Nationalize Oil Industry?

[Figleaf]

That's actually a good point. What's the value of EnCana or Syncrude? It would cost trillions to buy out the oil industry.

That's assuming the Quebecers want to give us a fair deal. Chances are it wouldn't be that way. At least Trudeau was decent enough to pay market (or higher) prices when he decided to pull a Chavez (or I suppose Chavez pulled a Trudeau?).

Shares x Price = Market Capitalization:

ECA

777,900,000 x 60 = 46,674,000,000

COS

471,000,000 x 28 = 13,188,000,000

PCA

497,538,385 x 46 = 22,886,794,000

IMO

952,988,000 x 44 = 41,931,472,000

NXY

262,513,206 x 70 = 18,375,910,000

SHC

825,662,514 x 45 = 37,154,835,000

Total: 180,211,011,000

(180 billion)

This would be quite readily within the ability of the Canadian government to purchase.

Canada's GDP in 2001 was 1,080,000,000,000 (just over a trillion)

[blueblood]

That's actually a good point. What's the value of EnCana or Syncrude? It would cost trillions to buy out the oil industry.

That's assuming the Quebecers want to give us a fair deal. Chances are it wouldn't be that way. At least Trudeau was decent enough to pay market (or higher) prices when he decided to pull a Chavez (or I suppose Chavez pulled a Trudeau?).

Shares x Price = Market Capitalization:

ECA

777,900,000 x 60 = 46,674,000,000

COS

471,000,000 x 28 = 13,188,000,000

PCA

497,538,385 x 46 = 22,886,794,000

IMO

952,988,000 x 44 = 41,931,472,000

NXY

262,513,206 x 70 = 18,375,910,000

SHC

825,662,514 x 45 = 37,154,835,000

Total: 180,211,011,000

(180 billion)

You have to remember that during a takeover, the price of shares takes off, and a takeover that big will make those shares shoot up through the roof

[geoffrey]

Demand push on medium-high risk investments. Taking $180b off the table for investors will do so.

$180b is alot of cash. Are you prepared for the Canadian government to float $180b in new bonds to pay for that? Or if the taxpayer paid for it, about $6000 a person.

What benefit would be achieved by buying out the oil industry? And why not buy out cars or aerospace instead, the government is their primary lender anyhow?

[Figleaf]

Demand push on medium-high risk investments. Taking $180b off the table for investors will do so.

$180b is alot of cash. Are you prepared for the Canadian government to float $180b in new bonds to pay for that? Or if the taxpayer paid for it, about $6000 a person.

Well, presumably we would get value for money, so the question is, would nationalizing the oil industry give Canada a positive ROI?

What benefit would be achieved by buying out the oil industry? And why not buy out cars or aerospace instead, the government is their primary lender anyhow?

Presumably because the oil industry is a better investment. If you believe in the Humboldt Peak theory, then oil is also a strategic asset, as well as being a sure bet investment.

[geoffrey]

Well, presumably we would get value for money, so the question is, would nationalizing the oil industry give Canada a positive ROI?

Hmm... the government would see a decent ROI, it can borrow at what these days, about 3.8 to 4 over 5 (mind you, that rate will increase after borrowing $180b), that selection of oil and gas is about 15%. Yup, definitely a sizeable ROI for the government.... a sizeable tax cut I hope... as in no income tax at all.

They'd also have to find $180b worth of cash from interested investors to pay for their bond issue, but hey, a little inflation due to skyrocketing interest rates didn't hurt anyone.

Also remember that EnCana is worth more as a whole at the end of the day... share prices will be massively bid up when the government tries to take a bite. As with Trudeau's attempt, the government will pay far more than what the market cap is today.

Essientially your relying on $180b in investment (we're talking what, 75% of Canada's average annual domestic investment) from people selling their 15% return Encana for 3.85% government bonds.

Won't work my friend.

Presumably because the oil industry is a better investment. If you believe in the Humboldt Peak theory, then oil is also a strategic asset, as well as being a sure bet investment.

I do happen to agree with the theory, and oil can be a strategic asset, but I don't think we should be interested in it that way. Selling oil makes Canada rich, the US will protect us as long as we give them oil. What's the problem there? We have more in the oil sands than we'll need in the next 100 years easy.

If oil is the better investment, then it shouldn't be hard for private companies to raise private capital, which they do. The government should not be involved when the private sector does it more efficiently.

