Who should own Alberta's oil?

[idealisttotheend]

SmilingMoose:

From Tredeau's Memiors , (sparse but containing a spirited defence of the NEP).....

In 1960, the Borden Royal Commssion on Energy had reccommended that in order to encourage the developement of oil resources in the West, all oil sold east of the so-called Borden Line - which was roughly the Ottawa River - would be imported at the world price.  But west of this line all consumers - largely in Ontario - would use Alberta and other Western oil at $1 to $1.50 a barrel above the world price.   In effect, for most of the period from 1961 to 1973, the producers in Alberta had been subsidized by consumers in other provinces, and this had enablesd the oil industry to establish itself in a way that led to Alberta's later prosperity. 

...Albertans were not eager to remember the days when their industry was subsidized, finding it easier to see the money they were paying out today.

This was part of Diefenbaker's National oil policy (mainly requiring new leases to be given only to Canadians) which was in turn part of his broader Northern and Resources agenda.

As to what Albertans though of the NOP:

"one of the brightest aspects of the economic scene in Canada, as 1961 enterts it's last month is the success of the National Oil Policy"

--Edmonton Journal Dec 4, 1961

Here is a great internet link from an Albertan MLA (conservative no less).

Opinion Canada

Those with non-selective memory might recall Mr. Diefenbaker's National Oil Policy of 1959, otherwise known as the Borden Report. It was the one where the Chief forced most of those Easterners, to have to heavily subsidize the development of our oil industry, by only allowing them to buy Western Canadian oil, and forcing them to pay well above world oil prices at the time, and furthermore, using their money to build the pipeline to transport it. Among other major uproars it created in Eastern Canada, that policy nearly decimated Quebec's petrochemical industry- throwing gasoline on the fire of Francophone anger towards the Federal government there - and of course, let's not even mention the Avro Arrow either. No wonder Easterners have been so suspicious of Western politicians ever since, with only the 38 year old Joe Clark managing to earn their trust since then, and not for long at that, since the first thing he did, was try to again raise the price of oil, which would have only benefited Albertans - no wonder we don't like him!

Those who wish to perpetuate the "Alberta as a victim myth" necessarily don't bring this up very often.

[playfullfellow]

Idealist, you quotes bring up some food for thought I have to admit. So, we can say that there was a subsidy to the Alberta oil industry but there are no figures showing how much this benefitted Alberta. Is there some totals available? I guess you can say that Alberta oil, which does produce a lot of revenue for the country as a whole now, has received help, sort of like Air Canada or Bombardia? How much help has the automobile manufacturing industry received in government help over the years? Did Quebec hydro receive any money at all from the ROC? How much revenue have these other subsidies help Canada as a whole? No matter how you look at it, there has been plenty of money spread around over the years with no return at all to the Canadian tax payer. At least the oil and gas industry is showing a rather large return right now.

[August1991]

Idealist, these links are interesting. (I always wondered where the term "Borden Line" came from.) And true, Trudeau's Memoirs is a weak book.

However, since you open the box, you must take out all the contents.

In the 1950s and 1960s, Canada had a variety of tariffs against imported goods. This meant that Westerners had to buy expensive equipment from Ontario and Quebec rather than cheaper products made elsewhere. This was an indirect subsidy from the West to the East.

I still maintain that the Albertan government has been three-times lucky to receive royalties on oil. 1) The BNA Act was drafted that way. 2) Oil is under Albertan soil. 3) The world price of oil is now relatively high.

In this sense, I think that it's incorrect to say that Albertans pay the way of other Canadians.

[playfullfellow]

In this sense, I think that it's incorrect to say that Albertans pay the way of other Canadians.

Aside from Ontario, Alberta is the only other province that contributes to equalization payments according to this site.

check this august

[playfullfellow]

The federal government currently takes back about 70 cents in equalization for every dollar in energy royalties. The suggestion is to allow provinces to keep all of their equalization payments for 10 years, despite any improvement in their economies.

http://www.cbc.ca/news/background/equalization/

So according to the info I found on this site, Ottawa essentially takes 70 percent of the royalties, so essentially you want the other 30 percent too.

[August1991]

In this sense, I think that it's incorrect to say that Albertans pay the way of other Canadians.

