Globe and Mail: Feb 2, 2011
Suncor Energy Inc. (SU-T41.940.330.79%) credits improved margins, increased sales of refined products and improve results from its oil sands operations for almost tripling fourth-quarter net earnings and handily beating analyst expectations.
Canada's largest energy company reported Wednesday that it earned $1.35-billion, or 87 cents per common share, in the quarter ended Dec. 31. That compared with net earnings of $457-million, or 29 cents per common share, in the fourth quarter of 2009.
Alberta’s Nationalist Manifesto by Satya Das
When the influential magazine Policy Options asked The Wildrose Alliance party “to tell us what Alberta wants in the Canadian federation,” the answer was the ugly face of Alberta nationalism.
In party leader Danielle Smith’s telling, http://www.irpp.org/po/archive/may10/smith.pdf Alberta should put a firewall around its resources, make other provinces pay for their own lavish social programs, restrict equalisation payments, keep oil companies happy with low royalties, deny climate change, and encourage citizens to be independent and self-reliant.
And this resolute step away from the obligations of federalism, from an active engagement in the shared national space, is cast as a template for Alberta leadership within Canada. Far from being a fresh voice, the political manifesto of the Wildrose Alliance reflects a selfish and insular vision as corrosive to the Canadian social contract as Quebec’s independence movement.
“What Alberta wants” may indeed be the question of the day in the federation, as the province’s ownership of the oil sands gives it control of the single largest wealth-driver in the country, the largest single source of the federal government’s tax revenue, and the backbone of the equalization system which drives Canada’s social equity.
Which is all the more reason to push back on Smith’s contention that a low-tax, low-royalty regime can somehow coexist comfortably with an apparently insatiable citizen demand for high-quality health care, education and public services. To Smith’s credit, there is no ambiguity in her views, honed in her formation at the laissez-faire think tank The Fraser Institute, and she is skilled at expressing her fundamental idea of “each province for itself” with clarity and vigour.
Yet other Canadians would be wrong to think that the Wildrose actually aligns with the fundamental values of Albertans, or that it will be able to claim a majority. Indeed, Policy Options might have done better to ask “what do disaffected Albertans of the far right want from confederation?”
The success of the Wildrose arises from a deeply flawed narrative: that the government of Premier Ed Stelmach led the province from prosperity to ruin, and that its modest changes to its royalty regime (since diluted, after furious behind-closed-doors lobbying by the energy industry) amounted to “ripping up contracts” and driving investment out of the province. This narrative holds powerful sway among the Calgary oligarchy, and is sold on op-ed pages and talk-radio shows as an incontrovertible truth.
Well, it’s time other Albertans pushed back: at the very least to assure our fellow Canadians that the Calgary/Wildrose myth-making bears little semblance to reality.
First, the fiscal position. Nearly every jurisdiction in the developed world struggles with deficits and debt: for most finance ministers, the key challenge is to reduce the proportion of debt relative to economic output (frequently called the debt-to-GDP ratio). Well, Alberta actually has an asset-to-GDP ratio of 15 per cent. Not only is it entirely debt-free, it has a huge accumulated surplus – so much so that the arm’s length Alberta Investment Management Corporation (Aimco) runs at $70 billion portfolio of public fiscal assets. And as for the one to three year deficit budgeting that the Wildrose cites as evidence of ruin? It is more than covered off by the sustainability fund – a pot of money saved up during the boom cycle, precisely to provide a cushion during downturns.
Alberta’s fiscal mistake is paying for core programmes from volatile resource revenue. Yet as a province with no consumption tax and a 10-per-cent flat tax on personal income, it can hardly claim to have used its tax room. Alberta politicians have been far too timid in even floating the idea of taxation commensurate with citizen demand for services, fearful of precisely the sort of reaction they’re getting from the Wildrose.
As to the royalties, the province’s total return from the resources it owns remains the lowest in the world. By the Wildrose’s logic, a landlord should never be permitted to raise rent because it amounts to tearing up contracts. Besides, the $175 billion invested in the oil sands, is hardly a lack of confidence. The panic comes from the smaller, uncompetitive factions of the conventional industry that can only flourish in a race to the bottom.
The nationalist movement in Alberta has its roots in U.S. republicanism and attracts at most a third of the population. It does not speak for Alberta. In fact, my firm is in the field now mapping the values of Albertans with regard to energy development and ecological stewardship. I’ll wager that not even a quarter of our random sample survey will pick the Wildrose Alliance as the preferred stewards of the province’s resource wealth.
Alberta nationalism, like Quebec separatism, is something we have to live with. But we really shouldn’t waste our time accommodating agendas so at odds with Albertan and Canadian values.
- Comments
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|2011-02-02 17:07:03 Don Spence - ABSatya
Good on ya mate! Great piece.
Highly recommend you catch the film "FUEL" available at the public library. There are some interesting ideas (in place, not just ideas) concerning energy sources, carbon capture and conversion (not sequestration). Things we could do here in Edmonton and Calgary etc.
Cheers
Don
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