King Ralph Shills For Big Oil

Well that didn't take long. King Ralph went from Premier to Oil Lobbyist in a blink of an eye. Faster than Lougheed and even Getty, his old big oil nemesis.

Klein slams Alberta royalty recommendation

And luckily he did it in Alberta, where weak tea lobbyist legislation was only just passed this spring. So it doesn't affect him. And he is doing it as they say; pro bono. Yep the Big Guy is out defending the Oil lobby and his own political decisions when it comes to selling out Albertans to the Calgary Oil Lobby.

Remember Ken Kowalski's 1994 appointment to chair the Alberta Energy and Utilities Board? It stirred up so much oilpatch opposition that then premier Ralph Klein had to rescind the post he gave the former deputy premier who'd been freshly bounced from cabinet.

Governments in Alberta and elsewhere have traditionally rewarded loyal supporters with plum appointments, often over the hue and cry of opposition parties and the general public.

The Kowalski appointment enraged a sector with considerably more clout: Big Oil. When it said the position required somebody more qualified and less political, Klein was forced to respond.

For a decade Albertans have been ripped off of profits from our resources, shoring up the oil industry with subsidies directly and indirectly, the latter being our penny on the dollar royalty rate for developing the tarsands. The result was the famous neo-con Klein Revolution, for which he annually collected gold medals from the Fraser Institute, which then went on to hire him once he retired as premier.

Should we be surprised he defends his regimes sell out of Alberta, native and Canadian resources? Of course not. He was after all the Premier the Party of Calgary picked. The Party of Calgary has become the bugaboo of Edmonton Sun columnist Neil Waugh, who describes them as the oil aristocracy.

Which, in a sentence, is Big Oil's strategy as the Stelmach Tories attempt to claw back $2 billion a year in energy revenues - largely from Calgary's oilsands aristocrats,who have been awarding themselves multimillion-dollar annual salaries while the owners of the resource get a penny on the dollar payout until the massive capital costs are recovered.

While Rick Bell his counterpart at the Calgary Sun gleefully pulls Big Oils beard in his column. Reminding us from his window view of Petro Plaza,

The outrage from the highest offices in the tallest towers is so loud it is being heard all over the provincial government.

Tory MLAs are being reminded of who runs the show, or who think they run the show, or who did the show until now.

On Tuesday, mere minutes after a report called for the province to hike oil and gas royalties and get a fair share for the resource Albertans own, the oil industry sent the provincial powers a simple one word e-mail.

It read: "Disaster."

Interesting the oilpatch isn't commenting on the fact, on natural gas alone, Albertans are out about $6 billion. That's $6 billion that could have gone to affordable housing, schools, health facilities, other public building projects, a tax break, savings to the Heritage Fund and on and on.

The reality is that the Hunt Report outright says that Albertans have been shortchanged for a decade when it comes to oil royalties.

Royalty review calls for massive jump in oilsands payouts

A panel reviewing the fairness of Alberta's royalty take from oil and gas development said today Albertans are not collecting a fair share and recommended a massive jump in royalties paid by oilsands projects.

The six-member panel headed by Bill Hunter recommended that the government's overall take from oilsands projects be raised to 64%, from 49% today. The panel recommends leaving the 1% pre-payout royalty unchanged, but that the post-pay out royalty be increased to 33%, from 25%.

"Albertans do not receive their fair share from energy development and they have not, in fact, been receiving their fair share for quite some time," Mr. Hunter said in a letter to Alberta Finance Minister Lyle Oberg. "Royalty rates and formulas have not kept pace with changes in the resource base, world energy markets and conditions in other energy rich jurisdictions. Albertans own the resource."

Billions of dollars have been pocketed by the private interests while Ralph declared debt and deficit hysteria, cut jobs, delayed infrastructure, destroyed the health care system by laying off nurses and reducing graduates for their jobs and those of doctors, contracting out services, etc. He told us we were broke, and had to tighten our belts, the debt and deficit crisis was described by King Ralph as the need to not renovate our house, but to demolish and rebuild.

One of his would be heir apparent's is our current provincial treasurer Lyle Oberg, a true believer, who says dark days are upon us. Of course he too opposes asking for what belongs to the people, a just royalty for our resources.

In that wonderfully twisted world of social conservatism the politics of giving unto Caesar has become the economics of giving unto Big Oil. The logic goes like this, if it weren't for big oil the PC party would be nothing, so it does it all it can for Big Oil. Now like all One Party States this logic is then transformed into what is good for Big Oil is good for Alberta.

The irony is that this royalty scam was not even created by Klein. Rather it was created after the collapse of the global oil market in 1984 by then Petro Premier Don Getty. Don being the oil boys insider for the moment, Klein was able to scape goat him for all of Alberta's economic problems which were a result of the market melt down, the recession of the eighties. So when the momentary debt and deficit crunch came world wide, Klein was ready to step in. Rather than end the tax and royalty holiday for Big Oil, he continued it and turned on the people of Alberta to pay for the deficit.

