CanPol - Alberta edition

[notyoueither]

Wait a second-- If you are going to compare "government take" across jurisdictions-- IT is relevant what the general taxation level is in the province. A trucking comnpany may pay less tax in Alberta than Sask. Why shouldn't an oil company have a similar treatment on the general taxation portion of what they pay?

Because SK is one jurisdiction around the world with oil, and not a hugely significant one, yet.

BTW, they recently lowered their royalties to compete with Alberta. Now we have increased them. Give it an election cycle or two and they'll go back up.

[Flubber]

To be honest with you, I would be perfectly fine with the industry doing a reverse Chavez and cutting off their noses to spite their faces.

Statoil is not a bad model to follow.

WE have touched on this before-- You are a socialist or communist (for the oil industry at least).

Interestingly those oil companies in Alberta that own fee lands (ie its NOT owned by Alberta) are leasing out those rights for royalty rates less than those of the Alberta government. Why? Because they did an economic analysis and found this was necessary to make the plays economic

[notyoueither]

As for your argument that we must have the lowest taxation...

several US states have no income tax. Should Alberta eliminate it's income tax?

[Asher]

Only Suncor and Syncrude had contracts.

They were doing their own bit of weaseling, having avoided going over the 1% royalty rate for close to forty years.

The government told them the jig was up. They were going to have to start paying, either through renegotiating the deals or the government would use the power of taxation in other ways.

Nobody, anywhere in the province has any sort of contract that assures them they will not be taxed, or that the government cannot change tax levels. Except the natives.

nye, this is disgusting.

Suncore and Syncrude had contracts guaranteeing royalty rates up through 2014(?). The government reneged on those.

That single act sabotaged more future investment than you can possibly understand. Not just the fact that the companies need to pay FAR more money to Alberta to extract the oil, but because the Government of Alberta's reputation and trustworthiness took a major hit. Another risk factor that needs to be calculated is the risk of the GoA once again deciding they want more money to offset their fiscally irresponsible budgets.

I can see it now, 20 years from now you'll be sitting here justifying how the GoA reneged on all of the oil sands contracts because "back when they were negotiated $240 oil was unrealistic".

[Flubber]

Because SK is one jurisdiction around the world with oil, and not a hugely significant one, yet.

BTW, they recently lowered their royalties to compete with Alberta. Now we have increased them. Give it an election cycle or two and they'll go back up.

You are missing my point-- The roylaties will be what they will be but why shouldn't the taxes of general application levied on an oil corp be the same as the taxes of general application levied on all other Alberta businesses.

If those taxes are lower in Alberta than SK why shouldn't the Alberta oil corp get the benefit of that like any other Albert corp? Is it simply that you hate the oil industry?

[notyoueither]

WE have touched on this before-- You are a socialist or communist (for the oil industry at least).

Interestingly those oil companies in Alberta that own fee lands (ie its NOT owned by Alberta) are leasing out those rights for royalty rates less than those of the Alberta government. Why? Because they did an economic analysis and found this was necessary to make the plays economic

I like how not being in favour of Alberta being the lowest possible tax regime for the oil industry is communist.

The short answer is as I have given before. I want Alberta to have a tax regime that is fair. If the oil companies decide they do not want to develop the resource because they are in a snit, I have no qualms about replacing them with a publically owned company for an industry that is vital to the province. I would prefer the industry get over their snit, but it isn't a show stopper for me, comrade.

[Flubber]

As for your argument that we must have the lowest taxation...

several US states have no income tax. Should Alberta eliminate it's income tax?

Is this aimed at me-- I never said we should have the lowest taxation-- I am merely asking why the existing tax regime of general application should not apply to all industries equally

[Asher]

I like how not being in favour of Alberta being the lowest possible tax regime for the oil industry is communist.

We're seriously entering the Benaverse here.

Flubber is clearly making a comment based on your comparison with Statoil. You very clearly have extremely left-wing views with massive government involvement when it comes to the oil industry.

I don't understand why you are being deliberately obtuse here.

The short answer is as I have given before. I want Alberta to have a tax regime that is fair.

Then the only possible position you would have is for the GoA to honour its contracts which defined the tax regime for Suncor and Syncrude. You've already said you don't have that position. So it's clear to me this is not about being "fair", it's about maximizing revenue for the province so you don't have to pay more tax yourself.

[notyoueither]

You are missing my point-- The roylaties will be what they will be but why shouldn't the taxes of general application levied on an oil corp be the same as the taxes of general application levied on all other Alberta businesses.

If those taxes are lower in Alberta than SK why shouldn't the Alberta oil corp get the benefit of that like any other Albert corp? Is it simply that you hate the oil industry?

Can you elaborate?

[Flubber]

I like how not being in favour of Alberta being the lowest possible tax regime for the oil industry is communist.

