On Saturday, 10 November, Premier Jason Kenney spoke to the Manning Centre “What’s Next?” Conference in Red Deer. His one-hour, five-minute speech was a spirited lament for the manifest unfairness directed towards Alberta in confederation. His speech recounted the long litany of indifference from the federal government and grievances dating back to Alberta and Saskatchewan’s entry into the federation. In his speech, he stressed the immediate need for his administration to exercise leverage on the federal government. At the end of the speech, he identified a number of “demands” to the federal government including an “equalization” (sic) payment of $1.6 billion and tax credits to help Alberta companies to address orphan wells.
Numerous grievancs were cited: senate reform, equalization, Alberta’s oversized contribution to confederation, recent QUebec surpluses the result of alberta’s generosity, and the thwarting of the economic destiny of this province. His speech also launched another committee selected by the Premier to address issues that are central to the UCP platform.
The new panel’s mandate is ” is to listen to Albertans and their ideas for Alberta’s future. The Panel should focus on ideas that would strengthen our province’s economic position, give us a bigger voice within Confederation, or increase provincial power over institutions and funding in areas of provincial jurisdiction. ”
These ideas are well known in conservative circles and include: the collection of personal income taxes (this was greeting enthusiastically by the audience); the replacement of the RCMP with a provincial police force; withdrawal from the Canada Pension Plan (also enthusiastically received); emulating a practice of Quebec of a larger role in international relations; and a new Alberta constitution. Sone if these ideas come out of the famous “firewall letter to Premier Klein in 2001.
In Kenney’s letter to the newly appointed chair, Preston Manning, and eight members of the Fair Deal Panel, at least seven town halls were mandated. The panel could also “contract with a third party or parties to organize more structured citizens’ reference panels to be conducted in different regions.” Further, “online surveys, and other forms of direct feedback, both digital and traditional” are also to the used along with ” research vendors” to conduct empirical qualitative and quantitative public opinion research. The process also allows coordination with Members of the Legislative Assembly “who may consult their own constituents on Alberta’s future.” The Panel is allowed to “consult with individuals or organizations who it believes can offer useful knowledge or experience.”
The panel led by Preston Manning includes Stephen Lougheed, the son of Peter Lougheed, three backbenchers, Oryssia Lennie, Chair of the Canada West Foundation and former Alberta intergovernmental affairs deputy minister and Donna Kennedy-Glans a former oilpatch executive and Progressive Conservative cabinet minister. In Premier Kenney’s speech he alluded to the fact that two of the members’ were sons of premiers that served for fifty (sic) of 114 years.
Taken together, the mandate and the panel represent another example of a process of legitimizing policy options that have already been decided by the government. The specific issues in the mandate letter and the process of engagement suggests alternative voices will be drowned out, foreordaining the outcome. The outcome is little more than a playbook taken from Quebec nationalists of the early 1960s. However, the Premier promised that many of these initiatives, if supported through a “transparent process,” would not be implemented under a referendum was held .
Looking back
Given the economic insecurity that has brought fear and uncertainty to many Albertans, it is useful to look at a previous period during which conflict over energy resources rose to a fever point. Over the next several weeks, we will be extracting documents found in the ministerial papers donated by the late Lou Hyndman who played so many key roles under the premiership of Premier Lougheed.
We start with the 1974 review by a committee of Progressive Conservative M.L.A.s tasked to look at resource revenues in the wake of the OPEC embargo of 1973. Prior to the hearings, the Government of alberta had released a position paper entitled “Tentative Natural Resource Revenue Plan.”
In all disputes over royalties there are two main battle fronts: the industry versus the provincial owner and secondly, the province as resource owner versus Ottawa.
In the following archival documents, future Education Minister Dave King provides his impression of the hearings to the Mines and Minerals Minister, Bill Dickie. The second set of observations are those of future Tory Labour Minister, Les Young. Both M.L.A.s represented Edmonton ridings.
Memorandum
From: David King MLA To Mr. Bill Dickey, Minister of Mines and Minerals- dated May 30, 1974
Source: teachers.ab.ca
Re tentative Resorts Revenue plan hearings
A number of general observations come to mind concerning the hearings
- The oil industry did not take the government seriously, for example the need for additional revenue (for the government) was not dealt with in a concrete way; most did not suggest the alternatives to the expiration incentive plan, in spite of the fact that they condemned it as inadequate; conceding the need for additional revenue, and the inadequacies of the mineral tax, alternatives were not dealt with authoritatively.
- the two big industrial associations irritated and frustrated M.L.A.s by being alternately ambiguous and patronizing, by skirting some questions, but I only partially answering others, and by using selected for manipulated statistics.
- there appears to be, on the part of the industry an unwillingness, and, on the part of the government, an inability to provide accurate information on world energy demands, transportation systems and cost (including the cause and extent of fluctuations), and world energy price.
Source: Legislative Assembly of alberta
Observations and questions concerning crude oil revenues
May 29th, 1972 L.. G. Young, M. L. A.
- Based on the statements of anticipated price increases for crude oil, and the suggestion that increasingly Alberta wells will be entitled to produce closer capacity consistent with good conservation policy, it appears that profitability of major oil companies should increase at a very rapid rate. Even if allowance is made for cost increases rather than assuming additional economies related to greater volume production, it appears that profitability will increase per barrel of crude. If these assumptions are correct, it will be important that the provincial tax structure on the petroleum companies be such as to provide an increase to Government, not only in direct proportion to price and volume of production increases, but possibly in the form of an increasing proportion of price increase.
- Investor confidence, about which much was said during the hearings, is a very fuzzy concept. Given the type of investor who participates in the oil industry it is my view that fixed-term statutory commitments should not be equated with and are not as necessary as confidence on the part of the oil industry that provincial claims to a share of the profits will never be at such a level as to be confiscatory. It should be possible to convey this impression and establish this confidence more satisfactorily during Government-industry discussion than through legislation or through hearings of the nature just completed. On the assumption it might be possible to establish the system which would take into account shorter-term changes in the petroleum markets. In many respects there are benefits to such a gradual process of adjustment both to the industry and to Government. From the industry point of view it should avoid sharp dislocations which may occur when Government revenues are increased in amounts order of 50% at one jump. From the Government’s point of view it should be possible to convey to the public a position of continuing vigilance.
- Regardless of what the tax called it is obvious that it should reflect almost uniquely on current values and production. This could be achieved in part by using a very high discount factor with respect to production at future dates (current reserves).
- The petroleum industry much must be treated for taxation purposes as being composed of several groups, each possessing certain dominant characteristics. The criteria for the tax should be such as to impinge upon those groups deemed most able to pay. Generally, it would appear that these are the multi-national enterprises in the oil industry.
- Given the uncertainty about the price structure for crude petroleum, the government will need to be alert that the major enterprises do not unduly pressure the smaller ones which lack market capability. It would appear that those enterprises with backward integration are in a position to administer markets subject to Government decree from Ottawa and executive decree in the United States.
- It appears that exploration may be stimulated by certain reforms in the acreage control; by generous allowances to finders of new wildcats; and possibly by schemes to relate exploration cost write-offs against revenue from new drilling.
Source: Provincial Archives of Alberta, PR 1986.0245, Box #11, File 14. (Hyndman papers)