Posted on 09/24/2007 4:57:52 PM PDT by familyop
Whenever in the past I have suggested that Premier Ed Stelmach isn't up to the intellectual rigours of being Alberta's head of government, his loyal followers have wondered how can I say such things.
Well, the controversy and unreal expectations set off by his royalty review commission this week are prime examples of how Stelmach digs holes for himself, then willingly flings himself in.
There was no broad public demand for a review. Stelmach merely possesses an unhealthy measure of the-big-guys-are-out-to-screw-the-little-guys populism, one he shares with a large number of his supporters.
Last fall, while seeking the Tory leadership, Stelmach pandered to this constituency by promising a review of the way Alberta taxes oil, natural gas and oilsands extraction.
There's nothing inherently wrong in a periodic review. The current royalty regime was set up in 1997. It is neither ancient nor magic.
Indeed, the commissioner who reported this week did a tremendous service by uncovering how lackadaisical the provincial Energy department has been about monitoring royalty payments.
Commissioners were shocked to find that the departments responsible for collecting Alberta's $11 billion in annual resource revenue cannot give a good accounting of how much oil and gas is produced here each month.
So they cannot say with certainty whether or not the right royalties are being paid by resource companies.
This is unconscionable. The government has no clear handle on its largest stream of income. Whether one believes, as the commissioners recommended, that royalty rates should sore upward or, as I do, that no increases are warranted, it is preposterous that the provincial government cannot tell whether it is being paid what it is owed.
(As an aside, I got a kick out of the reaction to my Friday column on the royalty review, especially from those people who professed to be appalled by the government's incompetence in monitoring royalty payments, but who were nonetheless appalled by my suggestion that if that same government got an extra $2 billion from the oil industry each year it would spend it irresponsibly.)
It is the motives behind Stelmach's review that have been the problem from the outset. The current royalty structure was worked out when Jim Dinning was still provincial treasurer.
Dinning was running for the leadership against Stelmach in 2006. He was favoured by the big guys -- the ones so many Stelmachites are convinced have it in for ordinary Albertans -- i.e. the Conservative party's establishment and a significant share of oil executives.
By calling for a review back then, Stelmach was insinuating that Dinning and the big guys had pulled a fast one. If grassroots Tories wanted a leader they could be sure would stop the fleecing of the little guy, it was him and not Dinning.
The review proposal was as much a political pander as it was sensible policy. Its consequences were obvious from the start, even if Stelmach appears not to have had a clue where the review would lead.
By implying the existing regime was fraudulent -- rather than merely outdated -- Stelmach unleashed the politics of resentment.
While in advance there was no groundswell demand for a review, there has been a vocal "I knew it!" reaction since the premier's commissioners "found" a $2-billion potential shortfall in annual resource revenue for the province.
Equally, people involved in the patch have been angered by the premier's portrayal of them as "Big Oil," greedy robber barons out to defraud Albertans.
Stelmach could not heed the old axiom that if it ain't broke, don't fix it.
Rather than conduct a quiet, technical analysis of the royalty structure's strengths and weaknesses, Stelmach instead made a big show of his public review, and since its release has made a big show of his tough-guy stance on behalf of real folks against the greedy tycoons.
There's more than a little Calgary bashing mixed in here, too. Stelmach was elected Tory leader largely on the strength of his support in the northern half of the province, including Edmonton, where there was a fervent desire not to have another premier from Calgary.
Since a lot of rank-and-file northern Alberta Tories and other northern voters believe the provincial government has favoured Calgary in politics and policy -- and since the oil industry is largely based in Calgary -- it has been easy for Stelmach to whip up bitterness over the current Dinning-written, establishment-approved royalties.
But now Stelmach is stuck in a morass entirely of his own making with no good way out.
If he next month proposes to raise royalties only $1 billion (instead of the $2 billion the commission proposed) the interest groups and individuals whose resentment his anti-oil rhetoric has piqued will harrumph that he caved into the oil companies. Meanwhile, the oil companies -- Alberta's economic engines -- will be angry he raised royalties as much as $1 billion.
That's why I doubt whether he is up to his new job.
...related.
PrimeWest Picked Up By UAE (Arabs buying Canadian oil interests.]
http://www.freerepublic.com/focus/f-news/1901620/posts
LOL, Alberta is the UAE of North America. Suncor and Petro-Canada are begging for pipe fitters and electricians at $40/hr to complete oils sands projects. This pol is determined to kill prosperity through taxes.
Answer? BQI/Amex - Oilsands Quest holds the largest contiguous
oilsands land area in Canada, and they’re in Saskatchewan.
The government there is very pro-business, and welcomes new
exploration.
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