CALGARY – Former Saskatchewan NDP premier Lorne Calvert says oil and gas companies shouldn’t panic or lash out over the new Alberta government’s plans to review royalty rates.
Calvert, who led Saskatchewan from 2001 to 2007, reviewed that province’s royalty regime in 2002.
“We lowered the rates somewhat and we simplified them — which is what the industry hoped we would do — and we followed through on that,” Calvert said in an interview with The Canadian Press. “In terms of mining, we shifted the emphasis to the development of new exploration and mine development.”
Incoming NDP premier Rachel Notley has indicated she wants an independent review of Alberta’s royalty framework to ensure the province is getting a fair return for its non-renewable resources.
Royalties are paid to the government by energy companies to develop the province’s oil and gas resources.
The government of former Alberta premier Ed Stelmach increased royalty rates in 2007, but rolled them back after criticism from the industry and a loss of investment in the province. Producers argued royalty increases compounded the effects of low prices during the 2008 economic downturn.
Working with industry is a key step, said Calvert.
“We didn’t do a formal public consultation, but, clearly, whenever we worked on royalty structures we worked on them closely with industry,” he said.
“We did not endeavour to use the doctrine of surprise. We used the doctrine of no surprise where it was possible.”
Calvert said he expects Notley won’t be looking for a quick fix to address plunging revenues from low oil prices.
“Ms. Notley and her government understand well the importance of the oil and gas sector in Alberta’s economy,” he said. “I know they will be very cautious and very sensitive to current realities, but also to be looking at the future of the industry.
“It’s not a circumstance where I believe the industry or the people of Alberta should have a deep concern.”
Calvert left political life in 2009 and is now the principal at St. Andrew’s College at the University of Saskatchewan.
He said Albertans concerned about an NDP government after 44 years of Progressive Conservatives should understand that political parties on the Prairies are based on common sense.
“When I look at the policies of Peter Lougheed and I look at the platform of Rachel Notley, put before the people of Alberta, there are some similarities here,” he said.
“I would hardly describe the New Democratic Party in Alberta as radical left by any means, unless you want to say Peter Lougheed was as well.”
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