Alberta has basked in prosperity until Honest Ed came along and changed the rules

How many Albertans, you wonder, are conscious of the sharp change in direction Ed Stelmach has made in our government.

He has done something not one of his five predecessor premiers ever attempted. He has turned Albertans against the industry that has made them prosper and has made their province great.

How else can you interpret his new royalty regime, imposed without negotiation on the province’s central economic engine?

If you believe the polls, he has persuaded Albertans the oil and gas producers are robbing them blind and that he, Ed Stelmach, will defend them.

Shades of Tommy Douglas!

Ironically, it was exactly 60 years ago that Imperial Oil, after drilling more than 100 dry wells, finally found a major oil pool near Leduc.  It is said the discovery rig had been moved into Alberta from Saskatchewan. There, the renowned Premier T.C. “Tommy” Douglas, Canada’s first socialist head of state, had declared he would defend his people against exploitation by “Big Oil.” He would never allow the vicious multi-nationals to reap their customary “huge profits” out of Saskatchewan.  Well, he was certainly as good as his word.  He so thoroughly safeguarded his province against exploitation by private industry and initiative that its population has scarcely changed.

The year before the Leduc strike, it stood at 832,000.  The 2001 census put it at 978,000.

What a wonderful job Tommy Douglas did. His province has been economically paralysed for the whole 60 years, a standing testimony to the untold benefits of socialism.  Alberta followed a different course.  The first oil strike in the province was not Leduc, but at Turner Valley in 1914, though it was much more modest in scale.  From that time forward, Alberta promoters journeyed to Toronto seeking investors. They raised very little money.

Toronto wasn’t interested.  But Texas was, and when U.S. capital began to flow into Alberta, it was welcomed warmly.

Social Credit Premier Ernest C. Manning (lacking, of course, Tommy Douglas’s socialist vision, breadth of mind, and anti-capitalist sensitivities) worked along with the industry to establish policies that made investment in Alberta attractive. In the main, Premiers Harry Strom, Peter Lougheed, Don Getty and Ralph Klein did the same.

“Ravaged,” as Douglas would no doubt see it, by oil Big and Little, Alberta has seen its population rise from 803,000 in 1946 to more than 3,300,000 last year—a fourfold increase.

We now have four universities, nationally recognized art galleries and symphony orchestras, a widely respected medical research establishment, and a thousand other benefits, all flowing directly from our frightful exploitation by Big Oil.  Moreover, up until last month, we were recognized the world over as a safe and dependable haven for international investment.  We made deals and we stood by them. 

Then came “Honest Ed.” His government was in trouble. Its polled support was shrivelling.  He needed something that would attract attention.  So he turned on the oil industry, particularly on the oilsands developments, now fuelling the biggest boom in Alberta history, all of it based on a royalty structure very carefully worked out by predecessor governments. These, Ed decided, must change.

So he set up a committee that consisted of one long-term bureaucrat, two university professors, a high-tech accountant, and one representative from the oil industry.  He appointed a life-long forestry man with zero oil experience as chairman.  After providing a pulpit for every pinko group in the province, they became persuaded that Alberta is being horribly exploited by Big Oil, and they brought in a report seemingly calculated to shut the whole industry down.  But Honest Ed wouldn’t go that far. 

All he was prepared to do was raise the royalties on new oilsands plants by as much as 900%, raise the royalties on plants that have paid off their capital investment by 60%, and tell the two oilsands pioneers—Suncor and Syncrude—that the royalty they had been guaranteed to last until 2016 will be raised with all the rest.

There goes our carefully nurtured reputation for stability and dependability.

Tommy Douglas, you’ve finally won over Alberta.