The Government of Alberta has given its royalty review the green light and announced the review advisory panel will start reaching out to Albertans as it looks at the province’s non-renewable resource royalty framework.
The panel is made up of Beaverlodge Mayor Leona Hanson, energy economist Peter Tertzakian, former Alberta deputy minister of finance Annette Trimbee and is being chaired by president and CEO of ATB Financial, Dave Mowat.
According to a news release, the panel will connect with Albertans, energy-related industries and key stakeholders through meetings, public sessions and web-based discussions throughout the fall.
“Albertans deserve a royalty system they can trust,” Minister of Energy Margaret McCuaig-Boyd said. “We have to get this review right and doing it right means having an open, frank discussion about how our royalty system can better serve Albertans, industry and the good jobs industry creates for generations to come.”
The panel will be looking for the best ways to get returns to residents as owners of the resource, optimize industry investment and diversification opportunities like value-added processing and other innovation, and search for best practices regarding responsible development of the province’s resources.
“I’m excited about the panel we’ve brought together to do this work. We are all capable and collaborative people and we intend to tackle this process with the best interests of Alberta and Albertans always top of mind,” said Mowat. “We’re eager to ask some important questions and hear what people have to say.”
With the oil prices in a slump, the government promised the current royalty framework would stay as is until the end of December 2016 to give industry and investors a degree of financial certainty for the near future.
Vermilion-Lloydminster MLA Richard Starke says he is encouraged by the team that makes up that panel and doesn’t think any disapproval could be had about their specific credentials. He said he was also happy to hear about the fact that no changes would be made to royalties until the end of next year, but would have liked that news to come out sooner.
“It certainly would have been nice to have that assurance made to Albertans, and especially the oil and gas sector, two months ago when the review was first announce. Because in that two-month period there has been a tremendous amount of anxiety and uncertainty within the industry,” he said. “But to at least know that nothing is going to change until the end of 2016 is a help.”
Starke was disappointed that the government has chosen to have only two public consultations, both of which are taking place in the province’s city centres. Residents outside of Calgary and Edmonton only have the choice of voicing their opinions online, which Starke said he feels rural residents are being shut out of the process, and the Internet is not necessarily available to all rural Albertans.
Wes Taylor, Wildrose MLA for Battle River-Wainwright, has a more staunch position on the review and even with the 16-month cushion, doesn’t think a royalty review should be in the works at all.
“I know it’s going to be looming in their minds, what the royalty review is going to end up as,” said Taylor, referring to people connected with the industry. “Is it going to be high? I’m concerned that there will be substantial royalty hikes when the review does come out.”
See “Royalty review,” Page 9
Taylor said that Alberta’s economy isn’t at its best and that the Canadian Association of Petroleum Producers estimated there have been around 35,000 jobs shed in the resource sector during the current downturn. His party is in the position that the oil economy should have time to bounce back before there are even any talks of a review.
“Right now Wildrose says that we shouldn’t be having a royalty review until we at least until know what’s happening with this market. This is not a good time to even consider it.”