The dawn of Dion

[ivbinconned]

If Canadians eat this Poutine they are more than stupid they have a death wish....The only thing keeping Canada going economically is Western Canada and Alberta in particular.....Shut it down and give yourself a pink slip.....This man is one of the most dangerous French Idiots to ever leave Quebec since Great Leader Trudeau the Commie Ass Kisser....One little side note...If he is elected and he tries what he says he will do on Alberta....Canada will have it's first civil war, because Alberta will be Independent in a heartbeat......Sun, January 14, 2007

The dawn of Dion

Liberal leader's approach towards Alberta akin to 'slash-and-burn'
By Neil Waugh




The gurus at the Royal Bank's economics department were trying to make heads or tails out of the Canadian economy last week.

About the same time that prime minister wannabe Stephane Dion made his touch-and-go visit to Alberta. Although "slash-and-burn" might be a better way to put it. Dion revealed the "carrot-and-stick" approach the Quebecer wants to take to the recalcitrant oilpatch.

OILPATCH A TARGET

Fort McMurray oilsands developers must eat the federal Liberal leader's stewing veggies, and bring down greenhouse gas emissions plus cut water consumption by half.

Or he will take a big stick to them in the form of Pierre Trudeau-style punitive taxes.

Of course, Dion has to get elected prime minister first. Which he thinks shouldn't be a problem because he also predicted up to eight Alberta Liberal MPs will be elected in the next vote.

I guess the moon really is made out of green cheese.

Dion's proposed raid on the 'patch should solve one growing national problem - outlined in the RBC's provincial trends document.

"The most dominant theme continues to be the growing regional economic divide," the document lamented.

"The commodity-rich western provinces have reported stellar growth," the report continued. "While the manufacturing-heavy provinces in central Canada are struggling."

But not if Stephane has his way with Alberta's hydrocarbon-based economy.

Last week, the Conference Board of Canada put some flesh on the RBC report's bones.

"Alberta's economy is firing on all cylinders," the Conference Board's winter outlook whooped. "Easily surpassing all other provinces."

As if there was any doubt. Total GDP growth hit an incredible 7% last year. And 2007 will see another "extremely healthy" jump of 5%.

For Alberta's capital city, this translated into a 6.6% growth rate in 2006.

That's the good news.

"Unfortunately, Edmonton's real GDP growth will slow in 2007," the Winter Metro Outlook cautioned. "Slow" hardly translates into "recession," and there are still nearly 12 months to go to prove the eastern think-tankers wrong.

Expect retail sales to increase by just 6.7% this year. Again, not exactly desperate times. But not last year's 14.9% incredible sales increase either.

HOUSING STARTS

Last year's housing starts record won't be threatened. Mainly because the rapid rise in house prices (52% in the resale residential sector) "is about to take a bite out of residential activity."

Housing starts will only hit 13,000 in 2007 - a 13.8% decline.

It's pretty clear growth like that can't be sustained forever.

But the future still remains bright. Last week's dip in oil prices below the $52-US-a-barrel mark notwithstanding.

Both oil and gas hit record prices in 2006.

With $21.8 billion in energy projects underway and another $63 billion on the books, Edmonton's growth rate will still be a "robust" 3.6% in 2007 the Conference Board confidently predicted.

Look for "sound" increases in construction and manufacturing and a "healthy" boost in personal income.

Which sounds great. Unless Stephane Dion gets to be prime minister and takes his stick to the oilsands.



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E-mail Neil Waugh at nwaugh@edmsun.com.

[ivbinconned]

Alberta is already spreading the wealth

Any discussion of 'redistributing' the province's petrodollars to correct fiscal imbalances is misguided
PRESTON MANNING AND FRED KERR

As the premiers and the federal government discuss fiscal imbalances and equalization, one hears increasing references to Alberta's burgeoning petroleum revenues and suggestions that Ottawa should somehow involve itself in "redistributing" such revenues more equitably across the country.

In 1980 -- the last time the federal government acted on such advice after the OPEC-engineered oil price hike -- the results were politically and economically disastrous. Confiscatory taxes imposed on the industry in Canada almost killed the goose that was laying the golden egg. Oil-patch investment and jobs fled the country. Western alienation came within a hair of being transformed into full-blown western separatism.

And the Liberal government responsible for the so-called national energy program destroyed its electoral prospects in much of the West for more than two decades.