Deficits are not permanent, they are a year by year accounting phenomena. A debt on the other hand exists and transfers from year to year. A debt is what you owe someone else. You cannot have a debt to yourself. But in the wonderful Wizard of Oz Topsy turvy world of neo-con logic, government financed and owned infrastructure was seen as a business cost rather than as an asset.

The wailing and gnashing of teeth from the industry lobbyists, including Klein, and those in the investment business is predictable if somewhat disingenuous. After all this is Alberta, not Saskatchewan or Manitoba. This is a Tory run one party state at the beck and call of the Petroleum Club in Calgary. And the panel doing the review well it was stacked with capitalists.

The report was written by a six-member, blue-ribbon panel named by the government. The members included two economics professors, a chief economist for an Calgary-based energy research firm, a businessman, a forestry executive and a former senior executive with an oil company.

If anything, the panel was seen as too pro-business. In fact, the appointment of Sam Spanglet to the panel caused a stir back in February when news broke that the former oil executive still had "a couple of million" dollars worth of stock options with Shell Canada.

As if to bolster the opposition's accusation, the Canadian Association of Petroleum Producers was reportedly pleased with the panel's members and their credibility.

It seemed just about everyone was predicting the panel would deliver an industry-friendly conclusion.

One of the funniest comments comes from an one of those dime a dozen investment newsletters;

"Do they really wish to kill this golden goose with one fell swing of the tax axe?" said economist Dennis Gartman, editor of the Gartman Letter, an influential investment newsletter based in Virginia, who was "shedding tears" about Alberta going "socialist" and wondering whether the provincial government has "gone mad."

Socialist, well gee where has he been. Let's see Alberta is dominated by one party, a party that has been in power so long it naturally thinks it is the government. One that has subsidized the oil industry at the cost of the owners fair share. That spells socialism to me....well state capitalism actually, but for the rabid right they are the same. As ex- King Ralph pointed out;

"It was a regime created by industry and government. Those kinds of rules don't change on a whim. Companies are nervous."

And then there are those who, like our Treasurer Lyle Oberg, are doom and gloom proponents who claim that the sky is falling and once again are declaring impending debt and deficits. The reality is that it was the royalty holiday that Getty gave the industry that led to the deficit crisis of 93-95 that gave Klein an excuse to implement the Fraser Institutes neo-con revolution in Alberta.

On page 23, for example, the report points out "The panel was constantly told by companies and by energy industry trade groups that Alberta ranked very high in Government Take." However, those companies and groups were citing from an outdated 1997 report by an international expert. The review panel commissioned the same international expert who compiled new data and concluded "the very opposite is now unequivocally true."

In this case its also the oil and gas industries who are claiming a crisis in their industry and again have their hands out asking for more state subsidies.

Yet, because of public expectations, it's unlikely the panel will recommend what's needed at this time: a reduction in royalties to salvage what's left of this vital part of the sector. Indeed, there are indications the slump is not just another cycle, but a structural change that will require new thinking from everyone -- industry, government and labour -- to reduce costs so it can compete with the cheap imports of liquefied natural gas invading the U.S. market, once dominated by Alberta producers.

Oh you didn't know there was a slump in the oil and gas business? It didn't appear that there was according to the markets this week.

Oil prices hit record highs

Oil dips, but gas prices set to rise

Taking Cues From Fed, Speculators Bid Up Oil

More oil firms hike fuel prices

Crude oil sails over $80 buoyed by bullish mkt

Oil near new high amid tight supplies

Well there is. It's called peak oil and the industry is panicking over its potential impact. Alberta's conventional oil and gas reserves will peak in 2020 and begin to decline, as will provincial revenues. And so the oil business in Alberta is focused on developing the tarsands output, regardless of costs to the public or the environment, by then.

A litany of Canadian investment banks also pulled no punches in their assessment of the proposals in the Our Fair Share report.

FirstEnergy Capital Corp. warned the proposed measures, in a report entitled "Albertastan? Misguided Intentions and the Fair Share Option," would be "negative if adopted, and will slow down the development of oilsands."

Well frankly that's a good thing since the boom is artificial and has caused untold problems in Alberta. We need a planned economy from our 'socialist' government, since the oil sands development has gotten out of control.

Since Prince Eddies government refuses to adopt such a plan, then if the royalty regime forces a slow down all the better. Alberta is an overheated economy. One that is sure to bust big, because no boom is sustainable. And woe betide Albertans if that happens. The boom of the seventies and early eighties was followed by a quarter century recession in the province. One that was used as an excuse to rack up surpluses at the expense of public services and infrastructure expenditures.

Stelmach says he'd stand up to big oil

Be still my beating heart. Anyone who thinks Farmer Ed is going to accept this report in whole, has missed the fact he has not accepted the recommendations of any public reports that he called for upon his appointment as Alberta's CEO. He has adopted the minimum to make him look good sometimes that has meant rejecting the public reports and making a big deal out of the fact he asked for them.

We need only remember the Alberta Housing Report, which called for rent controls. He rejected this outright. He has rejected the public commission calling for controlled growth and a slow down in oil sands development as well.

A columnist at the U of C student newspaper the Gauntlet sums it up well.

