Elementary Schools in Alberta

The C.D. Howe Institute has just released a report on the ranking of the Best and Worst of the 2,240 Elementary schools in Alberta. This review and ranking actually takes into consideration the socio-economic aspects of the individual schools environment.

Rankings are always difficult to do and often mislead as much as they enlighten. In something as complicated and varied as elementary schools in a diverse province like Alberta those ranking problems tend to get amplified.

As Alberta Teachers Association President, Frank Bruseker, has oft said of other school rankings, they essentially measure the house prices in the neighbourhoods where the schools are located. That is a powerful way to say school performance is very strongly influenced by the socio-economic realties of the local neighbourhoods.

Full disclosure, I am a Member of the C.D. Howe Institute so I have a bias in fabour of their work. That notwithstanding, this review and ranking report on Alberta Elementary Schools is worth a serious read.

Does EUB Spying, Muncipal Funding Fiasco and Royalty Rates Review Mean Trouble and Turmoil in Alberta?

Boy what a week – Quebec by-elections, real threats of recession in the States, a run on a British Bank, the US dollar in meltdown and then we have Alberta’s governance in turmoil in the face of a municipal funding fiasco, two damning reports on EUB and spying and the recent Royalty Review report just released.

MUNICIPAL INFRASTRUCTURE FUNDING FIASCO:
There is plenty of consternation in the Edmonton region over the municipal funding for infrastructure. I have had my ear bent by a number of Edmonton politicians and officials on how unfair and damaging this funding approach will be to stability in the Capital City and the surrounding region. I need time to read and reflect on what happened and how it happened and to better understand the implications. Expect the City of Edmonton to take on the Stelmach government and all the other local regional governments surrounding the city. This political and governance turmoil is at play now because of the obvious unfairness of this municipal infrastructure funding model. Edmonton now has a central municipal election issue that will heat up significantly over the next month. Stelmach needs rural support and one of the major cities to retain power. He will not retrieve anything in Calgary and risks losing all of Edmonton with this municipal infrastructure funding formula.

EUB PLAYS "I SPY WITH MY PRIVATE EYE:"
I want to post on the EUB private investigator issues but need to find the time to read the two reports. The political responses to the reports are important and need comment. My sense is the government is under reacting and the opposition is over reacting. The implication for how citizens are treated by such agencies boards and commissions is critical and the security and protection of public officials is equally important. This is not about a trade-off of competing values. It is about what is a reasonable and responsible exercise of judgment and authority by public officials. More to come later.

ROYALTY REVIEW REPORT COULD AND SHOULD ENERGIZE THE STELMACH GOVERNMENT:
The Royalty Review is even more vital to the future of Alberta economically and politically. This report needs a thorough read and study. The importance of this report and the political, industry and citizen reaction cannot be over stated. It is foundational to the future of Alberta and not just the rates and payments. It is just as important to consider in terms of the relationship and roles of the development and management of this public-owned resource. How is the public’s government to behave as proxy for the citizenry? How is the oil and gas industry doing in the execution of its responsibility? How does it fulfil its various societal outcomes, ecological integrity and sustainable economic duties within the social license to operate responsibly and sustainably in this non-renewable energy resource sector?

IT IS TIME FOR CITIZENS TO READ AND REFLECT AND TO BE RESPONSIVE
Again I need time to read and reflect and respond to the reports and their recommendations. I encourage anyone who takes their citizenship seriously to read and reflect on these reports and to let their MLAs know what they think about the implications and impacts in each case. These reports identify issues that are all too critical to leave to politicians, government administrations, appointed agencies and industry self-interests to deal with alone.

Quebec By-Elections Herald Change and Uncertainty

What Happened in Quebec Politics Yesterday?

I watched the by-elections last night and had to wonder what is going on in Quebec. For the most part I think it is healthy for democracy and could be good for Canada. The reality is these events were by-elections. Personality of candidates often means more in those events than party or policy or leadership. There is a reality of the timing of these by-elections too. The current minority government could be brought down any given day the House is sitting and now the NDP alone can save the Conservative’s bacon in a confidence vote. So the consequences of a local constituency “getting it wrong” are not too damaging. So why not send the powers that be a message?

Enough context (excuses???) Here are the messages I got from the result in Quebec last night. Dion and Duceppe are damaged and personally deflated by these results. Layton is the big leadership winner by making a breakthrough in Quebec for the first time and very decisively.

The personality issue played well for the NDP with Mulcair but he also had some fascinating political manoeuvrings at play in his victory too. He attracted a large segment of the Bloc voters (Ouch Mon. Duceppe – that has to hurt) and what were those Bloc voters saying? Were they ticked with the Bloc and wanted to “block” the Liberals. Don’t forget Mulcair was a Charest Liberal Cabinet Minister who resigned and turned Dipper. His election as a Dipper sends a message to the federal and provincial Liberals and bruises them both badly.

The Conservative win by Lebel in Roberval was stunning. Not only was the margin of victory impressive it was in separatist country. This Conservative win was by a guy who, a few short months ago, was also a Bloc party member and presumably a separatist himself. Did Mr. Harper’s Quebec Nation sentiments trump his stance on Afghanistan? One can’t help wonder if Lebel is eventually going to be to Harper what Bouchard was to Mulroney.

