Taxes

[ClearWest]

Whatever happened to people making their own money, instead of just taking it from others?

Whatever happened to people making their own money instead of raping the earth of its resources for it?

We need to use the earth's resources for almost everything that allows us to survive. How can you suggest that this is wrong?

So what if someone makes a profit from it--they're doing a service by turning a raw material into something that can be used and sold. They add value to it, and there should be no problem with them getting something in return for that value--Profit.

If you are concerned that a company is wastefully using the earth's resources, by all means, you don't have to support it.

[geoffrey]

Everyone profits from oil and gas exploration. You pay less in prices. Any selection of reasonable mutual funds or if you have a managed portfolio will contain commodity based companies.

The reason our dollar will hit 90 cents next week is because of oil and gas fueling our economy. No other country will have Canada's, specifically Alberta's, wealth if the price of oil continues to climb. We already have the second richest region in the world (next to Luxenbourgh) between Calgary and Edmonton, I'm sure the rest of Canada will begin to catch up as we see the dispersion of money throughout the country.

Over 10% of our GDP is oil and gas exploration and refinement now in Canada. If you don't think many jobs are created by this industry, and spinoff industries your sadly mistaken. All throughout Canada too. Sarnia is a major refinery centre for Suncor, I know this for sure, so even Ontario is in on the oil and gas boom.

But exactly as ClearWest stated, your a complete hypocrit for stating such a comment. You profit off these companies 'raping' the Earth. Are you telling me your business does not use electricity or paper or fuel? I suggest you stop using all of these if you insist on calling those people that merely extract the goods for your use 'rapers of the Earth'.

If they are raping the Earth, your paying them to do so.

[BubberMiley]

If they are raping the Earth, your paying them to do so.

Of course. And I was just trying to get your dander up, because you like to emphasize Alberta's fiscal resolve over its geological fortune, and I think the latter has had far more of an effect on its wealth than the former.

[Riverwind]

The reason our dollar will hit 90 cents next week is because of oil and gas fueling our economy.

And kill off many non-oil based export industries in the process. Albertas wealth does come at a cost to the rest of the country.

[Wilber]

The reason our dollar will hit 90 cents next week is because of oil and gas fueling our economy.

And kill off many non-oil based export industries in the process. Albertas wealth does come at a cost to the rest of the country.

You mean the country would be better off if Alberta had no oil and their huge contributions to the tax base and equalization didn't exist. Odd logic if you ask me.

[Riverwind]

You mean the country would be better off if Alberta had no oil and their huge contributions to the tax base and equalization didn't exist. Odd logic if you ask me.

The country would be better off if the oil wealth was distributed across the country instead of concentrated in one part of one province.

[August1991]

You mean the country would be better off if Alberta had no oil and their huge contributions to the tax base and equalization didn't exist. Odd logic if you ask me.

The country would be better off if the oil wealth was distributed across the country instead of concentrated in one part of one province.

Oil and/or gas are found in Newfoundland, Nova Scotia, Sask, BC and Alberta.

The price of oil was around $10 per barrel as recently as 1998 and we are still below the price of oil (corected for inflation) of the early 1980s.

So, in a sense, the Canadian dollar is going back to its historic levels after being far too low before. (Something I never thought I would say.)

Keep in mind too that Canada's economy is largely resource driven for the simple reason that we have lots of land, few people and the glaciers tore the top soil off several thousand years ago. We share with all northern countries these basic facts.

Many Canadians are used to boom and bust.

[Wilber]

You mean the country would be better off if Alberta had no oil and their huge contributions to the tax base and equalization didn't exist. Odd logic if you ask me.

The country would be better off if the oil wealth was distributed across the country instead of concentrated in one part of one province.

It is distributed across the country in the form of taxes paid by Albertans and equalization transfers just as Ontario's economic power was in the past when the west was little more than an economic colony of Central Canada. Alberta's oil patch wealth is just the latest version of Ontario's Golden Triangle. Canadians seem to think we can somehow make every region of the country equal. The world doesn't work that way and never will.

