AB won't send energy windfall to rest of Canada

B. Max · September 19, 2005

No I did not. Now go to the blackboard and write out what I wrote ten times. Then recite it as far as you can remember. You may come to the point.

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How be i just write it once.

Natural resouces were just about wood and fish and coal

September 20, 2005

And was that not so. You know, the level of understanding you display makes these debates, at times, thoroughly depressing. Thonk of the time wasted on going over and over the obvious.

Shakeyhands · September 20, 2005

It's nice to know that, in an uncertain world, we can always count on Ralph Klein to drag out PET's corpse to scare the children. Noone has sugested a raid on Alberta's piggy bank. Noone. Such a move would be political suicide and, as much as it pleases Albertans to think that the Liberals are evil kitten eaters who would put everyone with a 780 or 403 area code in slave labour camps if they could get away with it, the feds aren't stupid. If there's one thing amoral power mongers like Martin know, it's don't shit where you eat. And right now, Alberta is setting the table.
But nevermind that. Ralph needs a boogeyman, something to drag out to show the local yokels that he's a tough-talkin', take-no-shit kinda guy who's always looking out for the regular Joe. And what better bogeyman than the hoary ghost of the NEP, something Alberta children are warned about from the time we're in short pants ("If you don't eat your vegetables Trudeau will tax them away!"), but few can tell you what it was.

It's a tried and true routine and one that never fails to set the rubes atwitter and, most handily, draws the spotlight away from the provincial Tories' own utter lack of vision or leadership.

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Great post.

kimmy · September 20, 2005

It's nice to know that, in an uncertain world, we can always count on Ralph Klein to drag out PET's corpse to scare the children. Noone has sugested a raid on Alberta's piggy bank. Noone.

No one from the federal government, at least. But recall that during their junket out west, PM Paulie and Landslide Annie and Big Fat Ralph were asked a number of times about NEP2. Why? Because the media recognizes public concern over energy costs and knows the government recognizes it too, and is wondering how the government will respond to these concerns. We have all seen speculation and commentary from major national media sources on the subject in the past few months, most notably during McGuinty's lobbying for "a new deal" as well as the poll showing nationwide interest in nationalizing the energy industry. Did this speculation just appear in a vacuum? Of course not. It appeared because Alberta's resource revenue is, as McGuinty put it, "the elephant in the room." So while nobody in Ottawa will say they're planning to raid the Alberta treasury, you'd have to be stupid to think they're not at least thinking of ways to appeal to the growing number of Central Canada voters that are fed up with growing energy costs and believe McGuinty is right.

Such a move would be political suicide

Not necessarily. Polls are starting to indicate that such a move might be very well received in other parts of the country.

and, as much as it pleases Albertans to think that the Liberals are evil kitten eaters who would put everyone with a 780 or 403 area code in slave labour camps if they could get away with it, the feds aren't stupid. If there's one thing amoral power mongers like Martin know, it's don't shit where you eat. And right now, Alberta is setting the table.

Nonsense. We *aren't* setting the table, and the Liberals *don't* eat here-- they have survived just fine with no electoral support in Alberta, and will continue to do so if it suits them. They will shit here if it's politically expedient to do so, because they eat elsewhere. And when they do, we'll eat their shit and call it ice-cream, because we have no other choice.

-k

Black Dog · September 20, 2005

No one from the federal government, at least. But recall that during their junket out west, PM Paulie and Landslide Annie and Big Fat Ralph were asked a number of times about NEP2. Why? Because the media recognizes public concern over energy costs and knows the government recognizes it too, and is wondering how the government will respond to these concerns. We have all seen speculation and commentary from major national media sources on the subject in the past few months, most notably during McGuinty's lobbying for "a new deal" as well as the poll showing nationwide interest in nationalizing the energy industry. Did this speculation just appear in a vacuum? Of course not. It appeared because Alberta's resource revenue is, as McGuinty put it, "the elephant in the room." So while nobody in Ottawa will say they're planning to raid the Alberta treasury, you'd have to be stupid to think they're not at least thinking of ways to appeal to the growing number of Central Canada voters that are fed up with growing energy costs and believe McGuinty is right.

Raiding Alberta's coffers won't address energy costs. Alberta benefits from high prices, but doesn't set them, the global market does (it was the global oil crash of the '70s, not the NEP, which made the last boom go bust). I'm not disagreeing with you that this speculation is media driven: it's a cheap and easy headline, a way to stir the pt and generate some juicy quotes. I would hope that even the federal Liberals aren't short sighted enough to try and rob the parairie Peter to pay Ontrio Paul. Unless hey've decided to abandon everything from Manitoba East, but I can't see much in the way of long term gains from that strategy.

