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Did the NEP cause lower royalties in Alberta?

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    Did the NEP cause lower royalties in Alberta?

    When Peter Lougheed became premier he raised oil royalties from 17% to 40%. Obviously this increased revenue and allowed the creation of the heritage trust fund. In 1980 the federal liberals decided they wanted a piece of the pie and enacted the NEP. The combined federal and provincial take from each barrel was enough that many companies went broke or left. When the price of oil bottomed out in the mid eighties the Feds abandoned the NEP.

    This is when the Alberta government started lowering royalties to attract oil companies back to Alberta. So those people who vilify the Alberta conservatives for low royalties should look at the real culprit one Pierre Elliot Trudeau. His son is now here for round two. Have a good day :-)

    #2
    Don't worry, Notley is acting like a "conservative" when it comes the oil patch - subsidizing corporate profits at the expense of the heritage trust fund. I am kinda disappointed in Notley. It was assumed that at 100 dollar oil the companies could pay more. I see too many jacked up pickup trucks and "toys" running around - times were good. Now they aren't. My understanding is that nothing was changed as per royalty review? How about making them pay lots more at 100 bucks? I know it is on a sliding scale, but I was hoping that the people could get more of a share of the profits at the high end than they were getting. The conservatives allowed this waste to happen. It is pretty disappointing, and I do not think the oil sands were paying more than a few percent royalties even when times were good. Don't worry, Alberta is going to be run by the oil companies no matter who is in power, and the politicians will still be bullied.

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      #3
      I have to question how higher royalties to governments who spend like drunken sailors is any different than all the jacked up trucks and toys created by 100 dollar oil. Point is we are better off for having this resource. we really need to do is learn how to manage the wealth that it is able to create. More money to government not the answer as they destroy wealth, not create it.

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        #4
        Well, increasing the royalties and not spending like drunken sailors excludes both the conservative party and the NDP. Corporate welfare and big vote buying projects/government is practiced by both parties.

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          #5
          My understanding on royalties is they are only paid on profit, hence the high costs of everything oil, they can keep on expanding at no cost to themeslves and pay all kinds of 6 /7 figure salarys and them leave the cleanup costs to taxpayers as they have a fortune stashed away for own persolal use. Dont need to sell the co.

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            #6
            Hence the pennies on the dollar royalties paid by the oil sands companies. These projects will never be paid off - not in their interest: the royalties will just go up. Continually expand/ start new ones as the projects as they get paid off, plead poverty to the provincial government, and keep milking the system. Meanwhile the taxpayers get stuck providing massive infrastructure to support these projects with little to no royalties coming in. Alberta has added 1 million people in the last 10 years, maybe some profits should be used to pay for the required infrastructure?

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              #7
              I think the simple answer is, oil prices got too high, too fast and the money came too easy. Usually in that environment, the cash disappears as fast as it came. not a new phenomenon.

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