Kevin O'Leary nails it.

[Swarez]

The cracks were here when the conservatives were in charge, very little if anything would be different today if they won instead of the NDP. Oil tanked no one wants to invest.

Raising taxes would actually make a company think do I put my free cash flow into a new project and take on the expenses with that or cash it out and pay taxes the fact that most of the companies want to pay taxes instead of invest should be saying something. There is no return right now. But everyone's actual profit will be done regardless this year because of oil prices so amount government will collect will likely be lower regardless of rate.

[PeteMoss]

I know nothing about the oil industry at all - but in terms of what is effecting these companies investing in Alberta now - is the fact that oil is so cheap right now not a much larger factor of why investment is low now versus a potential royalty/tax increase?

[Looch City]

Don't worry guys, Harper will win the federal election and fix everything that NDP messes up here.

Long Live Conservatives.

[IliketoPuck]

Originally Posted by Resurrection

You know that the conservative cheerleaders on this forum are desperate when they look to celebrities like O'Leary to try and crap and dump on Notley.

Can anyone find out what Russell Peters thinks of Notley? Maybe we should get a couple famous hockey players in on this too. O'Leary isn't a money manager, he's a bimbo shill; the investing worlds Kim Kardashian.

In answer to the ridiculous question about raising corporate taxes by 2% (i know 20% sounds scarier so go ahead and use that number if you like) is a possibly bad idea because of the state of oil...or royalty reviews... yes. Great idea. Business should pay their fair share. We shouldn't get involved with a race to the bottom. We have lots of oil, and that demand will eventually go right back up as well as prices. When that happens I'd like to make sure we aren't getting bent over a table.

Dislike O'Leary all you want, that's fine. His message is accurate.

Capital flight does occur, it is occurring, and it will continue to occur so long as the government of Alberta fails to provide the stability necessary for investment in our province's energy industry.

Furthermore, I think you are missing a very key point. Yes we have a great deal of oil in our province, no one denies that. However, our oil is far more expensive to produce than in many areas of the world. By continuing along this path, the NDP is simply encouraging capital to leave the province.

The entire premise of the NDP is to create jobs by sticking it to corporations and higher income earners. There is a reason that every single time an NDP government is in power they end up making things worse (hint: their economic policies are not grounded in reality). If you think a 20% increase in taxes is minor, you are kidding yourself; you can directly link NDP policy to job losses in corporate Alberta, at a time when they should be doing everything possible to support job creation.

I'm no fan of Kevin O'Leary, but he is absolutely right. The NDP are making a mess of this, and they haven't even been in office for a calendar year. The 2019 elections can't come soon enough.

[Zarley]

Regardless of your opinion on O'Leary, he is completely right in this instance. Denying this would indicate a fundamental lack of understanding of the investment market.

I understand that the NDP was elected based on a promise to raise corporate taxes and review royalties, but the prudent thing to do would've been to shelve the increase and rule out any change in royalty regime for the short to medium term. Raising corporate taxes during a recession amid massive rounds of layoffs sends a terrible signal to investors.

[Coach]

Originally Posted by EldrickOnIce

How about the IMF as a source? They suggest policy induced uncertainty is bad.
http://www.imf.org/external/pubs/ft/...3/03/bloom.htm

I didn't actually think there any debate on this topic.

Firstly, there's debate with pretty much anything involving economics. It's a moving target and everything is based in theory, even when looking at historical data.

Secondly, there's debate right in the main part of your quote. It is difficult for policymakers to battle uncertainty caused by the business cycle (ie, the oil prices that no one can do anything about). It then says that uncertainty about policy is unusually high. Which begs, how are they measuring uncertainty? Is it the low/stale corporate investment? While policy may be a contributing factor to that, so is the state of the oil market in general, and I would argue is much more significant. If oil was still at $90, I would bet everything would still be trucking along just fine with or without the NDP.

NDP has been left holding the bag of a whole bunch of crap with the deficit brought on the PCs combined with the ridiculous drop in oil, neither of which has anything to do with them. I certainly agree they should at least be more vocal and specific about what their plans are going forward, even if they are waiting until after the federal election to release a budget, but you can't expect the government to base their policy around what is an aberration in the business cycle and one that is historically volatile. It is up to the businesses that operate in this market (and have done so for generations, and should presumably be learning from the past) to guard themselves against the volatility of the market in which they have chosen to operate. I find that, generally speaking, the people crying now that the government isn't doing enough to step in and help the oil companies are same type of people who cry when the government is too involved in the private sector when times are good.

[OMG!WTF!]

Originally Posted by PepsiFree

Sorry, you're right, the royalty rate just isn't changing soon (until 2017, I misread it as the review not until 2017).

There's no need to be condescending. "Well if you're soooooo smart" isn't a good way to have a conversation. In my opinion though, yes, the finances look rough enough that a review of everything should be in order, including royalties. When you walk into a mess you have to take account of anything and everything to make sure it's of benefit to you, not of detriment.

You could also ask yourself, what happened the last time we mucked about with royalies? It took about six months for Stelmach to apologize, turn everything back to the way it was and pray oil companies would come back. What in the world would make anyone think now is a better time to screw around?

[White Out 403]

When is the right time to raise taxes or increase royalty rates? When the oil and gas sector is booming? Then we would hear that "oh, this is the worst time to do it because things are going well. A tax hike will ruin the prosperity and cause capital flight".

[GGG]

I think the mistake was not doing the royalty review now. The current price of oil doesnt change what th spectrum of royalties should be across all prices. By waiting they increase uncertainty.