Duceppe had something to smile about winning St Hyacinthe “comfortably” and over a Conservative…who will no doubt be breathing down the Bloc’s neck come the next election.

Dion is the sacrificial lamb in all of this. Quebec is still smarting and clearly unforgiving over Adscam and about being “played” by the cynical Chrétien government. It was the Chrétien government who tried to buy Quebec’s loyalty with flags and banners scam perpetrated by a Quebec Liberal party arm that was infected with culture of fraud and favouritism.

Quebecers were insulted and still unforgiving of the Liberals and Dion has to wear it. Such is the reality of the Liberals in Quebec...and for a while yet obviously. And while all this is not technically not Dion’s doing or fault – as the leader of the Liberal Party of Canada he has to carry that baggage. It is proving to be a heavy load. That past party baggage is not a new phenomenon nor unique to Dion. Harper had to live through the disaster that was Stockwell Day when he took over the Conservative Party and on his way to 24 Sussex Drive. All this is as it should be.

The larger question is what doe this mean for Quebec politics and how does that impact Canada? Quebec is no longer a fight between Liberal federalists and Bloc Separatists. Quebec’s feelings and political aspirations are much more unclear, uncertain and consequential for Canada since yesterday. Is the Quebec-Canada Cold War over? If so what political relationship within Quebec and between Quebec and Canada fills the vacuum? Is the Rest of Canada ready to deal with the Harper declaration of the Quebec Nation as a reality? Is Mr Harper the new voice for Quebec aspirations or just a means to an end in Quebec – that end being power or at least access to it?

Will Harper “play” Quebec or will Quebec “play” Harper for power and which “player” wins in such a power-game? What happens to the Harper’s western political base in either event? Wasn’t this the kind of Quebec Problem that Mulroney dealt with in his efforts around Charlottetown and Meech Lake? Wasn’t all of that the stuff that lead to the formation of the Reform Party in the first place? Interesting time ahead – interesting times indeed.

In summary – here is how I saw last nights by-elections. Duceppe had some cold water poured on his Quebec sovereigntist torch last night. Dion’s Quebec torch was all but blown out last night by winds of change in those three by-elections. Both of these parties and their leaders were sent strong and angry messages by the Quebec people last night.

Layton has found a small candle in the Quebec winds of change and will have to tend it carefully if he is to keep it lit. One candle does not make a torch…but it can light one.

And as for Mr. Harper, well he was seen as the new and emerging de facto torch carrier for Quebec’s national aspirations. Last night Harper was handed the Quebec Nation’s torch and we shall see how high and well he carries it…or if it ends up burning him and his political carrier in the process.

Bon chance Prime Minister Harper as you move to bring Quebec into nationhood and lead the rest of Canada into a better understanding and an abiding acceptance those unique francophone aspirations. The eyes of an uncertain and a hesitant nation(s) are all upon you.

EUB and Royalty Review Reports Coming - A Defining Week for Stelmach

This is going to be an interesting week in politics in Quebec but in Alberta too. The Quebec by-elections on Monday are getting lots of attention but they are merely that; by-elections. Likely to be lots of noise by signifying not very much as to indicating the future.

Alberta on the other hand has lots going on – most of which will impact or interest the nation. The next EUB spygate report is due for release this coming week and Premier Stelmach will be responding quickly to the findings. This is pretty consequential stuff. The way the EUB has been handling protesters and participants at “public” hearings in at least 2 instances is more aligned with fascism than citizen sovereign democracies. This needs fixing and I will have a specific post on the EUB from the Privacy Commissioner Report on Monday.

The Royalty Review Report is to be ready Tuesday. Originally this was a Stelmach idea that was commissioned by Dr. Oberg and retrieved by Stelmach who has taken back the lead politically on the initiative. Stelmach has said that he would make the report public as soon as he got it. Good move Mr. Premier. We don’t need these kinds of consultation reports being studied by government before public release. We can all study it concurrently and we do not need the government to have a position first. We need this complex stuff to be handled differently...like more openly.

I know the media will look for the typical short sound-bite responses but that is not good enough any more either. This stuff needs to be analyzed and the outcomes need to be designed to achieve identified and agreed to goals. Citizens need to see such significant reports in the first place not at the end of an internal government review process. This is risky in the current superficial political and media culture we live in - but this is the place to start to change that culture.

The Royalty Review Report authors say they are presenting a package of integrated recommendations that should not be cherry picked but taken or rejected as a whole. Makes sense in terms complex issues like royalties. These are not linear incremental issues but highly integrated and interrelated concerns.

Dr. Oberg has said publicly that the government (meaning him???) reserves the right to pick and choose from the various recommendations. This approach will likely lead to a similar result like what happened in the recent Affordable Housing Task Force report. A package of integrated proposals was presented to government to resolve affordable housing. The politicians in charge accepted and rejected various parts of the whole systems approach and the results were confusion and confrontation.

If the government does not like the Royalty Review Report recommendations or they want to put revised limits or refinements on the issues – they should do so - in public - and then send the job back to the review committee to revisit and report again. Do not deconstruct a whole systems set of recommendations based on pure political ideology and think that will lead to an effective policy design outcome.