Aside from Ontario, Alberta is the only other province that contributes to equalization payments according to this site.

check this august

I don't dispute the numbers. (Is it not sad that BC is now a receiver though?)

My point is that if the federal government collected the oil royalties, then equalization might not be necessary and Albertans would have no reason to believe they pay "welfare" to other provinces.

In the UK, London gets the royalty payments (even though North Sea oil is off the coast of Scotland) and all UK citizens benefit. In Norway, Oslo gets the royalty payments and all Norwegians benefit. No region in Norway believes that the other regions are free-loading off the money.

[playfullfellow]

So, after reading the above information, we can figure that Alberta loses 70 cents of every dollar it gets from royalties in equalization payments. Alberta is projected to make 8 billion in revenues from royalties this year, take away 70 percent and you are left with 2.4 billion. Alberta is using this to pay off it's debt which is a good thing. The ROC wants to get in a pissing contest over 2.4 billion, is it really worth to Canada as a whole? Not really a lot of money when you look at the whole picture but it is a lot of money to Alberta. When you split that 2.4 billion up evenly between the other provinces and territories, they each end up with 200 million. To some provinces, that is a lot of money, to others it doesn't mean very much at all. At least here in Alberta we know the money is going to pay off our debt, improve infrastructure, improve healthcare and education, etc.

[August1991]

So according to the info I found on this site, Ottawa essentially takes 70 percent of the royalties, so essentially you want the other 30 percent too.

This applies to NS and Nfld, I believe.

So, after reading the above information, we can figure that Alberta loses 70 cents of every dollar it gets from royalties in equalization payments.

This is wrong.

[playfullfellow]

In the UK, London gets the royalty payments (even though North Sea oil is off the coast of Scotland) and all UK citizens benefit. In Norway, Oslo gets the royalty payments and all Norwegians benefit. No region in Norway believes that the other regions are free-loading off the money.

Canada is also a much more diversified and regional country than Norway or even the UK. We are also looking at the second largest country in the world when you consider land mass. The constitution set up this diversification to try and keep everyone happy. It aint working. Personally, if I knew the bloody money would not be pissed away, then I couldn't care less. But we as a country have witnessed hundreds of millions of dollars, if not billions get tossed out the window on stupid ideas and plans. People might call Albertans whinners for still being pissed at the NEP but we watched 60 billion dollars leave our province in 4 short years and the majority of it headed east. Also, if you take note, since equalization payments, Alberta has only received 7 payments, Ontario none. The ROC besides BC (yes that is unforunate for such a diverse province) has always been on the receiving end from the beginning.

[playfullfellow]

This is wrong.

OK August, I have been looking for info, maybe I am looking at it the wrong way then show me why I am wrong. At least I am trying to back my arguments here

[Guest eureka]

The federal government receives monies in taxes from the natural resources of all provinces and from manufacturing, customs etc. It is misleading to think that Alberta loses 70 cents on the dollar of royalties since it is just one form of indirect taxation and every province "loses" money similarly. Without that, direct taxes would be greatly increased to provide the required revenues.

Alberta does not suffer. Every province pays taxes in one form or another. If the price of potash should rise dramatically, for instance, Saskatchewan would be making similar claims.

Equalization payments to Alberta did not begin in 1957. That is only the year that payments to disadvantaged provinces were formalised and given a name. Alberta received money from the federal government from the day it entered Confederation - money that came from Quebec as well as Ontario. Check Alberta's constitution if you want confirmation and you will find per capita payments outlined.

Some Albertans now behave like poor lottery winners who think that there new wealth removes them from their families and communities.

[idealisttotheend]

Some Albertans now behave like poor lottery winners who think that there new wealth removes them from their families and communities.

Well said Eureka.

[August1991]

This is wrong.

OK August, I have been looking for info, maybe I am looking at it the wrong way then show me why I am wrong. At least I am trying to back my arguments here

I didn't mean it wrong that way. Thanks for the links.

The CBC article says that equalization payments are about $10 billion in 2003-04 but it doesn't say how this is split between Alberta and Ontario.

You state that Alberta expects about $8 billion in (oil?) royalties (what year?).