Furthermore, even if the provincial government does go for the whole 20 per cent increase, Alberta’s royalty rates will still be some of the lowest in the world. And don’t try to tell me that all the oil companies will uproot and flee the country the second people start talking about increasing royalties. As a fellow editor commented to me recently, “They’re in the oil business. They’ll go where the oil is.” The oil companies have invested too much money and stand to make far too much money for them to vanish in a cloud of carbon monoxide like the conservatives are arguing.

Anybody who has studied the provincial Conservatives in even the shallowest capacity knows that Premier Ed “Steady Eddy” Stelmach will likely not raise royalties at all come Oct. when he makes the decision. If royalties are increased, it will likely be by just enough for Stelmach to seem like a populist without putting even the slightest dent in Big Oil’s beer budget. This isn’t necessarily is bad thing; the quality of life in Alberta will continue to improve at the same rate it always has if nothing is done. There’s no immediate negative consequence in deferring to the oil companies on this one, and that’s likely why nothing will be done: nobody wants to rock the boat. However, it’s worth considering the possibilities of even a slight increase.

And those who are in the known when it comes to economics agree. Big Oil will stomp their feet and wail but all is for naught. They will go where the oil is and if they don't well there are the Chinese, and Japanese, and....

Alberta premier walks into lion‘s den with business leaders over royalty review

Many of the business leaders attending the event said whether Stelmach chooses in the coming weeks to adopt the report‘s recommendations or not will be his most important decision, not just for now but for generations to come.

“My view is that the province should just out of hand reject this report because ... the decisions that they made are totally out of touch with the economy and what‘s happening around the world right now,‘‘ said Doug Mitchell, co-chairman of the forum.

“I don‘t see any credibility whatsoever in the report.‘‘

But one energy specialist said regardless of what Stelmach decides, the oilsands are too rich and vast for industry to ignore.

Ken Moors, a managing partner of Risk Management Associates in Pittsburgh, Pa., said he has brokered royalty deals around the globe and he believes Stelmach has been smart to make this dispute a public one.

“This is a rare opportunity for a democracy to do things in the open,‘‘ he said.

“But you must remember that every other time these royalty situations have been advanced in other countries, they‘ve been advanced in a market in which the expectation was that supply was going down. This is the only example I‘ve ever seen where these are being introduced in a market where the supply is bound to go up.‘‘

He said the province will still be very competitive with other countries.

"It is not going to take place . . . this is the only major supply side push left in the international oil market, so people either invest here or they see their profit margins dwindling in the future -- there is no other alternative," he said.

That is rich, There Is No Alternative. TINA. The famous neo-con excuse for selling off government services to embrace the Market. And now the shoe is on the other foot for Big Oil. TINA. LOL.

Amongst the sturm and drang of capitalist outrage in columns in the National and Financial Post comes a whiff of wisdom if not prudent observation.

Royalty review just good business

Diane Francis, Financial Post

Published: Saturday, September 22, 2007

It's important to note that what is being discussed is not taxation but the royalty paid to Albertans who own the lion's share of subsurface mineral rights in the province. And they are not getting as much revenue from their resources as competing jurisdictions are, according to the report. Industry spokesmen dispute the numbers and say Alberta's take is already high enough, and any higher will drive away investment.

For instance, conventional oil and gas royalties and taxes in the U.S. average 67% while they are 50% in Alberta, said the report.

Non-conventional oil production -- offshore and heavy oil -- is another interesting story. Heavy oil royalties in Cold Lake are 60% compared with Nor-way's offshore royalties of 76%, California's heavy-oil royalties (and taxes) of 67.5% and Venezuela's 72%.

To me, both the markets and media have been hysterical about nothing. Stelmach is not some fiscal confiscator. He's the CEO of the most valuable jurisdiction in the Western hemisphere and his review of royalties is simply prudent business practice.

Just like Danny Williams is doing in Newfoundland except in order to get his folks the best deal he didn't sell the goose, just a part of the golden egg. Funny thing the same folks whining over the Alberta Royalty report said this about Danny's provincial version of Petro-Can;

Paul Barnes, the St. John's-based spokesman for the Canadian Association of Petroleum Producers, said state equity stakes are common throughout the world beyond North America and Europe. He said his members are prepared to negotiate exact figures for specific deals. "It's not overly concerning to our members that equity participation is on the table here because we experience it on worldwide basis."

Gee you don't hear that from the CAPP when it comes to Alberta's Royalty Revue.

"At first blush," gulped Canadian Association of Petroleum Producers spokesman Greg "Sky is Falling" Stringham, "this is far worse than anticipated."

So what is all the fuss about, why the chicken little exercise in outrage? What does this dastardly commie socialist pinko report say. Well it is damning of years of incompetence by an entrenched and debouched Tory party of Calgary Oil insiders.