This will be an interesting week in politics in Quebec and Alberta – both of which will have an impact on the rest of Canada – but in different ways. Lot to talk about this coming week for sure.

Harper Con's Allegations Against Dion Prove To Be False.

Quick update on the Harper Cons attempt to change the channel on their election campaign Ad-Scheme . Jeff Jedras who blogs as a “A BCer in Toronto” has updated his explanation of the Con allegations that Dion "does it too."

Newspaper reports confirm his analysis of the Cons allegations about Dion’s election campaign. Again – for every citizen who cares about democracy and integrity in government - it is worth a read.


Dion's dealing are proven to be totally above board. The diversionary tactics that have become the trademark of the Harper Cons have proven false once again. These tactics are not honest mistakes. They are character flaws in a political party and the people who run it.

Mayrand of Elections Canada Stands His Ground - Canadians Owe Him Respect

Marc Mayrand, Canada’s Chief Electoral Officer will have done enough service to the country to earn the Order of Canada when the veil issue is completed and run its petty political course and our politicians shake their collective heads and do the right thing in the right way (for a change?)

As reported in the Globe and Mail today, a truly astonishing thing happened yesterday in the Commons Procedure and House Affairs Committee. All parties yesterday pressured the CEO as a bureaucrat to “adapt” the law they passed in order to force voters to show their face before being permitted to vote. This is so wrong at so many levels it boggles the mind as to how the collective ignorance of those Committee members could manifest itself in such a perverse way.

There is nothing wrong with a law requiring this requirement for citizens to be identified and to show their faces for voter. Even those in the Muslim community most impacted have seen the need for such accommodation. If only that was what our lawmakers required in the legislation they passed earlier this year then it should be implemented by the CEO and Elections Canada. BUT that is not what the law they passed said! And now the politicians seem to be trying to shift the blame to the bureaucracy and by doing so they abdicate their governance responsibility at the same time. Shame on them! AND REMEMBER WE ELECTED THEM!

Mayrand has put the ball back in the political and lawmakers court by telling them clearly and precisely that “One of the conundrums I have here is I am being asked to change the law that was just adopted by Parliament and was debated at length…I am being asked to change the law and forcing electors to choose between two fundamental rights.” WELL SAID SIR!

Mayrand is single handedly forcing the politicians to face up to the consequences of their sloppy work, fuzzy thinking or policy making cowardice. Politicians too often skirt the hard choices of choosing between competing fundamental rights. That at the end of the day is a big part of their job as ELECTED representatives in a mature and modern democracy. They too often try to duck the heavy political lifting and avoid serious philosophical thought on the major policy issues as they superficially pummel each other in Question Period or the media.

The first duty of engaged citizenship is to be an informed voter AND be careful who you vote for.

Blogging Tory Dion Allegations Debunked

I promised to post on the allegations of a Blogging Tory on party campaign fund transfers between the Liberal Party of Canada and their leader Stephane Dion in his 2006 election campaign.

The issue has been covered so much better than I would have or could have done by the Blogger “A BCer in Toronto."

I commend you to his insight and analysis.

In summary it proves there is no tempest. No teapot and no hand in any cookie jar.

Proving only one thing – the CPC Blogging Tory blog-machine is merely reflecting the anxiety CPC brain trust and obviously nervous enough to make stuff up and then grab ant the manufactured straw to try and change the channel.

Kind of like the political bullying they are perpetrating on Elections Canada officials and the phony veil threats.

Imperial Tobacco Offers an Unsafe Alternaive to Cigarettes As An Exercise in Corporate Social Responsibility

Imperial Tobacco has chosen lucky Edmonton for the launch of test marketing of a new nicotine product “SNUS.” This is a chewing tobacco alternative that that replaces smoking and does not involve “chewing or spitting.” How charming.

Reader of this blog will know I have written on tobacco control often. I have worked in the area professionally helping get a smoking ban in Alberta legislated…something that is still in process.

The CEO of Imperial Tobacco was dong the run of the Edmonton Editorial Boards yesterday and is quoted as admitting the product is not completely safe but his justification for knowingly incurring risk by using it is – wait for it: “SNUS is the first real product we’re able to bring onto the market where there seems to be pretty compelling evidence that this product is significantly less risky.” (EMPAHSIS ADDED)

And the rational the CEO uses for Imperial Tobacco doing this is – wait for it: it is part of the company’s strategy to become a better corporate citizen by offering a product that research SUGGESTS poses lower risk than smoking.” (EMPHASIS ADDED).

He is also quoted as saying “harm reduction is what responsible companies do.” This is a company offering an unproven product positioning it as a safer alternative to another deadly product it legally sells under the guise of a public health campaign and call this corporate social responsibility.

The company refers to studies showing SNUS users experience significant smoking declines and anecdotal evidence (TRANSLATED AS MEANING GOSSIP) that SNUS is effective in keeping smokers from returning to cigarettes. They admit that the researcher have noted they did not placebo-based controlled confirmation studies that prove this. Spare us the hype and hypocrisy.

Sweden is offered as the shining example of the positive impacts noting only 13% of men smoke and 22% use SNUS. So the rational conclusion from this is that 35% of the male population of Sweden are nicotine users – and this is progress? There is the added bonus of SNUS studies showing a 100% increase in pancreatic cancer in non-smoking construction workers and it raises blood pressure and it is admittedly addictive.

