Quote:
Originally Posted by Regorium
How would you word a clause like that?
The premise is that when you entered into that contract with the government, the government cannot re-negotiate the terms without allowing the contract purchaser to leave. Basically it allows the purchaser to leave without penalty if the government changes the law on them.
I think it's quite reasonable as a premise in that neither party in a contract should be allowed to unilaterally change the terms of the deal.
Basically for the government to make the changes that they've made, they have, in essence, bought out the contracts that were bound to the previous laws. Now they can enter into new contracts with the new rules in place. Seems quite reasonable to me.
The other thing they could've done is grandfather all of the old contracts. But they chose not to do that either.
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This is nice in theory but not reality. If you really believe the above, why should any provincial government ever be allowed to unilaterally change royalties that apply to oil and gas leases (contracts)? Royalties are borne by their respective leases.
Don't forget, the PC's under Stelmach did the same thing (change royalties), but yeah I agree. It is kind of bull#### because companies purchase / lease land with a bonus payment for rights under terms and conditions that may unilaterally get changed in the future rendering said rights uneconomic (ie. Changing the rules after the money is paid on bonus).
Regardless I bet you won't get many Albertans agreeing that the government should never change royalties, so, your argument is kind of moot. Fact is, governments just do what they want, and businesses will always have to just deal with it. Also that's sort of how it works around the world too.