A tired old party that instead of collecting what is owed to Albertans by Big Oil for the past decade, forget just the last few years of booming oil prices, gave them a royalty holiday paid for by Albertans. We paid in increased user fees, privatization, contracting out, wage freezes in the public sector, caps on AISH payments and claw backs,kicking the poor off welfare, selling off the ALCB at fire sale prices, systemic mistreatment of seniors in seniors homes, the Health Care premium which is a tax grab, failure to invest in infrastructure, firing of nurses and doctors, capping of nursing and doctor graduates in Alberta universities, not only closing but blowing up hospitals, lack of vocational and technical education that has led to current labour shortages, etc. etc.

The government makes more money off gambling then it does off either royalties or taxes on conventional oil and gas and the tarsands.

And no matter what Stelmach does, he cannot make up for being part of a government that at best was asleep at the wheel for two decades, at worst was implementing harsh cuts and reconstructing the state according to a neo-con agenda that was never for the benefit of the people of Alberta but to please the Fraser Institute and its pals.

Stelmach will never, ever, ask for the billions Big Oil owes the people of Alberta who had to pay for Ralph Klein's renovation of the province for their and the Fraser Institutes benefit.

The Conservative regime has forgotten that natural resources belong to Albertans and not developers, says the report from the royalty review panel appointed by the same government.

And the Alberta Energy ministry is bracing for another unsparing probe next month of how it handles royalties from Auditor General Fred Dunn.

His office has chided the government in past years for being unable to effectively track what companies owe in royalties, and suggested the problem was costing hundreds of millions of dollars in royalty losses.

But the royalty review panel took the criticisms much further, recommending a new oversight body and far better reporting to the public.

"During our review we discovered an absence of accountability from the government to Albertans, the owners of resources," panel chairman Bill Hunter told reporters this week. "We encountered significant difficulty in accessing information -- to have even simple questions answered."

"How the administration or public leaders make informed decisions in this vital arena is an open question," says the review report, made public Tuesday.

"In the case of Alberta's multibillion-dollar energy reserves, seen as an enterprise, the onus on government to inform the public should actually be orders of magnitude higher," the report said. "Stated politely, this standard of disclosure is not presently being met.

"The panel is of the opinion that the government has not built up sufficient expertise and capacity to administer and manage this complexity."

It also identified a specific problem of missing money, or "what preliminarily seems like a pattern of material deferral of payments that is not in the interests of Albertans."

Once again the real Alberta Deficit is revealed, the democratic deficit. So the next time some Alberta Conservative MLA or MP, they are after all joined at the hip, talks about accountability, transparency, honest government, usually pointing fingers at Liberals in Ottawa, just ask them if they know where the missing billions from Big Oil are squirreled away.


Read it for yourself.

Royalty Review Panel final report

SEE:

Transparency Alberta Style

Closing The Barn Door

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Edmonton Journal A Liberal Rag

Brian Mason and the NDP have been complaining about lack of press coverage they get in the pages of the Edmonton Journal. When days before Farmer Ed went on TV, Liberal leader Kevin Taft finally came out, five weeks after the royalty report was issued, to say he supported the royalty review recommendations. It made front page news in the Journal, and he was given an approving pat on the head in the papers editorial.

The NDP on the other hand was given short shrift over their announcements regarding the royalties.

The NDP issued a statement to their members and supporters in their email newsletter;

Some party members have asked about the extensive coverage the Alberta Liberals have been receiving in the Edmonton Journal. This has been the case for several years, and with an election approaching, it will likely only get worse. The Journal is entitled to support the Alberta Liberals editorially, but unfortunately, its news coverage is often biased in their favour. This relates not only to the content of articles, but also to placement of stories, headlines, and photos.

Last week's coverage of the Liberal's position regarding royalties is a good example. The Liberals waited nearly 5 weeks before taking any position on the Royalty Task Force report, and then issued only the vaguest support for increasing royalties. In the Journal, this warranted a front page story and an editorial praising Kevin Taft for helping to "define the issue". In the meantime, Brian Mason and the NDP caucus have worked tirelessly to raise awareness on royalties and to fight for a better deal. Kevin Taft failed to provide leadership on this issue when it counted - but this does not deter the Edmonton Journal.

I want to be clear that this problem does not extend to other media outlets. It is unique to the Edmonton Journal. The Sun newspapers and the Calgary Herald have conservative editorial perspectives, but this doesn't usually affect their news coverage. Television and radio outlets also give generally fair coverage.

I would like to encourage our members and supporters to be aware of this problem, and to consider challenging biased coverage when they see it. The best way to do this is to write letters to the editor when you see unfair news coverage. You can write to the Journal at letters@thejournal.canwest.com. You may also wish to consult other media sources in order to get a more complete picture of politics in Alberta.

Thank you.

Sandra Houston,

Provincial Secretary

Often the pro-Liberal editorial bias of the Journal creeps into the news stories coming from the Leg.

The other day when Mason got an emergency debate over the royalty issue passed in the Legislature the Journal headline was:

Conservatives' actions regarding royalties criminal: Taft
... EDMONTON - The Conservatives' lack of accountability on oil and gas royalties verges on criminal behaviour, Alberta Liberal Leader Kevin Taft charged.

