Sack Stelmach
The Alberta Premier's foolish oil-royalty hike will hurt thousands of industry employees
Lyle Dunkley And Ezra Levant
Financial Post
Wednesday, October 10, 2007
CREDIT: Ed Kaiser, CanWest News Service
ED STELMACH: The disaster of weak leadership.
Ed Stelmach and Stephane Dion are the unwanted leaders of their parties, each accidentally elected on the same day last December. Both are now proving, at great cost, that the naive romance of electing an unready amateur soon gives way to the disaster of weak leadership.
The federal Liberals are imploding -- but Dion's mess doesn't hurt the country, only his own party. That cannot be said for Stelmach. True, he has lopped more than 20% off the support the Alberta PCs polled under Ralph Klein, and lost Klein's old seat in a byelection to boot. But that is nothing more than fodder for the political chattering classes. What matters -- what makes Stelmach dangerous, whereas Dion is just pitiful -- is that Stelmach actually runs the Alberta government.
Stelmach has had 10 months to legitimize the PC party's private leadership vote by calling a general election. That he has refused to do so -- and is getting away with it -- is an indictment of Alberta's weak culture of political accountability, atrophied after 36 years of one-party rule. The unofficial motto of the Alberta PCs is that of France's Louis XIV: "L'etat, c'est moi."
If Albertans in general had made the same mistake as the PC party did in voting for Stelmach, his proposed new $2-billion oil and gas royalty increase would be no less foolish, but it would have the veneer of democracy to it. Or if that tax had been proposed by the PC party in the last election under Klein, then even unelected Stelmach could claim a mandate to impose it.
But Stelmach has neither of these democratic fig leaves. And so an unelected Alberta Premier is about to impose a punitive new tax on Alberta's key industry, without the trifle of public consent. Even King Ralph wouldn't have been so presumptuous.
The rationale for this tax hike can be nothing but envy: The provincial government's annual surplus exceeds $8-billion, despite spending more per capita than any other province. This is a jealous ambush of the oil and gas industry -- killing the goose that lays the golden egg.
Good luck with that. There is no industry more mobile than the oil industry, with operations on every continent. Other than the immoveable oilsands -- where new investments will be mothballed -- it's all at risk, especially the money. We know that from the National Energy Program, when the world's capital markets bolted Pierre Trudeau's ambush taxes. Alberta's unemployment rate skyrocketed from 3.9% in 1981 to 11% in 1983. Housing starts in Calgary fell from 15,000 in 1980 to 2,000 in 1983. The $13-billion Alsands project was mothballed, as was the $12-billion Cold Lake heavy oil project. There was a 10-mile-long line of drilling rigs waiting to cross over the border into the United States.
Will this happen again? EnCana announced that it will scale back its investments in Alberta by $1-billion next year because of Stelmach's announcement, and Talisman said it would pull back $500-million. Crescent Point Energy said it will move $150-million of drilling money from Alberta to Saskatchewan. When entrepreneurs move from Alberta to NDP Saskatchewan, it's time to be concerned.
It's not just the substance of the tax threat that has spooked them, it's the tone -- the demonization of the oilpatch, the rhetoric of envy that colours the government.
Stelmach's hand-picked panel that proposed the tax hikes didn't end its job with its report -- it has since gone on a political campaign. Panel chair Bill Hunter dismissed concerns about making the energy industry uneconomic, telling oil and gas companies to "leave it in the damn ground." Pedro van Meur, the panel's hired "expert," told reporters that warnings from EnCana and others are "all part of the game."
To Stelmach and his court, it might all seem like a game. Publicly traded companies with billions of dollars in investments don't play games -- they minimize their risks, and when they make statements about shareholders' money, statements that move stock prices, they mean it. It's not a game to thousands of En-Cana and Talisman and Crescent Point employees and suppliers and countless others from auto dealers to restaurateurs who will be affected, too.
Loyal Liberals are working overtime at saving their party by sacking Dion. Forget about politics: Are there any grown-ups in the PC party working to save Alberta's -- and Canada's -- economic engine?
