Today the Parkland Institute released its official response to the report
and recommendations of the Alberta Royalty Review Panel. The report, entitled "Selling
Albertans Short" is available for free download from the Parkland
Institute web-site (www.ualberta.ca/parkland), or can be purchased in hard-copy
from the Parkland Institute office (sponsor-level supporters receive a
hard-copy for free upon request). Order information follows at the end
of the e-mail.
FOR IMMEDIATE RELEASE
October 17, 2021
New Study Shows Royalty Panel’s Recommendations
Would Continue the Giveaway of Alberta’s Resource Wealth
EDMONTON - A new report released today by the U of A’s
Parkland Institute says that the recommendations of the Alberta Royalty
Review Panel are far too timid, and fall far short of what Albertans
have said they wanted.
“Selling Albertans Short: Alberta’s Royalty Review Panel
fails the public interest,” makes the case that there is room
to go much further on royalties than what has been recommended by the
Panel - without impacting jobs or investment.
The report analyzes
some of the panel’s key recommendations
in the context of the current realities of the international energy
market and the energy industry’s own numbers and projections.
The Institute takes issue with the recommendation that the 1% royalty
rate be maintained, that the rate for projects that have paid off their
start-up costs be pegged at 33%, and that Coal Bed Methane be given
“Even with full implementation of the Panel’s recommendations,
royalty revenues would decline by $2 billion between now and 2016.
This makes no sense when production, demand, prices and profits are
high and rising,” says Diana Gibson, Parkland’s research
director and author of the report.
Parkland’s Director, political economist Gordon Laxer, points
out that “Panel chair Bill Hunter has articulated quite clearly
that Albertans own 100% and deserve 100% of the revenue from the resource.
Unfortunately, the recommendations in his report are a compromise and
do not even come close to that figure.”
The Parkland Institute report concludes by making a number of recommendations
of its own which would ensure that Albertans receive maximum benefit
from their own resources. Some of the key ones include:
- that the 1% royalty holiday be eliminated;
- that the base royalty rate should be increased to the point where
Alberta is capturing at least 90% of available economic rent;
- that a windfall profits tax be implemented with the goal of capturing
close to 100% of any significant increase in energy prices;
- that instead of the proposed royalty credit for companies that upgrade
in Alberta, which would cost Albertans $3.2 billion, the government
ensure value-added processing through strong regulations; and
- that, in recognition of the fact that 80% of global oil is controlled
by National Oil Companies, Alberta seriously study public ownership
as a way of maximizing revenues and playing a leadership role in the
“Alberta has a significant advantage over most other places
in the world in that we are more politically stable than most, and
our resource is relatively easy to find - there is no need for
us to sell ourselves short in order to be competitive,” says
Gibson. “These same people would tell us that the marketplace
is about maximizing your revenue and selling at the highest price possible,
not about negotiating for a ‘fair share’”.
Copies of the report are available on the web at www.ualberta.ca/parkland
or can be requested by phone at (780) 492-8558.