Fearmongering or Hopemongering? It’s Your Call Alberta

“I think it has deteriorated into groundless name-calling, and it’s certainly not the strategy that I would take.”—Rachel Notley reflecting on comments made by Jim Prentice and Brian Jean

To hear Jim Prentice and Brian Jean tell it, Rachel Notley’s plan to create a royalty commission and increase corporate taxes to 12% is an anti-free market experiment that will plunge Alberta into economic armageddon.

Once everyone stops hyperventilating we’ll take stock…

…okay, ready?

Impact (or lack thereof) on Big Oil

On the last day of the spring legislative session, Rachel Notley tabled Bill 209 which would create a resource owners’ rights commission. The commission would include industry representatives, experts in energy economics and sustainable development, aboriginals and industry employees.

Ms Notley “hopemongering”

It would make recommendations on royalty structure, value-added processing of natural resources and proposals for long term sustainability. And most importantly, it is transparent. The commission is required to make regular reports and consult with Albertans on the management of their natural resources.

Ms Notley assured Albertans that there would be no royalty changes in a low price environment.

Nevertheless Mr Prentice and Mr Jean are running around with their hair on fire and one industry executive, Cenovus CEO Brian Ferguson, fretted that anything that makes Alberta uncompetitive will cause capital, investment and jobs to flow to other jurisdictions.

Ms Notley was puzzled. “I don’t know how talking…with Albertans, in an independent, transparent accountable forum about a resource that belongs to Albertans is going to kill the industry.”

Is Big Oil really rattled?

The best way to find out whether Ms Notley overlooked a looming threat to Big Oil is to check out what Big Oil is saying about the royalty review and tax hike to its own analysts and investors.

Securities laws require Big Oil to file its first quarter earnings results in mid to late April. These results must include a discussion about the risks Big Oil has identified in the foreseeable future.

Guess what.

Not one energy company, not even Cenovus, updated its boilerplate risk language to address this so-called threat to their bottom line.

Mr Brian Jean “mulling” boilerplate?

A quick look at the boilerplate, which covers every risk known to man including changes to royalty regimes, tax laws, computer hackers, terrorist attacks and alien invasions (sorry, as a corporate securities lawyer I always wanted to slip in the “alien” bit just to see if anyone actually reads boilerplate) reveals that no one other than Mr Prentice and Mr Jean is fussed about Ms Notley’s suggestion that Albertans deserve the right to control their natural resources and corporations can pay a little more in corporate taxes.

Why me?

Recently five Edmonton businessmen called a press conference urging Albertans to “think straight”. Apparently anyone who wants to vote NDP has lost his mind.

They’re particularly concerned about the NDP’s plan to raise corporate taxes to 12%. One businessman, John Cameron (Keller Construction), said he couldn’t afford to pay two more percentage points in taxes or a minimum wage which will increase over time to $15.

He lamented: “Why is it always the corporations? “Why? Why is it me?”

Ashif Mawji (NPO Zero) said an increase in corporate taxes could result in reduced corporate contributions to charities like the Stollery Children’s Hospital.

Anybody got a hanky?

Right, let’s start at the top.

  • The NDP plan will not destroy the Alberta Advantage. The all-in tax burden on individuals and corporations will remain the lowest in Canada because Alberta does not have a sales tax. The sales tax in other provinces ranges from a low of 5% to a high of 10%. I know it’s hard but do the math.
  • The Stollery Children’s Hospital is not a charity, it’s a public service provided to sick children. Veiled (well, not so veiled) threats to stop charitable contributions is the last refuge of an illogical mind.
  • Why not you? Just because the PC government showered corporations with tax breaks and short-changed public services in the process doesn’t make it right.

Bottom line: if Alberta’s businesses are so fragile that they can’t survive a slight increase in corporate taxes and the obligation to pay a minimum wage that it still less than a living wage, it’s time these businessmen took another look at their business models.  Albertans can’t afford to carry them any longer.  

Mr Prentice “stabilizing” government?

Amateurs

The most bizarre argument against voting NDP is that they’ve never been in government and the newbies will create instability at a time when one false step will result in…well, something horrible.