I don't have a quick link to give the answers. I just know that the equalization formula is messy and as the CBC article notes, equalization is just one way the federal government makes transfers. (I've always been curious to know how much the large chartered banks transfer too but that info is private...)

[playfullfellow]

the 8 billion is a projection for 2004, it could be even more but that is the numbers we are given to date.

[playfullfellow]

that is total revenue from all resource royalties as far as I can figure.

[kimmy]

Canada has received a great return on its investment in Alberta's oil sector, and continues to do so.

There's literally hundreds of thousands of high-paying jobs that are contributing income tax. Not just in the oil industry but also in spin-off industries that support the oil industry. I imagine corporations are probably paying some amount of tax as well, although that's not necessarily a given.

The equalization point has been made already in this thread. Money that the Federal government doesn't need to transfer to Alberta is money that can be transfered to other provinces.

And the NEP raised a large chunk of revenue for the federal government as well, didn't it?

August mentioned a counterexample-- tariffs causing Canadians to pay above-market price to support Ontario manufacturers. Playful mentioned that a lot of federal money has been thrown around to support industry in Canada, with often questionable results. You can look at various forms. Whether it's subsidies to shipbuilders or jet manufacturers, or bail-outs for agriculture and fishermen, or freight rates that gave preferential pricing to send certain types of product one direction or the other, or military purchases that require jobs to be created in certain regions of the country. In the big picture, the federal government has always made an effort to promote industries, not just nationally but also within specific regions. I guess the idea is that helping a region become stronger is good for the whole country. Well, oil has made Alberta stronger, but Canada derives a huge benefit from that industry as well, even without receiving royalties.

-kimmy

[kimmy]

Regarding the separation point, I think you fail to understand because you don't wish to understand.    What you purported just now to mock was hardly that incomprehensible:  "Can the mouse jump over that wall?"  "No, and the caterpillar even less so."

Equally so. The mouse and the caterpillar are both stuck in your terrarium.

If the mouse or caterpillar are going to get out of the terrarium, it doesn't appear that jumping is a solution for either of them.

The distinction you drew-- Alberta and Saskatchewan having no status prior to being given created by constitutional act-- might be accurate, but doesn't seem to have any practical value. It doesn't seem to have much to do with how a province would actually go about attempting to secede. Most likely it would come down to either a peaceful constitutional amendment, or else a unilateral declaration followed by either external mediation or military force. Don't you think?

-kimmy

[playfullfellow]

Equalization payments to Alberta did not begin in 1957. That is only the year that payments to disadvantaged provinces were formalised and given a name.

Yes, I know this, I do know my history fairly well. My point being was that for 40 years, Alberta has not received any such payments. Ontario is the only province that has never received equalization payments. BC has only received payments the last few years. Ontario has never received equalization payments but it's industries has received money over the years.

My point is that in all reality, we are talking about 2.4 billion dollars based on projections for 2004. I know every province loses 70 percent of their royalties in transfer payments. My point is that I know more or less how this money is being used in Alberta, how would it be used if it went to the ROC? Short term job creation? Pay out for more feel good programs in Quebec?

My fear is also that if Ottawa gets their hands on controling royalties, will they be able to resist increasing the amount they collect? Probably not because we are only talking about 255,000 direct and indirect jobs in Alberta. Who cares about Alberta, they are only a bunch of whinners, right?

[The Terrible Sweal]

The distinction you drew-- Alberta and Saskatchewan having no status prior to being given created by constitutional act-- might be accurate, but doesn't seem to have any practical value. It doesn't seem to have much to do with how a province would actually go about attempting to secede. Most likely it would come down to either a peaceful constitutional amendment, or else a unilateral declaration followed by either external mediation or military force. Don't you think?

-kimmy

In the speculative realm of separation, some provinces have more or stronger constitutional, and international law/sovereignty positions than others.

To compare strictly on the level of 'equities', B.C., for example, brought itself to Confederation, whereas Saskatchewan is a creature of Confederation.

(And BTW, if a wall is low enough, a mouse can jump it. A caterpillar cannot jump.)

[takeanumber]

QUOTE (takeanumber @ Sep 9 2004, 03:03 AM)

The NEP was not, by any stretch of the imagination, 'legitimate'.