The short answer is as I have given before. I want Alberta to have a tax regime that is fair. If the oil companies decide they do not want to develop the resource because they are in a snit, I have no qualms about replacing them with a publically owned company for an industry that is vital to the province. I would prefer the industry get over their snit, but it isn't a show stopper for me, comrade.

I wasn't talking taxes-- I was talking your liking for state control

Oh and thats twice you have said that I was in favor of Albnerta being the lowest tax regime when I said no such thing-- I have asked if you favored increased taxes generally and you answered that-- I have also asked several times if taxes of generalk application should apply equally to different types of industries in the province

[notyoueither]

nye, this is disgusting.

Suncore and Syncrude had contracts guaranteeing royalty rates up through 2014(?). The government reneged on those.

That single act sabotaged more future investment than you can possibly understand. Not just the fact that the companies need to pay FAR more money to Alberta to extract the oil, but because the Government of Alberta's reputation and trustworthiness took a major hit. Another risk factor that needs to be calculated is the risk of the GoA once again deciding they want more money to offset their fiscally irresponsible budgets.

I can see it now, 20 years from now you'll be sitting here justifying how the GoA reneged on all of the oil sands contracts because "back when they were negotiated $240 oil was unrealistic".

There are no more contracts beyond the leasing regime.

Hysterical much?

[notyoueither]

We're seriously entering the Benaverse here.

Flubber is clearly making a comment based on your comparison with Statoil. You very clearly have extremely left-wing views with massive government involvement when it comes to the oil industry.

I don't understand why you are being deliberately obtuse here.


Then the only possible position you would have is for the GoA to honour its contracts which defined the tax regime for Suncor and Syncrude. You've already said you don't have that position. So it's clear to me this is not about being "fair", it's about maximizing revenue for the province so you don't have to pay more tax yourself.

Suncor and Syncrude were cramming through capital investment to be covered by the 1% and expected it to be honoured no matter what else changed.

These projects began ~1970. They were beneficiaries of massive provincial investment alongside their own. I think it's safe to say they paid for themselves long before 2007. With gas revenues decreasing rapidly it was time for them to begin paying.

[Asher]

There are no more contracts beyond the leasing regime.

Hysterical much?

You are incredible.

First, you keep avoiding the Suncor & Syncrude issue. I'm going to assume you admit this was a major cluster**** and mistake on behalf of the GoA, since you refuse to address the issue.

Second, you are ****ing crazy if you think oil companies don't get the royalty numbers printed in exact numbers on every contract they sign for projects worth many billions of dollars. That is one variable that needs to be set in stone for a fixed period of time. If it's a variable that is completely up to the government, they could theoretically legally jack the royalties to 100% at any time. Think about it.

Suncor and Syncrude were cramming through capital investment to be covered by the 1% and expected it to be honoured no matter what else changed.

Suncor and Syncrude were constantly expanding and upgrading their operations. They had not turned a profit in terms of how much was spent to develop them, vs how much their revenues were over the lifetime of the project. I'm getting very, very sick of your claims that they were somehow gaming the system and exploiting it. You need to substantiate it if you're to repeat it further.

And if this was true, the GoA could've easily taken them to court. Which they never did. They instead chose to be ethically questionable and nullify the agreement -- which itself was illegal. The only reason Syncrude and Suncor didn't take them to court is because then the GoA would stall any future development of their projects for years. The GoA screwed them, and you know it.

I think it's safe to say they paid for themselves long before 2007.

Only someone with immense ignorance about the costs of developing the oilsands (particularly the pioneers like Syncrude and Suncor) would make such a claim. You also never mention the upgrades and expansions over the years. You act like they snapped their fingers, built the facilities in 1970 and instantly refined the technology...never expanding them since. This is you either being deliberately dishonest, or you being immensely ignorant.

Again, cite facts and figures if you're going to claim Suncor and Syncrude were behaving illegally. I'll give you a pro tip that you won't find them, since the GoA never could take them to court over it because they were behaving perfectly legally and according to contract.

[notyoueither]

Here's a clue. The government could raise taxes to 100% on everyone, any time.

Do you have a contract specifying they can't?

[Asher]

Here's a clue. The government could raise taxes to 100% on everyone, any time.

Do you have a contract specifying they can't?

The difference being I did not just spend $50B setting up my business in the province that CANNOT BE MOVED.

These numbers are in all the contracts. I know this for a fact. Anyone with an ounce of rationality would see why it makes sense to do so.

The root of your massive ignorance is you do not understand the phenomenal RISK in an oil sands play. It is NOT a license to print money. To mitigate the risk, as many variables as possible need to be set in stone for as long as possible.

Think of it like a fixed-rate mortgage. Mortgage rates may go up and down, but if you sign a fixed rate, it's in the ****ing print. The bank should not be able to reconsider the interest rates whenever they want and force it on you, which is what the GoA did to Suncor & Syncrude.