Quote:
Originally Posted by flamey_mcflame
Yes, the oil companies are gonna run away from Canada due to higher taxes.
They will forgo the billions they make quarterly, not annually, due to carbon regulations. Watch how fast they leave $120 oil.
And, of course, they have multitudes of places to run to. Russia will welcome them and their equipment and maybe, if the oil companies are lucky, they'll get a bottle of Stoli before the Russians boot them out. Ok, maybe not Russia.
But there's always the Arctic. Well, it'll take 30 years to get a steady flow of oil. And it will cost them around $100-$110 a barrel to get them to refineries will be a much better option than Alberta's $50-$60 a barrel.
Brr, please don't leave oil companies. Please stay and keep making billions. And get your best friends, the major natural gas companies, not to abandon their obscene profits. We promise to vote Conservative in Alberta. Don't leave without taking all the money first, pleeeeease.
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It really isn't that simple.
Alberta is the most expensive place in the world to operate in for O&G companies due to the cost of labor, taxation, royalties and yes, extensive environmental regulations as it stands today. If a carbon tax is tacked on to this list of expenses, it will make operating here even less desirable and make too many projects unfeasible.
What will these "fat cat" oil companies do? Probably divert more resources into the US, Middle East and South America. But they won't go outright, naturally... they would do what they did the 1980s and keep Alberta as an administrative center for operations outside because the infrastructure is already in place. Will it hurt them? Maybe a few of the poorly run ones, but the major players will be fine.
What does that mean? Well, it means the labor shortage ends pretty fast. Little new operation, and what is done will employ far less than before. High paying, blue-collar service industries are likely to dry up fast. On the administrative side, companies will accept the fact that they have an average of 10 people employed for work that 3 or 4 could easily do... and lay off entire departments. Entire departments of much higher than average paying jobs.
Why should Dion and Layton care? Well, lets lowball the numbers. Say 40% of the 20% of workers in Alberta and Saskatchewan directly employed by O&G lose their jobs. This means less taxable income, less economic stimulus, displacement of lesser skilled workers, and increased syphoning of funds via EI and welfare. Then there's the effect on the retail and service sectors that aren't affiliated with the oilpatch directly, because these high-income earners are off the books. Less tax and higher expenditure means less money for social programs. Then you can likely expect a brain drain. Highly educated people will not want to stay and will go where the money and jobs are. Many of which will likely be transferred by the O&G companies they are currently employed with. Doctors and nurses will probably want out too, since there will be less tax revenue available to improve the public healthcare system, or, cuts to the system in lieu of lower revenue, and in a twist of irony, less disposable income for private clinics. This is notwithstanding the likely inflation of all goods and services due to added transportation expense.
Revenue neutral? Harmful only to the "fat cats"? I think not.