I've been fortunate enough to have never been unemployed but I have moved across the country and back and gone offshore twice to keep it that way. You do what you have to do. I have no patience for people who sit where they are and tell others they are owed.

[Riverwind]

I've been fortunate enough to have never been unemployed but I have moved across the country and back and gone offshore twice to keep it that way. You do what you have to do. I have no patience for people who sit where they are and tell others they are owed.

The same kind of wealth redistribution goes on inside Alberta. According to your logic the beef farmers should stop asking for BSE handouts, declare bankruptcy and go work on an oil rig.

[Wilber]

I've been fortunate enough to have never been unemployed but I have moved across the country and back and gone offshore twice to keep it that way. You do what you have to do. I have no patience for people who sit where they are and tell others they are owed.

The same kind of wealth redistribution goes on inside Alberta. According to your logic the beef farmers should stop asking for BSE handouts, declare bankruptcy and go work on an oil rig.

They can ask for handouts if they want but it's up to Canadians as to whether they want a beef industry or not and it's not just Alberta ranchers who have been effected by BSE, but if I had to quit ranching or anything else, move to Alberta and go work on an oil rig to make a living, that is what I would do.

[geoffrey]

That's ridiculous to assume that Alberta's oil wealth belongs to the rest of the country.

Saskatchewan has the resources to compete with Alberta, they choose to run their economy in such a way that doesn't allow businesses to operate.

We paid for a long time to get the wealth we have. It doesn't belong to the other provinces that picked ridiculous social spending over truly effective economic measures.

You have Quebec that is ok with paying welfare for 8% of its population that chooses they don't feel like working. Or you have Alberta were less than 3% are unemployed all together. That's a choice all you non-Albertans made when you elected your governments, you picked welfare and poor economies.

Don't blame us for making a right choice.

Ontario has the power to be the manufacturing capital of the world. They choose not to, and now their auto industry is going down the drain. Japan has the added expense of importing all their goods to make cars and then ship them across an Ocean to the US. Yet they still make more in profits than Ontario car makers.

Wonder why? Blame your govenrment, don't look for Alberta's money.

[BubberMiley]

But we're going to have to pay for the transition away from oil dependency somehow, now that we've probably already reached peak oil. It's in all of our interests to make sure the economy doesn't collapse, and what better way to do that than with oil and gas revenue?

[Riverwind]

That's ridiculous to assume that Alberta's oil wealth belongs to the rest of the country.

"Alberta's" oil wealth belongs to the people in Fort McMurry. Why should anyone in Edmonton or Calgary be entitled to any of it? Perhaps because people in Calgary and Edmonton are in an arbitrary geographic area called 'Alberta'.

[shoop]

Ahhh, so geographic areas are merely *arbitrary*. Your argument would carry more weight if it didn't ignore the Constitution, which defines ownership of natural resources to these *arbitrary* geographic areas known as provinces.

Do you feel that all geographic areas are arbitrary?

"Alberta's" oil wealth belongs to the people in Fort McMurry. Why should anyone in Edmonton or Calgary be entitled to any of it? Perhaps because people in Calgary and Edmonton are in an arbitrary geographic area called 'Alberta'.

[willy]

Alberta will need the money.

The environmental clean up from the development and refining of oil and the gas production will add up.

If the rest of Canada takes the money, will they fund the substantial effort it will take to maintain a livable Alberta environment.

BC for instance could have off shore oil production but they are unwilling to pay the environmental price of development. Should they benefit from the sacrifice Alberta takes?

Alberta is paying that price and should keep the money to clean up after.

This is one argument that continually ignores the billions the federal government is currently collecting from the oil industry. They benefit every time the industry grows and every time the price of oil increases. The feds are also the reason the industry has not grown quicker. Navigating the regulations and compliance on oil sands development alone is a big risk for any new entrant. Many investors have already failed and lost.

[Riverwind]

Ahhh, so geographic areas are merely *arbitrary*. Your argument would carry more weight if it didn't ignore the Constitution, which defines ownership of natural resources to these *arbitrary* geographic areas known as provinces.

