EDMONTON – Premier Rachel Notley says Alberta’s review of energy royalties will not be a wallet-buster given that worldwide oil prices are in the tank.
“I can say very definitively that no one’s going to see a royalty review that increases anybody’s costs in the near future,” Notley told a legislature news conference Tuesday.
“We’re very, very conscious of the situation that we’re in here in Alberta.
“What we’re going to do is bring forward a process that is predictable (and) more transparent that will give developers a good understanding of what they can expect and in no way should undermine the situation that they’re in now.”
Alberta’s four-person royalty review panel, headed by ATB Financial president Dave Mowat, has been taking submissions and listening to opinions since September.
The panel’s report was to come out by the end of 2015, but has been delayed.
“We’ve been working with the panel and white-boarding stuff … but there will be something that will be released at the end of the month,” Notley said.
She has faced criticism over the uncertainty that detractors say the review has created for the industry.
Oil prices dipped below US$30 a barrel Tuesday from a high of more than US$100 a barrel for West Texas Intermediate in 2014.
Falling prices have drained $6 billion from the Alberta government’s budget in the current fiscal year alone.
Notley said the steep drop has forced the government to rethink its next budget, which comes out this spring, but she added it won’t alter the fundamental blueprint set out in the last budget.
That plan calls for increased infrastructure spending to take advantage of low interest rates and create construction jobs, taking on more debt in the process, while avoiding cuts to front-line health and education spending
“We don’t want to get into a panicked slash-and-burn kind of dynamic where we simply take a problem and make it worse.”
Notley said the New Democrats will do what they can to create jobs and diversify the economy.
“I’m not a magician,” she said. “We’re going to pull a bunch of different levers and … work as a partner with our job creators and with the citizens of this province.”
Also Tuesday, Alberta Party Leader Greg Clark released his suggestions for a new royalty framework. He said it’s critical the province grow the industry through such measures as drilling incentives.
“I have a lot of faith in the panel, and I hope the NDs listen to their advice even if what the panel reports doesn’t fit their political ideology,” he said in a news release.
Notley was asked if the new royalty framework would contain drilling or other production incentives.
“The disincentives to growth will hopefully be minimized to some extent in the new process,” she said.
The last changes to royalties came in 2010. Notley’s government has already said any new changes won’t begin until 2017 at the earliest.
The industry is already dealing with higher fees for larger carbon emitters and is awaiting the implementation of a broad-based $3-billion a year carbon tax.