Oh really?

Was it enacted by a legitimate government? Yes.

Was it declared illegal by the courts? No.

Ergo, it was legitimate.

Was it declared illegal by a federalist, Ontario-Quebec dominated court? No.

That doesn't make it any less illegitamate.

Was the Trudeau government legitimate at the time of the NEP?

Yes.

Does that automatically make every single law that a legit government passes legit?

No, of course not. Don't be stupid.

---------------------

Alberta gets boned on equalization payments.

Alberta oil companies used to get taxed at a rate much higher than any other corporations, particularly a lot higher than the Ontario auto industry.

----------------------

Ontario reaps tons of benefits from Alberta's oil fields and infrastructure.

The arguement that since Ontario subsized the industry 50 years ago, therefore, Alberta is indebted to Ontario for the rest of its existence, smacks of Torontotism.

Alberta subsidized Quebecois rail companies by paying very high rates to ship their grain.

Using the previous flawed logic then, Quebec is to be forever indebted to Alberta forever.

What you're suffering from is called Quebec-Ontario Myopia. It's the belief that everybody in Confederation owes you something because you're from Quebec or because you're from Ontario.

Those from Quebec (August1991 in particular) who are advocating for the second raping of Alberta should be thanking those of us in Alberta for subsidizing his ass. If it wasn't for Albertan money, the socialist province of Quebec would have to cut a lot deeper than it is.

[Bro]

Why doesn't all of Canada,especially nfld.,benefit from

Hydro Quebec?

Why doesn't all of Canada,especially the west,benefit

from bilingualism?

Canada is full of inequties,but rather than solve them,they [the governing party,we won't mention names here]encourage more.

[Bakunin]

Why doesn't all of Canada,especially nfld.,benefit from

Hydro Quebec?

Hydro-Quebec is owned by the quebec provincial government, it never received a dollars from the federal. Its one of the reason why we have a big provincial debt.

Canada is full of inequties,but rather than solve them,they [the governing party,we won't mention names here]encourage more.

Il name it for you: the Liberal party of Canada, with the help of Trudeau and Chretiens. And don't forget to mention a special thanks from Ontario to vote in mass for them.

[ticker]

Why doesn't all of Canada,especially nfld.,benefit from

Hydro Quebec?

Hydro-Quebec is owned by the quebec provincial government, it never received a dollars from the federal. Its one of the reason why we have a big provincial debt.

Canada is full of inequties,but rather than solve them,they [the governing party,we won't mention names here]encourage more.

Il name it for you: the Liberal party of Canada, with the help of Trudeau and Chretiens. And don't forget to mention a special thanks from Ontario to vote in mass for them.

while you can blame ontario this time around because quebec voted for the block. Alberta remembers those 70+ seats truedau would win every election in quebec during the 70's & early 80's and the easy majorites with only a few of the ontario votes counted.

that is why the quebec ecomomy has a big provinvial debt; they are socialist spenders. let me correct that; that is why the country is in debt... quebec would be in a bigger debt if quebec was paying for all trudeau's socialist programs in quebec and the ROC was still on a pre trudeau agenda.

what we need is a NAP 'national auto program' where the the price of cars are sold at a 50% discount for the 'good of the country' ... i mean non ontario. businesses go under; people lose their jobs and homes while alberta gets 60 billion in 4 years.

[The Terrible Sweal]

QUOTE (takeanumber @ Sep 9 2004, 03:03 AM)

The NEP was not, by any stretch of the imagination, 'legitimate'.

Oh really?

Was it enacted by a legitimate government? Yes.

Was it declared illegal by the courts? No.

Ergo, it was legitimate.

Was it declared illegal by a federalist, Ontario-Quebec dominated court? No.

That doesn't make it any less illegitamate.

So now the courts are illegitimate too, are they? I have the feeling the only legitimacy you recognize is whatever matches your personal prejudices.

[ticker]

I have the feeling the only legitimacy you recognize is whatever matches your personal prejudices.

have you ever heard the phrase coffiee pot calling the tea kettle black.

someone from Quebec shouldn't be accusing someone in another part of the country as having a personal bias on what is & what isn't legit.