The Harper government obviously has no intention of repeating such mistakes. And there would be less misguided pressure for it to do so, if the public were to better understand the following facts:

1. Albertans' per capita contribution to equalization is by far the highest in the country.

The federal government collects consumption, income and other taxes from individuals and corporations across Canada. Naturally, it collects more revenue in provinces whose economies are vigorous than it does in provinces whose economies are weak. Ottawa then redistributes significant revenues to the governments of less affluent provinces through the equalization program, to enable them to provide social services to their people roughly equivalent to those available in the rest of the country.

Ontario Premier Dalton McGuinty cites the $23-billion net federal fiscal contribution made by the people of Ontario, and argues that this is excessive. But, for 40 years (even when oil prices have been low), Albertans' net federal fiscal contribution per person per year has been more than triple that of Ontarians.

Any suggestion that Albertans have not been contributing their fair share to equalization and should be contributing an even higher percentage is itself unfair.

2. The benefits of the current boom in the petroleum sector are already distributed far more broadly than most people think.

In 2006, $108-billion in revenue will flow into the petroleum sector in Canada as a result of record high oil prices.

The portion of this revenue that is most visible to the public -- because it is most frequently mentioned by the media and the politicians -- is the portion that flows into the coffers of the Alberta government. In 2006, this will amount to almost $20-billion -- about $14-billion in royalties, $3-billion in taxes, and $3-billion from the sale of drilling rights.

But what about the other $88-billion? The Canadian petroleum industry will send about $5-billion to Ottawa in federal income taxes in 2006 and another $2-billion to $3-billion to the treasuries of other hydrocarbon-producing provinces such as British Columbia, Saskatchewan, Nova Scotia and Newfoundland. It will spend $11-billion on debt and equity financing charges, and another $23-billion on administrative and operating expenses.

And then there is the big ticket item -- capital expenditures.

Conventional oil and gas wells start declining from the moment they come on stream. Typically, a new gas well's production declines around 30 per cent in the first year. As a result, the industry must drill an ever-increasing number of wells just to keep production flat, let alone grow it. Oil-sands plants are even more capital intensive. This means that much of the capital generated by conventional and oil-sands production must be reinvested in further development. Thus, in 2006, the industry will commit more than $40-billion to capital expenditures -- everything from rigs and mining equipment to chemicals and pipes -- much of which is made outside Alberta, notably in Ontario.

Finally, there is the stream of dividends and distributions paid to investors in Canada's petroleum sector -- about $6-billion in 2006. The ownership of today's industry is structured quite differently than it was in the 1980s -- with many energy producers having organized themselves into royalty and income trusts. The majority of these are owned by individuals, mutual funds, and pension funds based in Central Canada. When the Liberal government mused about rejigging the tax rules for royalty and income trusts, it was no coincidence that the loudest and most immediate protests came not from Calgary but from Toronto.

And then there are the capital gains recently enjoyed by Canadian energy investors, most of whom live outside Alberta. The energy sector, which, during the Nortel glory days of the high-tech boom, represented less than 10 per cent of the TSX index, today represents about 30 per cent. That's a lot of wealth generation for a large number of Canadians right across the country.

The bottom line? While $20-billion of the $108-billion generated by the petroleum industry in 2006 will end up in the hands of the Alberta government, the remaining $88-billion is much more broadly distributed than most media commentators, politicians and Canadians think.

3. The investment of $100-billion in the oil sands will generate more tax dollars for the federal government than the Alberta government, and almost as many person years of employment outside Alberta as within the province.

A recent study by the Canadian Energy Research Institute highlighted the following facts: Conventional oil production in Canada is declining, underscoring the importance of oil sands as a vital source of North American supplies. In 2004, Alberta's oil sands were recognized by the International Energy Agency, for the first time, as part of global oil reserves. This established Canada's reserves as second only to Saudi Arabia's, justifying Prime Minister Stephen Harper's assertion that Canada is becoming an energy superpower.

But oil-sands development requires massive capital investment before anyone sees a dime of revenue. Producers need to delineate ore bodies, build processing facilities, and buy trucks and loaders or inject steam to coax the gooey stuff out of the ground.

The need for massive capital investment creates opportunities for investors across Canada and around the world. And all this capital investment creates thousands of jobs, for which Alberta alone cannot hope to supply the labour. Trades people, engineers and labourers are flocking to Fort McMurray from across Canada, including a large contingent from Newfoundland. Most of those workers pay Canadian taxes.

Many send a portion of their oil wages home to Corner Brook, Barrie or Moncton.

The CERI study estimated the impacts of $100-billion invested in oil-sands development over a 20-year period through to 2020.

Even if oil prices were to level off at half their current level, this investment will lead to:

6.6-million person years of employment, 44 per cent of it outside of Alberta. Of the 1.7-million person years of employment generated in Canada outside of Alberta, 1 million would be in Ontario alone.

