The royalty structure gets a facelift
Premier Stelmach has unveiled his new royalty structure after months and months of waiting by the public and very vocal energy companies.
His new plan will bring in about $1.4 billion dollars by 2010 (a 20 percent increase) and will work on a sliding scale. When the price of oil goes up, so does the rate…when it goes down, the rate follows.
Alberta’s planned royalty increases are about $500 million less that what was recommended by a government-appointed royalty review panel in September. This new plan doesn’t come into effect until 2009.
That is the Coles notes version of Stelmach’s royalty policy.
So now that I’ve thrown the numbers at you, why don’t we take a look at the question “is this good or bad for Alberta?”
Shortly after the details were announced Ryan Ballantine was out on the streets getting your reaction. Pretty much every person he spoke to was all for Stelmach’s compromised approach to the royalty ruckus. When I went out today and asked if this would impact your life, practically all answered yes saying the extra cash for provincial coffers will help boost funding for health care, education and infrastructure…that is of course if the Tories choose to spend the money in those ministries.
But we are all mere people, and this is a complex issue. What do the experts think? That is where things start to divide. It seems there are two basic reactions to the new royalty structure. They either hate it or are mulling it over.
Many oil and gas companies say they need to crunch the numbers before giving their opinion on the new structure and the Canadian Taxpayers Federation is not calling the program a success, but not calling it a failure either. The federation wants to wait and see what happens.
Many others on both sides of the issue are unhappy with the plan. Some comparing Stelmach to Hugo Chavez in Venezuela, others saying the rates will ruin the winter drilling season, while some say he didn’t do enough, and others believing the oil and gas sector heavily influenced the final details.
With rumours swirling about a possible election by the end of the year I guess, for Stelmach, it all depends on what the general public (he’s hoping for a majority of them) thinks of his new structure. The speculation is if most are for it and applaud steady Eddy for his work then he’ll announce the date we head to the polls so he can soar to an easy win. If the reaction is negative, we will be spared two elections in one year.
So do you think we’ll be casting another vote soon?