Friday, March 25, 2011

The Reason For Alberta's Deficit-Big Oil

Just like back in the nineties when Alberta gave big tax breaks to big oil, we went into a deficit. And Deja Vu if it didn't happen again.

Canadian Energy Research Institute (CERI) paints a picture of declining production and royalties from Alberta's natural gas industry for the rest of the decade, but sharply rising oilsands royalties.

Royalties from natural gas and the oilsands totalled more than $8.8 billion in 2009, but just over $4.6 billion in 2010 -a big cause of the provincial deficit.

"The government is running a province which assumes they will take in $6 billion to $8 billion a year, and this is not happening," CERI CEO Peter Howard said.

Premier Ed Stelmach has said the province aims to balance its budget by 2013. CERI's estimates suggest that will be a challenge if they are depending on royalties.

The institute estimates Alberta will be back to 2009 royalty levels by about 2016, when oilsands royalties will be more than $7.2 billion, with just $1.1 billion coming from natural gas.

Yep Big Oil gets Royalty breaks that resulted in the deficit and schools get cuts!

Alberta Premier Ed Stelmach says school boards may have to "hold some of their labour costs low" in coming years as the province looks to rebuild its coffers, but critics blame the Tory government for looming teacher layoffs.

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