Quote:
Originally Posted by Tinordi
Lets play the counterfactual card. Say WRP was in power the last 18 months. How would Alberta's fiscal situation be materially different? What specific policies would they have done besides sprinkling fairy dust?
Globally, investment in the oil sector is down $700 billion. No I'm sorry to tell you that policy "uncertainty" or "taxes" had essentially zero impact on investment in oil and gas. Policy uncertainty has had no bearing on the fact that the Canadian patch is cash flow negative leaking $2 in costs for every $1 in revenue.
Investment in the broader economy is down because of the figures above.
So yes, we all want someone to blame. We all want to think that there's some causal connection between the government and our economy but in this instance, we need to accept that as a province we live by the resource economy and we die by the resource economy. That was a long-term policy built over generations of PC governments that the success of this province hinged on oil and gas development.
The outlook is particularly grim as well. We may well have witnessed the peak of the Canadian oil patch 8 years ago.
|
This makes the same mistake that blaming the government for the failure does though. Yes of course investment is down, but the uncertainty didn't help. So could any government have weathered this storm after being elected last year? I don't think so because the time for that was in the decade leading up to it when we (as a province) failed to prepare. Did we need a royalty review and these increases in costs while we faced the crisis though? No.
IMO you can't blame the government entirely, but you also can't blame it all on the price collapse.