Quote:
Originally Posted by polak
How is this for an idea for diversifying the economy. For every dollar that Oil goes over $90 bucks a barrel, O&G producers need to pay an extra royalty which gets distributed to non-oil and gas companies.
This would attract all industries when times are good. Not just the ones that can benefit from Oil and it's not like O&G companies are going to close shop when there is +90 dollar oil to be had.
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This is the type of idea that could potentially set the Canadian oil patch back decades. Provincial oil & gas fiscal regimes need to be competitive with the rest of the world or corporations will simply take their money elsewhere. The provincial royalty regimes in place today are carefully calculated to take a larger royalty on higher rate wells and increasing oil prices while remaining competitive with other provinces and states. Getting too greedy will send the oil companies to more competitive regimes. See the Stelmach royalty review in Alberta in 2007 for an example. Distributing oil and gas revenue directly to non oil and gas companies is essentially taking it right out of the pocket of the government and the tax payers.