The launch initiative in Edmonton is a test marketing effort to see how people respond to the purchase of the product – NOT the health implications of the product. If it is a product that is a “gateway product out of smoking” you would expect the company to be researching the positive health impacts on lung cancer and other diseases and health issues associate with the product. That would be some serious examples of a meaningful corporate social responsibility effort.

This entire idea is like Kafka meets Alice in Wonderland.

Dealing With Delusions About a Fall Election in Alberta

The speculation in some circles around a fall election in Alberta is living proof of how delusional the human species can be sometimes. Premier Stelmach has given existing MLA notice they have until the end of November to get nominations over with and new candidates have to get nominated before the end of October.

Secondly the PCs have a Policy Conference scheduled for late October as part of a party revitalization – a real one this time. Not the fiasco that happened after the 2004 election. The Policy Conference is intended for the rank and file to consider and discuss what they want the future of the PC Party and the province to be all about.

Finally we have municipal elections that would be messed up if there was a fall election and it would not be smart to tick off local politicians any more than we have already.

The last time the PC called an early election was in the Getty days and we were appropriately punished for the tactic. There is no need for Alberta to pay for an election now and if it were motivated – or perceived to be motivated – the recent poll results – the PCs would deserve to be punished at the polls again.

A fall election is not going to happen. Notwithstanding the logic, Brian Mason’s NDP have “launched” their campaign in preparation for a fall election at the U of A is past week. This is a smart tactic for the NDP because they need all the lead time they can get. By starting their election campaign now they might be able to get to the starting line for when the real election will actually be called in the coming spring.

More "Veiled Threats" From the Far Right.

As an update on a couple of past posts I want to refer you to some MSM columnists who have writing pieces that I think are worthy of attention and praise.

Further to my post of September 11 on the Prime Minister and Cons veiled threats (yes bullying) of the Elections Canada CEO over him doing his job you will want to read the Edmonton Journal’s Paula Simons today. She does a terrific job of putting some more perspective on this shabby bit of politics.

Next, an update of my post of September 10 we have a very revealing column by the Edmonton Journal's Graham Thomson on the efforts of the far right candidate Craig Candler’s and his tactics to win the PROGRESSIVE Conservative nomination in Calgary Egmont.

This gentleman needs to visit the Progressive Conservative Party of Alberta website and read the Party's Statement of Principles. Then he needs to think about if his values and beliefs align sufficiently with those principles for him to be an appropriate PC candidate.

Scary stuff and it is important that we citizens become more aware of and involved in. Cynicism and indifference to politics is a luxury we citizens can not longer afford.

Harper Cons Are Feeling the Heat on Quebec Ad Scheme

So the Cons are feeling the pressure of the national party funnelling funds through local constituencies into Quebec based advertising and allegedly exceeding legislated spending limits.

They have done some homework on Dion’s 2004 campaign and Steve Janke of Blogging Tories has done an interesting post on the findings. He seems to be alleging a Dion scandal with this post that parallels the Conservatives scheme. I will deal with the merits of the Janke claim in another post. In the mean time lets catch up on the recent developments om Cons version of Adscam.

The opening paragraph of the Janke posting reads like a Statement of Defence for the Cons in their pending Federal Court action. The Blog post provides what might be suggested as the redeeming fact they want us to focus on as the justification for the scheme.

The ad-scheme money was aggregated through an in-and out payment using the campaign bank accounts of 67 Con candidates across the country. The funds once back in the national party accounts were used to buy ads in certain regions of Quebec that were deemed winnable by the Cons. The justification for this scheme seems to be that while the ads were the same ones that were used by the Con in their national campaign they apparently had “the local candidates name added to the end.”

Since the funds were funnelled through the bank accounts of some 67 “local candidates” it would be expected the names added to the advertising would state that a certain candidate “authorized the ads.” Logically the names that should be added to the commericals would be those of local candidate’s whose bank accounts were used to funnel the funds – right? After all the way the schmes is set up it is supposed to look like those 67 candidates used their own campaign money to pay for the ads.

Media reports have indicated that some of the 67 candidates and their official agents did not even know the national campaign office of the Conservative Party was doing this funnelling through their campaign bank accounts. Classy don’t you think? If they can’t be open and transparent with their own candidates, on what basis do they think the rest of us should trust them?

I have not seen the Quebec ads that the Cons bought with the money they funnelled through 67 other candidate’s bank accounts. But my suspicion is any efforts to make the national campaign ad buy in Quebec look “local” was focused on the local Quebec candidates in the regions where the ads were purchased. The candidate "authorization" tag at the end of the commercials I'll bet at best was only the names of the Quebec regional candidates where the ads were televised.

The meltdown gets worse. The timing of the Harper Cons re-launch of their version of the famous “Sponsorship” program in the front page of the Globe and Mail could not have been worse. This is the program that has been working it way through the system for a while. There were media report that the former Minister (Bev Oda) was sending memos to her caucus asking for the Cons MPs to submit ideas for how this $30m could be spent in their local constituencies. Was that co-incidental to when Harper was trying to get traction for an election a few weeks ago?