Not necessarily. Polls are starting to indicate that such a move might be very well received in other parts of the country.

In places that already vote Liberal.

Nonsense. We *aren't* setting the table, and the Liberals *don't* eat here-- they have survived just fine with no electoral support in Alberta, and will continue to do so if it suits them. They will shit here if it's politically expedient to do so, because they eat elsewhere. And when they do, we'll eat their shit and call it ice-cream, because we have no other choice.

You misread. Alberta is the economic engine that drives this whole country. Even Martin wouldn't be stupid enough to sacrifice the country's economy for some marginal electoral gains.

shoop · September 20, 2005

Raiding Alberta's coffers won't address energy costs. Alberta benefits from high prices, but doesn't set them, the global market does (it was the global oil crash of the '70s, not the NEP, which made the last boom go bust). I'm not disagreeing with you that this speculation is media driven: it's a cheap and easy headline, a way to stir the pt and generate some juicy quotes. I would hope that even the federal Liberals aren't short sighted enough to try and rob the parairie Peter to pay Ontrio Paul. Unless hey've decided to abandon everything from Manitoba East, but I can't see much in the way of long term gains from that strategy.

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The problem with the NEP is that it exacerbated the problems caused by the oil bust. Oil companies looked elsewhere to drill more profitable wells before the bust and it took them a long, long time to return.

There won't be any serious talk about a new NEP anytime soon. This time is a whole different ball of wax.

In the early 80s Alberta was the only province that got any sort of money worth mentioning from oil. Now Saskatchewan and Newfoundland get big money from royalties, no where near as much as Alberta, but still a significant chunk of cash.

Klein proved his shrewdness in supporting Newfoundland in negotiating its sliding scale for the clawback of subsidies. If Dithers wants to raid the oil money in Alberta they have to risk their standing in Sakatchewan and Newfoundland this time around.

kimmy · September 20, 2005

Raiding Alberta's coffers won't address energy costs. Alberta benefits from high prices, but doesn't set them, the global market does (it was the global oil crash of the '70s, not the NEP, which made the last boom go bust).

Sure, but using resource royalties to (for instance) provide refunds, remove federal fuel taxes, or fund that "new deal" that McGuinty is after, these are things that would have considerable political appeal to people in other provinces.

People in other provinces can not be happy when get home from paying $1.15/L for gas and turn on the news to see that idiot Klein talking about writing cheques to Albertans and their own premier talking about fiscal imbalances and deficits.

I'm not disagreeing with you that this speculation is media driven: it's a cheap and easy headline, a way to stir the pt and generate some juicy quotes. I would hope that even the federal Liberals aren't short sighted enough to try and rob the parairie Peter to pay Ontrio Paul. Unless hey've decided to abandon everything from Manitoba East, but I can't see much in the way of long term gains from that strategy.

Realistically, regaining the 25 or so MPs they lost from Ontario in the last election would be more than they could hope to gain from Alberta and Saskatchewan in any circumstances. Even winning half the seats in Alberta and Saskatchewan, which would be an unprecidented historic breakthrough for the Liberals, only gets them 21 seats. Why just talk about Alberta and Saskatchewan? Because those are the provinces that'll be affected. Taking action on resource revenues would cost votes in AB and SK, but probably gain votes in every other province.

So yeah, I think they would be that shortsighted. Or at least, I wouldn't be surprised if they were.

Not necessarily. Polls are starting to indicate that such a move might be very well received in other parts of the country.

In places that already vote Liberal.

But simple math shows that they don't need to elect MPs in oil-producing provinces to get a majority government.

Nonsense. We *aren't* setting the table, and the Liberals *don't* eat here-- they have survived just fine with no electoral support in Alberta, and will continue to do so if it suits them. They will shit here if it's politically expedient to do so, because they eat elsewhere. And when they do, we'll eat their shit and call it ice-cream, because we have no other choice.

You misread. Alberta is the economic engine that drives this whole country. Even Martin wouldn't be stupid enough to sacrifice the country's economy for some marginal electoral gains.

They're creative people. I'm sure they could think of ways of making a grab without putting the energy industry on the skids. It's not like anybody can afford to shut down the wells.

Anyway, I think you'll agree with me that it's not a question of "can they?" but rather of "would they?" Your view is that they probably wouldn't; my view is that they probably would, and that before long they probably will. Political pressures in this country are going to force a situation where they can't afford not to. And when they do, the anger and fury it causes here on the prairies will be by far outweighed by the political rewards in more populous areas.