Which was not the real news story as even Right Wing Edmonton Sun Columnist Neil Waugh noted in his column;

Then he hilariously got out stick-handled by Brian Mason's tiny NDP caucus who asked for - and got - an emergency debate on resource royalties.

The reason behind the pro-Taft position of the Journal news and editorial writers covering the Leg was made clear in Leg Reporter Graham Thompson's column on the same subject. After spending the first half of his column uncritically quoting Taft he goes on to belittle the NDP's success at getting an emergency debate on the royalties issue. A debate that does not occur often in the Tory dominated house.
And one supported by disgruntled backbenchers not Stelmachs cabinet.

In supporting the NDP motion for an emergency debate on royalties, government members were embracing the old adage that the enemy of my enemy is my friend and so were happy to see the NDP go at the Liberals like two scorpions in a bottle and leave the government relatively unmolested.

It is much easier for the NDP to take a black and white stand on royalties than the Liberals.

The NDP doesn't have any chance of forming government and therefore doesn't have to worry about implementing its policies. Its ambition begins and ends at replacing the Liberals as official opposition.

It's an understandable strategy, one leader Brian Mason has been playing for months. And it's one he'll continue to play all through the fall session.

Or compare these two stories on the Premiers charge that the NDP wanted to bring back the dreaded NEP. Of course it is a favorite tactic of the Government to cry NEP when wanting to inflame their supporters. Of course the charge didn't stick but you wouldn't know it from the Journal article.

Edmonton Journal

Premier Ed Stelmach compared an oil and gas production tax to the much maligned national energy program today in the legislature.

Such a tax was one of the key recommendations of the province's royalty task force that delivered its report in September.

In question period, NDP Leader Brian Mason pressed Stelmach as to why he didn't adopt it and panel's other recommendations. Stelmach said it would cripple the province's economy.

"He wants a production tax, which goes back to the old strategy ... that drove Albertans out of the province, created a situation that people actually couldn't pay off their mortgages, had to leave, businesses went broke," Stelmach said.

"We're not going back to that kind of model of collecting royalties."

It was the second straight day opposition leaders went after Stelmach over royalties.

The Alberta Liberals demanded to see energy department documents from previous royalty reviews. So far, the government has kept most of those documents from the public.

Stelmach didn't answer the question directly. Instead, he talked about his government's record since he became premier last year.

Taft also asked Stelmach to explain why his governments refused to raise royalties until this year, despite warnings from the energy department that they were missing their internal targets.

"We take advice, obviously, from others," Stelmach said.

"But at the end of the day in this government the decisions are made by government, not listening to advice that may come from bureaucracies."

Edmonton Sun

Premier Ed Stelmach compared a key recommendation of his own royalty task force to the dreaded national energy program yesterday.

He also said the government overruled calls from experts for higher royalties from the energy sector because it got better advice from Tory politicians.

After ignoring repeated demands from the opposition to table all documents related to proposed energy royalty increases in the house, Stelmach suggested his government couldn't have followed through on an independent panel's recommendation that it charge a surtax on products from the oilsands.

"He's supporting the panel in its entirety," Stelmach said of a question from NDP Leader Brian Mason on why Alberta receives less oil royalties than nearly every other jurisdiction on earth.

"He wants a production tax, which goes back to the old, old strategy the former party from Ottawa imposed in Alberta, that drove Albertans out of the province and created a situation where people actually couldn't pay off their mortgages, had to leave. Businesses went broke. We're not going back to that kind of model for collecting royalties."

Mason was incredulous, noting that the independent task force was appointed by Stelmach's own government.

"Mr. Speaker, I just heard the premier compare the royalty task force to the Trudeau government's national energy program.

"So my question is, if they came up with something that's equivalent to the national energy program, Mr. Premier, why did you appoint those individuals?"

Stelmach didn't answer, instead suggesting the NDP can't both support the report and criticize it.

And for those who are in the know many of the editorial staff at the Journal have been suspected of having a bias towards the Liberals. And not just because the are the 'Official Opposition'. Now we know for sure.

Another One Bites the Dust...

Edmonton Journal veteran Larry Johnsrude is leaving journalism for redder pastures -- to join the staff of the Alberta Liberals.

He's the third high profile Alberta journalist to make the jump to politics this year. In January, Paul Stanway of the Edmonton Sun and Tom Olsen of the Calgary Herald joined Premier Ed Stelmach's office as senior flacks.

Here's the letter Johnsrude wrote to his colleagues at The Journal

Hi all,
With mixed emotions I would like to announce I have accepted the position of Director of Communications for the Alberta Liberal Caucus. It wasn't something I was seeking but was an opportunity that presented itself and I felt I couldn't turn it down. Over the past 11 years with The Journal, I have enjoyed working with all of you. I admire your professionalism and journalistic integrity. Journalism has been good to me, but I feel this is an opportunity to acquire a new set of skills and embark on a new profession.
Best wishes to all.
Larry Johnsrude

Johnsrude was the web-site editor for the Journal. He used to do a political blog
until April of this year. His new online blog he launched back then is now gone. As is he.

I've got a new blog address: MY NEW BLOG ADDRESS

It uses new software that allows for posting photos, video, links and room for feedack — all the bells and whistles.