[Riverwind]

Well, presumably we would get value for money, so the question is, would nationalizing the oil industry give Canada a positive ROI?

Publicly owned resource industries in virtually every country are used as a means to dispense political favours and social welfare programs. This generally makes the business much less profitable and (in the case of Venezuela) unable to make the necessary capital investments.

If the is an ROI to be had the CPP can invest in the private company.

[blueblood]

Well, presumably we would get value for money, so the question is, would nationalizing the oil industry give Canada a positive ROI?

Then why not let the gov't of Canada pop up some oil rigs and compete with the private boys. Your idea is bloody communism, and there goes any foreign investment opportunities in Canada, therefore making us poorer. Take a look at the Republic of Ireland, they manage a much better ship than we do. By nationalizing the oil industry to give Quebec some cheap oil means that the workers are going to have to take a big paycut in order for the industry to pay for itself. Then who wants to work on a godforsaken oil rig for craptacular pay? Quebec is basically all gov't jobs and look how wealthy it is 56 out of 60 provinces/states in North America, A JOKE!!! Saskatchewan has tried this and only now have they got their industry online because they opened it up to private investment. Hate the big boys all you want, but they provide the dollars to get things rolling, dollars the government doesn't have.

What happens when oil runs out, the gov't of Canada is caught with it's pants down, mark my words when this happens in Venezuela, the crap will hit the fan. Also the private boys have profit margins to maintain, the smaller the company the tighter the profit margins, the tighter the profit margin the more efficient the company has to be, with the gov't of Canada means that the oil industry will be running one inefficient outfit, plus they will want to unionize which makes things even worse.

The Soviet Union nationalised all of the farmland and it destroyed their agriculture economy, even now they cannot compete with Canadian farmers. Nationalization is a recipe for economic disaster. Geoffery being in an actual economics class or two could probably elaborate much better than me on this issue. If people in Quebec and the ROC want a piece of the oil action, they can easily buy shares in the multitude of publicly traded oil companies

[August1991]

Then why not let the gov't of Canada pop up some oil rigs and compete with the private boys. Your idea is bloody communism, and there goes any foreign investment opportunities in Canada, therefore making us poorer. Take a look at the Republic of Ireland, they manage a much better ship than we do. By nationalizing the oil industry to give Quebec some cheap oil means that the workers are going to have to take a big paycut in order for the industry to pay for itself...

The Soviet Union nationalised all of the farmland and it destroyed their agriculture economy, even now they cannot compete with Canadian farmers.

Are you Albertans all so easy to con? Do you all react on cue so easily? If so, you're the famous suckers born every minute.

Somebody posts with "Quebec" and "nationalization" and "oil", and you guys go nuts. No wonder the rest of Canada keeps pulling the football from under your foot.

Rubes.

The trick in life is to be sincere - and if you can fake that, you've got it made.

[blueblood]

Then why not let the gov't of Canada pop up some oil rigs and compete with the private boys. Your idea is bloody communism, and there goes any foreign investment opportunities in Canada, therefore making us poorer. Take a look at the Republic of Ireland, they manage a much better ship than we do. By nationalizing the oil industry to give Quebec some cheap oil means that the workers are going to have to take a big paycut in order for the industry to pay for itself...

The Soviet Union nationalised all of the farmland and it destroyed their agriculture economy, even now they cannot compete with Canadian farmers.

Are you Albertans all so easy to con? Do you all react on cue so easily? If so, you're the famous suckers born every minute.

Somebody posts with "Quebec" and "nationalization" and "oil", and you guys go nuts. No wonder the rest of Canada keeps pulling the football from under your foot.

Rubes.

The trick in life is to be sincere - and if you can fake that, you've got it made.

I'm debating a hypothetical situation. What are we being conned out of? The LPOC tried conning the Albertans out of their oil, and paid for it at the ballot box. I'd rather be conned into a debate educating left wingers on the evils of nationalization than being conned into borderline communism.

We have our things that make us go nuts, for Quebecers it's Reasonable Accomodation, defending Bill 101, culture, their equalization payments they're "entitled" to

[geoffrey]

Somebody posts with "Quebec" and "nationalization" and "oil", and you guys go nuts. No wonder the rest of Canada keeps pulling the football from under your foot.

