|Herald photo by David Rossiter
Andrew Nikiforuk was guest speaker during ThursdayÕs session of SACPA.
Albertans face severe cuts in this spring's budget. But things could get worse, a Lethbridge audience was warned Thursday, if the price of oil continues to fall.
The latest financial crunch is looming because Alberta has become a "petro-state," says award-winning author and journalist Andrew Nikiforuk. And its government continues to spend all it gets.
But some Albertans are becoming aware of how little their government is collecting from the global oil companies, he said - despite their rapid exploitation of the northern oilsands.
And continuing low prices for oil, fuelled in part by that massive series of developments, could result in much broader debate over Alberta's royalty rates and taxation in general.
"Albertans are becoming more and more concerned about the economic and political volatility in this province," he told a meeting of the Southern Alberta Council on Public Affairs.
The Alberta-based writer praised Premier Peter Lougheed for his approach to Alberta's resource development.
"He said, 'We should behave like owners.' "
Albertans should collect their fair share from oil and gas production, the first Progressive Conservative premier maintained. And they should save most of that income to safeguard their future when the oil runs out.
Nikiforuk said when major deposits were found in Norway, its government borrowed Lougheed's approach. It continued taxing its citizens for the services they wanted, and put its royalties income into a savings fund.
While Ralph Klein and others who followed Lougheed drained Alberta's savings away, Nikiforuk reported Norway's nest egg now exceeds $650 billion.
"It's criminal how our fund has been wasted."
Klein actually cut this province's royalty rates, he noted, and slashed the amount of income tax paid by high-income Albertans. By contrast, then-governor Sarah Palin hiked Alaska's royalty rates but the big oil companies kept on pumping and earning profits anyway.
Like Alaska, he said, Alberta has become a "petro-state" - relying on oil and gas for at least 20 per cent of its revenue - with many of the same characteristics of places like Mexico or Saudi Arabia. One of those is one-party rule, backed by big oil.
In Mexico, Nikiforuk said, the "revolutionary" party lasted 70 years, in oil-rich Texas the state government was unchanged for 90 years. Here, it's more than 40 years.
As long as oil money is flowing, he said, people remain complacent. In Alberta, as many as 60 per cent of the citizens don't bother to vote.
As well as demanding a decent return from their oil, he said Albertans should prevent "Dutch disease" symptoms by cooling the rate of oilsands development - saving more for decades when its value is far higher.
"We need a national debate on the pace and scale of their development."