The corporate tax increase I believe makes sense and makes little difference in the current viability of projects.

[CaptainCrunch]

One of the things that I heard over the dinner table from a family member is that the company she works for which is a "Major" has stated no capital investments outside of stuff in China and I didn't ask what this meant "Steam"

So basically they've turned off the capital taps in Alberta.

If someone can tell me what Steam is, I'm assuming it has to do with extraction, but I was too drunk to ask and understand.

[OMG!WTF!]

Originally Posted by Resurrection

When is the right time to raise taxes or increase royalty rates? When the oil and gas sector is booming? Then we would hear that "oh, this is the worst time to do it because things are going well. A tax hike will ruin the prosperity and cause capital flight".

Yes, when oil is booming is the right time. But we're all happy with our fair share when oil is booming. What makes you think we aren't getting our fair share now?

[PepsiFree]

Originally Posted by OMG!WTF!

Yes, when oil is booming is the right time. But we're all happy with our fair share when oil is booming. What makes you think we aren't getting our fair share now?

May I ask what makes you, in the face of how well Oil WAS doing and how little we have in our back pocket to show for it, think we were ever getting our fair share?

[EldrickOnIce]

Originally Posted by MattyC

Firstly, there's debate with pretty much anything involving economics. It's a moving target and everything is based in theory, even when looking at historical data.

Secondly, there's debate right in the main part of your quote. It is difficult for policymakers to battle uncertainty caused by the business cycle (ie, the oil prices that no one can do anything about). It then says that uncertainty about policy is unusually high. Which begs, how are they measuring uncertainty? Is it the low/stale corporate investment? While policy may be a contributing factor to that, so is the state of the oil market in general, and I would argue is much more significant. If oil was still at $90, I would bet everything would still be trucking along just fine with or without the NDP.

NDP has been left holding the bag of a whole bunch of crap with the deficit brought on the PCs combined with the ridiculous drop in oil, neither of which has anything to do with them. I certainly agree they should at least be more vocal and specific about what their plans are going forward, even if they are waiting until after the federal election to release a budget, but you can't expect the government to base their policy around what is an aberration in the business cycle and one that is historically volatile. It is up to the businesses that operate in this market (and have done so for generations, and should presumably be learning from the past) to guard themselves against the volatility of the market in which they have chosen to operate. I find that, generally speaking, the people crying now that the government isn't doing enough to step in and help the oil companies are same type of people who cry when the government is too involved in the private sector when times are good.

Not doing enough? That's not really it.
What people are saying they should/should have got out of the way right now - not add to the uncertainty.

[Coach]

Originally Posted by OMG!WTF!

Yes, when oil is booming is the right time. But we're all happy with our fair share when oil is booming. What makes you think we aren't getting our fair share now?

I think NDP ending up as the government of the province shows that most people weren't happy with the share. Considering we were running a deficit when the provinces biggest and most important industry was at its peak, I would think it's fair to say we weren't taking a big enough share, or the share we had was being allocated very, very poorly.

[DownhillGoat]

Originally Posted by PepsiFree

in the face of how well Oil WAS doing and how little we have in our back pocket to show for it, think we were ever getting our fair share?

Getting a "fair share" (god that term is getting old fast) and what we have left to show for it are completely independent things though.

If someone makes a massive salary but still lives paycheck to paycheck, I wouldn't say the problem is needing to make more money.

[PepsiFree]

Originally Posted by kunkstyle

Getting a "fair share" (god that term is getting old fast) and what we have left to show for it are completely independent things though.

If someone makes a massive salary but still lives paycheck to paycheck, I wouldn't say the problem is needing to make more money.

I agree entirely! That's kind of the catch in the situation. Either we weren't getting our "fair share" (I also agree on the 'ear feel' of that term) or that money was being wasted. In the end, status quo royalties or the conservative government were the problem. Change in some form was essential.

Too much change is possible, but we won't know how much is too much until further down the road IMO.

[Zarley]

Originally Posted by PepsiFree

May I ask what makes you, in the face of how well Oil WAS doing and how little we have in our back pocket to show for it, think we were ever getting our fair share?

Quite obviously due to horrendous management of our non-renewable resource revenue by the previous government.

Particularly the use of royalty revenue to fund operational government spending, something that should be curtailed as soon as possible. The most concerning thing about the election of the NDP is that they see nothing wrong with this practice.

[CaptainCrunch]

Originally Posted by kunkstyle

Getting a "fair share" (god that term is getting old fast) and what we have left to show for it are completely independent things though.

If someone makes a massive salary but still lives paycheck to paycheck, I wouldn't say the problem is needing to make more money.

Actually I have to add to that.

If someone makes a massive salary and is going to payday loans places on the Thursday you're spending to much.

When I look at my paycheck and I see over 40% siphoned off of it, I ask the same question, why ain't I getting a fare share of my own money.

[Handsome B. Wonderful]

Originally Posted by Resurrection

When is the right time to raise taxes or increase royalty rates?

Then answer, still, is never.

[Zarley]

Originally Posted by MattyC

I think NDP ending up as the government of the province shows that most people weren't happy with the share. Considering we were running a deficit when the provinces biggest and most important industry was at its peak, I would think it's fair to say we weren't taking a big enough share, or the share we had was being allocated very, very poorly.

Not at all, it shows what happens when the right leaning vote is split and a group of naïve people throw their support behind a charismatic socialist.