This is rich coming from the PCs who’ve had four different premiers in four years (Stelmach, Redford, Hancock and Prentice), changed the way they budgeted $45 billion in revenues three times in three years and lured 11 Wildrose MLAs, who were universally despised until defection day, into their caucus.

The new NDP government will do what every new government has done in every other province across Canada. Ms Notley will review her mandate, name her cabinet and set an agenda to deliver on the promises she’s made to Albertans. Then she’ll ensure that the public service understands its mandate and gets cracking.

Sure it’s a big job, but someone’s got to do it. Unfortunately for Mr Prentice and Mr Jean they’re so busy fearmongering that Albertans no longer believe they’re up to the task.

May 5: fearmongering or hopemongering? What’s it going to be Alberta?

This entry was posted in Economics, Energy, Energy & Natural Resources, Politics and Government and tagged , , , , , , , . Bookmark the permalink.

43 Responses to Fearmongering or Hopemongering? It’s Your Call Alberta

  1. cyberclark says:

    When Harper took office he inherited a 75 million dollar surplus from the Federal Liberals. He immediately chopped corporate taxes to eat up the surplus. It ended up that Canada’s corporate taxes were far below what would be considered competitive. It was a giveaway.

    Later the Bank of Canada chided the business community for sitting on the money; that they should spend it because, Canada needed it. None of it appeared back into our economy.

    Now industry is crying the blues because the NDP want to take 1% more in taxes than does the conservatives.

    We need strong corporations as we need strong banks but this panic BS is grossly overstated and not worthy of the concern.

    • cyberclark says:

      The problem isn’t that we need extra tax money the problem is following conservative policies for 40 years, allowing them to take over 700 billion dollars from the heritage trust fund using it in place of taxes and allowing them to discount oil 30% off market values costing producers over a trillion dollars in 15 years is the problem!
      You cannot fix a problem by doing the same thing time and time again. We need a realistic change and at this point in time it appears to be the Alberta NDP.

    • Elke B says:

      you are wrong cyberclark. Harper inherited a 13 billion dollar surplus which he blew in 2 years before the recession and then when that hit, the bank was dry

  2. Exactly, and the fact that the major players like Suncor, Imperial, and Cenovus did not mention the possibility of a royalty increase or a tax hike in their Q1 earnings releases and not one of the analysts from JP Morgan, RBC Capital, FirstEnergy, CIBC, the Wall Street Journal, the Globe and Mail, etc bothered to mention it confirms this.

    • cyberclark says:

      It’s not that cut and dried Susan. Every time the oil sands got an environmental penalty it was paid for out of our royalty portion. Now, the oil companies pay a 15% carbon tax and we get zero for royalty.

      Loose Lips Liepert on his last public address said our royalty was at 6% and falling. Albertan’s should get rid of their feeling of entitlement and tighten their belts. Wonder why he’s not there now?

      • Cyberclark, Prentice strikes me as a slightly smarter Liepert. He touts his “free enterprise” vision but it’s nothing more than a sell out to the energy sector. Lougheed said shortly after he became became premier he realized royalties were too low and tore up the old agreements because “it had to happen”. The industry railed against him (apparently the Petroleum Club cancelled his membership), but they adjusted and went on to make billions in profits. Contrast this to Prentice who became premier and quickly introduced a budget that protects corporations from tax increases, the energy sector from royalty hikes and nails the rest of us. Lougheed knew the difference between free enterprise and corporate welfare. Prentice doesn’t.

      • cyberclark says:

        This whole thing is bigger than Alberta Susan, that is positions taken in the extreme. Harper envisioned pulling the right together. They are all beating on the same drum now and its extreme. Prentice is one of the good ol’ boy s on side as is Jean.

  3. Catherine says:

    Picture this; 3 Albertans holding a press conference. One speaks first hand about how PC cutbacks to healthcare have impacted the cancer treatment she received. The second is a student that talks about large class sizes that make it impossible for his wonderful teacher to meet all their learning needs. Because of PC cuts to education, this young man does find math difficult!! The third is a union member that has seen hard times come and go even when the oil prices were high. Regardless of their troubles, these Albertans happily chipped in to buy a huge case of Kleenex for the 5 Edmonton businessmen to dry their tears and a bigger box of toilet paper for all their BS.

