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| Archived HOT STUFF August 2005 |
| Klein must share: expert - Country will be in danger if Alberta keeps riches: Courchene |
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(Lee Greenberg, CanWest News Service, Saturday, August 27, 2005)
TORONTO - One of Canada's leading experts on equalization and interprovincial relations says Alberta will have to relinquish some of its windfall billions in oil revenue or risk the destruction of the federation. Discussing a paper to be released next week, Thomas Courchene, senior scholar at Montreal's Institute for Research on Public Policy and a professor at Queen's University, said yesterday a portion of Alberta's projected $7-billion surplus should be shared with the other provinces. Alberta's wealth, generated by crude oil and natural gas deposits, which are now fetching historic prices, has left the province with a series of enticing possibilities, including eliminating income tax, corporate tax, or even providing free post-secondary education. The province is already debt-free and has the lowest income tax rates in the country. However, Mr. Courchene said continued financial growth would prompt Canadians to flock to Alberta, weakening all the other provinces in the process. "If Alberta spends all of it internally it either means zero taxes in Alberta or Cadillac versions of all public services, or variations of both. "Who's about to live in Saskatchewan in those scenarios? You could just go to Alberta and be unemployed and probably get welfare that's a bit more than you could earn in Saskatchewan," Mr. Courchene said in a telephone interview yesterday. "The real difficulty that Canada faces is that if Alberta starts spending this on infrastructure. It can have a health system, an education system, an environmental -- anything it wants -- that no other province can afford. If that happens, the Confederation is gone." Mr. Courchene, a Sask- atchewan-raised Princeton graduate, is a former director of Queen's University's School of Policy Studies and is the author of some 250 books on Canadian policy issues. He said he had mixed feelings about initiating a discussion that could stir up divisive sentiment. "This is the beginning of a 'let those eastern bastards freeze in hell' type of scenario," he said. "I guess someone has to say it." The infamous National Energy Program, imposed by the Trudeau government when crude prices soared in 1980, was used as a mechanism to distribute wealth from Alberta to the rest of the country. However, it chilled investment and remains a flashpoint for Western alienation. On Wednesday, Alberta Premier Ralph Klein reminisced about the "ghost towns" that Edmonton and Calgary became in the wake of the NEP and warned Prime Minister Paul Martin against a similar redistribution strategy. Responding to reports that Ontario Premier Dalton McGuinty said Alberta's wealth was becoming "the elephant in the room," Mr. Klein said Mr. McGuinty and Mr. Martin should"keep your hands off" his province's oil riches. "If they are the great Canadians that they profess to be, then they'll leave us alone and respect the constitution," he told reporters. Mr. Courchene agrees that the NEP was a "disaster," but says some sort of revenue-sharing mechanism is needed for the good of the country. "Alberta's biggest fear should be that Ottawa put in another National Energy Program. But ... it came in because the system couldn't afford to handle the cost of it," he said. "If Alberta sits tight and keeps collecting all these revenues, Ottawa's going to step in. I don't think Ottawa can tolerate $7-billion a year. The pressures on the rest of the country will be too hard." One of the suggestions Mr. Courchene will propose is an energy revenue sharing scheme whereby provinces kick in 10% of those resources to be distributed by the provinces themselves through the Council of the Federation. He will also suggest the imposition of a minimum taxation level to partly recoup some of the revenue lost if Alberta decides to eliminate income taxes. Mr. Courchene said the federal government might raise the minimum level at the highest bracket to 35% from 29%. Alberta's income tax levels in that bracket are 10%, he said, meaning rates would drop from 39% to 35%, instead of 29%. "We should celebrate the fact that Alberta's getting rich because that's good for all of Canada and we should try to find ways to make it good for all of Canada as well as Alberta. We can't take this money away from them, but we can ... still keep the federation functioning effectively and co-operatively from east to west." Mr. Courchene also bolstered the Ontario government's campaign against a $23-billion gap, the difference between what it pays into federal government and what it gets back by way of transfers and other program