Thursday, January 18, 2007

Only Nixon Can go to China

Two interesting stories from the past two days:


Oilsands tax incentives questioned

OTTAWA — Environment Minister John Baird hinted Wednesday his government is considering eliminating tax incentives introduced in the 1990s to boost production in Alberta’s oilsands.

As he announced a $230-million investment over four years into research on clean technologies with Natural Resources Minister Gary Lunn, Baird acknowledged Wednesday that he is puzzled by the federal assistance in the booming sector.

“I cannot explain why the Liberal government of Mr. Dion made these changes,” Baird said, speaking in French.

“I’m not here to defend the policies of Stephane Dion and the Liberal party. It was the (Liberal) cabinet with Stephane Dion that created this program. (Finance Minister Jim) Flaherty is in the middle of listening to the needs of Canadians from coast to coast and he will present the budget not this morning, but in the coming weeks and months.”



Alberta, energy cousins to fight Ottawa
PM's equalization plans a 'betrayal'

Alberta pledged Tuesday an "important alliance" with Saskatchewan and Newfoundland in their equalization battle against Ottawa and the possibility Prime Minister Stephen Harper will retool the federal revenue-sharing formula to include half of non-renewable resource dollars.

The partnership solidified Tuesday when news reports suggested Harper will break his federal election promise and include resource revenues in the equalization calculation -- a move that Saskatchewan's finance minister called a "betrayal" and an attempt "to buy Quebec votes with western oil."


While I think both of these moves are the "right" policies to adopt, it might make life a little easier for Liberal candidates in Alberta next election.



UPDATE: The Times they are a changin'. Here's what Harper said just a short month ago (thanks to DH for the e-mail on it):

Dion said he will review existing breaks for the oil sands if he becomes prime minister, and will only allow them for companies that meet high environmental standards. The proposal earned him a rebuke Thursday from Harper, who suggested that politicians from central Canada tend to single out his home province.

Dion said he would not impose a tax on gasoline but would use fiscal measures to encourage companies to adopt green technology.

Alberta's oil patch receives an estimated $1.4 billion in annual tax breaks through a program designed to encourage new construction projects.

Dion said the Accelerated Capital Cost Program, designed a decade ago to help the then-fledgling industry, is outdated and needs to be revamped.

[...]

Harper appeared to shoot down the idea Thursday. He said his government's recent decision to tax income trusts had already impacted the Alberta oil sands - and suggested further hikes would be unfair.

"It would be asking a bit much to target the energy sector for tax hikes in that matter," Harper said.

"It's easy for some of the other parties - for Mr. Dion, or the NDP, or the Bloc - who don't represent Albertans and Westerners to say Albertans should pay all the taxes in the country.

7 Comments:

  • Forgive my ignorance here, but what does only Nixon going to China have to do with the contents of your post?

    By Blogger Keith Richmond, at 7:40 PM  

  • Only a conservative (Nixon) can normalize relations with a communist country, because a non-conservative would have been pilloried.

    Only a conservative (Harper) can screw over Alberta, because a non-conservative would be pilloried.

    By Blogger LeoPetr, at 8:32 PM  

  • I don't think Baird knows the file (accelerated capital cost allowance). Regardless of the industry, I don't think one can incent $50B of investment and then change the rules. That smacks very much of a banana republic. That's not to say that the policy should continue on a go-forward basis, but where companies have alreay invested in good faith that ought to be respected.

    By Blogger matt, at 10:52 AM  

  • I don't think Baird knows the file (accelerated capital cost allowance). Regardless of the industry, I don't think one can incent $50B of investment and then change the rules. That smacks very much of a banana republic. That's not to say that the policy should continue on a go-forward basis, but where companies have alreay invested in good faith that ought to be respected.

    By Blogger matt, at 10:52 AM  

  • Forgive my ignorance here, but what does only Nixon going to China have to do with the contents of your post?

    It's from "Star Trek VI - The Undiscovered Country".

    Spock: "There is an old Vulcan proverb: 'Only Nixon could go to China'"

    By Blogger Hatrock, at 12:38 PM  

  • loepetr sez: Only a conservative (Harper) can screw over Alberta, because a non-conservative would be pilloried.

    Ah, thanks, Leo. Except I remember Clark and Mulroney thought the same thing, and we all remember how that one turned out....

    By Blogger Keith Richmond, at 4:08 PM  

  • I understand a document was signed with the Feds, Alberta, and the U.S. This means that the U.S. gets 75% of Alberta oil, and even if gas and oil are short in supply, the U.S. gets first choice.
    Also water sold to the U.S. comes from the West, where water is badly needed.
    It looks like the west and the east
    (Nfld) are royally screwed.

    By Blogger Jacquie, at 5:35 PM  

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