EDMONTON, AB (September 14, 2011): A C.D. Howe Institute report released today confirms the foolishness of raising resource royalty rates and the importance of having a stable and competitive business climate, a point only the Wildrose Caucus drove home when the current government raised royalties in 2007.

The report – Rethinking Royalty Rates: Why There Is a Better Way to Tax Oil and Gas Development – concludes that raising royalties on oil and gas companies often has the opposite of the desired effect. Instead of increasing provincial revenues, the higher rates discourage investment and, as a result, less land is leased and fewer products make it to market.

Wildrose Leader Danielle Smith said Alberta is a textbook case. In 2007, when the current government hiked royalty rates promising windfalls of resource revenues, investment dollars fled to neighbouring jurisdictions with more competitive conditions.

“In 2007, Wildrose stood alone in condemning the royalty hike because we knew the devastating impact it would have on industry,” Smith said. “Alberta learned a hard lesson when this government

brought in the higher rates and I hope it’s a lesson no leader – regardless of political stripe – will forget.”

In May, the Wildrose released its energy policy which focuses on streamlining regulations and working with industry to ensure policies like royalty rates are predictable, planned and conducive to fostering the most competitive business environment in Canada.

“This government has yet to learn that increasing taxes to cover spending does not balance a budget. By abruptly hiking royalties, this government created volatility in what was among the most stable and competitive investment climates anywhere in the world,” Wildrose Energy Critic Paul Hinman said. “Government’s role is to create a competitive and level playing field for industry and then get out of the way.”

The Wildrose Caucus stands for free enterprise, less government, increased personal freedom and democracy.

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For further information or to arrange an interview, media are invited to contact:

Brock Harrison

Director of Communications, Wildrose Caucus

Ph: 780-399-2890