spending. On Wednesday, the Ontario Chamber of Commerce released a report saying that if the system is not fixed, Ontario could become a 'have-not' province by 2010. Mr. Courchene agrees. In a study presented to a federal committee in May, he argued that because Ontario has significantly higher wages than anywhere else in the country, it can afford to provide fewer services than elsewhere. "And for me, that's an ideal definition of a have-not fiscal province," he said. One political analyst, however, University of Calgary professor David Taras, said that any federal effort to take away Alberta's booming oil revenue could itself lead to the break-up of Canada. "I think that the reaction in Alberta to that would be very very harsh," he said. "If you ever wanted to reopen the constitutional wars with real nastiness and venom, that would do it. It would cause real questions about national unity. The memory of the NEP and the devastation that it caused are still very much alive in Alberta." |
| Analysis |
| Quebecer Doesn't Give A Damn About Albertans |
| (ALEX DOBROTA, Montreal Gazette, Wednesday, August 24, 2005)
Qualifying the latest surge in gas prices as a robbery, a Montreal accounting professor called on the federal government yesterday to nationalize the oil industry. "We have to repatriate this resource," said Leo-Paul Lauzon, who holds a chair in social economy at the Universite du Quebec a Montreal. "Oil companies are making immoral profits on the back of this society." Speaking at a press conference inside a reconstituted church in the university's building, Lauzon said private oil companies have downplayed the global supply of crude oil to boost prices at the pump. He based that assertion on his own study of the spending behaviours of three private Canadian-based multinational oil companies over the last 15 years. Data from annual reports of Esso and Shell show 84 per cent of the companies' profits have gone to shareholders, instead of being reinvested in exploration activities, Lauzon said. In the case of Petro-Canada, that percentage falls to 15 per cent, Lauzon's study found. Nonetheless, most of those funds leave the country, as Canadian oil companies are owned mostly by "foreign interests," the professor said. "There's plenty of oil to be had," Lauzon said. "But the companies are voluntarily reducing the offer to increase the price." Wearing running shoes, a white shirt and a tie bearing the logo, "Save our planet," Lauzon spoke loudly at times, animated by his admiration for the president of Venezuela, Hugo Chavez, a coup leader who uses his country's oil reserves as a political bargaining chip. "Sometimes, you have to shake things up," said Lauzon, who already has been touted by the NDP as a potential candidate in the riding of Outremont. Oil company officials vehemently denied the professor's allegations. "Oil companies can't control the price of oil," said Petro-Canada spokesperson Andrew Pelletier. "It's the international market that decides that." Besides, Petro-Canada has invested heavily in exploration activities, Pelletier added, citing the Alberta oil sands and Atlantic off-shore platforms as examples. Shell spokesperson Louis-Philippe Gariepy agreed. "Only last year, we've invested $1.8 billion in capital and exploration programs," he said. "I think that speaks for itself." Neither Pelletier nor Gariepy would comment on the possibility of converting the oil industry from private to governmental control. The closest Canada has come to such a measure was in 1980, when Prime Minister Pierre Trudeau implemented the New Energy Program amid the 1980s oil crisis. By heavily taxing oil exports, that initiative was aimed to increase the use of domestic oil, curbing the price of gas at the pump. It was cancelled four years later, after Alberta's premier challenged it in court. Asked yesterday whether he thought a nationalization program would create a similar backlash in Alberta, Lauzon simply responded: "I don't give a damn about what Albertans think." The Department of National Resources and the Department of International Trade turned down interview requests. |
| Analysis |
| No Problems With The Price Of Gasoline? Web Editor, August 20, 2005 |
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| Analysis |
1) A thorough investigation takes approximately one year. 2) Sheridan Scott's travel expenses from March 2 to December 1, 2004, total approximately $43,000. 3) It is very difficult to find out how much it cost us to find out that the gasoline industry is, once again, not guilty. 4) It is very time consuming to find out that the federal government is, once again, not responsible. |
| August 20, 2005 - Red Deer Advocate |
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| August 4, 2005 - Radio Interview |
| Analysis |
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