The Alberta Premier's foolish oil-royalty hike will hurt thousands of industry employees
Lyle Dunkley And Ezra Levant
Financial Post
Wednesday, October 10, 2007
CREDIT: Ed Kaiser, CanWest News Service
ED STELMACH: The disaster of weak leadership.
Ed Stelmach and Stephane Dion are the unwanted leaders of their parties, each accidentally elected on the same day last December. Both are now proving, at great cost, that the naive romance of electing an unready amateur soon gives way to the disaster of weak leadership.
The federal Liberals are imploding -- but Dion's mess doesn't hurt the country, only his own party. That cannot be said for Stelmach. True, he has lopped more than 20% off the support the Alberta PCs polled under Ralph Klein, and lost Klein's old seat in a byelection to boot. But that is nothing more than fodder for the political chattering classes. What matters -- what makes Stelmach dangerous, whereas Dion is just pitiful -- is that Stelmach actually runs the Alberta government.
Stelmach has had 10 months to legitimize the PC party's private leadership vote by calling a general election. That he has refused to do so -- and is getting away with it -- is an indictment of Alberta's weak culture of political accountability, atrophied after 36 years of one-party rule. The unofficial motto of the Alberta PCs is that of France's Louis XIV: "L'etat, c'est moi."
If Albertans in general had made the same mistake as the PC party did in voting for Stelmach, his proposed new $2-billion oil and gas royalty increase would be no less foolish, but it would have the veneer of democracy to it. Or if that tax had been proposed by the PC party in the last election under Klein, then even unelected Stelmach could claim a mandate to impose it.
But Stelmach has neither of these democratic fig leaves. And so an unelected Alberta Premier is about to impose a punitive new tax on Alberta's key industry, without the trifle of public consent. Even King Ralph wouldn't have been so presumptuous.
The rationale for this tax hike can be nothing but envy: The provincial government's annual surplus exceeds $8-billion, despite spending more per capita than any other province. This is a jealous ambush of the oil and gas industry -- killing the goose that lays the golden egg.
Good luck with that. There is no industry more mobile than the oil industry, with operations on every continent. Other than the immoveable oilsands -- where new investments will be mothballed -- it's all at risk, especially the money. We know that from the National Energy Program, when the world's capital markets bolted Pierre Trudeau's ambush taxes. Alberta's unemployment rate skyrocketed from 3.9% in 1981 to 11% in 1983. Housing starts in Calgary fell from 15,000 in 1980 to 2,000 in 1983. The $13-billion Alsands project was mothballed, as was the $12-billion Cold Lake heavy oil project. There was a 10-mile-long line of drilling rigs waiting to cross over the border into the United States.
Will this happen again? EnCana announced that it will scale back its investments in Alberta by $1-billion next year because of Stelmach's announcement, and Talisman said it would pull back $500-million. Crescent Point Energy said it will move $150-million of drilling money from Alberta to Saskatchewan. When entrepreneurs move from Alberta to NDP Saskatchewan, it's time to be concerned.
It's not just the substance of the tax threat that has spooked them, it's the tone -- the demonization of the oilpatch, the rhetoric of envy that colours the government.
Stelmach's hand-picked panel that proposed the tax hikes didn't end its job with its report -- it has since gone on a political campaign. Panel chair Bill Hunter dismissed concerns about making the energy industry uneconomic, telling oil and gas companies to "leave it in the damn ground." Pedro van Meur, the panel's hired "expert," told reporters that warnings from EnCana and others are "all part of the game."
To Stelmach and his court, it might all seem like a game. Publicly traded companies with billions of dollars in investments don't play games -- they minimize their risks, and when they make statements about shareholders' money, statements that move stock prices, they mean it. It's not a game to thousands of En-Cana and Talisman and Crescent Point employees and suppliers and countless others from auto dealers to restaurateurs who will be affected, too.
Loyal Liberals are working overtime at saving their party by sacking Dion. Forget about politics: Are there any grown-ups in the PC party working to save Alberta's -- and Canada's -- economic engine?
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