-kimmy

shoop · September 20, 2005

Anyway, I think you'll agree with me that it's not a question of "can they?" but rather of "would they?" Your view is that they probably wouldn't; my view is that they probably would, and that before long they probably will. Political pressures in this country are going to force a situation where they can't afford not to. And when they do, the anger and fury it causes here on the prairies will be by far outweighed by the political rewards in more populous areas.
-kimmy

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that is the key. would they try to grab the oil?

If oil prices stay this high I think they might try.

But I honestly don't think they will. I feel that oil will get below $40 a barrel by this time next year.

This mini oil shock has been a positive thing. It has probably kicked more people in the butt to start thinking about ways to reduce their personal oil consumption than any government programme could have.

Black Dog · September 20, 2005

Sure, but using resource royalties to (for instance) provide refunds, remove federal fuel taxes, or fund that "new deal" that McGuinty is after, these are things that would have considerable political appeal to people in other provinces.
People in other provinces can not be happy when get home from paying $1.15/L for gas and turn on the news to see that idiot Klein talking about writing cheques to Albertans and their own premier talking about fiscal imbalances and deficits.

Fair enough. Perhaps I'm underestimating the stupidity of the average Canadian.

Anyway, I think you'll agree with me that it's not a question of "can they?" but rather of "would they?" Your view is that they probably wouldn't; my view is that they probably would, and that before long they probably will. Political pressures in this country are going to force a situation where they can't afford not to. And when they do, the anger and fury it causes here on the prairies will be by far outweighed by the political rewards in more populous areas.

I would disagree with the point that there's strong political pressure to screw the prairies. I don't know how much of what we see is the product of real political tides or just, as I said before, lazy op-ed writers smelling an easy angle. I would hope (there I go again...) that there's enough people out there with the foresight to see that prosperous and happy prairie provinces are far more beneficial taht pissed off ones. For the sake of my own sanity, I hope it so, because I cannot abide the thought of dealing with yet more self-righteous rage from this priovince's blowhard sector.

August1991 · September 20, 2005

Ralph needs a boogeyman, something to drag out to show the local yokels that he's a tough-talkin', take-no-shit kinda guy who's always looking out for the regular Joe. And what better bogeyman than the hoary ghost of the NEP, something Alberta children are warned about from the time we're in short pants ("If you don't eat your vegetables Trudeau will tax them away!"), but few can tell you what it was.

I tend to agree with BD but at the same time, giving the money back to people is the ultimate "firewall". No federal politician will be able to get it easily then. At present, the cheque would be around $300 per person but I think it will be closer to $1000.

Canuck E Stan · September 20, 2005

I think your right August, Ralph has aready stated it will be more than $300.

Albertans are against the $300 saying it really won"t do much and it would be better to get a tax break instead.

But $1000, now we're talking about something you can take to the bank. Like you I think this is the magic number that will appeal to the tax payers and keep Ralph's Tories on the up side.

Riverwind · September 20, 2005

I tend to agree with BD but at the same time, giving the money back to people is the ultimate "firewall". No federal politician will be able to get it easily then. At present, the cheque would be around $300 per person but I think it will be closer to $1000.

To be fair to the rest of us this money would have to be taxable and it will likely trigger clawbacks on numerous federal benefit programs (like EI and OAS). The net result is close to 25% of this money will end up in the hands of the feds anyways. This approach may be the most politically astute way to 'share' the oil dividends with the rest of the country.

August1991 · September 20, 2005

To be fair to the rest of us this money would have to be taxable and it will likely trigger clawbacks on numerous federal benefit programs (like EI and OAS). The net result is close to 25% of this money will end up in the hands of the feds anyways. This approach may be the most politically astute way to 'share' the oil dividends with the rest of the country.

That's a very good point, Sparhawk. (I wonder if the Alaskan payment is taxed by the feds.) In any case, how will Albertans react when they learn that the feds have taken a big bite out of their cheques?

Canuck E Stan · September 20, 2005

Albertans,being anti-Liberal and pro-conservatives will say, see "those damn Feds are at it again" This would also be an excellent anti-Fed move on Ralph's part......but do really think Ralph thinks smart like that?

B. Max · September 20, 2005

And was that not so. You know, the level of understanding you display makes these debates, at times, thoroughly depressing. Thonk of the time wasted on going over and over the obvious.

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If you are speaking in the past tense that might be possible. However, that is your conculsion and it doesn't matter anyway. It's covered. It's not that long ago that you claimed alberta didn't own its resourses and that's clearly not the case.

Canuck E Stan · September 20, 2005

Funny how the easterners are trying to ply at the oil $$ from Alberta and at the same time The CAW has settled with both Ford and Chrysler. Interesting note in this article on the negotiating.

