One more time: the road tax

[cowman]

The mayor of Calgary has been making a lot of noise lately about getting a share of the Federal roadtax. Martin had promised, before his coronation, that he would give the municipalities some of the revenue from the federal tax to help fix the roads. Now he has pretty well reversed himself, pleading poverty!
Now as I understand it, the road tax, is just that...a tax to keep up the infrastructure and build new roads, bridges,airports etc. In stead this money has been bled off to finance other things. So today we have the cities in crisis due to a lack of funding.
I would suggest to Martin that what he needs to do is look for other funding for his various other schemes and return the full road tax to the purpose it was intended for? I mean when you think about it what is more important than the transportation infrastructure? It fuels business and commerce which in turns creates wealth? I do believe that infrastructure is one of the things government needs to be involved in? Especially when they are collecting a $10 billion dollars a year tax for that purpose?

[ivbinconned]

"I mean when you think about it what is more important than the transportation infrastructure?"

Anything...I mean anything that will keep the Golden triangle happy, liberal, and federal!

Cowman...don't tempt me like this.

[cowman]

Well ivebinconned, I didn't think I was tempting you! I mean isn't this a pretty fundamental question? I am sure you can see the necessity of proper infrastructure as I believe every Canadian should?
And I'm not necessarily talking about just the west here! Hardly any of the provinces have benifitted from the road tax like they should??? Or am I wrong here???(How is that for tempting? lol) It frankly has been squandered on programs that it was not designed for? Although I will concede out here in the west we have gotten the really "dirty" end of the stick?

[ivbinconned]

A federal fuel tax is not levied fairly and thus the feds should never tax it.

The cost of goods moved great distances (as in the west and east)are driven higher as a result. This is why in the U.S. this is a tax the feds avoided for years because it is so hurtful to consumers and industry in the outlying regions.

When the fridge, stove, washer etc. is freighted from Toronto to Calgary the added cost because of the tax makes it more expensive in the west. As compared to shipping it from Toronto past millions of consumers to Sarnia.

I suspect the feds have collected alot more fuel tax loot (and that is what it is to them)out side of the golden triangle than from with in it.

[Horse]

I have to sayI think the tax should be spent where it is generated. Example there are a lot of producers making silage now a days in all kinds of weather on all kinds of roads and it is up to us all to maintain the roads through our property taxes but lots of tax payers never run more than a pickup and a cattle liner or 2 a yr and 3or4 times a yr fuel delivery but those that use the roads lots pay a fuel tax that is not seen in thier area.

[cowman]

When they move a rig the company has to post a bond with the county. They wreck the road they either fix it or lose their bond. Makes sense right? Meanwhile the silage trucks destroy 6 miles of road and when it gets too rough they move over a mile and destroy that road. Pretty soon out comes the county grader and gravel trucks and fix up the destroyed road so they can have another go at it the next day! Seems to me the ones wrecking the road should be paying for it just like the oil company?

[Horse]

Cowman I realy like your sugestion of posting a bond for silage trucks just for the hell of it I am going to run this past county council I rather imagine that it will be shot down real quick but as this is an election yr it might be fun.

[cakadu]

Cowman, your explanation might just help me to understand why they paved the Benalto road in our county, yet the majority of the traffic goes on the unpaved roads on either side of it.

Meanwhile, highway #54 goes without much in the way of getting repaved and one of these years small cars are going to disappear never to be seen again. They keep saying that the road isn't all that bad, but they should travel down it sometime. I hope to see it repaved in my lifetime - with some of the dollars that I pay every year in taxes and fuel tax.

Some things just make you go hmmm.

[cowman]

The municipality tries to keep the heavy rig traffic off the paved roads. The rigs have to contact the county everytime they intend to move and the county tells them which roads they can use. The county can be pretty ignorant sometimes about these moves and make the company go out of their way quite a bit. Often they will send them down a cruddy road they want fixed up!
Most people don't understand how much money these companies put into the local economy and tax base. For example: Farmers and residents complain about their land taxes while in fact their share of the total tax bill is around 31% and falling! The rest of the tax bill is picked up by the business tax...read that as a tax on the oil companies and their many suppliers! A typical drilling lease has a tax of $2000/year! Consider how many we have in the county of Red Deer? A $500 county fee to move a rig with all repairs paid for by the oil company!
Oil and gas put a whole lot of money into our local and provincial economy. It is why Alberta rocks! So remember to always thank your local oil company for paying your taxes and keeping your roads, schools, and hospitals functioning!

[cakadu]

I don't doubt that oil has paid for a lot in this province, but at what cost? There are many cons to having all this oil production, not the least of which is the toll it is taking on the environment i.e. water that will never be recovered.

1 in 3 jobs in this province is related to the agriculture sector in some way. If agriculture saw as many R & D tax credits as some of the other sectors then things might start to happen. The energy sector in this province gets it's fair share of tax incentives and tax breaks.

If agriculture were doing better, I'm sure there are those producers that would be happy to have to pay more tax because that would mean that they are actually making something and not working off of negative margins. Some of the agriculture in this province is due to the fact that people are trying to keep from having to pay a lot of tax on the money they've made and how do you separate those out from the people who are trying to derive their living solely from production?