I was enjoying a nice hypothetical discussion and you had to crash the party. Unfortunate.

Would I be suprised if many Quebecers were looking at Alberta's oil with entitlement in their eyes? Nope. It's the Quebec way.

I wonder what the reaction on a French Canadian forum would be if we posted an "Alberta refuses to provide even Federal services in French," or "UofC prof tells Ottawa that Alberta isn't going to send money anymore."

Outrage abound no doubt.

[August1991]

I'm debating a hypothetical situation. What are we being conned out of? The LPOC tried conning the Albertans out of their oil, and paid for it at the ballot box. I'd rather be conned into a debate educating left wingers on the evils of nationalization than being conned into borderline communism.

You miss the point.

The ROC knows your buttons - and think of what that means in a negotiation. (Quebecers are different.)

Geez - do I have to paint this by numbers?

I wonder what the reaction on a French Canadian forum would be if we posted an "Alberta refuses to provide even Federal services in French," or "UofC prof tells Ottawa that Alberta isn't going to send money anymore."

On my French forum, there's a good, intelligent debate about Albertan independance.

An Albertan paper should pick up on it.

[blueblood]

I'm debating a hypothetical situation. What are we being conned out of? The LPOC tried conning the Albertans out of their oil, and paid for it at the ballot box. I'd rather be conned into a debate educating left wingers on the evils of nationalization than being conned into borderline communism.

You miss the point.

The ROC knows your buttons. (Quebecers are different.)

Geez.

Shoot, if the Liberals want landslide majorities maybe they shouldn't push them. The ROC knows Quebec's buttons too, heaven forbid we should push them. That's quite a double standard coming up, it's ok to piss off Alberta and not Quebec???

[August1991]

Shoot, if the Liberals want landslide majorities maybe they shouldn't push them. The ROC knows Quebec's buttons too, heaven forbid we should push them. That's quite a double standard coming up, it's ok to piss off Alberta and not Quebec???

Blueblood, this has nothing to do with Liberals.

Naive Albertans - with easy buttons to press - may be sitting on a gold mine but Quebecers have been playing the game for ages. The names of rivers and places in Alberta and Saskatchewan are French. For Quebecers, Canada is their country - not yours. Quebec's buttons are different.

So, have no fear in this negotiation. You may be naive but you're dealing with the sentimental. Too many people in Quebec are too attached to Canada. It's their country.

[blueblood]

Shoot, if the Liberals want landslide majorities maybe they shouldn't push them. The ROC knows Quebec's buttons too, heaven forbid we should push them. That's quite a double standard coming up, it's ok to piss off Alberta and not Quebec???

Blueblood, this has nothing to do with Liberals.

Naive Albertans - with easy buttons to press - may be sitting on a gold mine but Quebecers have been playing the game for ages. The names of rivers and places in Alberta and Saskatchewan are French. For Quebecers, Canada is their country - not yours. Quebec's buttons are different.

So, have no fear in this negotiation. You may be naive but you're dealing with the sentimental. Too many people in Quebec are too attached to Canada. It's their country.

That's sounding like colonialism and elitism, just because a person is from Quebec, they're entitled to Western Canadian resources??? That's why the wheat board was created (topic for another thread). It's an attitude like that which spawned the Reform Party and pushes our buttons.

Using that logic, I get to say the Brits handed the French a silver medal on the Plains of Abraham and since the French got smoked they should fall in line. For an English Canadian when you lose a war you are under the conditions of the conquerors, not the other way around. An English Canadian would be thinking "Good Grief they were handed a silver medal and they think they run the show" I can guarantee you Canada would be a much different place had the French won that war. Quebec thinking they can dictate Canada's business is like a computer nerd bossing around a linebacker. I think that little rant would push the average Quebecer's buttons.

[Remiel]

Why was it exactly that the government sold off their (remaining) interest in Petro Canada?

[geoffrey]

Why was it exactly that the government sold off their (remaining) interest in Petro Canada?

Political pressure, a realisation that private industry does it better and a realisation that the government has no business being in profitable enterprise.

Not to mention a whole whack of instant cash.

[B. Max]

Why was it exactly that the government sold off their (remaining) interest in Petro Canada?

A better question would be. Where is our money from the sale of the shares. Everyone who was paying taxes at the time of the purchase should have gotten a cheque from the sale of the shares.