Grassroots Oilworkers Rally, Oct. 17, 2007

[firebug]

Originally Posted by First Lady

The panel has recommended a premium of $10.00 per acre on crown land.

This is over and above agreements already in place. This will effect many farmers who cultivate the lands and ranchers who graze their livestock on crown leases.

There are a couple other sectors effected as well. Forestry is one... I would have to go back to report to recall the other.

Remember the panel has told the government it is an all or nothing review.

Stelmach has not said a thing on it as yet. So we don't know if he will look for "grey" area. Which, personally I think that is where the real solution is.

FL,

I work in corporate finance raising equity capital for E&P producers in the WCSB and globally.

My naive solution is that there could be a way for the AB government to maximize its share of the taxes that resource companies are currently paying.

An example (and these numbers are not accurate, but used to illuminate the concept):
Company A is paying $100 towards government revenues ($50 in royalties, $30 fed tax, $20 provincial tax), which in this case $70 stays in alberta

Since royalties are paid before taxes, an increase in the royalty rate should decrease taxable income for the firm. If the AB gov't reduced the provincial corporate tax rate there may be a point at which the changes will be neutral to the corporation but increase the provincial revenues.

Example continued:
Company A still pays $100 towards government revenues, but now the breakdown is $57 in royalties, $28 fed tax, $15 prov. tax.

The result is a net transfer to the provinces coffers (from the federal govt.) of $2, with the fringe benefit of a lowered corporate tax rate for all other businesses in the province to enjoy.

A more accurate and detailed review of the numbers may not bear this solution out, but food for thought at least.

Best regards,

~bug

[Deelow]

Has anyone heard the Epcor radio spots? They are running in Grande Prairie. Basically it says "if this goes through your city will die". "Don't let it happen". Makes me laugh. Grande Prairie needs to be knocked down a peg or two.

[Azure]

Originally Posted by killer_carlson

It also depends upon what the Province does with the extra money.

If they put it into the seperation....er I mean Heritage Fund, then forget it. Don't pass it.

If they spend most of it on initiatives to diversify the economy and improve our infrastructure, then that's a different story.

Well said.

Agreed 100%.

EDIT: I should say though....that is a big 'if.'

The government, especially here in Alberta doesn't exactly have a good track record for timely and 'wise' investments to improve the infrastructure of the province.

[First Lady]

I suspect this has been posted elsewhere before; however I see Derrick is using it at his site....
it is very appropriate to the Royalty Review "Fair Share".

Royalty Review Analogy

Put in terms everyone can understand.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.
"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost
just $80. The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers?

How could they divide the $20 windfall so that everyone would get his 'fair share?'

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all.The system exploits the poor!"

The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even hal f of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics
University ofGeorgia

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.

[First Lady]

Just a quick update.... there are now buses scheduled from Calgary and other cities are being added...
Contact for busing is Justin 835-7590.

For all rally updates:

http://www.quattroenergy.ca/Royalty.html

[Reggie Dunlop]

I find it somewhat ironic that a "Workers Rally" is being held during working hours.

[First Lady]

Originally Posted by Reggie Dunlop

I find it somewhat ironic that a "Workers Rally" is being held during working hours.

Many employers fully support this and are encouraging employees to attend.

Others are already laid off.

http://canadianpress.google.com/article/ALeqM5ibLYTxegTGEI4z88H9K136C9nlAw

[Reggie Dunlop]

Originally Posted by First Lady

Many employers fully support this and are encouraging employees to attend.

Must be nice....

[First Lady]

Originally Posted by Reggie Dunlop

Must be nice....

A day out skiing would be "nice".
A evening at a hockey game would be "nice."

Not sure that I would use "nice" to describe demonstrating on the steps of the Leg because you (and your employer) do not have confidence in you own government.

Standing up for what you believe in is important and rewarding; far too few people do it..... IMO.

[Reggie Dunlop]

Hope the weather's good.

[Vulcan]

Originally Posted by First Lady

Many employers fully support this and are encouraging employees to attend.

Others are already laid off.

http://canadianpress.google.com/article/ALeqM5ibLYTxegTGEI4z88H9K136C9nlAw

Man, those poor multinational natural gas and oil companies. You've got my sympathies. I'll be right on it.

[Reggie Dunlop]

Employees attending rallies sponsored by a boss-approved political party? I've read about this sort of thing in history books.

[ddj]

Originally Posted by Reggie Dunlop

Employees attending rallies sponsored by a boss-approved political party? I've read about this sort of thing in history books.

There is no political party that is boss approved. These are fellow Albertans voicing their concerns on the Royalty issues at hand. The problem is alot of people are talking when they should be listening. All parties were invited to address the public, the only two with the courtesy to talk to these Albertans were the Alliance Party and the Wildrose Party. If people can't take the time to know what they are talking about on these issues they should be careful when voicing their opinions. If and when the money leaves, I geuss we'll see who Alberta blames then. Especially when the Government still wants the money, who do you think they'll look to next????