The impoverished, war-torn African nation of Angola rakes in more oil profits than Alberta, argues the Alberta Federation of Labour.

According to an April 2011 government review obtained by the labour group, the province gains 55% of windfall industry profits, compared to 78% for Angola and 69% in Russia. AFL president Gil McGowan says this proves Alberta’s low oil prices are “ripping off” taxpayers, while being asked to endure spending cuts at the provincial and federal level.

“The big argument from industry groups is that we shouldn’t worry about our low royalty rates, because the industry generates lots of jobs and that’s what we should be concerned about,” he says.

Organizations like the Canadian Association of Petroleum Producers, for instance, boast that the oilsands has provided thousands of jobs across the country, is the largest employer of aboriginals in Canada and offers some of the highest-paying salaries in Canada.

“But other oil producing countries have managed to balance both,” says McGowan.

While McGowan acknowledges Alberta’s standard of living is significantly better than a country like Angola — that country is still recovering from a decades-long civil war that killed more than 500,000 civilians — he says other developed countries command higher royalties without discouraging investment from the oil industry.

Norway, for instance, demands 81% of windfall energy profits and has a reserve savings account worth $700 billion, despite having smaller oil reserves and neighbouring oil-rich Russia. Alberta’s Heritage Trust Fund is worth $16 billion after 37 years.

“Even the United States, where most of the big oil companies doing business are based, charge higher oil rates than Alberta,” said McGowan. “Lately, there’s been a lot of news about the jobs being generated in North Dakota’s oil fields. They charge higher than Alberta.”

Both the Tories and Wildrose Party have no interest in raising Alberta’s royalty rates, arguing the prices keep the oilsands competitive on the global market and are fair. A 2008 attempt to do so caused massive criticism, but McGowan says the outrage is misguided.

“Royalties are not the same as high taxes that could drive away investment,” he says. “They are a price for companies to develop our resources and any business owner knows it doesn’t make sense to give away assets for next to nothing. Could you imagine if Ontario’s auto industry asked the government to provide discount steel to make cars in exchange for more jobs? Canadians would be up in arms. But if we give away raw bitumen at low prices, that’s fine?”

Fort McMurray Today, Wednesday, Apr. 03, 2013
Byline: Vincent McDermott