The higher the royalties, the more likely underinvestment will occur, and the lower the royalties, the greater the chance for inflation and less of a return, according to the Sask. Party. .
The issue of oil price royalties have been thrust back into the limelight after a comment that Cam Broten, leader of the NDP, made on a Saskatoon radio talk show earlier this week.
Premier Brad Wall said, in an interview with the Lloydminster Source, that the Opposition is dangerously playing with an issue that could lead to layoffs and a downturn in the economy.
“What the NDP are proposing is bad for the province,” Wall said. “In a time when oil prices are falling, one of the success stories in our economy is the oil sector.
With “the increased exploration that has happened in the last couple of years, and increased presence of oil companies in the Lloydminster area, it’s a big driver of jobs,” he added.
Wall said that the NDP in the past have campaigned on the increase in royalties, which he said would hurt jobs in Lloydminster.
“They have not changed their campaign policy, that I know of, and to hear most recently the Leader of the NDP, Mr. Broten, calling for regular royalty reviews, this would send a chill through the oil industry,” Wall said.
The instability that the NDP are proposing would be followed by a change in the tax rate, according to Wall.
“What the NDP are proposing would be the kind of volatility that would drive out jobs and investments,” he said.
The premier went on to say that the province, and particularly the people in Lloydminster, do not need this type of thinking.
“The people need to know prior to a byelection that, as a province, we need to stay away from the volatility that they are proposing and continue with the stable opportunities that (the city) is seeing on the Saskatchewan side of Lloydminster growing more than the Alberta side.”
With falling oil prices in the province and across Canada, Wall
said that royalty changes are not what the province needs to do right now.
“Mr. Broten suggesting that we increase taxes, and what are companies going to do? They are going to lay off, and stop drilling,” Wall said.
“Oil companies are going to stop having clients to work in the oil patch, and those companies will begin to lay off people.”
Wall said that he doesn’t believe that the people of the Lloydminster constituency would want to support a policy, in a byelection or a general election, that would see people being laid off.
“Family members don’t want to be losing their jobs in Lloydminster because taxes have been increased at a time when we are seeing falling prices,” the premier said.
“It doesn’t make sense to me.”