Over the last two years, oil and gas companies have used $2.9 billion of public money to boost profits under a royalty credit system with little in return for the province, the Alberta Federation of Labour said.

During that time the industry lost almost 8,000 jobs, a study by the group found.

AFL president Gil McGowan said the program was a “colossal waste of money.”

“It did not create jobs. It did not stimulate increased capital spending or drilling,” he said.

The Drilling Royalty Credit program, which expired on March 31, 2011, was a short-term, two-year stimulus designed to offset the global economic slowdown.

New oil and gas wells were eligible for the credit for one year, which would reduce royalty payments according to a sliding payment scale based on production.

An official with Alberta Energy discounted the findings of the AFL, saying the programs helped Alberta survive the economic downturn.

“Those programs undoubtedly worked,” Derek Cummings said. “The Alberta economy is expected to lead Canada and that’s largely based on increased oil and gas activity.”

McGowan said he wants the provincial legislature’s public accounts committee to look into the program.

CBC News, Fri Jul 15 2011