Dion Announces Policy to Protect Canada's Water

Tip of the Hat to “While the Earth Burns” on his posting on Dion Liberals proposal for a Task Force of the Protection of Canada’s Water Resources.”

Here is a taste of the posting and the policy proposal:

"Today, the climate change crisis makes it more important than ever to preserve fresh water supply in Canada,” added Mr. Dion. “Our fresh water resources aren’t as abundant as we think. While Canada houses almost a quarter of the world’s fresh water, the renewable amount that can actually be replenished by rain fall, and that is safe for sustainable use, is about 7 per cent.”

Lazy Lawmakers Cause Judicial and Administrative Activism

There is an irony of some politicians who are constantly complaining about activist judges and interfering bureaucrats these days. I’ll bet that far-right grumpiness is wafting through the political air in Ottawa these days.

There needs to be some truth brought to power methinks. Dear politician, the way to avoid judicial and bureaucratic “activist” interpretations of your laws it to pass better and clearer laws. It is that simple.

We too often see weasel words and implications woven into legislation because politicians seem to lack the courage to say what they mean and mean what they say when they draft our laws. That intellectual laziness or lack of intellectual integrity merely invites activist interpretations BECAUSE it creates a need for interpretation. This clarity rule of law making cannot be iron clad and absolute obviously. Some laws are living things and are intentionally designed to have adaptive interpretations to deal with and accommodate a changing society – like the Charter of Rights and Freedoms for instance.

And while you are at it Dear politician, when you pass laws, show some respect for jurisdiction and the Constitution in your law making. A few years ago the Alberta legislature passed a law defining marriage in Alberta during the same-sex debates. They did it even after being told through undisputed legal opinions that it was outside their jurisdiction. At the same time that Alberta government was very happy to tell the federal government to keep its face out of provincial jurisdiction like education (remember Millennial Scholarships?) and health care. I suspect this pretensive political positioning was more about hubris and stupidity than it was about mere hypocrisy.

Contentious legislation that requires social, economic and ecological values trade-offs are exactly why we have democracies and the politicians are preferred our proxies to make these hard choices on our behalf. When we vote for you and grant you our consent to govern us we do not expect you to take the easy way out. We expect your insight, wisdom and judgment to be applied to serve the best interests of our society to the best of your ability.

We know politics is a difficult job and often a messy business. Get over it or get out of it. When you don’t do the difficult jobs and intentionally leave philosophical fuzziness in your legislation you are inviting, no you are requiring, the courts to be there. All to often they end up doing your job.

The problem is usually not judicial or administrative activism. Most often the problem is inadequate politicians.

So Mr. Harper, get off the backs of Elections Canada. If you want to eliminate the wearing of veils at voting stations – say so in the law and make it absolutely clear. You and the rest of the politicians were already forewarned by your administration this would happen and you let it slide. Not good enough. Not good enough at all.

Greens Breathing Down the NDP Necks in Ontario Election

The Greens (11%) are within the margin of error of the NDP (13%) support in the first poll in the Ontario election since the writ was dropped.

Come on Greens!

Politicians Are Pandering Over "Veiled" Threats.

The silliness that has emerged over the “veiled threat” is unhelpful at so many levels. The allegations abound as to the motives. Some say it is political pander to Quebec angst over religious minorities in the face of the by-elections next week. Others say it is Harper taking on Elections Canada because he is ticked over them disallowing the advertising scheme the Cons did in the last election. Others accuse Harper of using this to change the channel on the advertising scam issues with Elections Canada and to focus on this voter identification issue.

Still others see this turn of events as politicians of all stripes talking out of both sides of their mouths since they all just agreed and passed the legislation amendments that enabled this silliness to prevail and now they are blaming the Elections Canada administration.

The Cons have added a partisan spin to this saying Dion is flip flopping on veiled voting. The Cons make a stretch in their own credulity when one day he says he does not like Election Canada’s decision and asks them to revisit it. Two days later Dion say he still disagrees with Elections Canada decision not to revisit it but he can live with the law as it is. A visit to the CPC official website shows Dion's picture 3 times and Harper's only once. Are the Cons that afraid of Dion?

This is no Dion flip flop it is enlightened accommodation. How you ask? The Muslim community itself has said women are more than prepared to raise their veils and identify themselves – provided it is to another woman. In fact they do it now when doing banking, crossing a border or writing an exam.

People have a responsibility to reveal their identities for purposes of voting. That problem is solved in very practical terms already according to Muslim leaders. Those veiled woman will willingly show their faces to another female official at the polling station for purposes of identification. That is no different to my mind than same-sex personal security searches at airports. So the posturing and pandering around this stuff is pointless and obviously purely political…and the politicians involved should be embarrassed.

What I am really wondering about all this is why a women would choose to submit to such attire in a free and democratic society like Canada in the first place. I know I have a lot to learn about this culture and its beliefs. I have made some effort to try and understand but I have to admit – I don’t get it as to why women are wearing burkas, abayas and niquabs in Canada. It is still pretty foreign to my values and very hard to comprehend.

What that leads me to wonder is will our high minded and principled politicians do when a woman wishes to breach such religious requirements? Will they rush to her aid and support her individual expression of her rights in the face of some inevitable cultural-community pressures? Or will they choose to run for cover themselves?