    • cyberclark says:

      One of the most disappointing things that came out of Prentice/Mandel was the cancellation of the new Cancer Treatment Hospital in Calgary. This province is a cancer haven with all the toxins in the workplace. If these guys had their priorities straight that would have been the primary make work project to put in place.

      The Cross Cancer Institute has loads of money but is very restricted on what they can spend it on. Point is there would be public support to no end for a facility like that.

    • Catherine, your scenario would make a wonderful Youtube video! It’s perfect. Thanks.

  4. Liz says:

    This is how charity works for John Cameron of Keller Construction. He was one of the 5 Edmonton ‘suits’ that sat in front of the media last week, claiming they couldn’t afford a slightly higher corp. tax rate. (One of the other cohorts suggested that they would have to cut their charitable giving.)
    It is quoted in the Edmonton Journal that Cameron attended a recent charitable fundraiser and bought a $5,300 suit!!!! YIKES…..and that qualifies as a charitable donation. Oddly enough he will get a tax break on it, so basically we are all chipping in to subsidise his (so called) charity suit!
    Check it out here – http://www.edmontonjournal.com/news/edmonton/Lees+Generous+Edmontonians+make+fundraisers+success/11025165/story.html

    • Liz, thanks for this! While it’s laudable that Cameron and others contribute to the CASA Foundation which supports mental health for children, teens and their families, the fact that the Alberta government is relying more and more on charity to fund essential public services is making things worse. Why? Because vulnerable Albertans suffer when well-heeled donors like Cameron decide they’re not going to donate anymore. A rich Calgarian once told me that he was sick and tired of the government expecting wealthy Albertans to pick up the slack. He characterized it as a hidden tax and he refused to do it anymore. Not good, anyway you look at it.

  5. ABCanuck says:

    You know the PC/Wildrose right (“dirty clique”) is in deep trouble when you read the likes of Ezra Levant saying this on Twitter:

    Ezra Levant – Verified account ‏@ezralevant

    No word of a lie, if my only choices were this dirty clique, or the NDP, hand to God I’d vote NDP. #abpoli http://www.therebel.media/alberta_election_secrecy_around_denis_case_bizarre_and_uncanadian
    6:16 pm – 29 Apr 2015

    • ABCanuck, I never thought I’d see the day when I agreed with Ezra Levant, but he’s right. Prentice needs to explain why it was necessary to disqualify Jamie Lall as a potential candidate based on a restraining order that was issued 8 years ago, but it’s not necessary to disqualify Denis as a candidate based on a restraining order that was in place the day Prentice accepted Denis’ resignation as Justice Minister. Here’s the press release Prentice issued about the matter. Prentice appears to think that stripping Denis of his cabinet post is sufficient. Prentice also says he and his wife have had no further contact with Denis (is he a pariah?) and he refuses to say anymore about “this very personal matter”. https://pbs.twimg.com/media/CELmKC6UgAA20au.jpg
      Very poor judgment by our premier, in my humble opinion.

      • GoinFawr says:

        I was pleasantly surprised to find this apparent moment of clarity on Mr.Levant’s wikipage:
        “It’s tough to be a pure libertarian, because reality has a way of messing with that beautiful theory.”- Ezra Levant

    • Carlos Beca says:

      Ezra has seen a bit of the light since he had to pay 80 thousand dollars for being a jerk. Life has its ways and I hoped he had to pay 300 thousand. I am sure he would have learned to respect others.

      • cyberclark says:

        Here is a fresh and timely linkhttps://drive.google.com/file/d/0B9hKZEGlI3lXbVJ4SWhadkhVOEU/view?pli=1 Someone has put a lot of work into it.

      • Carlos, I second that! Goinfawr, that was an incredible chart. The pollsters called it and are back in business.

  6. Alake says:

    Absolutely love your postings. Very well thought out and refreshingly objective but in a cheeky sort of manner.
    Keep it up.

    • Thank you Alake, Ms Soapbox tends to the cheeky side; needs to be reined in periodically or she’d get sued! OK, now I sound like the lead character in The Three Faces of Eve.

