Royalty Revenue: Why is Alberta "Giving" Away Our Resources?


April 12, 2012 :: David Campanella
Moderated by Knud Petersen

A new report from the U of A’s Parkland Institute says that despite a provincial deficit, the Alberta government will forego some $55 billion in potential revenue over the next three years as a result of overly generous royalty cuts and the government’s failure to meet even the modest targets set by previous administrations. The report looks at the most recent data on profits in the oil and gas industry versus government share and determines that despite tremendous growth in the industry the share of profits to Albertans is shrinking.
Alberta has gone from capturing close to 40% in 1979 to only 10% in 2009 and 13% in 2010.That is arguably all money that has gone directly from serving the public interest to serving the bottom lines of huge oil and gas corporations. Peter Lougheed set a target of capturing 35% of the revenue from oil and gas production, which his government met or exceeded. Ralph Klein lowered those targets significantly, yet in most years even failed to meet those. If Lougheed’s 35% target had prevailed, and been met, Alberta would have collected an extra $195 billion between 1971 and 2010.

The current provincial budget seeks to capture only between 9% and 12% of oil and gas revenues, instead of working towards Lougheed’s target of 35% for conventional oil and gas and 25% in the tar sands, which could yield an extra $55 billion in revenues over the next three years. The speaker will argue that by properly managing oil and gas revenues in Alberta, we could quickly pay off our current deficit and begin to build a fund that would generate enough revenue to support future generations as is the case in Norway, where their Oil Fund is currently valued at around $600 billion.

Speaker: David Campanella

David Campanella is the Public Policy Research Manager for the Parkland Institute and is based in Calgary. In 2011, David received his Masters degree from York University where he studied environmental politics and focused on the political history of carbon capture and storage in Alberta's oil and gas industry.


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