Pipeline tolls are deductible from royalties; agreement could cost Alberta taxpayers

Edmonton – The Alberta Federation of Labour is warning that Albertans could be shortchanged for their natural resources if the province goes ahead with the pipeline deal Premier Alison Redford struck with her counterpart in B.C.

Under Alberta’s royalty framework, pipeline tolls are deductable from the funds that oil companies pay for the right to extract the province’s resources. Unless this is clarified, every penny that is paid to B.C. under the deal would be one less penny that goes to pay for public services in Alberta.

“The Northern Gateway pipeline is a bad deal for Canadians, this loophole could make it an even worse one,” Alberta Federation of Labour president Gil McGowan said. “If Christy Clark is worried about B.C.’s revenues, she should work with Premier Redford toward creating more good-paying value-added jobs, rather than crafting a deal that could raid our coffers.”

An additional toll paid by companies shipping raw bitumen through British Columbia for refining in China will translate into fewer royalties paid to Albertans.

“It is entirely inappropriate for a neighbouring province to attempt to grab value from the resources that belong to Albertans,” McGowan said. “This deal could make Alberta’s budget deficit worse, it will undermine public services…on top of which, the Northern Gateway pipeline will funnel good-paying upgrading jobs out of the country.”

The benefits of the pipeline have been greatly overstated. Enbridge forecasts that the pipeline will bring only 228 permanent jobs across the entire pipeline, with the vast majority of them – 183 jobs – in Kitimat, B.C. Alberta will get a mere 24 permanent jobs from pipeline operations.

“Rather than ill-considered resource revenue grabs, Clark and Redford could provide incentives for in-province upgrading and refining of Alberta’s oil sands,” McGowan said.

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MEDIA CONTACT:

Olav Rokne, Communications Director, Alberta Federation of Labour at 780.289.6528 (cell) or via e-mail orokne@afl.org