Government failure on oil-sands royalties shameful, says AFL: "The Tories are allowing billions of dollars to slip through their fingers while they say we can't afford to keep schools o...

EDMONTON - The Auditor General's Report on oil-sands royalties confirms Albertans' worst suspicions – that the Progressive Conservative government cares more about the energy industry's bottom line than what is in the best interests of Albertans, says the Alberta Federation of Labour (AFL).

"Premier Stelmach should hang his head in shame with the release of this report," says Gil McGowan, president of the AFL, which represents 137,000 workers. "The Auditor General has confirmed our fears that we may be missing out on billions of dollars in foregone royalty revenues."

In February, McGowan and the leaders of the Canadian Union of Public Employees (CUPE), the Health Sciences Association of Alberta (HSAA), the United Nurses of Alberta (UNA) and the Alberta Union of Provincial Employees (AUPE) wrote to Auditor General Merwan Saher (click here for full text of letter), asking him to investigate why the government is failing to meet its own targets for collecting revenue from oil and gas companies.

"What the Auditor General discovered is that the government doesn't actually have any targets – which is shocking when you consider that the oil sands provide one of our province's most important revenue streams to fund things like health care and education," says McGowan.

"The Auditor also shows that there has been a seismic shift in the way the Conservative government looks at oil-sands royalties. For a brief period, the government paid lip service to maximizing royalties for the benefit of all Albertans, the owners of the resource. But, as the A-G shows, the government is now far more concerned with attracting investment with bargain-basement royalties than it is about collecting a fair amount of royalties on behalf of the Alberta public."

McGowan points out that the government's decision to re-orient its approach to oil sands royalties away from maximizing value for the owner of the resource was made without any public consultation -- and without being honest with Albertans about what the change will mean for government revenue and the funding of vital public services.

"It makes me wonder who these guys are working for: the Albertans who elected them or the oil companies who wine and dine them," said McGowan.

McGowan says the Conservative's failure on oil-sands royalties should infuriate Albertans on two levels: First because it's robbing them of billions of dollars in revenue that could be used to pay for things like schools, health care and infrastructure; and, second, because there is no reason why Alberta should be rolling over in the face of lobbying pressure and scare tactics from big oil companies.

"With high oil prices, instability in the Middle East and dwindling international supplies, we hold all the cards," says McGowan. "And yet the Tories are behaving as if it's the oil companies that have the better hand."

"The Tories are allowing literally billions of dollars to slip through their fingers at the same time that they're saying we can't afford to keep school open," says McGowan. "It's outrageous. The Tories always talk about the need to run government like a business. If a CEO was ever as careless with his company's assets as the Conservatives are with our energy assets, he'd be fired in a minute."

To help Albertans understand just how significant the Auditor General's findings are, McGowan says people should think about how they would treat the sale of assets they own personally, like their homes.

"For individual Albertans, their home is usually their biggest asset. For Alberta as a whole, our biggest asset is the oil sands," says McGowan.

"Can you imagine selling your home without trying to figure out what a reasonable price would be? Can you imagine setting the price for your home far below market value and then patting yourself on the back because so many people are lining up to take advantage of your stupidity? That's what's happening with our collectively owned oil sands assets. The Tories think they're smart because oil companies are lining up to get a piece of the action. But giving away your assets at bargain basement prices doesn't prove that you're smart; it proves you're a sucker. Unfortunately, in this case, it's the Alberta public that's going to pay the price for the government's gullibility in the form of billions of dollars in foregone revenue. Where is a Peter Lougheed or a Danny Williams to drive a harder bargain when you need them?"


Contact: Gil McGowan, President, Alberta Federation of Labour @ 780-218-9888 (cell)

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