ATB boss heads royalty review.
No others yet named to join Dave Mowat
ATB Financial president Dave Mowat, the business-friendly face of the province’s royalty review advisory panel, is already under pressure from the energy industry.
The Canadian Association of Petroleum Producers on Friday afternoon issued a four-point plan for the review, announced earlier in the day at the legislature.
CAPP said it wants the review to reflect the following principles: a government commitment to a vibrant and competitive oil and gas industry; any changes should be forward looking, stable and predictable, and considered in the context of “all the mounting costs from new government policies, such as climate change and corporate taxes.”
CAPP estimates those costs at $800 million to date. The former Progressive Conservative government budget called for $2.4 billion in royalty revenue this year, well off the $8.1 billion collected in the 2011-12 fiscal year.
Mowat, who turned 60 Thursday and was introduced as chairman Friday, said he understands the spotlight is on the panel.
“I have a strong sense of how important this is, not only for Albertans, but for our country to get it right. It’s a daunting challenge, but I also think it’s a great opportunity to help people from around Alberta understand such an important issue.”
The makeup of the panel, its terms of reference, and a timeline for its final report have yet to be confirmed, a fact that rankled the Wildrose official Opposition.
“Ongoing delays in providing any framework or timelines for a royalty review will hurt confidence and investment in Alberta’s economy, which is already rattled by tax increases and other policy changes,” Wildrose Leader Brian Jean said.
“We don’t support this review, especially given the low price environment, but we were at least hoping today’s announcement would provide clarity for our energy and job creation partners.”
The NDP campaigned, in part, on a pledge to establish a permanent commission that would report within six months of taking office “on measures to promote greater processing of Alberta’s energy resources, and to ensure a full and fair return to the people of Alberta for their energy resources.”
Energy Minister Margaret McCuaig-Boyd said this royalty review will satisfy the pledge, but would not commit to establishing a permanent commission.
“I think there was a concern from Albertans: ‘Are we getting our fair share? Could it be different? Could it be better?’ So we’re delivering on that promise and reviewing it. I think in anything, there probably should be a review every few years. It’s been a few years. I think it’s quite a good time.”
The energy royalty framework was last reviewed by the government in 2010, and rates were rolled back, effective January 2011. In 2007, an independent commission recommended a 20-per-cent royalty hike, which was adopted by the Stelmach government, effective January 2009.
Mowat will be on loan from ATB Financial, which will continue to pay his salary. First steps include working with the energy minister to finalize terms of reference and the makeup of the panel, which will not necessarily contain a member of the energy industry.
“I don’t think the panel is representative,” Mowat said. “I think what the panel is is smart people who understand the issues, have inquiring minds, are creative, and who have the ability to engage and allow people to have substantive input.”
McCuaig-Boyd said the panel will issue preliminary findings by the end of the year. They will not be binding. “It will be advice,” she said. “As the premier and I have committed to do, any changes that may come from this review will only be made after thorough and thoughtful discussions with all Albertans.”