Last year on May 5, the Alberta New Democratic Party won a surprisingly large majority government. One of the key planks to their campaign platform was an assertion that Albertans were not getting their “fair share” of resource royalties and promised that, if elected, they would make it right.
Our Progressive Conservative team warned the NDP that a royalty review would bring instability and uncertainty to an already suffering energy industry and contribute to the loss of thousands of jobs and billions in investment.
This was particularly true when layered on top of increased corporate tax rates and a promised remake of the energy regulator.
The government ignored our pleas, along with those of economists, industry experts, municipalities and regular Alberta families dependant on paycheques, either directly or indirectly from the industry, and went ahead with the review.
Jobs evaporated and investment went away as the review dragged on for over eight months causing maximum damage to Alberta's reputation and economy. To be clear, the price of oil is not the government's fault, but eroding industry confidence through poor economic policy is.
The review panel, led by Dave Mowat of Alberta Treasury Branches, listened to a wide variety of voices in an open and transparent engagement process.
I attended one meeting with hundreds of Albertans participating. The dialogue from the public was respectful and I thought the answers from the panel members were very thoughtful. These panel members courageously made recommendations in the long-term interest of Alberta, and I compliment Premier Rachel Notley for accepting those recommendations. It was without a doubt the right thing to do.
My optimism however, is tempered with scepticism. Even on the day Premier Notley announced the results of the royalty review she answered a question from the media by saying, “This is not the time for a cash grab.” The obvious question to follow might be, “When will the cash grab take place?”
On the same day, when the finance minister was asked if he would consider raising royalties when the price of oil recovers, he would not rule it out.
This casts doubt on how long their good decision will last. To build confidence and stability within the industry, the premier and finance minister must confirm that the decision made last week on royalties has staying power.
Only then will we be able to send the message that Alberta is once again open for investment and a good place to hire and retain well-paid employees.
Ric McIver is the Progressive Conservative MLA for the provincial riding of Calgary Hays and is the interim leader of the party.
