Redford is no Lougheed

Premier Allison Redford spends an inordinate amount of time referring to herself as a Peter Lougheed Progressive Conservative but her actions certainly don’t bear out her words.
In her televised address to Albertans on January 24 the Premier said her priority is to continue pushing the Keystone XL and Gateway pipelines in order to open up new markets for our product. In Redford’s vocabulary “product” equals raw, unprocessed bitumen.
Lougheed’s priority was to export value-added product.  To him any pipeline shipping raw bitumen was nothing more than a “job exporter”.
All those well-paying, permanent jobs at Joffre’s petrochemical plant are directly thanks to Lougheed’s vision and taxpayers’ past investments.
How often we’ve been told, “we can’t afford to build upgraders (and create permanent jobs) in Alberta because the price gap is too small between what Alberta gets and what the world price for refined oil is”.
Redford “bitumen bubble” has put that argument completely to rest.
Yet during a tele-town hall meeting with PC faithfuls on January 28, Redford argued that with such volatility in oil prices it would be far too risky for governments to push for or invest in Alberta upgraders. Talk about “double-speak”!
Corporations are risk adverse because they are forced by shareholders to be short-term thinkers.  Governments can’t be. They have to be long-term thinkers and risk takers.
What would Alberta be without Syncrude today?  Yet industry was walking away from that uncompleted project in 1978 when oil prices plummeted.  It was gutsy Alberta (Lougheed) and Federal politicians that picked up 25 per cent ownership in Syncrude and made the project happen.
Both Syncrude and Nova’s Joffre plants are excellent examples of wise risk taking investments made by government to secure long-term benefits for its citizens.
Redford likes to flip out the mantra, “it’s very important to let the market do what the market does”. Yet her government policies build in market inefficiencies.
In a free market economy when the world price for bitumen plummets, a rational corporation would reduce or stop production.  But in Alberta with a sliding royalty scale, when world prices drop, input costs (royalties) also drop. So it becomes unnecessary for corporations to become more efficient or reduce production.  And even worse, we give corporations the choice to pay royalties in the form of bitumen rather than cold hard cash.  Now that’s irrational market economics.
The world price of oil is not the only reason why our government lost $6-billion in revenue virtually overnight.
We accept rollercoaster-government funding of essential services because we depend on 30 per cent of our budget being covered off by resource revenues rather than taxes.
Yet, Redford’s own government studies show that Alberta could collect $11-billion dollars more in taxes and still remain the lowest tax regime in Canada.
Interestingly, we’re prepared to leave $11-billion on the table in lost tax revenue, sell raw non-renewable resources at bargain basement prices, and financially cripple future generations because we don’t have the guts to acknowledge the real problem . . . unsustainable tax rates.
Premier Redford, says increasing taxes is “the easy way out”. No, in fact raising taxes is the pragmatic, prudent, tough-choice decision that Albertans need from their government today.
Will citizens like it?  No.  Albertans, corporations operating in Alberta and the Alberta Government have all been living beyond their means for far too long. But somewhere, sometime, we will have to face the music.
Slashing government programs (again), increasing the deficit, borrowing for infrastructure projects, re-introducing health premiums or even introducing a sales tax, that’s the easy way out.
Premier Redford needs to stop ‘talking’ Peter Lougheed and start ‘acting’ Peter Lougheed, which means making tough, risky and often unpopular decisions.
As you yourself have said Premier Redford, “governments need to look beyond the short-term”!

About the author

Avatar

Submitted

Subscribe

* indicates required