Even with $6 billion revenue shortfall Alberta won't change royalties: Redford - Macleans.ca

Even with $6 billion revenue shortfall Alberta won’t change royalties: Redford


CALGARY – Alberta Premier Alison Redford says raising royalty rates for energy companies won’t be on the table as experts gather in Calgary this weekend to hash out the provinces’s financial woes.

“I don’t know what people are going to say on Saturday at the summit. I can predict what some people are going to say just based on their reputation,” Redford said Tuesday.

“But we made it very clear that we think supporting our energy industry is fundamental to our future economic success. There are other things we need to do as well but very clearly we will not change royalties.”

Redford will preside over an economic summit in Calgary that is being billed as an opportunity to brainstorm solutions to the province’s reliance on energy revenues ahead of the March 7 budget.

Redford said falling oil prices in the U.S. market will take a $6-billion bite out of Alberta’s bottom line next year and it’s time to figure out ways to improve spending and how to get the province off the roller-coaster of volatile energy revenues.

Redford’s predecessor, Ed Stelmach announced a new royalty framework in 2007 that would give Albertans their “fair share” of the resource they own.

However, the energy sector railed against that new regime, moving their investment dollars elsewhere. It forced the Alberta government to do an about-face on its royalty framework to lure activity back to the province.

Redford said another matter that won’t be considered is the possibility of re-introducing health-care premiums.

The fees cost families about $1,056 a year before they were eliminated four years ago.

The Alberta Medical Association and the province have been negotiating a new deal for doctors for almost two years. Frustrated by the lack of progress, the government imposed a deal on doctors last November, but later backed off, allowing talks to continue.

“The salaries of doctors in our whole provincial budget is 8.5 per cent of the provincial budget,” said Redford.

“That’s a pretty fundamental decision for us to make representing the people of Alberta as we move forward with a $6 billion revenue shortfall,” she added. “I’ve made it clear that we have no more money.”

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Even with $6 billion revenue shortfall Alberta won’t change royalties: Redford

  1. Alberta has a spending problem, just like many other provinces, cuts have to come from the top, administration and management in most jurisdictions are bloated and wasteful.

    • Is that just your subjective opinion or can you offer any rationale to support that position. In relation to GDP is Alberta spending more now, then it did 5 years ago, 10 years 10 or 30 years ago?

      Is Alberta spending more than other jurisdictions with similar population growth and similar cost of living?

      Exactly where would you cut and by how much?

      Please be specific.

      Name the programs or departments you would cut and estimate how much it would save to the nearest $ 10 million.

      Ranting about administration and management is vague.

      • Well we do spend more per person on healthcare than any other province and yet we aren’t providing outstanding service. Our healthcare costs have soared over the last 10 years and if you have done any reading you know that the administration has spent A LOT of money on “expenses” and management personnel. In 2009, Mr. Duckett and Mr. Liepert gave many nursing manager 2 years pay to retire early. Many of those managers are now back working on the floor. Do you need more examples of where they have wasted money?

        • What you have identified is specific enough to discuss.

          First, good point.

          But many costs have soared in Alberta over the past 10 years. Primarily due to the governments approach (“free for all”) to the regulation of O&G development. Honestly, I don’t know if health care works are paid too much or too little. I suspect it is about right. I don’t know the details of the Duckett deal, but on its face it does seem wasteful. But keep in mind that morally any waste matters, but financially you can only make a substantial line items.

          The cost of building and staffing a hospital has soared over the past 10 years. Alberta is one of if not the most expensive jurisdiction in North American to build a big infrastructure project (i.e hospital) and the wages in Alberta are among the highest in North America.

          With those being two of the biggest factors in the cost of public healthcare, is there any surprise that health care spending has increased dramatically?

          Lets look at the counter factual. What is the alternative? Not build new hospitals or added capacity? Not increase wages, with the hope that the province will attract and retain people in the healthcare sector, while offering an uncompetitive wage?

  2. Worst money management in the country, and they’ve been warned about it for years.

    • “worst money management….for years”. I am not sure about that. When we had balanced books and owed NO MONEY, we were the envy of every province. How is that bad money management? Something you don’t seem to understand is that the population of the province is continually growing at a tremendous rate. The city of Calgary grew at up to 25K people a year. Governments have to provide services for those people…healthcare and education, roads, etc. It is not cheap.

      • No, you just thought you were the envy of every province. You hadn’t changed the basics. Still haven’t.

        And Ralph admitted you hadn’t planned ahead.

  3. Alberta is charging the lowest royalty in the world; bordering none! That and only that is the reason we are in the fix we are now! When Ralph Klein took office royalty was at 30% and when he left it was at 16% It has since fallen to 6% with the taxpayers paying for all their overhead.

    In addition to this result of Conservative policies; not necessities, they have discounted oil going south at 30% over the past 20 years costing this province untold billions; trillions.


    Again, this is Conservative Policy, not necessity!

    The Petroleum industry is meddling in our politic like a third world banana republic.

    Their interference both on the left side and the right side will prove devastating if Albertans do not give their collective head a shake!