The blog address this one appears on will remain online as an archive of my pre-April 24 postings. But anything posted since then will be at my new blog address.

Not Found: Forum Not Found

The forum you requested does not exist.

So if you detect a bias in the news coverage in the Edmonton Journal when it comes to Kevin Taft and the Alberta Liberals it's part of the Journal's view that the paper is a political player, a king maker if you like.

The paper has a long history of this going back to when they covered civic politics in the city and what applies to civic politics also applies to their provincial coverage.

In Edmonton, just as the Journal pandered shamelessly to William Hawrelak's Citizens' Committee during the 1950s, it again shilled patently for the new age progressivism of the city's brie elites in the 1990s. According to Lorimer, "Given the situation in which the mass media operate, however, it is unlikely that there can be any dramatic change in the way they inform people about city politics."(f.42) With little budget for sustained investigative reportage, and with so little real, long-term news of significance to break, the press gallery appears to fear becoming as marginalized on the news pages as the councils they cover. One remedy has been to transcend "objective" reporting and to editorialize within the guise of covering the story.

The Journal quickly turned on Bill Hawrelak when he decided to run again in the Sixties after he was found to have been in a conflict of interest. They ran a concerted campaign against him ,including front page editorial telling voters not to vote for him, but he won anyways.

During the Lougheed years, when the PC's dominated the Leg and the NDP had only one seat,and the Liberals none, they viewed themselves as the 'official opposition'. This inflated view of their political importance, has continued in the editorial mindset at the paper ever since.

This of course fulfills William Burroughs dictum; "we don't report the news, we write the news."

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P3 Failure In Alberta

What raving leftist said this?

"Although it appears that ideology has ruled over common sense. Monopolies have to be rigorously regulated. When they aren’t – the Edmonton Regional Airports Authority and CLS being two obvious examples – they get out of hand. Having the private sector market alcohol has led to competitive pricing, extended business hours and a huge ramp up in selection. It hasn’t been all bad. Even though the trend recently has seen the mom-and-pops being squeezed out by the big chains."

Neil Waugh in the Edmonton Sun on the failure of the current privatization monopoly in liquor distribution in Alberta.

You see when the government privatized its liquor business it sold off its buildings at fire sale prices, and sold the rights to its lucrative government run distribution business, warehousing and trucks included, to a private company. But that company also maintained the State's monopoly. And as a P3 it is not subject to the usual checks and balances that even the promoters of P3's say need to be in place.

The Alberta Liquor Association called it the “disastrous warehouse mess.” The Alberta Hotel and Lodging Association said it’s had a “serious and negative impact” on its members.

Meanwhile, the Canadian Restaurant and Foodservices Association notes that the outfit running the province’s liquor distribution monopoly “enjoys” a deal where there is “no risk of losing market share due to poor service.”

But more to the point, the new Alberta Tories’ first dive into the P3 shark tank appears to have popped its top.

All this and a whole lot more was revealed in a damning report by Pricewaterhouse Coopers into what’s wrong with the province’s liquor distribution system released by the government yesterday. The very first line of the report warned that “a simple, expedient solution to Alberta’s current liquor supply chain challenges does not exist.”

But at least we may now get a liquor warehouse and distribution operator, that has a contract with Alberta taxpayers with performance measures and penalties. Because right now Connect Logistics Services has a sweet deal where “no incentives or disincentives exist for good/poor performance,” the report determined.

But the Pricewaterhouse report is a clear warning that public/private partnerships aren’t the dream team that the PCs would have us believe. Especially if no one is willing to keep a firm hand on the private partner.

But now the Stelmach government is determined to charge ahead. Ring roads are going to be run as P3s under long-term contracts. There’s talk of “bundles” of schools turned over to the private sector. The new Calgary hospital was originally shopped around as a P3. There were no takers. The liquor warehouse report may have just told us why.

See

Privatization


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Stelmach the Perfect Strom

As I have said before our new Alberta CEO Ed Stelmach is haunted by the ghost of a Premier past; the lame duck Harry Strom.

Edmonton Sun columnist Neil Waugh knows this too and gloating with glee likes to rub it in;

Listen up on land

Last week Premier Ed Stelmach finally gave Albertans a peek under the tent flaps about his plans to stop the insanity of Ralph Klein's flawed oilsands policy, which sees energy companies pay a penny-on-the-dollar in royalties while at the same time shipping raw bitumen and jobs down the pipeline to Illinois and Texas and turning 48 townships of pristine boreal forest around Fort McMurray into a vast industrial zone.

"My government is committed to ensuring there will never again be a major downturn like we saw in the 1980s," Stelmach boomed to the Canadian Energy Research Institute.

He plans to thwart any National Energy Program rerun by "developing and diversifying" the energy industry.

During the Alberta PC leadership campaign last fall Stelmach compared pipelining raw bitumen to Texas as selling the "topsoil" from a farm.

"This includes encouraging more upgrading and value-added activities in the province," he told the oilmen. "Our government will encourage that to happen."