Federal government tax revenues of $51-billion, making Ottawa (not Alberta) the largest recipient of government revenues generated by oil-sands development.

An interesting future study would be to compare the national distribution of benefits, including tax revenues generated for the federal government, from the development of an oil-sands plant in Alberta versus a hydro-power project in Quebec or a nuclear-power plant in Ontario. And if such a study showed -- as it would -- that the benefits from the hydro and nuclear projects were much more narrowly distributed than those of the oil-sands project, would the political and business establishments of Ontario and Quebec support federal intervention in the name of equalization to ensure a more equitable distribution? Not likely.

The above facts concerning the current and future distribution of benefits from the development of Alberta's petroleum resources are not widely known. They are rarely even mentioned, let alone taken into account, in the debate on how to correct fiscal imbalances and reform equalization. It is high time they were.

Preston Manning, a former federal leader of the Official Opposition, is president of the Manning Centre for Building Democracy and a senior fellow of the Fraser Institute. Fred Kerr is a Calgary-based commentator and former institutional stockbroker specializing in the energy sector.

Source; Globe & Mail.

[wilagro]

ivbinnconned: An article fron the SUN and one from Preston Manning...hmmm perhaps they are a bit slanted??? A bit of rightist propaganda perhaps???

Keep it up, I'm sure that you will convince more than enough viewers.

Cheers

[FarmRanger]

If its propaganda, it should be pretty easy to point the falsehoods?

Name the best one.
It's easier to attack the messenger than refute his message.

[northfarmer]

wilagro.....right wing slant, maybe, but real numbers....if you do not beleive them challenge them with your left wing statistics.....

you will be dissapointed becuase there are no challenges to the numerical facts about wealth redistribution in Canada.....

so we are supposed to beleive the Liberal rhetoric, from the nationally dominating liberal media....frankly we do not nearly have the balance media representation on such fiscal matters to make Canadian really understand the factual basics of our national economy...

and of last night national news the separtists are on the envirnomental bandwagon hoping to make a defence of their position for the next election...

I say look at the polls, liberals are defecting to the conservatives, and the tories have rising numbers....

[cowman]

Wilagro: You might be interested in Preston Mannings position on "Conservatism and Conservation"? All the lefties are raving about what a good deal it is...even your hero Jack Layton!
Check out the Manning Institute on Democracy.
Why who would think this "neo Con" would ever think up something that the common man could agree with? Might open your eyes to what a Conservative is and what a populist is?

[wilagro]

I'll stand by my comments. I don't think that they were too radical and were very mildly critical of Ivbinconnedmanytimes.

I am NOT a fan of Preston Manning and it is too bad that he can't resist poking his nose into things and snipes away from the sidelines. He had his day and his own party dropped support of him. He and other old politos such as Ralphie should spend their time fishing and leave politics to the "new" crowd.

[ivbinconned]

One thing is certain...willy, you are not part of the "new crowd"!

You have floated around this site for a long long time (taking cheap shots and offering only ridicule) (never and I mean NEVER offering anything instructive) and if you had paided attention you would know that I am no great fan of Preston either.

However I should follow my own advice and not get into a war of wits with someone who is... un-armed!

[cakadu]

I would caution people to remember that for every finger pointed at someone else, there are 3 pointing back at oneself.

[wilagro]

ivbinconned: Thanks for your critique of my attitude and postings.

I will take it under advisement.

Have a nice day...Cheers

[cowman]

Wilagro: Do you think the day comes when you are "insignificant" and they might as well take you out and shoot you?
Now I'm not his biggest fan...but I would suggest to you that Pierre Treudeu had things to say long after he was out of power...and I might add Peter Lougheed?
I don't think they give you a lobotomy when you leave one phase of your life and enter another!
Every citizen, including Treudeu, Lougheed, Manning...and yes even Ralph Klein has a right to comment on how they see the world?
Maybe they should take you and me out and shoot us, because we are ornery old buggers!

[cowman]

...And Linda and coppertop stand up and applaud! LOL!!!

[cakadu]

I have no idea what you want me to stand up and applaud about, cowman.

I don't mind issues being debated, as we all have our opinions and I would think it would be a terribly boring world if we all thought the same. When it turns personal, then that is something different.

Over the years I've learned that the things that bother us the most in others are the very things we do ourselves, but it is easier to find them in others.

[cowman]

Well it was supposed to be funny? Sorry you didn't see it that way!

[cakadu]

I got that it was supposed to be funny, I just am not sure what it was - the fact that you had said that you should be taken out back and dealt with?