  7. Bruce Jackson says:

    Hannah Arendt – in Crisis in the Republic wrote ”
    “”Lies are often much more plausible, more appealing to reason, than reality, since the liar has the great advantage of knowing beforehand what the audience wishes or expects to hear. He has prepared his story for public consumption with a careful eye to making it credible, whereas reality has the disconcerting habit of confronting us with the unexpected, for which we were not prepared.!”” I am not sure Albertans will be ready for the unexpected which we have not been prepared for. Seems we will have a time of disaster management to deal with. Seems Rachel will have to call in the “disaster recovery cleaning firms” to clear out the mud and other layers of garbage to even begin looking under the carpets for what has been hidden. With the Justice minister out of commission who will direct the fraud squads to review the books. Sure will be interesting days ahead. Wonder if the National Post will send in a few more reporters or just leave town now they have lost control?? The economy will get a great boost with this increased activity and clean – up and review committee’s being hired on. Hope they can check their references and political affiliation before hand as some of them may be running around with more membership cards than party rules allow. Warm and sunny days ahead with lots of thunder storms to light up the dark.

    • Bruce, you’re right. The first thing Notley should do is quadruple the Auditor General’s budget so a thorough review of every ministry, government department, agency, board and tribunal can be undertaken. The bigger challenge will be to repair the damage resulting decades of incompetent government. It took the PCs 30 years to destroy the Alberta created by Peter Lougheed. It’s going to take more than 4 years to fix it.

  8. Elke B says:

    with respect to an increase in corporate tax that is advocated by Ms Notley, for many companies it would not affect their bottom line:
    “For the many US companies operating in Alberta (the US provides two-thirds of foreign investment to Alberta), an increase in our provincial corporate income tax wouldn’t actually affect their bottom line at all because of what is called “the treasury transfer effect.””

    “The US government taxes the profits that US corporations make in foreign countries, such as Canada, at a rate of 35% (minus taxes paid in the country where the profits were made). Due to drastic cuts to corporate income taxes by the Canadian federal and Alberta governments over the last 15 years, the combined federal and provincial corporate income tax rate is now 25%. What this means is that US corporations exploiting Alberta’s natural resources for a healthy profit are paying our provincial government 10% tax, the Canadian federal government 15% tax, and the US federal government 10% tax. These US corporations have to pay 35% tax on profits made outside of the US regardless of what the tax rates are in those countries and provinces. So if the Canadian federal and Alberta provincial tax rates added up to 35%, instead of 25%, then all of that money would stay in Canada and the bottom line of the US corporation wouldn’t be affected at all. A corporate income tax increase of 1% in Alberta for these US companies would just mean that they would begin paying that extra 1% to the Alberta government rather than the US government, but their total tax bill would not change at all. ”
    http://parklandinstitute.ca/blog/comments/making_minced_meat_out_of_mintzs_politicized_numbers

    • Elke B: thank you for this excellent example. It demonstrates the stupidity of keeping corporate taxes low in Alberta. We already have a lower tax rate for small businesses. There’s no reason to shortchange public services for Albertans in the misguided belief that by doing so we’re ensuring American companies will continue to do business here. As you point out it really makes no difference whether the tax is 10% or 12% or 15% to the global players active in the oilsands.

  9. Thanks Susan,

    Well written and reasoned. I like your zingers and insights. This is how I have been working through this political nonsense: https://moreenigma.wordpress.com/tag/political-but-not-partisan/

    Rusty

    • Rusty, you do have a different perspective. The intersection of politics and morality is a topic that should be of interest to everyone, regardless of religious affiliation. Thank you for sharing your blog with us.