Denis Ducharme Doesn't Want to Run Again.

Denis Ducharme (Bonnyville-Cold Lake) says he is not running for the PC’s in the next election. This is unfortunate. He has done much to foster a positive change the culture of governance in Alberta over how well he handled the Marie Lake issue.

Politicians tend to forget to whom they owe their first loyalty in our partisan political system. It is not the leader. It is not the party. It is the constituency. Denis reminded us of that reality in the past few months and he reaffirmed the appropriate ranking of the relationships and responsibilities that a politician needs to honour.

We all owe him a debt of gratitude to setting the relationship record straight and especially for following through and sticking to his guns. In our system of government, it is after all the responsibility of all backbenchers – including and especially on the government side - to keep the Executive on their toes. Denis did that is spades in the past few months.

This political life is not an easy job. It takes commitment, courage and character. Ducharme was a quiet and competent exemplar in all three aspects. I can hardly blame Denis for stepping down after 10 years but I for one will miss him. Thanks for the work you have done on behalf of Alberta.

Ontario Goes to the Polls - and We Better be Watching What Happens

Ontario just went into official election mode today. The outcomes are uncertain because it is an election and campaigns matter. I recommend the rest of us watch this election closely…particularly the Alberta Tories.

The best seat in the Blogosphere to view the Ontario election as it evolves will be frequent visits to the site known as democraticSpace.

I have a link to democraticSpace on this site so you can easily find it from here.

BTW Pollster Ipsos Reid has joined with this Blogger and he is providing them with seat projections and analysis during the elections. Good for him.

Alberta Oilsands Production Pressures Increasing.

The Alberta oil sands are coming under increased pressure. According to the Globe and Mail, demand for additional production is coming out of the U.S. to move from the current 1.2 million barrels per day to more than 3 million by 2015 in one estimate and over 3.4 million in the same time frame by another estimate.

Pipeline capacity is strained and the lead time for new capacity is a problem but some relief is expected by 2010 with new projects doming on stream. Then we have the refining issues and Midwest American refiners are reported to be spending abut $18billion up to 2012 to adapt to increased bitumen availability.

That additional refining capacity in the States brings another problem that may not sit well with Albertans. It could cause the discount between the conventional oil prices and the synthetic crude that is derived from oil sands to increase impacting negatively on provincial revenues.

Then you have expanded American refining capacity as a potential to undermine the over $40billion of scheduled Upgraders in the Edmonton area because they may not be cost effective. Albertans want the value added benefits of upgrading and refining in the province so this American refining capacity adaptation and energy demand is something the province is going to have to respond to aggressively.

Alberta is already suffering and not keeping up under the social and environmental, economic and inflationary strain of 1.2 million barrels pf daily production. To triple that in about 8 short years is going to take some serious adjustments to wages, investment in all kinds of infrastructure from physical to human, to social and natural stewardship initiatives.

If anyone thinks this is going to be resolved purely by market forces, the evidence today is that it is only going to get worse. The Canadian Press out of Toronto quotes the CIBC World Markets with some interesting observations. The story says the Canadian oilsands gain importance as other cut exports. “Canadian oilsands”…and out here in Alberta we thought the province controlled its natural resources by virtue of the Constitution…how naïve of us.

The prediction is that OPEC other countries like Russia and Mexico will be cutting exports in a few short years due to production lags and increasing domestic demands. The estimates are for a 7% decline in exports by 2010 – causing much higher oil prices.

Reports say that last year OPEC countries plus Russia and Mexico consumed about 12 millions of oil per day. That was 60% more than China and a td more than all of Western Europe. Canada’s oil consumption is reported to have actually declined last year.

CIBC economists Jeff Rubin predict oilsands will expand in the next decade and surpass deep-water sites as the largest sources of new supply…almost all of which he says will be exported to the U.S.A.

Alberta is rapidly emerging in the cross-hairs of geo-political energy battles and the forces that will be brought to bear on us are going to be substantial. We better get ready for that reality and quickly. A good start would be to find the new person to go to Washington DC to act on Alberta’s behalf on US issues, not the least of which will be energy export followed by demands for water exports.

NOTE TO READER: The impact of other countries and their oil policy was the subject of an editorial on Policy Channel on August 13. It adds fuel to the fire.

Does Chandler Have Opposition in Calgary Egmont Nomination?

Some efforts are starting to emerge to take on the Craig Chandler campaign in Calgary Egmont. I expect Mr. Chandler would be more comfortable in Link Byfield’s Wildrose Party not the Progressive Conservative Party of Alberta.

I smell something between political opportunism (a la Chandler) and real democracy (a la the August 29th posting by The Enlightened Savage) in the air.

If the Enlightened Savage is seriously into running for the Calgary Egmont PC nomination – I am behind him all the way.

It is Time to Resolve the Teacher's Unfunded Pension Issue

As school starts for a new year in Alberta the old issue of teacher’s unfunded pension liability is working its way through the political system. Premier Stelmach took the position during the PC leadership that the issue of pensions and contract negotiations were separate issues. He was then, and still is, keen to resolve the unfunded pension liability…if for no other reason it is still a real debt hanging over the head of the province and it is a significant burden on young teachers.

