Government short-changes Albertans; health care, education and environment suffer
A recent PC Party survey of 290,000 residents revealed that the environment is one of the top three priorities for Albertans, along with health and education. Yet, when it comes to oil and gas-a major provincial source of revenue that could be used to protect these priorities-the government is leaving windfall profits in the hands of multi-national corporations in the hopes of accelerated rates of exploration and development in Alberta.
According to a recent Pembina Institute study, Alberta collected a meager 69% of available oil and gas revenue between 1995 and 2002. Norway collected 88%, Alaska 99%, and British Columbia 93% during the same period.
Norway and Alaska are similar to Alberta in that they depend on the development of oil and gas for a significant portion of their total annual government revenues. And yet their citizens receive markedly more compensation for the development of those resources than do Albertans.
"The money Albertans are losing in this deal is needed to provide quality health care and education, as well as to protect the environment," says Amy Taylor, Director of Ecological Fiscal Reform at the Pembina Institute.
The Pembina Institute is calling for reduced credit and incentive programs, a review of royalty regimes, and environmental taxes to minimize environmental impacts associated with oil and gas developments. It supports increased energy efficiency and a transition to renewable energy sources, together with the establishment of long-term savings and stabilization funds to protect Alberta citizens.
Others are offering their own solutions. The NDP has proposed that, when oil prices are high, energy companies pay a 40% surcharge on royalties. The Liberals suggest investing 35% of any annual surplus into the Heritage Fund, aiming to build this fund to a level that will generate enough investment income to sustain program spending when Alberta's oil and gas resources are depleted.
And the Pembina Institute isn't alone in its call for a review of the province's royalty regime. In its annual report, the Alberta Auditor General found $442 million of oil and gas royalty reductions and rebates that lack either stated objectives or reviews to determine if objectives have been met.
"Clearly there is a need to review and revise the oil and gas royalty structure in Alberta to make sure that the regime is maximizing the return to the citizens of the province for the development of these non-renewable resources," Taylor commented.
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For more information:
Amy Taylor, Director of Ecological Fiscal Reform
Tel: 403-678-3355