      • Hi Susan, I am impressed that you make time to respond to all your commenters. I am more getting at that notion that we all bring beliefs and faiths with us, irrespective of their source – whether its faith in scientific theories, or faith informed by religion. I am more interested in the ethics that are informed by these beliefs than I am in “morality” – though, invariably, this includes morality. Therefore I wholly agree with you when you say “it should be the interest of everyone” since everyone has ethics that are informed by something, and lead to somewhere – and therefore – it is my hope that today’s election will reflect a better informed ethic to “de-select” the current sitting government. But, as you may read in my three-part post on “Political but not partisan” (and I don’t expect to add to your enormous reading horizon), I am encouraging people to be better ethically engaged in politics without it sliding off into the rough & tumble team sport (blood sport?) of partisan politics. May you have continued success in your influential blog. Sincerely, Rusty

      • Thank you Rusty. Your description of partisan politics as a blood sport reminded me of the time I visited the Legislature. Question Period was definitely a blood sport with the opposition firing off pointed questions, many of them well founded but delivered in a snarky manner, and the government responding with non-answers–it was entertaining but not terribly productive. I’m looking forward to seeing this change under our new NDP government (did I mention that I’ve spent the last 2 days dancing in the streets?)

  10. Jim Lees says:

    I feel the Resource Commission is a great concept, and should be followed up on by whoever wins the election. It may be an NDP proposal, but as an Albertans, I want to know that our natural resources, especially non-renewable ones, and being managed with Albertans’ interests in mind. I would go a step further and have public representation on the Commission, not just industry and economic experts. I thought the comments of the Fearful Five were lame. Perhaps donations to Hospital Foundations would be secure if the govt restored the tax credit they reduced for all but political donations. I suspect that is a bigger factor in deciding where to make donations.
    What’s next – should be be buying a year’s worth of water, food, power generators etc. in order to hunker down on Wednesday if the NDP come out on top?

    • Jim, I agree. Work on the Resource Commission should proceed regardless of who forms government on Wednesday. I don’t know whether debate on Bill 209 will continue after the House goes back into session. I sincerely hope so because I’d love to hear the arguments against this proposal for greater transparency and accountability with our most valuable resource.
      As to whether we need to head for the air raid shelters in the event of an NDP majority government, I saw a comment from a Wildrose supporter who said, the sun will still rise in the east, the birds will still sing, we’ll be fine. If the Wildrose are prepared to press on, one would hope the PCs can do likewise.

  11. ABCanuck says:

    The Calgary Herald’s subscribers and readers are not stupid but rather incredulous that there wasn’t a single letter from the Herald’s more than 524,900 total readers about the election in the Monday May 4 edition of the paper.

    I suspect this may be a directive from Postmedia. If true, this does nothing to enhance respect for the individuals on the Herald’s editorial board for whom I feel sorrow and pity.

    In stead we got letters on backyard chickens, scantily-clad ice-girls at the Saddledome, and an 11-year-old detained at the LEGO store -among other mostly trivia.

    Obviously whoever is responsible for the editorial endorsing the PC’s and Prentice as Premier wants to have the last word and not present any dissenting opinions and criticisms of which I have no doubt plenty were received.

  12. Kathleen Lowrey says:

    “The Stollery Children’s Hospital is not a charity, it’s a public service provided to sick children. Veiled (well, not so veiled) threats to stop charitable contributions is the last refuge of an illogical mind.”

    aha hah ha ha ha ha. Thank you for turning a shameless attempt to use sick kids as a scaremongering prop into the laughingstock it deserves to be.

  13. Brent McFadyen says:

    Some people would have you think the sky will fall, there will be famine, gross unemployment, business will leave on mass, no investment in the province if you have an NDP government. What will happen is the “right wing” establishment will work overtime to return to the status qua . It was appalling in the nineties in Ontario what they did to the NDP there. If they made mistakes it was because they did not have the full time political professionals that the established Liberals and Conservatives had. A large portion were new to the game, teachers etc.. Mistakes were made but not corruption, no one had their hand in the cookie jar. The press hounded that government that were making sensible policy. I predict the establishment will do everything in their power to discredit the NDP and the press will hop on board. Be ready progressives to counter the lies and half truths that will come.

    • Carlos Beca says:

      Brent is very right and I am not sure it is possible to counter what is coming. We are in different times but the Alberta extreme right wing machine will not let go of our oil without a major war. I doubt another oil boom will happen again, if ever, but there are still many billions to be taken out of Alberta.

    • Sage advice Brent. Thank you. The public is going to have to cut the NDP a little slack. It will take more than 3 months to clean up 30 years of mismanagement and abuse of power.

