Commentary by Naomi Rankin, Communist Party-Alberta leader
If anyone in Alberta thought that electing an NDP government was all they needed to do to fix the economy, they had a rude awakening in the royalty review report finally issued by the NDP appointed committee. This is a document that could have been accepted by any Tory government in the last 40 years, or the Socreds before that, making no challenges to illogical economic assumptions that have guaranteed oil and gas corporate profits at our expense – except that the Tories might have felt obliged to engage in more window dressing of the blatant surrender to the big oil and gas operators.
Not only does the report not call for any increase in royalty rates right now, it recommends lowering the rates for all categories of new production into the indefinite future, no matter what the price of oil or gas or the condition of the economy.
Simple capitalist Economics 101 would tell us that it’s not a good idea to subsidize increased production when the price of oil and gas is low. Increasing production would just contribute to further downward pressure on prices. Instead, a sensible capitalist government would seize the opportunity to use low-cost oil and gas as inputs to secondary processing and manufacturing, to begin the process of diversifying our economy. A more diverse economy would free us from the boom and bust dependence on one category of commodities, and would incidentally improve the health of democracy in Alberta, even it did no more than increase the diversity of capitalist interests.
If we ignore the enormous carbon footprint of Tar Sands production, some of our potential customers are not so cavalier. Whether or not they care about the environment, oil and gas consuming countries have a vested interest in developing alternate forms of energy, just to improve their balance of payments and the profitability of their domestic economies. They will not only remove themselves as customers, but get a head start in research and development of the new economy. Continuing to rely on oil and gas exports as the only driver of the Alberta economy is short-sighted, even from a corporate point of view.
The best that can be said for Notley and her government is that they are consistent. When they campaigned on a program of continuing to rely on oil and gas exports, it was not just opportunistic rhetoric.
Luckily for working people in Alberta, Gil McGowan, president of the AFL, has come out strongly criticising the report. What is needed now, as much as under any Tory regime, is a campaign for an alternate economic plan of maximizing our share of the value of existing production, green diversification, and improved social spending, that can unite trade unionists, First Nations, environmental activists and even independent business. There’s still a possibility of people’s power outweighing corporate power.