The Alberta Teachers’ Association

Teachers of Alberta: please provide input.

That’s the message that Dave Mowat is spreading.

The CEO of ATB Financial is heading up a panel established to review Alberta’s resource royalty regime, and he says he wants to hear from as many Albertans as possible. His four-person panel, appointed by Energy Minister Marg McCuaig-Boyd, has set up a website called Let’s Talk Royalties to share information about royalties and gather Albertans’ views on the subject.

"We’re not trying to mold opinion. We’re trying to draw people into the discussion," Mowat said. "If you don’t hear from everybody, we’re back to hearing from the squeaky wheel.

The province collected $9 billion in nonrenewable resource royalties last year. As energy companies develop the resources, they pay the government a percentage of the revenue generated. The review website explains how this royalty regime currently operates and is posting an ongoing series of questions for Albertans to answer.

Alberta’s royalty regime is very complex and includes more than 100 rates based on highly technical criteria, Mowat said. So rather than trying to determine whether royalty rates are too low or too high, the panel is aiming to formulate a set of principles that define what Albertans want and expect from the royalty system.

In Mowat’s mind, the system has to balance four different elements: optimize revenues for the province, provide good returns to energy companies, allow for industry innovation and diversification and create an environment of responsible development.

"There’s a natural tension there," he said, adding, "I think the old view that one comes at the expense of the other is exactly that, an old view. I think the world we live in today says you better do all four and you better do them all well."

Reaching out

Mowat contacted the Alberta Teachers’ Association seeking help getting out the message that the site is open to feedback from all Albertans.

He said he’s reached out to every group he can think of, including businesses, large employers, think tanks, universities, nurses and labour groups. So far there have been more than 20,000 visits to the site.

"If there’s one thing that’s unanimous that we’ve heard from everybody, whether it’s the government or from business, it’s do this well and do it quickly," Mowat said.

Two other messages that he’s hearing a lot are that, whatever royalty scheme is chosen, it needs to work regardless of the price of oil and it has to be comparable to other jurisdictions.

There have been 10 reviews since 1931, Mowat said, with the last one coming in 2007 under then premier Ed Stelmach.

The royalty review was a promise of the NDP during the spring election campaign. Opposition parties have criticized the review as being ill-timed given the current low price of oil and say it’s creating additional uncertainty in an already reeling industry. McCuaig-Boyd has said that any changes resulting from the current review won’t come into effect until the end of 2016.

Wildrose finance critic Derek Fildebrandt told the Calgary Herald that he’s concerned the outcome of the review is a "predetermined" way for the NDP government to generate revenue to cover its spending commitments.

"Let’s be clear. This is not a review; this is a raise," he said.

McCuaig-Boyd responded by saying the government has no preconceived notions about the results of the review.

"One of the things I want, when all is said and done, is a system that everybody feels they can trust and have faith in," she said.

The NDP has also pledged that any incremental revenue generated by a revamped royalty framework will go to the Heritage Fund and not general revenues.

Information sessions

The royalty review includes four information sessions scheduled throughout the province. Two of these are still upcoming.

Calgary
Monday, October 5
5:30 pm to 8 pm
Location TBD

Edmonton
Tuesday, October 6
5:30 pm to 8 pm
Location TBD

 
Learn more and share your views at letstalkroyalties.ca.