Sunday, January 06, 2008

I Have A Problem With These Estimates

While I'm not particularly opposed to the restructuring of Alberta's resource royalties, there's a problem with could have been estimates and declaring them as "losses".

n a 2006 report, the department estimated that since royalty rates were capped at certain price levels, Alberta had lost between $1.3 billion and $2.8 billion in "uncaptured economic rent" for natural gas alone in 2003 and 2004, or between $700 million and $1.4 billion a year.


It's a little like saying that if I didn't get a pay hike of some percentage last year, that I "lost" however many dollars that hike represented. The simple fact is that I didn't earn that money ... period.

In other words, the estimate describes the dollars that Alberta did not realize as a result of the royalty regime at the time. Using the term "loss" is quite incorrect.

If this latest debacle tells us anything, it is really more about the lack of transparency and accountability that Albertans have from the government in Edmonton. These numbers should have been public a long time ago, as this is a matter of public policy that requires information to be put into the public arena.

The information, inadvertently released by Alberta Energy, demonstrates the lengths to which the provincial government went to hide the fact that it has known for years Albertans weren't getting their fair share, provincial Liberal energy critic Hugh MacDonald said Friday.


As the public debate in recent months over the royalties discussion has shown, there are multiple aspects to this discussion, and all of the stories need to be put forward reasonably. When major chunks of information are withheld, it is extremely difficult for people to make reasoned assessments of the issue - and we should be very worried when we are told "you wouldn't understand" by both industry and political players.

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