Quote:
Originally Posted by Red
Problem is, this is Alberta and people have no trust in any government other that the PCs. A review doesn't have to be a bad thing. It's likely that nothing changes.
And really, the uncertainty is the reason for capital withdrawal? The $30 WTI has 10 fold the impact. Just trying to keep things in perspective. In no way am I suggesting that the delays are a good thing.Or that the NDP are not gonna mess up etc. But they are not the reason why there is capital withdrawal right now. These decisions are not being made on a whim...
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Political uncertainty, including the pending royalty review, has absolutely had a major impact on decision-making. US investors have no reason to invest here anymore and they are pulling capital and cancelling projects. Why would they deal with the market uncertainty
and the political uncertainty we have with this review? Especially when they have a stable and supportive framework, and cheaper oil. They have their own industry down there that has the market uncertainty but not nearly as much other risk as up here.
You're right decisions aren't made on a whim. When companies are making capex strategy for the next year, the next 3 years, 5 years....and they don't know what the royalty framework is going to look like, they are deciding to be conservative and wait/go elsewhere.
So yes, the NDP really did #### this up and it's mostly the timing (so far) that the NDP has screwed up. They should have waited for markets to stabilize, instead of "piling on". It has had a huge impact.