Quote:
Originally Posted by Harry Lime
I was wondering, why does any action taken as a result of the review have to be static? Why not have a dynamic algorithm that reacts to the state of the industry, the price of oil and refinement? For example, when prices are low, as they are now, the royalties are subject to decline to support the industry, but when they chase $100, as they did recently, the royalties are altered in favour of the province to reflect the value of their commodity.
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Because we don't save squat and spend every penny we get, as a result if they lowered royalites in bad times the government would run massive deficits. If we funneled resource revenues into the Heritage Fund and then paid out steady predictable returns to the government we would have the flexibility to raise and lower royalties without killing the budget. This should have started under Klein when the debt was brought under control but unfortunately politicians suffer from short sightedness and weak backbones. Now we are going back into heavy debt and are back to square one so I'm not holding my breath that the system is reformed in my tax paying lifetime.