  14. Carlos Beca says:

    What is happening is not only fear mongering, it is way more than that.
    In Edmonton both the Edmonton Journal and the Sun editorials on the weekend openly supported Jim Prentice. The Sun is no surprise. They have done that in previous elections, but I believe this is the first time I have seen the Edmonton Journal doing so. It is definitely the end of a true democracy in Alberta and in my opinion in Canada in general. We are now one of those banana Republics that support elections where all parties are allowed to run but the ballots only have one choice.
    Paula Simons, columnist of the Edmonton Journal had to apologize on twitter on the weekend because she said that the paper had decided, as they always do, not to endorse anyone. Well she was wrong. The final word must have come from the corporate bosses that they did not have the power to make that kind of decision.
    It is clear to me that both the Sun and the Edmonton Journal are now changing from newspapers to brainwashing destroying machines if the NDP wins the elections.
    Rachel Notley is going to be suffocated with lies, innuendos and even personal attacks as soon as the election is over. We all know how this is going to work.
    As far as the five business men I can only say that it is pathetic, immature and disgusting. Imagine if Rachel Notley had gathered five Union Leaders to attack Jim Prentice’s reputation as a business leader? It would be all over the newspapers as ‘Outrageous socialists dare to challenge our deities’.

  15. That’s a very good point Carlos. Repairing Alberta’s public services and diversifying its struggling economy will take time and money. The NDP will quickly come under fire for taking “too” long and spending “too” much (although how anyone determines what “too long/much” means is beyond me).
    We’ll need to expose the propaganda machine in action. Better yet, we need to turn the machine around and point it at the PCs. One way would be to point out that it’s hypocritical for the PCs to argue that the NDP is beholden to the unions when the NDP want to enact laws banning corporate and union political donations. The PCs have said no such law is necessary. Could it be because the PCs get the bulk of their funding from corporations? Heck no!
    Challenging times ahead, but we’ve come this far, we can go all the way. We have to.

    • GoinFawr says:

      These attempts at manipulation of perspective are ‘par for the course’

      “It was almost impossible to get an objective statement of our policy or even an adequate description of any piece of legislation printed in the daily press. We would hand the press a statement and either it would not be printed at all or it would be run in such a distorted form that it looks almost meaningless and would appear among the classified ads, while the criticism of the legislature would be plainly visible on the front page with a two-inch headline.”

      “The newspapers said we were going to socialize everything, that the government would own the farms, the corner store, the barber-shop, and the beauty parlor, and that everybody would be working for the state. When that didn’t happen, they had to give some explanation. So the explanation was that we had betrayed our principles, we were no longer socialists and we were now reactionaries, having departed from our original ideals. In effect, we were now traitors, because we didn’t do the horrible things they promised we would. They had built up a straw man and now they were knocking it down.” – T Douglas.

      Fortunately, unlike most of the 20th century, these heady digital days we have easy access to a virtually unlimited range of opinions (including your discerning thoughts Susan) and the means to verify them.
      As a result it seems more and more Canadians, Albertans included, are beginning to recognize exactly who’s been buttering whose bread. We’ll see how far it goes.

      • GoinFawr: your point about the media’s inability to objectively report on the NDP’s policies was borne out this week. The number of industry reporters who jumped on the alarmist bandwagon to speak on behalf of the energy industry far outnumbered the number of industry CEOs who made a comment. While the reporters were busy pointing out the sky is falling, most (admittedly not all) industry CEOs said they could work with the new government.
        And they wonder why the mainstream media is losing its audience.

  16. Diana says:

    Spot on as usual!! Thanks for your unbiased insight! So refreshing given the inability for the media to report “FACTS” preferring instead to report their biased “FICTION” and outright fear mongering!!!

  17. Thanks Diana. The media’s coverage of the run-up to the election and the NDP sweep was both good and bad. It was great to see Rachel Notley get the coverage she did, but it was very frustrating to see all the stories reporting on how the “left-leaning” NDP were going to destroy our province. It was the level of vitriol that surprised me the most. Makes me think we’ve got somebody very very worried 🙂

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