CAW to lose 1,000 jobs at DaimlerChrysler in Ontario

"DaimlerChrysler has agreed to a $575 million investment in Windsor to build the next-generation minivan, but that deal relies on federal and provincial funding that has yet to be secured."

Last round the Feds and Ontario gave the Auto companies over $500 million.It appears that the Auto companies expect (and will get) funding to keep these jobs in Ontario, as they usually do.

Maybe the tax payers outside of these auto related areas should stick their hand out to the Feds or Ontario, to get cash for their communities.Money seems plentiful to give away to the auto companies, so there is really no need for a handout from Alberta.

kimmy · September 21, 2005

Fair enough. Perhaps I'm underestimating the stupidity of the average Canadian.

Underestimating the stupidity of the average Canadian? I'm not even sure that's possible. Why would anybody do that? I'm sure PT Barnum would have been most successful as a politician in 21st century Canada.

I would disagree with the point that there's strong political pressure to screw the prairies.

If there isn't, there will be. Not so much from voters who want to see somebody get rolled, but from political strategists who recognize the potential of the situation.

And of course they won't call it the "Screw The Prairies Program". Probably the title will have some combination of the words "Canadian" and "Future" and "Energy" and "Security". It'll be supported in language that makes it sound like we have to do it to save Canada's economy. It'll be accompanied by lots of talk of environmental thinking and alternative energy and Kyoto commitments, to help try to paint opposition into a corner. When this thing happens, and it probably will, it'll be wrapped in pretty paper and ribbons and bows.

When it happens, and it probably will, it'll come with political packaging that makes it an easy sell in the rest of Canada. When it happens, and it probably will, they'll try and convince the rest of the country that those opposed are just greedy, selfish, nouveau-riche prairie oil-barons, which (as we both know from our experience here on the forum) is not exactly a hard sell. Especially when Klein insists on not parading "the elephant in the room" around like a show-horse.

I don't know how much of what we see is the product of real political tides or just, as I said before, lazy op-ed writers smelling an easy angle.

Well, this is not just Kimmy and some news-hacks making crap up because they're bored (or, in my case, a little tanked right now... :blink: ) MacLean's ran an article recently on the subject, and interviewed political scientists who were of the view that another showdown isn't just likely, it's inevitable. It was suggested that Canada's next constitutional crisis won't come from french-english issues, but energy issues.

I would hope (there I go again...) that there's enough people out there with the foresight to see that prosperous and happy prairie provinces are far more beneficial taht pissed off ones.

I think that the more politically astute and pragmatic elements in Ottawa will recognize that whether the prairie provinces are happy and prosperous or pissed off is pretty irrelevant, and that having billions of extra dollars to win political favour in more populous parts of the country. In fact, I bet that just being seen to be strong enough to stand up to the prairie oil barons will win the Liberals votes in central Canada, even if it doesn't put a nickel in anybody's pockets.

Honestly, why would it even matter if we on the prairies are pissed off? What are we going to do?

-Teach them a lesson by cutting oil production? uh, no, for obvious reasons.

-Elect fewer Liberals? yeah, that'll teach'em.

-Start a new political party? greaaat idea.

You know what we pissed-off prairie-people would do? We'd write angry letters and editorials, put mean-spirited bumper-stickers on our cars, turf the remaining 3 prairie Liberal MPs from office, shake our fists in impotent rage, and carry on as usual. As I wrote earlier, we'll eat their shit and call it ice-cream, because we really don't have any other option.

And while PM Paulie and Big Fat Ralph might make remarks that they regret how deeply the NEP scarred relations between their party and this province, the truth is that their party has not just survived our scorn, they've thrived. They have done very well without our support, and they'll continue to do very well without our support, and if it begins to look like they can boost their support in Ontario and Quebec and BC's urban ridings by throwing away their chances in Alberta for another 25 years, they'll do it because simple math says its in their best interest. And if the present minority situation has given us prairie yokels an overinflated notion of the importance of our handful of seats in parliament, that situation won't last long. Reality will resume shortly.

For the sake of my own sanity, I hope it so, because I cannot abide the thought of dealing with yet more self-righteous rage from this priovince's blowhard sector.

I think our province's blowhard sector is going to be getting bigger and louder in coming years.

-kimmy

theloniusfleabag · September 21, 2005

Dear Cartman,

But $1000, now we're talking about something you can take to the bank. Like you I think this is the magic number that will appeal to the tax payers and keep Ralph's Tories on the up side.

