09) ALBERTA LABOUR DEMANDS HIGHER OIL ROYALTIES

 

Special to PV

 

            The new government of  Alberta has appointed a Royalty Review Panel to consider whether the province is receiving a “fair price” for resources. The Panel is encouraging Albertans to visit letstalkroyalties.ca, where they can ask questions and submit comments on this crucial issue. Panel chair Dave Mowat is on record saying that “we might never have another royalty review again.”

 

            The Alberta Federation of Labour says that “working people have an enormous stake in these discussions. This is our opportunity to encourage the government to negotiate on our behalf to get the best possible framework for Albertans.”

 

            The AFL points out that while industry has “strong, well-funded lobby groups that command a great deal of attention in the mainstream media and behind closed government doors,” Albertans have not been well represented by former governments.

 

            “We give our oil away,” is the labour movement’s argument. In 2012, Alberta collected barely 10 per cent of oil sands revenue in royalties, and just 11 per cent the next year. By contrast, the AFL says, the Lougheed government of 1971-1985 collected 35-40 per cent of  industry revenue in royalties. If Lougheed-era royalties had been collected in 2012, the province would have received $12 billion extra in revenue, from an industry that collected more than $42 billion in revenues that year.

 

            “For all of  our oil wealth,” laments the AFL, “we have very little to show for it. Primarily because we continue to subsidize one of  the most profitable industries in the world. For years, the Alberta Federation of  Labour has demonstrated that Alberta has one of  the cheapest conventional oil and gas fiscal regimes in North America. The same goes for the oil sands. Past Progressive Conservative governments slashed non-conventional oil revenues, handing industry billions in subsidies at the expense of  government revenues and Albertans’ fair share. The AFL estimates that royalty giveaways since 2009 have cost Albertans at least $4.7 billion. It’s no wonder we are in a deficit budget position today.”

 

            Instead, the Federation says, “we need to think like owners,” since Albertans actually own the oil resources (although the First Nations of northern Alberta would view this statement in a very different light).

 

            The goal of Alberta’s energy policy, says the AFL, “should be to maximize returns to the owners in terms of  royalties and jobs. This requires a system that is transparent and delivers fair value for the resources that can only be sold once. Selling resources is exactly like selling off  anything else we own, such as a building, a car, or a road – once you sell it you can never do so again. Albertans need a royalty system that enables us to put aside the proceeds in a heritage

 

fund so that we can bequeath the benefits of  resource extraction to future generations, and to make the transition to a less carbon intensive economy.”

 

            Among other suggestions, the AFL says working Albertans should demand to make the current royalty system more transparent and consistent, remove handouts and hidden industry subsidies from the royalty framework, and develop value-added projects, including local upgrading and refining to create good paying local jobs.

 

(The above article is from the October 16-31, 2015, issue of People's Voice, Canada's leading socialist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)