The principal of equalization is also in the constitution. So you have to be careful when you start using that to justify anything. My point is gov't redistributes income. If you accept that it is ok for the arbitrary constitutional jurisdiction of Alberta to transfer money from people in Ft. Mcmurray to people in Edmonton then it should be ok for the arbitrary constitutional jurisdiction of Canada to transfer money from the people in Ft. Mc Murrey to people in Cape Breton.

[shoop]

Are just the jurisdictions within the Constitution arbitrary? Or is the actual division of powers within the Constitution arbitrary as well? For example, s. 109 of Constituion Act 1867 which gives the Provinces control over their natural resources?

The principal of equalization is also in the constitution. So you have to be careful when you start using that to justify anything. My point is gov't redistributes income. If you accept that it is ok for the arbitrary constitutional jurisdiction of Alberta to transfer money from people in Ft. Mcmurray to people in Edmonton then it should be ok for the arbitrary constitutional jurisdiction of Canada to transfer money from the people in Ft. Mc Murrey to people in Cape Breton.

[Riverwind]

Are just the jurisdictions within the Constitution arbitrary? Or is the actual division of powers within the Constitution arbitrary as well? For example, s. 109 of Constituion Act 1867 which gives the Provinces control over their natural resources?

Yep. The division of powers was basically a coin toss decided by a bunch of men in funny coats 140 years ago. There is nothing particularily sacred about it other than that is was exists and should be respected until it is changed.

[August1991]

Are just the jurisdictions within the Constitution arbitrary? Or is the actual division of powers within the Constitution arbitrary as well? For example, s. 109 of Constituion Act 1867 which gives the Provinces control over their natural resources?

It's no accident that oil was found around Sarnia in the late 1850s and this was a profitable business during the US Civil War. By 1867, there was no question that Protestant Ontario was going to share the royalties with Catholic Quebec so the BNA Act granted control over natural resources to the provinces.

The principal of equalization is also in the constitution. So you have to be careful when you start using that to justify anything. My point is gov't redistributes income. If you accept that it is ok for the arbitrary constitutional jurisdiction of Alberta to transfer money from people in Ft. Mcmurray to people in Edmonton then it should be ok for the arbitrary constitutional jurisdiction of Canada to transfer money from the people in Ft. Mc Murrey to people in Cape Breton.

True, equalization was added to the Constitution Act of 1982 but it is not clearlt defined there. IMV, a constitution should not be as ocial policy statement.

Furthermore, equalization is unfortunately not about transfers between individuals. It amounts to a transfer from individuals in one province to the government in another province. The official logic of equalization is to allow all provincial governments to offer roughly the same services, even those with a weak tax base. The economic logic of equalization is that it is better (for Canada) to pay people to stay at home (in the Maritimes) rather than to move to a new province (Alberta) merely to benefit from lower taxes.

We now have the situation where poor people in Ontario are being taxed to lower the taxes of rich oil workers in Newfoundland. Then again, Canada's tax system is filled with so many anomalies that equalization hardly seems major.

[geoffrey]

That's ridiculous to assume that Alberta's oil wealth belongs to the rest of the country.

"Alberta's" oil wealth belongs to the people in Fort McMurry. Why should anyone in Edmonton or Calgary be entitled to any of it? Perhaps because people in Calgary and Edmonton are in an arbitrary geographic area called 'Alberta'.

Edmonton has major refining centres and Calgary has all the head offices for oil companies. It's not arbitrary, its where the money is.

That's a horrible ridiculous comparison. Business make money, those businesses are in the highly competitive tax situation we call Alberta and especially Calgary. That's why we are booming and Ontario is suffering.

[Renegade]

That's ridiculous to assume that Alberta's oil wealth belongs to the rest of the country.

The oil in Alberta doesn't directly belong to to the Alberta government nor to the Albertan people. It belongs to the companies and individuals who have secured the resource rights on the land where the oil is located.