There is lots of history here and divided opinions – mostly based on ideology rather than logic. Some recent blogger and media commentary is available. For full disclosure, a few years ago I helped the ATA in their attempts to get the Klein government to revisit the unfunded pension liability issue with some moderate success but nothing conclusive. The efforts eventually paid off became it was a key issue in the PC leadership campaign. Many of the candidates took policy stands saying it needed to be resolved as a priority issue.

This is a key public policy issue that demands political leadership and there has never been a better time to resolve it. The issues are well understood and the solutions are obvious. To go through the current exercise of a province wide consultation on this matter is not going to add any light on the issues. The solution is to be found in the exercise of some pure political will and leadership. The current round of public consultations is no reason to delay a Government of Alberta decision on resolving the unfunded liability issues either.

It is time to get the unfunded pension liability issue dealt with and behind us. Then the system can move on to deal with the outstanding teacher contract concerns right afterwards. Nothing is really standing in the way of this resolution happening, except some old attitudes and personal grudges of a past Minister arising out of the 2002 teacher's strike.

The Greatest Canadian Premier

The Calgary Grit has narrowed the Greatest Canadian Premier Contest to Peter Lougheed of Alberta versus Oliver Mowat of Ontario.

I was just the 223 person who voted and the race was a 1 vote separation. Of course my choice was Lougheed, being that I am from Alberta but my reasons run deeper than that.

The poll is open Monday until 11 pm Mountain time. Visit the Calgary Grit and play along an make your choice in this interesting exercise.

Stelmach Touches the Brakes and Shifts Gears At the Same Time

So Premier Stelmach has once again exercised a bit of political muscle. He first did it over Alberta teacher’s unfunded pension liability and set the wheels in motion to resolve that problem when the old attitudes of the Klein – Dr. Oberg regime threatened to derail doing the right thing for all Albertans again.

Now with Stelmach’s personal intervention to reverse the Dr. Morton decision to allow seismic testing on Marie Lake he has shown that there is a way to "touch the brakes" and not mess with the market place. You do that by accepting that the environment is the trump card in all long and short term planning decisions. Stelmach did and he led yesterday and played the eco-logical trump card last night. Stopping any testing on Marie Lake is touching the brakes for reasons more significant than the sanctity of the marketplace. It was about sound stewardship and nothing less than an overarching concern about the sustainability of the biosphere.

He also personally intervened on the big cities infrastructure funding issues. The need to provide assured long-term, flexibility for sustaining intelligent planned growth in Edmonton and Calgary is a no-brainer. What ever political forces that came into play to put a great urban infrastructure policy initiative in jeopardy have been culled by Stelmach. By cutting the Municipal Sustainability Initiative strings for the big cities yesterday he set another smart political direction and reassured Albertan of a good governance stance going forward.

Marie Lake and the plight of Alberta’s municipalities, especially the two big cities, have emerged as symbols of what as been out of whack in the governing principles of Alberta in the past decade. Economic growth at any cost is not sustainable. The messy inefficient but largely effective policy tools of the free marketplace and democracy are sometimes blunt instruments to resolve complex issues.

As a good friend once told me “Sometimes you have to put away your principles and do the right thing.” Ed Stelmach believes in the free marketplace but he also knows it has its place and it alone cannot solve all of society’s ills. He also believes in democracy but he also knows it can sometime result in pooled ignorance instead of collective wisdom. When the blunt instruments are found wanting to resolve issues or to achieve the common ends of the society, that is when the sound judgement of quality leadership comes into play.

Growth has a cost and demands investment and planning – long range integrated planning. Short-sighted incrementalism is not good enough any more. Integrated sustainable approaches with full life-cycle cost-benefit analysis are what we need to embrace in our governing principles from now on. Ed Stelmach showed yesterday that he understands that and he is starting to act accordingly.

P.S. Congratulations to MLA Denis Ducharme for his good work on Marie Lake and to Mayor Mandel of Edmonton and Mayor Bronconnier of Calgary for their efforts on the MSI policy changes too.

Going Nuclear Demands That Albertans Take a Holistic and Integrated Approach

Conservation is becoming renewed foundation of progressive conservative political philosophy. Be it in ecological, economic or social terms, enlightened conservatives are embracing conservation. This is especially true amongst progressive conservatives when it come to addressing stewardship responsibilities and concerns for the environment.

The need for an integrated approach to modern public policy development is also becoming a vital new and systemic challenge. The old idea of “a balanced approach” was too often an excuse to seek a "no action stasis." The balanced approach too often pitted one weighty issue against another but failed to reconcile or resolve the respective issues at hand. A mediocre goal of achieving some sort of temporary equilibrium in the face of changing dynamics of today’s complex inter-dependent world is just not good enough. In fact it is down-right dangerous.

Old style balanced approaches are just like left versus right or Conservative versus Liberal tags. They are becoming meaningless because the approach is to mistakenly define reality in discrete compartments that are deemed to be mutually exclusive to each other. That old fashioned adversarial political model and policy development perspective is under siege as highly ineffectual and it is finally fading.

