Royalty review suggestion sparks criticism

A business commentator is blasting the NDP over the party'sintention toreviewroyalty rates in Alberta, saying rejigging the rates should not be considered given current economic conditions.

"You have to pick your time, and you can't just go do it,"CBCbusiness columnistDeborah Yedlin said on Edmonton AM Wednesday.

The passionate debate over royalty reviews wasre-ignited afterNDP leader Rachel Notleyrefused to shyaway from her promise toreviewroyalty rates if elected premier, saying Albertans deserve to get a fair return for their non-renewable resources.

"I think it's always a good time to review them," Notley said. "It may or may not be a good time to look at changing them.

"For years, Albertans have been left out of this process. They haven't been able to get access to why our royalties look the way (they) do we have the lowest royalties almost in the world."

The issue, evercontentious inAlberta,aroseduring the leaders debate on April 23, followed by a campaign stop in Calgary Tuesday wherePC leader Jim Prentice again slammedthe suggestion.

"Albertans know that the last thing that this province needs right now is a royalty review because it will undermine business confidence at the very worst possible time," he said.

'Cost us billions'

"The last time we did this, it cost us billions and billions of dollars of investment and thousands and thousands of jobs. It's the last thing we should do," Prentice said.

Ed Stelmach reviewed, then increased,royalty rates in 2007after becoming premier. He then rolled them back in face ofcriticism from the oil and gas industry.

"That was probably one of the most divisive times in the energy sector in Alberta in a very, very, long time," warned Yedlin,saying American companies chose to not do business in Alberta because of uncertainty over royalty rates.

"What people don't understand is that companies make investments for the long term and so they base those assumptions and those investment decisions on a certain fiscal structure, and to change that fiscal structure in the middle of an investment cycle ... means to decrease certainty for future investment."

Notley said her suggestion that a review be done isn't a promise that rates will change.

"I allow for, very possibly, economists saying, 'Nope, now is not the time,'" she said.

"But that doesn't mean it's not always the time to be accountable to Albertans for how we manage and steward this resource, which belongs to all of us."