The question is who has the power to tax the wealth that the oil brings. The oil will bring direct and indirect wealth to a large number of Albertans. The provincial government has the power to tax that wealth. Unfortunately for Albertans, until such time they have their own nation, the Canadian government also has the power to tax that wealth, and the Canadian government is compelled to distribute the proceeds of that taxation to other parts of Canada.

So like it or not, the oil wealth will be distributed across Canada, regardless of claims that the wealth "belongs" to Alberta.

[BHS]

Excellent post, Renegade.

[Riverwind]

The oil in Alberta doesn't directly belong to to the Alberta government nor to the Albertan people. It belongs to the companies and individuals who have secured the resource rights on the land where the oil is located.

Ah. No. The oil companies own the "rights" to extract that oil. They definitely do _not_ own the oil that is sitting in the ground. Paying royalties to the gov't of Alberta is part of the contract that the oil companies agreed to when they acquired those extraction "rights". Implying that the gov't is taking undeserved money from those poor little oil companies quite ridiculous.

The provincial government has the power to tax that wealth. Unfortunately for Albertans, until such time they have their own nation, the Canadian government also has the power to tax that wealth, and the Canadian government is compelled to distribute the proceeds of that taxation to other parts of Canada.

Why is this a problem? The gov't of Alberta has no problem redistributing the oil money to people that have no connection to the oil industry within Alberta. If Albertans have no problem sharing that wealth with fellow Albertans then there should be no problem sharing _some_ of that wealth with fellow Canadians.

[Renegade]

The oil in Alberta doesn't directly belong to to the Alberta government nor to the Albertan people. It belongs to the companies and individuals who have secured the resource rights on the land where the oil is located.

Ah. No. The oil companies own the "rights" to extract that oil. They definitely do _not_ own the oil that is sitting in the ground. Paying royalties to the gov't of Alberta is part of the contract that the oil companies agreed to when they acquired those extraction "rights". Implying that the gov't is taking undeserved money from those poor little oil companies quite ridiculous.

I think we are quibbling about nomenclature at this point. Once they have the rights to extract the oil, and they extract it, do they not have the same rights property owners have for any other resource and can do with it as they see fit. Yes I agree, that they made an agreement to pay royalties to the provincial government in return for the right to extract that oil. I did not mean any judgemental implication by the statement, nor do I believe that the government is taking undeserved money from companies. I acknowledge it was simply part of the deal. When you refer to royalties, it was part of what I meant when I referred to the power to tax. Royalties imposed by governments are only one specific kind of tax.

The provincial government has the power to tax that wealth. Unfortunately for Albertans, until such time they have their own nation, the Canadian government also has the power to tax that wealth, and the Canadian government is compelled to distribute the proceeds of that taxation to other parts of Canada.

Why is this a problem? The gov't of Alberta has no problem redistributing the oil money to people that have no connection to the oil industry within Alberta. If Albertans have no problem sharing that wealth with fellow Albertans then there should be no problem sharing _some_ of that wealth with fellow Canadians.

It's not really a problem, it is just a statement of fact.

By extension of your argument that the wealth should be shared with all Canadians, why stop there? Why not share it with the rest of the world, afterall Canada is just an arbitraty geographic designation. Also by extension, are we not morally entitled to some of Saudia Arabia's oil wealth?

The point is what anyone is morally entitled to, is irrelevant in the case of resources. What is relevant is who has the power to control that resource. As the situation now stands, both the Albertan and Canadian government share some power in controlling the wealth generated by the oil. Until there is a power shift such as a Constitutional amendment or Alberta separates, that is not likely to change.

[Riverwind]

The point is what anyone is morally entitled to, is irrelevant in the case of resources. What is relevant is who has the power to control that resource. As the situation now stands, both the Albertan and Canadian government share some power in controlling the wealth generated by the oil. Until there is a power shift such as a Constitutional amendment or Alberta separates, that is not likely to change.

I basically agree with that statement. What I read into your previous statement was there was something morally wrong with the Canadian gov't exercising its power but there is nothing wrong with the Alberta gov't exercising the same power.