Wednesday, September 19, 2007

THEY DID IT

Yesterday, the Progressive Conservatives broke the Social Credit government record, celebrating their 13,157th consecutive day in power. During that time, there have been 30 provincial government changes across Canada. There was no big victory speech last night, but it would probably go something like:

I'd like to thank the Alberta Liberal Party, Lawrence Decore for musing about abortion in '93, the NEP, the NDP, PET, the ontinuously divided right wing, Ralph Klein, Peter Lougheed, and, of course, God, for puting the oil in the ground.


How many more days they last in power will probably depend on how they handle this. Oilsands royalties could very well be the top issue of the next election campaign.

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10 Comments:

  • Oil sands royalties and the Klein blind eye and Melchin obfuscations saying he had done a royalty review and we were getting our fair share. Melchin, as I recall, could not produce any evidence of such a review actualy haven taken place.

    That stark political reality and the findings of the Hunter Royalty Review is a damning indictment of the laziness and insouciance of Klein regime - and the various Energy Ministers who "served" him.

    As for the industry - they are about to be reminded very forcefully about whose oil and gas it is anyway. They seem to have some serious accountability and transparency problems over the royalties they paid and if they were the correct amounts.

    It would be a meaningful exercise to have them prove they were compliant with their royality payment calculations. Hunter says the Department of Energy didn't monitor or audit royalty payments very effectively. Not good!

    Every Albertan needs to read the Hunter Royalty Review right away. It is our resource and our revenues and our future that is at issue (and at risk) here.

    By Blogger Ken Chapman, at 9:16 PM  

  • Umm, just to correct you, everybody knows that Aberhart and Manning put the oil in the ground.

    By Blogger GritPatriot, at 1:06 AM  

  • Right, Ken, we know from experience how well informing the industry, forcefully, who owns the resources works for the Alberta oil industry.

    See goose laying golden egg.

    Shoot goose.

    Display shock and awe at damage to industry.

    AKA why the Liberals will NEVER rule in Alberta.

    Honestly, you guys are a joke.

    By Blogger Candace, at 2:36 AM  

  • I have to say - that is a pretty impressive record to hold. Wow.

    Like, WOW.

    By Blogger Jason Bo Green, at 9:23 AM  

  • candace; the current royalty rates were not designed with 80 dollars a barrel oil in mind. Why shouldn't Albertans get their fair share?

    By Blogger calgarygrit, at 11:50 AM  

  • Why shouldn't Albertans get their fair share?

    Let's see...no deficit, no debt, no pst, the lowest provincial income taxes in the nation, exponential real-estate wealth.

    Let's see how long that all lasts with this sort of government intervention.

    And exactly what does the Alberta government intend to do with all of this extra revenue?

    If you want your fair share, invest in the resource yourself with all your extra personal revenue.

    Are there any Liberals who don't have a sense of entitlement???

    By Blogger Dr. Strangelove, at 12:02 PM  

  • On royalties: Alberta should be moving away from royalties. The resource curse is a very bad thing to engender and typically creates massive shocks to governments when things go tits up.

    Ignoring all the horrendous resource curse economies (Africa, Newfoundland, Nova Scotia, Louisiana, Scotland...), lets look at California. A reasonably well diversified and industrialised economy, too many hippies for my taste, but whatever. The hippies have actively destroyed one of the earliest industries in the state with impenetrable restrictions on oil development. Then you see the economy devastated after 1990 when defence cuts hit - California was so exceptionally dependent on aerospace that it was essentially a hidden resource curse economy. After a long hard slog, repurposing all sorts of high-energy physicists and real-time computer programmers (gee, I wonder what they worked on at that research facility... and why is everyone sooo impressed with their patchy resume??? they were a consultant to a janitorial services company and then an animal control firm - "skunk works"...) the state clawed its way back and was going nuts with the internet boom (all of the state: SF, LA, and San Diego dominated areas). Great, diversified, no problems.

    Dot.com popped - the state budget implodes for the second time in a decade. Apparently it was exceptionally dependent on capital gains taxes from VCs and company founders, and it was only bubblenomics that kept it competitive with lower tax, lower cost, and lower regulation neighbours. LA rebounded on mortgage finance (oops) and SF has gotten some Web 2.0 - watch out for crashing state finances!

    Alberta needs to ensure that it doesn't become California. Eliminating royalties would help reduce the damage to the budget when oil prices come back to earth. Regardless of your preferred level of government services (mine is exceptionally low), prudent government requires that the budget not be dependent on boom-times. If the government's budget implodes along with the economy, then you've got horrible politicians.

    Loading up on services and programs during a boom exacerbates bubble issues (see government construction boosting inflation and blowing capital budgets...) but doesn't appear to cost too much (lots of hidden costs, but low direct costs... "we can afford it"). When the crash hits, many more people are using the new gold dipped Rolls-Royce services, busting the budget just when the revenues are crashing. Keynesian models say run a deficit during busts and surpluses during booms, and there is some value to that... the government should be neutral to the economy and do as little distortion as possible. But Keynes didn't mean that you should lard up social services during a boom so that you can go extra super duper bankrupt in a bust. These ultra-luxe services and resultant rev crashes bring back anti-keynesian government behaviour while claiming to be Keynesian. The government has to institute austerity measures and massive cutbacks, further exacerbating an economic downturn. Absolutely fucking shambolic policy.

    CG, you are smarter than this. Ignorant populism and class warfare is stupid. Comrade Bob is not an example that you should be following, nor is Danny Millions! Turning Calgary into a suburb of St John's is one of the worst ideas ever. Thankfully this trail balloon of Ed the Buffoon will be destroyed and no Liberal will ever be elected.

    Though here's a hint - go right of the PCs on economics and you'll win. Going left ain't gonna work, and repeating past efforts just means that you're mentally challenged or insane.

    By Blogger Hey, at 1:18 PM  

  • I don't think governments failing to collect taxes is exactly the best formula for building a free market paradise. At any rate, there is no reason you can't turn the additional revenues into a tax cut - perhaps a corporate tax cut (unless corporate taxes are zero in Alberta... make them negative).

    The advantage of that approach is that it encourages economic diversification (away from a resource that may become obsolete over the next 50 years).

    By Blogger hosertohoosier, at 3:35 PM  

  • That's a diversification plan I've been thinking about, too. Raise royalty rates and reduce corporate taxes by an equal amount, making the change revenue-neutral.

    By Blogger The Invisible Hand, at 10:45 PM  

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