Is Alberta Becoming a Banana Republic?

Did you ever wonder how oil companies are able to invest in corrupt, third-world countries?

In many African and southeast Asian countries (among others), governments will do thedarndest things. They will set inconsistent rules that approve projects based on the amount ofbribe money offered to key officials rather than on objective and consistent criteria thatsecures a reasonable return for their citizens and health for their environment. They willsometimes change agreements (either officially or under the table) once a development is offand running, ripping up contracts they feel aren't paying a fair share when the project turns into a success. Some, like Venezuela, just revoke oil leases and nationalize the whole industry sending all investment fleeing the country.

Well, I don't think Alberta has quite reached this point, but we are certainly well on our way.Last week, the PC Government proposed regulations to halt oilsands production on millions of hectares near Fort McMurray - including some that had already been leased to two dozen oil companies. These are companies that followed the rules, purchased the licenses and put these assets on their corporate balance sheets. These are companies whose shares are traded daily on the stock exchange. Using the Government's now infamous Bill 36, the PCs now plan to extinguish those rights based on a unilateral decision made behind closed doors by Cabinet.

At this time, there are conflicting reports on how these companies will be compensated for this but you can bet it won't be for the full value of the oil under the ground. If it is, taxpayers will be on the hook for billions.

Predictably, environmental extremists accused the Government of selling out to oilsands companies. Of course, the folks at Greenpeace will only be satisfied when we beat our oil rigs into hammers and sickles. A bit more surprisingly, many in the oil industry trotted out the "it's not that bad"

PC party line. Of course, who can blame them - after the royalty framework disaster, the regular bullying tactics, and now this, I wouldn't be surprised if many of our energy entrepreneurs aren't curled up in the fetal position praying that Stelmach and company don't simply revoke all their leases and hand them out to the first 100 people to sign up for the next PC AGM.

The fact is the Government's decision to unilaterally revoke the mineral leases of two-dozen oil and gas companies is bad...very bad. It sets a dangerous precedent that would give any sensible investor pause when deciding whether to take a risk investing in Alberta. Just because they didn't confiscate as many leases as the energy industry first feared, does not make the Government's actions benevolent or rational in any way. This hurts investor confidence in our province...period.

And imagine if the PC Cabinet is willing to do this to multinational oil companies in the Lower Athabasca, what makes anyone think they won't do the exact same to our farmers, ranchers, and water rights holders as well?

Bill 36 gives them the power to make this move...and last week's land grab shows this Government is willing to do it.

But there is a solution. If elected as the Government at the next provincial election, a Wildrose Government would immediately repeal Bill

36 (along with Bills 19, 50 and 24), and pass an Alberta Property Rights Preservation Act, which will ensure fair, full and timely compensation to property owners for any Government expropriation of property where a public need is determined by a fully independent and impartial board.

Instead of centralizing all regional planning power in the Cabinet, a Wildrose Government would empower and resource locally elected municipal governments and other regional representatives to have the authority to guide development in their respective regions. Furthermore, parks and other reserve areas would be set up in advance prior to granting property rights in them. And for those areas we want to protect where property rights have already been granted, we would work with rights holders to compensate them in a matter that is fair, which has for the most part, been done for decades prior to the passage of Bill 36.

I know we as Albertans are focused on a federal election right now; but what we really need is a provincial one…and fast.