Province does not collect fair share for conventional oil and gas
Calgary – Alberta is close to last place in collecting a fair share of royalties from conventional oil and gas.
Government budget documents obtained by the Alberta Federation of Labour show the province leading the race to the bottom on oil royalty rates. This stands in stark contrast to claims made by the Redford government in a taxpayer-funded mail out about the state of the economy in Alberta.
“Alison Redford wants us to believe – is willing to spend $350,000 trying to convince us – that her government is getting a fair price for Alberta’s natural resources,” AFL president Gil McGowan said. “The numbers show it isn’t true, and no amount of spin will make it true.”
The budget document includes a chart showing that every U.S. state is ahead of Alberta in collecting a fair share. The measurement used – called Combined Royalty and Tax Measure (CRTM) – is a composite of various forms of revenue collection and is a widely used measurement for the public share of oil and gas revenue. Every U.S. state has a CRTM of more than 50 per cent, while Alberta, Saskatchewan and British Columbia are at less than 40 per cent.
“It’s the government’s stated goal to have one of the cheapest oil and gas royalty regimes in North America,” McGowan said. “Our government should work on behalf of Albertans who own the resource, not on behalf of oil-industry donors who want Alberta to give everything away under the smokescreen of keeping us ‘competitive.’”
Of our competitors, Louisiana gets the most out of its non-renewable resources: 60.9 per cent for natural gas and 64 per cent for conventional oil – more than 20 percentage points higher than Alberta.
Alberta’s revenue problem has become an area of ongoing public concern in light of the provincial budget of 2013, which brought in drastic cuts to services despite the province’s booming economy. Over the last ten years, Alberta has repeatedly cut royalty rates despite the findings of the 2007 Royalty Review Panel, which showed that the province does not collect enough for its oil and gas.
“The government knew that the 2013 budget deficit was on the way. Their projections showed that cuts to royalty rates would result in a deficit, but they went full-steam ahead with those royalty cuts,” McGowan said. “The reason their brochure has gone over like a lead balloon – and the reason audiences have applauded our cinema ad – is that Albertans know that we’re giving away billions to the super-rich.”
The AFL released an internal government document earlier this year that showed the last year’s deficit was not caused by the so-called ‘Bitumen Bubble,’ but was entirely due to royalty giveaways.
AFL Backgrounder: Conventional Oil and Gas Royalties-30-
Olav Rokne, AFL Communications Director at 780-289-6528 (cell) or via email [email protected].