On Tuesday, July 10th, the Calgary Herald published a column by Matthew Fisher entitled “Norwegians pay a price for saving oil revenues,” found here. Below is my response.
I believe Herald readers can be forgiven if they were confused after reading Matthew Fisher's Tuesday column, for the title promised one thing and the column delivered something quite different.
The headline reads that Norway's determination to sock away vast sums of its oil wealth is less than ideal -- that such a policy comes with a “price.”
The column, however, is largely a description of how the country boasts both a $600 billion savings account and the world's highest living standards.
It would appear that, in Fisher’s view, the hitch with such a remarkable achievement is that Norwegians choose to collectively fund it through taxes. But it's hard to see such a decision as anything other than wise financial planning, since in addition to preventing their economy from overheating and protecting themselves from “dutch disease,” Norwegians have established an inheritance capable of ensuring that the benefits of their finite, fossil-fuelled fortune continues for generations to come. Robust savings, high living standards, and an assured future? Surely this is a “price” most Albertans would be happy to “pay.”
Perhaps Fisher should have mentioned that Norway has a state-owned oil company that returns all oil profits to its citizens, whereas the royalties for Alberta's privately-developed oil, gas, and bitumen resources last year delivered only 9% of the revenue back to Albertans. As this province rapidly burns through its natural wealth, Albertans can only look on with envy as Norwegians enjoy the benefits of wise financial planning.
No sales tax until the oil runs out is a very short-sighted approach. Does Minister Snelgrove really believe that Albertans will have money to pay higher taxes when the oil is gone?
According to Alberta's Environment Minister Rob Renner, "The fact remains, we have to face the reality that there will not be a dramatic reduction in dependence on hydrocarbons until alternative kinds of fuel and energy are developed." Actually, he has it backwards.
Already “under attack for allegedly being rude and dismissive when he was health minister,” current Energy Minister Ron Liepert conceded he hadn’t read the Parkland Institute’s new report on vast oilpatch profits but that didn’t stop him from dismissing it...
Parkland released its latest report yesterday morning, detailing the huge scale of oilpatch profits – Misplaced Generosity: Extraordinary profits in Alberta’s oil and gas industry. Many of the responses from government and industry were predictable – that’s why they were addressed in the report. Let’s run through the standard excuses offered for the string of royalty cuts Albertans have watched their government hand out over the last two years.