Quote:
Originally Posted by Cowboy89
I don't think a lot of people who propose corporate tax increases and royalty increases really fully understand what that means and the impact that those initiatives would have. I think the mentality is that money from these sources comes from some giant pot somewhere that can be tapped with no consequence.
1. Corporate taxes are on profits only. An increase would probably raise less revenue in the here and now as for obvious reasons Alberta's largest corporations are not profitable at sub $50 oil. The companies in the province that are profitable are the ones that are more likely to actually be hiring at a time that the oil companies are laying people off. When the economy is hurting, why give these companies incentives to not continue with investment?
2. Royalties. Sure there are some tweaks that can be made (such as one that addresses existing oil sands operations that are allowed to pay lower royalty rates because of the inclusion of capital from add-on phases and projects). But once again, why provide incentives for oil companies to slow down operations further? Also isn't the point to not unduly rely on resource revenues?
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I think the point is to put policies in place that will provide the revenues when (and if) the economy becomes healthy again. I'd like to see progressive royalties that increase with the market price of oil. Counter cyclical.