Premier Stelmach Expected to Raise Royalties on Oil and Gas Development in Alberta

For a long time Alberta with its attractive tax rate has been an oasis for billions of dollars in investment in its oil and gas sector. This however could change with an expected announcement tomorrow, in which Premier Stelmach may raise royalities on oil and gas development by as much as 20%.

Hopefully this will not be the case, as the initial short term gain for Alberta from this draconian measure will most certainly end up as long term losses. Nothing good can come from such a radical change in policy, as it will only serve to discourage future investment.

The one piece of advise I have for Premier Stelmach is "Don't Kill the Goose the Lays the Golden Egg" Excessive greed by the Province will turn into long term need, especially if the oil and gas companies cut back on their investment and number of people they employ in Alberta.

Update:

From the Toronto Star - John Cotter

Stelmach vague on new energy royalty system

In a televised speech Stelmach said his government will create a new system for charging royalties but will give companies time to adapt to it.

The premier did not say if the changes will yield the 20 per cent increase in royalties called for last month by a review panel commissioned by his government, how the new system will work or when the changes will kick in.

"Now we are ready to take decisive action," Stelmach said. ``One that delivers the fair share Albertans rightly expect from the development of their resources.