If we didn't have all the money from oil, where would we be? The energy sector gets special consideration and it is quite frustrating. I don't know what other sector could get to collect money on their product or service for 2 years because they were kept to a ceiling. For 2 years we had to pay an additional fee because the power companies couldn't gouge us all at once.

Wouldn't it be nice to get paid what it actually cost to produce something?

While oil and gas may have done a lot for this province, I'm not so sure that it will be the best thing in the long run.

[cowman]

I agree completely with you on the wasted water deal. Our provincial government has a long history of not protecting the environment. Injecting water into a formation is something that should never have been allowed. Short term gain- long term pain.
On the electricity thing...that has in reality nothing to do with the oil companys. There is a commodity price for gas and thats just how it is. If its worth $6 then that is what we need to pay. No different than wheat, soybeans, or beef. The whole electricity deal falls back squarely on the provincial governments ideology and incompetence. We should not be using natural gas to produce electricity! We should not have had a deregulated power industry! That is why you and me pay around 9 cents a kilowatt while kato pays 5 cents! So ATCO and Epcor can make a killing!
You ask what Alberta would be like if we never had the oil and gas production? Not too hard to figure out...just look to the east?

[Horse]

Cowman you say just look to the east I agree that we are better off than sask but when you figure the resources we had in this province I say we are doing damm poor o I am sure there are lots of people out there that have a great deal but sask is now starting to develop thier oil and hopefuly they will at least look after thier people instead of seeing how fast and how cheap they can give it away like alta did.
Do you know what the royalties are on a barrel of oil of a gj of gas I heard Ralph say one time we dont need royalties we will tax those that make the good coin and that way we grt our share.
I have a niece in ottawa that did a study on oil resources in alta for her thesis and she said it was unbelivable that we just gave it all away.
Of cource some do very well when I worked in the patch 35 yr ago the whole thing ran on govmt incentives no one worked until the govmt came out with something like a royalty holliday or tax concessions and I bet that today isnt much different does corporate welfare mean anything.

[cakadu]

How safe/fair is it to say that without the oil and gas, Alberta would have been nothing or next to nothing? Wouldn't we have found another way? Before Leduc #1 came in sometime in 1949, weren't we still doing okay as a province? I recall my father-in-law telling me that he worked on the rigs when there was absolutely NO money to be made (that would have been pre-Leduc #1).

I believe that Sask is developing it's oil potential and that is just great.

How much of the lack or seeming lack of resources that other provinces have can be attributed to lack of vision in the government and the leadership? Seems to me that there are times when there appears to be a lack of leadership in this province too, the only difference is that we keep having all of this money come in, so many people in the province tend to turn a blind eye. I recall in the last election that "king Ralph" won all those seats because of deals he made at the last minute AND because oil was back up to a very high level. Would his coronation have been as complete if oil were at $11/barrel? I don't know for sure and that is something we will never know.

Seems to me our leaders spend an awful lot of time going on missions somewhere with pieces of paper having signed promises on them, but not a whole lot ever seems to come of it. Maybe it's just me and someone else out there knows a lot more of the stats than I that these missions do some good. What good came from our leaders flipping burgers at a rock concert in Toronto?

In other threads and in talking personally with people from provinces like Saskatchewan, there seems to be an awful lot of despair over the government and the leadership.

I'm concerned about our growing too dependent on any one thing for our economic survival - low oil prices and the current problems in agriculture point to that not being the best way to go.

[cowman]

Horse:The royalties paid on gas and oil vary. There are still a lot of incentives from the government on royalties. A very small portion of the oil/gas rights are freehold(owned by private individuals) and the royalties on those are almost always higher than the government owned oil/gas rights. That is why you will always see a field exploited on the gov. land before the companies come onto private freehold land.
When the railways were built CPR got every other section in a township along with all mineral rights.I believe this was for 25 miles on either side of the railway. Of the remaining sections the crown gave one section to the Hudsons Bay co. and one section to the schools.The crown land became homestead land, but the crown kept the mineral rights. For a very short period of time CPR sold the land with the mineral rights although they kept the coal rights. By about 1907 they were no longer selling the mineral rights but kept them.
Freehold royalties vary. 15% of production less the owners share of costs is what the oil companies like. This can usually be run up to 17% without a lot of trouble but anything more could be tricky. I have heard of royalties as high as 21%! Now the Alberta government usually takes the 15%!
When Peter Lougheed came into power he tried his best to steal the freehold rights. He got some stiff opposition and lost in court. So now freehold rights are enshrined as real property that the government can't steal. Recently CPR tried to claim that methane gas from the coal beds was actually theirs. After a court battle they lost.
Linda: I can't tell you how we would have done without gas and oil. I don't think we have any better land or climate than Sask.? Sometimes it seems like about half of Albertas population once lived in Saskatchewan, so I guess we've benifitted from stealing their young people and entrepreneurs?
Before Leduc there was Turner Valley. The old time ranch families made a literal killing in oil. A lot of very prominent Calgary families owe their fortunes to the Turner Valley oil fields. The Cross family(A7, Bar Pipe farms, Calgary Breweries) would be one.
I happened to know a couple of old ranchers from Turner Valley(Hartell Bros) who told me about those wild old days. I wish I'd wrote it all down because it was fascinating stuff.