Biting the hand

September 26th, 2007
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Well, you could have seen it coming. Some, like MrK did. Others simply didn’t believe it could ever happen. What am I talking about? Why nothing less than Alberta’s government going over the edge and threatening to take the province with it.


The climax occurred with the release of the government’s new report on oil and gas royalties – in short, planning a significant increase in same. I won’t go into a blow-by-blow comment on the report mainly because several professional columnists have already weighed in.

Notably, there’s been a “Clash of the AR Alumni”, with Lorne Gunter slamming the new report – citing the spectre of past government “fair deals” as warning beacons – and Andrew Nikiforuk singing its praises, as if sanity had at last returned to the province.

At the risk of losing all credibility I’ll mention Jeffrey Simpson’s evaluation. Simpson slams what he calls Alberta’s “bozo years” principally under Ralph Klein. But as usual, he misfires, saying that the political drift was characterized by “unthinking ideology” and occurred during the influx of “buoyant oil and gas revenues”. He advocates taking more royalty money to diversify the economy and deal with “social inequalities”.

Perhaps he is unaware that oil was at $12 a barrel not so long ago, and the echoes of that affected the industry for many years. As we have written before, Alberta was not suffering from ideology under Klein, but from a lack thereof. Yes, the province was drifting, but the problem was not that the government was reaping too few royalties but rather that it was using its revenues to fatten itself up and fund unnecessary policy initiatives. What Simpson calls “cheesy” rebates to taxpayers – giving them back their own money – is better than further fattening government.

The directionless fattening itself has had an ideological result, of which the royalty report is just the latest, most egregious example. More money burning a hole in government’s pocket is not the solution; it would be a greater problem. And holding up state corporatism a la Loughheed (as Nikiforuk does) is not helpful. Older readers will remember the results all too well, of billions of taxpayers’ dollars flushed down the rat hole of white elephant industries.

Most concerning to me are some of the attitudes reflected in Nikiforuk’s article (unfortunately password protected). He accuses the “greedy” of not wanting to help the “needy”, sarcastically asserts that “lowly Albertans” should get enough money from their resource to build schools, infrastructure, etc. He further smears “comfortable Calgary columnists” (present company excluded I assume) and “Calgary truffle eaters” (ditto) for being “servile attendants” of the evil oil industry.

This is perhaps a virulent example, but representative of a growing amnesia in Alberta. Amnesia regarding what has provided the province’s prosperity. And not just that, but done so in an environmentally and otherwise ethically upstanding way. As I have written before – and contrary to the vitriol Nikiforuk has uttered – Alberta is a model regulator of industry, has succeeded in optimally extracting the resource compared to almost all other jurisdictions; and the province has an exemplary environmental record.

But, as I say, Nikiforuk’s views are just the worst version of the knowledge deficit amongst many Albertans – those that advocate increasing restrictions on industry, increased “planning” and regulation. Hard core Greens and others have been driving the bus, but there have been willing and many unwitting fellow travelers. Precisely the people who’d smile on the government’s new royalty “fairness” proposal.

Also culpable are the throngs of ostrich in industry who said it would never come to this, who snickered at the activists, muddled through environmental hearings and were lulled to sleep by cashing in their stock options. The absolute failure of the Canadian Association of Petroleum Producers (CAPP) to effectively represent industry only made matters worse.

The new royalty plan is more than a warning; it means the province is at a dangerous crossroads, much more serious than the “bozo years”. We need the right leadership now or the province could slide sideways worse than its eastern cousins. Hey, but that’s just the opinion of a comfortable, yet servile attendant and truffle eater. Snort, snort.

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