Indeed, but how can people overlook the fact that Ralph is merely saying "We fleeced you so badly, we decided to give some of the wool back?" Further, this is an old ploy of Ralph's, buying favour by sending out cheques. (Remember the 'energy rebate cheques' that came out after privatizing energy but before an election?)

As if an opposition party could stand up and say, "Elect us, and we promise to send cheques out to every Albertan!"

Canuck E Stan · September 21, 2005

Media reports today say,that Ralph said, every man,woman and child in Alberta will get $400 each,no provinical tax,but discussions are on with the Feds over their tax.

Riverwind · September 21, 2005

Media reports today say,that Ralph said, every man,woman and child in Alberta will get $400 each,no provinical tax,but discussions are on with the Feds over their tax.

I don't begrude Albertans getting such a bonus, however, I think it is grossly unfair for them to expect to get it tax free. I have to pay takes on the dividends I receive from oil patch companies. Why should a dividend from the Alberta gov't be any different?

August1991 · September 21, 2005

Mr. Klein said the surplus cash will also flow into two other priority areas — infrastructure projects and various endowments.
Marisa Etmanski, a spokeswoman for the premier, said few details of those programs have been worked out yet.

G & M

Klein's got about $4 billion extra in royalties - mostly from natural gas. That's over $1000 for each Albertan.

Probably the title will have some combination of the words "Canadian" and "Future" and "Energy" and "Security". It'll be supported in language that makes it sound like we have to do it to save Canada's economy. It'll be accompanied by lots of talk of environmental thinking and alternative energy and Kyoto commitments, to help try to paint opposition into a corner. When this thing happens, and it probably will, it'll be wrapped in pretty paper and ribbons and bows.

I agree Kimmy. There are so many ways this could be done, it is inevitable.

sutherland · September 24, 2005

I tend to agree with BD but at the same time, giving the money back to people is the ultimate "firewall". No federal politician will be able to get it easily then. At present, the cheque would be around $300 per person but I think it will be closer to $1000.
To be fair to the rest of us this money would have to be taxable and it will likely trigger clawbacks on numerous federal benefit programs (like EI and OAS). The net result is close to 25% of this money will end up in the hands of the feds anyways. This approach may be the most politically astute way to 'share' the oil dividends with the rest of the country.

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Most news stories I read state that the payouts are not taxable. If the feds are planning to tax it please post links.

And although I don't believe this is the way the surplus should be doled out, now that they've committed to cutting the cheques - why should it be taxable? That would be like taxing your 2004 tax refund again in 2005. You see, this is a rebate from the government on taxes that have already been paid. It would be immoral to tax the money again, and it seems the Albertan government knows that.

Riverwind · September 24, 2005

It would be immoral to tax the money again, and it seems the Albertan government knows that.

Why? It is income from the oil resources paid out to the 'shareholders'. It is not refunded tax money. Furthermore CPP, EI and other government benefit programs are taxable. Why wouldn't this be as well? Alberta can waive the provincial tax on it but that does not automatically mean the federal tax is waived as well. The federal tax should not be. If the oil revenues give Albertans more income then they should pay their share of income tax like the rest of us.

sutherland · September 24, 2005

It would be immoral to tax the money again, and it seems the Albertan government knows that.
Why? It is income from the oil resources paid out to the 'shareholders'. It is not refunded tax money. Furthermore CPP, EI and other government benefit programs are taxable. Why wouldn't this be as well? Alberta can waive the provincial tax on it but that does not automatically mean the federal tax is waived as well. The federal tax should not be. If the oil revenues give Albertans more income then they should pay their share of income tax like the rest of us.

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Are you really trying to tell me that royalties are not a form of TAX?

I paid about $2500 to my friendly Albertan government last year and now, out of the goodness of their hearts, they're going to give me $400 back. Misguided alturism at best as I said before, but it is still a tax refund and I have serious problems with ANYONE trying to "tax" a rebate of taxes that were already paid!

Riverwind · September 24, 2005

I paid about $2500 to my friendly Albertan government last year and now, out of the goodness of their hearts, they're going to give me $400 back. Misguided alturism at best as I said before, but it is still a tax refund and I have serious problems with ANYONE trying to "tax" a rebate of taxes that were already paid!

Are EI and CPP benefits refunds of taxes paid? Hardly. They are benefits paid by government and they are taxable. You could argue that they were a tax refund if they went only to people who paid taxes and that the 'refund' could not exceed the amount of tax payable. However, the checks go to all people regardless of the amount of tax actually paid. For that reason, the $400 is clearly a government benefit and potentially taxable.

That said, Martin may make a political decision to forego the tax on these monies, however, that would mean that the federal gov't is giving Albertan's a special deal on taxes and the implications for other provinces could be huge.