He has a strange way of doing it. The latest jobs-down-the-pipeline dust-up happens before the National Energy Board in Calgary on June 4 when TransCanada Pipelines pitches its ultra-controversial Keystone bitumen pipeline to the States.

Alberta Federation of Labour president Gil McGowan has already filed an intervention describing the dubious line as a "devil's bargain".

NEB documents reveal the Alberta government is intervening too. But instead of a blizzard of submissions backing up the premier's pledge, Alberta taxpayers will be represented by one lowly "regulatory analyst" who is only there to "monitor" the hearings on behalf of his Edmonton bosses.

Spare us any more goofy speeches, Ed.

Tories drop ball on housing problem

They recommended the premier consider "limited, short-term market intervention." In short, they proposed the province impose "rent stability guidelines" consisting of once-a-year rent increases of no more than 2% above inflation. Also proposed was a one-year notice for condo conversions with no lease-busting rent increases in the meantime.

The task force report described this recommendation as a "very difficult one."

The Alberta Tories obviously had a difficult time of it as well. Because when the smoke cleared and Housing Minister Ray Danyluk released his $285-million response this week, rent controls were mysteriously missing.

In their place were a series of half-hearted attempts to rein in runaway accommodation costs.

The proposed condo conversion restrictions have been accepted. But landlords can impose once-a-year hikes with no ceiling.

Instead of responding boldly and constructively to a problem that's creating economic hardship for large numbers of Albertans and employment problems for many Alberta businesses trying to compete with the oilsands developers for workers, the Tories tried to dodge the bullet. They're attempting to buy a little more time.

In the meantime, apartment owners will continue to record huge profits, the affordable housing crisis will continue and the whole problem will blow up again next spring.

This is not leadership.

Boom's deadly toll

The blood spilled and the body count wasn't as high as in the tragic Diversified 690 bus crash. Thank God for that. But the cause of the death of two Chinese temporary foreign workers at Canadian Natural Resources Ltd.'s Horizon oilsands plant this week can be traced back to same source.

And that's the Alberta Tories' botched - and now extremely deadly - oilsands policy, which triggered a massive oilsands building boom without first putting in place the necessary infrastructure.

The Tories then conspired with the developers to tear up the labour peace treaty that ruled the oilsands for more than a decade.

There followed the airlift of cheap foreign workers, while thousands of Alberta tradesmen and women sit on union dispatch lists.

The collapse of the tank roof structure that killed Genbao Ge and Hong Liang Liu and injured four others working for the Chinese-government-owned contractor was the culmination of this goofy policy.

It's the same one that allows oilsands developers to pay a penny-on-the-dollar royalty until the multi-billion-buck plants are paid out, while at the same time shipping raw bitumen and jobs down the pipeline to Illinois and Texas and leaving behind irreparable environmental damage in the pristine boreal bush north of Fort McMurray.

It wasn't until after the bus crash that killed six construction workers on the Syncrude job that the Alberta PCs finally admitted that Highway 63 was fundamentally dangerous. And they're now playing a desperate game of catch-up to twin the major route to the oilsands.

But only last week, Finance Minister Lyle Oberg was bragging in his budget speech about more offshore workers coming in.

"We will develop an immigration strategy to encourage more skilled workers to come to Alberta." Oberg boomed. Well, how do you like your strategy now, Lyle?

And just how panicked the Stelmach government is to control the damage and deflect the blame has been clearly evident since Tuesday's tragedy.

A limited internal investigation by government bureaucrats - and no public report, but simply a handover to the dubious Alberta Justice Department, which already has the worst record in Canada on bringing boardroom bad guys to justice. (They've yet to get the trucker who crashed into Bus 690 into court - an accident that happened way back on May 20, 2005.)

Worker error

Meanwhile, CNRL is being allowed to do a parallel "full investigation" of the incident, where worker error will be the inevitable conclusion.

Heck, Employment Minister Iris Evans didn't even bother to issue a press release acknowledging the latest oilpatch accident even happened.

Smoke and mirrors

"Alberta intends to borrow $300 million on behalf of its corporations this year," noted CIBC World Markets economist Avery Shenfeld. "With half of that raised in the public debt market."

Shenfeld added that the government-backed Alberta Capital Finance Authority and ATB Financial plan on floating paper worth $2 billion this year.

BMO Capital Markets economist Michael Gregory also determined that the Tories are back in the borrowing business "which will be subsequently lent to other provincial corporations to meet their funding requirements."

Things get even more murky when you dig deep into the budget documents to find the true meaning of P3 (public/private partnerships), like the Anthony Henday and Stoney Trail ring roads in Edmonton and Calgary.

P3 magic, we are told, is that it "allows the government to transfer certain risks that the private sector is better able to manage."

Without getting too specific.

But the background blurb also admits: "contribution of public financing to a P3 project should reduce total project cost."

And under a section called "debt servicing costs," Oberg's documents show a line identified as "financing costs for government-owned capital (P3s)" growing from $8 million this fiscal year to $22 million by 2009-10.

Yup, we're back in debt.

Except the budget book would prefer to call it "alternative financing" or "capital lease liability".

