Freshman cabinet tripping over promises
It is not a royalty review.
It is a plan to have a royalty review.
Actually, it’s a plan to have a plan.
On Friday, Energy Minister Marg McCuaig-Boyd announced that Dave Mowat, president of ATB Financial, will chair a new royalty review panel.
This is the NDP government fulfilling an election promise to see if Albertans, as owners of the province’s oil and gas resources, are receiving high enough royalties.
Mowat’s first job, according to the news release: “recruit additional panel members.”
Mowat is currently a royalty review panel of one.
Not only that, but he doesn’t have any terms of reference and just the vaguest of timelines. McCuaig-Boyd is hoping to have a report by the end of the year. And we don’t know yet how Albertans can participate in the review process.
McCuaig-Boyd couldn’t even say how many members will be on the panel: “Dave and I will be discussing that in the next few weeks.”
Mowat, who has a reputation as one of the most affable and capable CEOs in Alberta, is taking time off from his ATB job to work on the panel. But he is not starting right away: “I plan to get organized over the next month and begin in earnest starting later this summer.”
Oddly enough, the panel feels like it’s being rushed into place, but will also take too long to come up with recommendations.
Predictably, opposition parties were quick to jump all over the announcement, with the Wildrose saying any review is a bad idea, but a sixmonth-long review will create uncertainty and job losses in the oilpatch.
Alberta Party Leader Greg Clark, in his daily quest to be quoted by the media, went one step further and demanded Notley fire McCuaig-Boyd: “I’ve listened closely to McCuaigBoyd’s statements since she became Energy Minister and I’ve given her a chance. But based on the haphazard and incomplete plan for a royalty review, I have lost confidence in her ability to do the job.”
Clark might want to holster the nuclear option. What’s he going to do when a minister really screws up? Demand a public flogging?
McCuaig-Boyd, though, does seem to have a chronic inability to explain herself, whether it’s over the hiring of a controversial chief of staff or clarifying details of a royalty review process.
There is such a slapdash feel to the construction of the panel that you wonder if the government is half-heartedly going through the motions of fulfilling an election campaign promise that it would rather forget during an economic downturn.
There is at least one thing the government has got right with the royalty review panel — it is running in conjunction with another panel set up Thursday by Environment Minister Shannon Phillips.
That panel, announced with more animation and clarity than Friday’s fuzzy news conference, is tasked with the monumental job of helping the government write a new climate change strategy.
The job of the environment panel is arguably more important than that of the royalty panel.
The royalty panel could decide royalty rates are just fine the way they are. The environment panel, on the other hand, cannot opt for the status quo.
It has to help the government come up with a climate change strategy that is not, as in the case of the old Progressive Conservative government’s strategy, a work of fiction.
Crafting a strategy is not just the right thing to do morally in the fight against climate change, it is the right thing to do economically for Alberta’s industries.
“If we get it right our environmental policy will make us leaders on this issue instead of giving us a black eye around the world,” said Phillips. “The future of energy jobs in Alberta depends on access to global markets and that requires us to get this right.”
The environment panel will be chaired by University of Alberta professor Andrew Leach, an expert on energy and the environment who has a reputation for being neither an apologist for the oilsands nor a tree-hugging environmentalist.
Leach’s team will work in conjunction with the royalty review panel to help the government draw up policies that balance its environmental obligations with its responsibilities to the economy.
When it comes to potentially raising royalties, for example, the government will have to take into account the fact it is doubling the province’s carbon emission levy (from $15 a tonne to $30 a tonne over two years) as announced by Phillips on Thursday. Another factor is the government raising the corporate tax rate on July 1.
The government doesn’t want to reduce emissions by forcing companies out of business. But the province needs to reduce its emissions if it wants to convince the rest of Canada and the world that our oilsands are not dirty and that we deserve more pipelines to ship our products to market.
It is a tricky balancing act, one the PCs never mastered.
Let’s hope the NDP have more steady footing.