Now we have to look at the real world with a more comprehensive set of social, ecological and economic progress indicators that see success as a more inclusive, integrated and meaningful way. The limitations of outmoded GDP measures of success are well known. They simply fail to consider what genuine progress really is, how it is being achieved and at what total cost.

We need to use genuine progress indicators that look at policy initiatives and investments in public infrastructure that goes beyond the purely physical aspects of roads and bridges. We need to consider investment in infrastructure areas like our natural capital and social capital elements that also preserve and project as much as grow and expand. We need to plan our public investment in these "softer" infrastructure areas just as purposefully and as significantly as we do in our physical infrastructure approaches.

We must begin to look at the full cost life-span cost accounting model for all types of infrastructure projects. The present value model of evaluation is shallow insufficient and misleading and ignores to true long term demands and benefits of a project. Conservation and stewardship policy concerns will also demand newer comprehensive long-view costing metrics be applied to evaluating projects and their contribution to our genuine progress.

The emerging idea of nuclear energy in Alberta is a perfect place to start this new integrated, holistic, comprehensive long-view, full cost accounting approach. We need to study, understand and appreciate just how nuclear energy will serve to advance our genuine progress economically, socially and ecologically. We need to have the first kilowatt of power costed at a rate that considers the total and comprehensive long term amortized costs of the project.

Those long term cost must include the cost of dealing with the waste now. It is not fair to leave the nuclear waste issues for some future generation do handle while this generation enjoys all the "benefits." Before we even start to consider a nuclear future, we need to have an acceptable resolution of how to handle the waste from the resulting depleted plutonium. That plan has to be acceptable to Albertans who are able to provide an informed consent to the risk.

We need to have the risk issue thoroughly assessed and evaluated and part of the costing. We need to ensure that we have a complete, ready, realistic and executable disaster response plan in place now. We need a disaster mitigation strategy in place now that has to include reclamation of land, water and air contamination as well as habitat replacement for wildlife and humans in the event of a nuclear accident...regardless of how remote we are told it will be.

That sense of conservation and stewardship would be Alberta at its Progressive and Conservative best and serve us well as we face our fate of an uncertain future. If we are to have a nuclear future or continue along in a fossil fuel future - we best consider just how conservation and stewardship define and determine our progress in that brave new future.

We Live in Exponential Times Update

This is a very thought provoking piece - it is 8 minutes long but worth every minute of it.

An official update to the original "Shift Happens" video from Karl Fisch and Scott McLeod, this June 2007 update includes new and updated statistics, thought-provoking questions and a fresh design.

For more information, or to join the conversation, please visit http://shifthappens.wikispaces.com -- Content by Karl Fisch and Scott McLeod, design and development by XPLANE.

Give Elections Canada Audit Powers

Duff Conacher of Democracy Watch has a Letter to the Editor in this weeks’ edition of the Hill Times calling for Elections Canada to be given audit powers in dealing with political parties’ books. I could not agree more.

More on MP Integrity Awards

Good to see the Edmonton Journal Editorial Board also seeing the MP integrity awards as somewhere between pathetic and pitiful. My take on this hair-brained idea is in my post of September 1, 2007

Their front page story in the Edmonton Journal on Sunday September 2 deals with the serious negative implications for the Nonprofit/Voluntary Sector from the pending Bill 1 Lobbyists Act in Alberta. This legislation is a good idea that has gone too far. Full disclosure - I helped write the position paper for Volunteer Alberta and did an editorial of my own on it on our affiliate website Policy Channel. You can read the entire document on Policy Channel in the Community Theme area.

An Award for Political Honesty and Integrity is Disturbingly Orwellian

Has our respect for our federal governors declined so far that we now need to have an award of recognition for a parliamentarian “…who slug their guts out on behalf of their constituents in a very honest, forthright way with high integrity, don't get recognized for it…?”

Has it now come to the point where honesty and integrity are considered such unique character qualities of our elected representatives that they deserve special recognition?

Such character qualities ought to be taken for granted in those to whom we entrust our environment, our economy, our community, or future prosperity, and even our public safety and security as a nation. We empower and delegate power to these people who we elect and endow with our consent to be governed. We expect them to make some of our toughest and most critical decisions as a society - like going to war and putting other citizens we call soldiers in harms way. We expect them to steward our environment and help enable our prosperity.

If we have to hand out awards for basic honesty and integrity as a basis to recognize outstanding parliamentarians, we are electing the wrong kind of people in the first place.

George Orwell: "In a time of universal deceit, telling the truth becomes a revolutionary act."

Have we descended so far into an Orwellian reality that this quote reflects our times? In a democracy we always get the kind of government we deserve because we are the ones who choose it.

Harper Deserves Credit on Mental Health Commission

OK - when Mr. Harper gets it right we need to say so. This time he has done just that...gotten it right. The big event today is the announcement today of the National Mental Health Commission. Look ignored and swept under the policy carpet -Canadians with mental health issue needs attention and support...as do their families.

More kudos for Mr. Harper for appointing former Liberal Senator Michael Kirby to head it up. the Kirby Commission on health reform coming out of the Senate was the most comprehensive, intelligent and practical review of heath care reform for the country.

So one example of a nonpartisan, non patronage appointment does not absolve but it is evidence of hope for enlightened change from other recent appointments.

Good on ya Mr. Prime Minister.