Of course, there's more debt on the books in "debt free" Alberta.

Another $166 million in medium term bonds comes due this year.

That leaves over $1.2 billion of old Don Getty debt on the books to be paid off from the debt retirement account when it comes due. Some of that won't be until 2013.

Sure, there's another $2.2 billion surplus in the forecast this year plus another $7.7 billion ticking over in the Sustainability Fund.

OTHER FUNDS

At the same time, the Tories will pull another $1.4 billion of investment income out of the Alberta Heritage Fund, while other funds will yield an additional $2.1 billion more.

But isn't the HTF supposed to be used for a rainy day?

Don't worry, it could be pouring soon.

The University of Calgary's Institute for Sustainability, Energy, Environment and Economy recently released a paper on Alberta's economic future.

The results of that study are suddenly showing up in government documents.

The "bulk" of the government resource revenue came from gas royalties in recent years.

In 2004, it hit over $8 billion. By 2013, the institute predicts gas royalty revenue will be only $3 billion.

While oilsands revenue is the next big thing, the way the Tories have screwed up the royalty regime with their goofy penny-on-the-dollar giveaway leads the institute to a grim conclusion.

"In general, one would expect significantly lower royalties as a percentage of revenues in the case of oil- sands compared to conventional oil," the paper warns. Expected royalties compared to recent years will be "substantially lower."

And the projected royalty revenues for 2013 are "just over $5 billion" - which the report points out are "about one-half the average levels" over the past five years.

Looks like Oberg is just getting warmed up for when Alberta is back aboard the debt and deficit wagon.

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Labour Shortage = Union Busting

The only labour shortage in Alberta is finding unskilled folks to work at Timmies, and even there they are now paying $14 an hour plus benefits. But as for skilled labour, well they are working there too because they can't find jobs through the Merit Contractors and their business pals like CNRL and the Padrone's of CLAC.

These guys being anti-union would rather hire temporary workers for $14 dollars an hour no benefits. To do union jobs that pay over $22 an hour with benefits.

Worker shortage a 'myth' - union
'Lots of skilled people in province'
Alberta's labour shortage is a myth, says the International Brotherhood of Electrical Workers.

Tim Brower, IBEW Local 424 business manager, says non-union contractors are using the "myth" of a labour shortage to bring in temporary foreign workers who are taking away jobs from Albertans. "There is a shortage of unskilled people in this province. I won't deny that," he told reporters at the legislature yesterday. "Tim Hortons is looking for people. 7-Eleven is looking for people ... but when it comes to skilled people in this province, there is no shortage. I am the expert. I have them available."Brower said 1,000 electricians in his union are unemployed or working other jobs because they can't find work in their trade. "I have run into my members working at Home Depot handing out electrical components," he said. "Some of them are driving trucks.

And since our new Minister of Human Resources; Monte Solberg loves his Timmies it's no wonder he is joining his pals in the non-union construction sector in Alberta calling for more Temporary Workers. Thats so more unionized workers can get jobs at Timmies. There are lots of unemployed skilled workers in Alberta, but of course they belong to the building trades unions.

Companies like CNRL and others that are using Merit Shops to build oilsands projects are taking advantage of this to undercut the unions. Heck even right wing Edmonton Sun Columnist Neil Waugh noted this 'fact' last summer. And he notes it again today in a scathing attack on lack of planning by the new Stelmach regime.

That's because the Merit Shops are not independent contractors at all but spin offs of unionized companies! Merit Shops are about as independent as CLAC is an independent union. Neither of them are and both are spin offs of Alberta's Big Construction Companies trying to bust the Building Trades Unions.

Kushner is the president of the Merit Contractors Association and the person most responsible for getting a review of the Code rolling. Call them merit contractors, or open shops, it all means non-union (or at the very most, an "alternative" labour group such as the Christian Labour Association of Canada).

Alberta's non-union construction industry began 20 years ago, as the oil price slump of the early 1980s shut down jobs and pushed companies into bankruptcy. Driven by the earlier, decades-long boom and labour shortage, construction labour relations had become a perpetual upward spiral of wage increases. Faced with the crunch, companies had to cut costs or go under.

The end result was the famous "spin-off" company, a term industry people are reluctant to use to this day. After locking out their employees for 25 hours, the firm would hire them back in a subsidiary company, or through a labour broker, at lower wages. After the dust settled, the complexion of Alberta�s construction industry had changed forever.

Today, there are few union contractors working in the commercial/institutional sector, while the large industrial projects are built almost exclusively by organized labour. The Merit Contractors Association represents 670 companies in Alberta, employing over 20,000 persons who complete 32 million hours of construction work annually. The Association has been growing at a rate of 36% a year, for the past four years. During those four years, it�s been lobbying ceaselessly, in its own right and through its members, for changes to workplace legislation, making annual presentations at Standing Policy Committee and appearances at Conservative Party functions.

See

Labour Shortage

History of the WRF

Alberta's Free Market In Labour

The Labour Shortage Myth

AFL Agrees With Me

Lack of Planning Created Skills Shortage in Alberta

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