Tweet
Globeandmail.com > National > Article
Klein steps up sabre-rattling on oil revenueBy KATHERINE HARDING AND PATRICK BRETHOUR
Friday, August 26, 2005 Updated at 5:14 AM EDT
From Friday's Globe and Mail
Edmonton and Calgary — Alberta Premier Ralph Klein warned yesterday that politicians who consider themselves "great Canadians" will "keep your hands off" the western province's swelling coffers, which could see its surplus soar to $7-billion this year.
"If they are the great Canadians that they profess to be, then they'll leave us alone and respect the Constitution," he said.
"We are doing more than our fair share, so keep your hands off," Mr. Klein said, later adding that other provinces could keep up to Alberta by becoming more economically competitive.
His warning was partly brought on by Ontario Premier Dalton McGuinty's recent musing that Alberta's wealth is becoming "the elephant in the room" and that the growing regional economic disparity needs to be addressed.
Prime Minister Paul Martin said this week that there are no plans to target Alberta's oil and gas royalties.
But the topic has nevertheless become a sensitive political issue in the province.
The front page of a local newspaper even carried a story yesterday with the provocative headline: "Is NEP junior in our future?" Many Albertans still blame the infamous 1980 National Energy Program for wreaking havoc on the province's economy in the 1980s.
Mr. Klein said politicians outside Alberta should remember that the recent record-breaking oil prices aren't going to last forever and the money the province has reaped is theirs alone.
"It's encouraging to hear the Prime Minister and [Finance Minister] Ralph Goodale say they aren't interested in raiding our resources and cashing in our royalty program in a second NEP," he added.
Yesterday, Mr. Martin touched on the thorny topic again, saying: "This country was not built on jealousy. . . . This country was built on working together."
Mr. Klein argued that his government is being prudent with its windfall and that he favours using cuts to both corporate and personal income taxes in the future to keep attracting workers and investment to Alberta.
He said the idea still needs his party's support, but new tax cuts could be implemented as early as the spring.
Recently, the Canada West Foundation, a western think-tank, warned against that strategy for fear it would disrupt the Canadian economy and set up Alberta as a "tax haven in the federation."
Mr. Klein said that concern is unfounded because other provinces could keep up to Alberta by using incentives such as subsidies and loan guarantees.
"The only incentive we have to sustain economic growth and prosperity is to have a very competitive tax regime," he said.
The continuing rise in energy prices will make it easy for Alberta to cut corporate taxes. High oil and natural-gas prices have eaten through the energy sector's tax credits, built up in lean years when exploration spending outpaced revenue.
The continuing rise in energy prices means Alberta can cut the tax rate and still collect much more revenue than in the past, said Greg Stringham, a vice-president at the Canadian Association of Petroleum Producers.
Mr. Stringham said he believes Alberta will reduce its corporate tax rate, currently 11.5 per cent, by a percentage point a year starting with the next budget, until it reaches 8 per cent. Alberta would then have the lowest corporate tax rate by far in the country, just over half that of Ontario's current 14-per-cent rate.
Klein steps up sabre-rattling on oil revenueBy KATHERINE HARDING AND PATRICK BRETHOUR
Friday, August 26, 2005 Updated at 5:14 AM EDT
From Friday's Globe and Mail
Edmonton and Calgary — Alberta Premier Ralph Klein warned yesterday that politicians who consider themselves "great Canadians" will "keep your hands off" the western province's swelling coffers, which could see its surplus soar to $7-billion this year.
"If they are the great Canadians that they profess to be, then they'll leave us alone and respect the Constitution," he said.
"We are doing more than our fair share, so keep your hands off," Mr. Klein said, later adding that other provinces could keep up to Alberta by becoming more economically competitive.
His warning was partly brought on by Ontario Premier Dalton McGuinty's recent musing that Alberta's wealth is becoming "the elephant in the room" and that the growing regional economic disparity needs to be addressed.
Prime Minister Paul Martin said this week that there are no plans to target Alberta's oil and gas royalties.
But the topic has nevertheless become a sensitive political issue in the province.
The front page of a local newspaper even carried a story yesterday with the provocative headline: "Is NEP junior in our future?" Many Albertans still blame the infamous 1980 National Energy Program for wreaking havoc on the province's economy in the 1980s.
Mr. Klein said politicians outside Alberta should remember that the recent record-breaking oil prices aren't going to last forever and the money the province has reaped is theirs alone.
"It's encouraging to hear the Prime Minister and [Finance Minister] Ralph Goodale say they aren't interested in raiding our resources and cashing in our royalty program in a second NEP," he added.
Yesterday, Mr. Martin touched on the thorny topic again, saying: "This country was not built on jealousy. . . . This country was built on working together."
Mr. Klein argued that his government is being prudent with its windfall and that he favours using cuts to both corporate and personal income taxes in the future to keep attracting workers and investment to Alberta.
He said the idea still needs his party's support, but new tax cuts could be implemented as early as the spring.
Recently, the Canada West Foundation, a western think-tank, warned against that strategy for fear it would disrupt the Canadian economy and set up Alberta as a "tax haven in the federation."
Mr. Klein said that concern is unfounded because other provinces could keep up to Alberta by using incentives such as subsidies and loan guarantees.
"The only incentive we have to sustain economic growth and prosperity is to have a very competitive tax regime," he said.
The continuing rise in energy prices will make it easy for Alberta to cut corporate taxes. High oil and natural-gas prices have eaten through the energy sector's tax credits, built up in lean years when exploration spending outpaced revenue.
The continuing rise in energy prices means Alberta can cut the tax rate and still collect much more revenue than in the past, said Greg Stringham, a vice-president at the Canadian Association of Petroleum Producers.
Mr. Stringham said he believes Alberta will reduce its corporate tax rate, currently 11.5 per cent, by a percentage point a year starting with the next budget, until it reaches 8 per cent. Alberta would then have the lowest corporate tax rate by far in the country, just over half that of Ontario's current 14-per-cent rate.
There is a growing embarrassment of wealth in Alberta. With oil at $50USD+ per barrel for the foreseeable future, the 'problem' is just going to get worse.
The premier of Ontario has begun the debate for the assault.
Meanwhile, Klein is stuck on 'leave us alone'. I wonder if he has any clue what storm is about to break upon us.
Comment