Alberta's royalty review still on despite $40 US oil: Notley
NDP government has no plans to roll back corporate tax hikes to help struggling industry
The Alberta government has no plans to roll back recently increases to corporate taxes and will push ahead with a royalty review, Premier Rachel Notley said Friday, on a day when the benchmark price of oil briefly dipped below $40 US a barrel for the first time in six years.
"Alberta still has, by far, the most competitive tax regime in the country," Notley said. "When times get tough, those who are profitable should be paying just a little bit more.
"Because again, the corporate tax is on profits, it's not losses. So, if companies struggle, their corporate taxes will go down."
The province announced in June that by 2017, large emitters will have to reduce the intensity of greenhouse gases by 20 per cent, and said carbon levies will double to $30 a tonne from $15. The Notley government also hiked corporate taxes to 12 per cent from 10 at the beginning of July.
The Canadian Association of Petroleum Producers said this week those two changes will add about $800 million in extra costs to the industry over the next two years.
"Our industry is already suffering from the dramatic drop in world prices for oil and gas," Tim McMillan, CAPP's president and CEO, said this week in an article on the organization's website. "Now, the mounting pressures on Alberta's top job-creating industry are beginning to layer on top of one another."
Layoffs in the industry have cost thousands of jobs already.
Notley said her government wants to create a more stable economy and will work hard toward that end.
"Of course we're concerned about, ultimately, the effect on Alberta jobs," she said. "That's why our watchword is stability. We don't believe that slashing and burning jobs is the way to deal with what might a weakening of our economy."
Employment plan set for fall
The province intends to roll out an employment plan this fall..
"Trying to diversify and stimulate other parts of the economy is a critical part of this," the premier said.
Both CAPP and the Wildrose have called on the government to back away from increased corporate taxes and from its planned royalty review.
But Notley said the royalty panel will go ahead with its work, taking into account both the current economic climate and the future. She said the government will continue to meet with industry leaders and will listen and respond to their concerns about the low price of oil.
"We have no intention of doing anything that would make things more difficult at this time," she said.
Albertans are concerned about the industry's ability to compete in the future, McMillan said.
The industry and the NDP government share common values about protecting jobs and the province's prosperity. CAPP has created an industry task force to work with the new government.
"We know that the best way to protect jobs and investment here in Alberta and across Canada is through improved market access and through fiscal policies that encourage investment and competition," said David Gowland, manager of Alberta operations for CAPP.
"It'll be important to emphasize that while industry is willing to do its share, any further changes — such as potential royalty changes — need to take into account the mounting costs imposed by recently announced policies on carbon and corporate taxes and various other policies under consideration by the government."
Notley's insistence on sticking with a "risky economic agenda" will put more Alberta jobs at risk and hurt the economy, Wildrose Leader Brian Jean said in a statement.
"There's no doubt these policies are creating uncertainty in our economy, and will lead to investment fleeing the province," Jean said. "We need Ms. Notley to step away from her ideology and start focusing on what's best for this province. The NDP can't continue to gamble with our economy when thousands of jobs are on the line."