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alberta auditor general report 2007 Alberta Royalty Review Ed Stelmach Mel Knight

ed stelmach compromises albertans on the royalty review.

I have three main thoughts on Ed Stelmach‘s royalty position and the past couple of days:

1)Please don’t say it’s a compromise,” were Ed Stelmach’s words after announcing the Tory position on royalties. The quarter-page ad in today’s Edmonton Journal didn’t convince me.

Sorry, Premier. You compromised.

Rather than taking a truly historical position, Ed Stelmach’s Tories have clearly compromised with the oil sector at the expense of Albertans. By taking a slow (a perhaps “dithering“) approach by only adopting certain portions of the already moderate and tame “Our Fair Share” report Stelmach has compromised the interests of Albertans in favour of oil companies that are posting record profits.

Ed Stelmach’s compromise with the oil companies includes increasing royalty rates by only $1.4 Billion across the sector starting in January 1, 2009 and not reaching this amount until 2010. This gives oil companies over a year to reap the rewards of current royalty system, which was created when oil was $11 a barrel. This compromise includes only moderate increases in royalties for companies such as EnCana, who have posted the largest annual profits in Canadian history. I have no problem with these companies making a profit, but these natural resources do not belong to the oil companies, they belong to Albertans.

Stelmach’s $1.4 billion will be $500,000,000 less than the amount recommended by the “Our Fair Share” report – which again was seen as a moderate and tame report to begin with (the $1.4 billion was also supported by Alberta Liberal Leader Kevin Taft) . Other reports, such as this report released by the Parkland Institute, recommended a more aggressive approach to royalty revenues.

A Premier should stand up for the interests of the citizens of his/her province. Stelmach didn’t do that. Instead, he compromised with the oil companies and made it clear that he is willing to hand over the potential of Albertans natural resources to the oil companies, rather than allow Albertans to directly benefit from the resources that they own in the first place.

2) Where’s the accountability? Mel Knight remains Minister of Energy even after Auditor General Fred Dunn singled out Knight and the Department of Energy for failing to collect billions of dollars in resource revenues over the past 15 years.

Here is what Dunn said of Knight’s Department of Energy:

“The principals of transparency and accountability, I believe, were not followed. I’m not impressed.”

“The department should demonstrate its stewardship of Alberta’s royalty regime and provide analysis to support that stewardship and this was not done.”

“The department’s monitoring and technical review findings were communicated to decision-makers. The question is: Did they hear or were they listening? At the end of the day, I don’t know, but they chose not to act.”

Former Auditor General Peter Valentine has been appointed to investigate, but don’t expect any heads to roll in this scandal.

3) There is very little talk about why Stelmach decided it was a good idea to spend $145,000 of public dollars to hold a prime-time infomercial on Wednesday night which only offered vague platitudes and sweeping visuals of Alberta’s foothills. Maybe the Public Affairs Bureau is bored?

There is much debate over this issue, here are some opinions and responses floating around the blogosphere:

The 5 R’s – Calgary Grit
A Half Billion Short – Le Revue Gauche
Royalty Check – Andrew Coyne
Stelmach’s Choice – The EcoLibertarian
Premier Stelmach Brought Progressive Conservative Politics Back to Alberta Tonight – Ken Chapman
Alright, everybody exhale now – albertatory
National “Eddie” Program – The Black Kettle

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