Post by Catdaddy on Oct 28, 2007 11:25:23 GMT -5
Saturday, October 27, 2007
Goodbye Alberta -- hello Saskatchewan?
The timing is perfect: just as Alberta is about to bring in a Tommy Douglas-style tax hike on the oil patch (and -- worse -- rip up signed contracts with the oil sands), Saskatchewan is about to elect the free market Sask Party.
Here's a column I wrote with Lyle Dunkley about it in today's National Post. Here's an excerpt:
Alberta's oilsands can't be moved. But what about oil sands and oil shale in Saskatchewan? The same geological formation that lies under Fort McMurray stretches across the border, into Saskatchewan's Clearwater River Valley. It was explored to some degree in the 1970s, but not developed for economic and political reasons. But new technology has made once-uneconomic oil sands profitable -- and oil at US$90 a barrel helps, too. Combine that with a new, property-rights-respecting Saskatchewan Party and hundreds of experienced oilmen returning home from Alberta, and you've got an interesting possibility. A company called Oilsands Quest is back out there already, drilling exploratory wells.
Don't get me wrong; Saskatchewan has 60 years of catching up to do. But it looks like 2007 alone will close that economic gap by about a decade.
The full article is below.
The next prairie powerhouse
For the first time since 1984, Saskatchewan had net in-migration
Lyle Dunkley And Ezra Levant, Special to the National Post
Published: Saturday, October 27, 2007
Saskatchewan looks set to end 16 years of NDP rule on Nov. 7, with the free-market Saskatchewan Party ahead in the polls. Combine Saskatchewan's move to the right with Alberta's dramatic hike in oil and gas royalties this week, and the once-unthinkable is now happening: Saskatchewan is the next economic powerhouse of the prairies.
The trend has been visible for a little while; housing prices, a good barometer of economic activity, jumped 50% this year in Saskatoon, and almost as much in Regina. By comparison, new home prices in Calgary actually declined by 1% last month, and that was before the oil boom in Alberta was officially euthanized.
It may seem hard to believe, but for a long time Saskatchewan used to be the more prosperous of the two provinces. Alberta and Saskatchewan joined Canada on the same day in 1905, and for a generation, Saskatchewan had a bigger population and bigger economy. The Depression hit both provinces hard, but it wasn't until Saskatchewan elected North America's first socialist government in 1944 that Alberta started to move ahead. Since then, the CCF/NDP has won 12 of Saskatchewan's 16 elections, while its Western neighbour slowly settled into Conservative rule. The result: Saskatchewan's population remains at just under a million people, essentially unchanged from 1931. During the same period, Alberta grew from 730,000 to 3.3 million people. And Alberta's GDP is nearly five times larger than Saskatchewan's.
There will be no Newfoundland-style exodus from Alberta; even under the new tax regime, things are still good. But it's not just the tax hike that has rattled the economy; it's the brazen threat that the government of Alberta will unilaterally break its contracts with the big oilsands producers. Governments of any stripe can raise taxes; but violating the rule of law and dashing the sanctity of contracts is a whole different species of government interventionism. It would make Tommy Douglas proud.
Already strange things are happening. Crescent Point Energy Trust announced that it was considering diverting $150-million in spending from Alberta to Saskatchewan next year. Some Saskatchewan-born oil patch workers, having made their fortune in Alberta, are returning home for sentimental reasons and the lower cost of living. This year for the first time since 1984, Saskatchewan had net in-migration from other provinces.
A few thousand people and a few hundred million dollars are one thing. But what about the tens of billions of dollars locked into Alberta's oilsands?
The oilsands are the hardest-hit by the province's tax hike -- and the premier hasn't revealed what he will do if the companies go to court to uphold their contracts. "The government will take other measures to ensure a level playing field," said Ed Stelmach, a not-so-veiled threat.
Alberta's oilsands can't be moved. But what about oil sands and oil shale in Saskatchewan? The same geological formation that lies under Fort McMurray stretches across the border, into Saskatchewan's Clearwater River Valley. It was explored to some degree in the 1970s, but not developed for economic and political reasons. But new technology has made once-uneconomic oil sands profitable -- and oil at US$90 a barrel helps, too. Combine that with a new, property-rights-respecting Saskatchewan Party and hundreds of experienced oilmen returning home from Alberta, and you've got an interesting possibility. A company called Oilsands Quest is back out there already, drilling exploratory wells.
They were betting on new technology and high oil prices. It's unlikely they ever thought their best promoter would be a socialist from Alberta named Ed Stelmach.
ezra@westernstandard.ca - Lyle Dunkley is chairman of Rider Resources. Ezra Levant is publisher of Western Standard online.
© National Post 2007
Goodbye Alberta -- hello Saskatchewan?
The timing is perfect: just as Alberta is about to bring in a Tommy Douglas-style tax hike on the oil patch (and -- worse -- rip up signed contracts with the oil sands), Saskatchewan is about to elect the free market Sask Party.
Here's a column I wrote with Lyle Dunkley about it in today's National Post. Here's an excerpt:
Alberta's oilsands can't be moved. But what about oil sands and oil shale in Saskatchewan? The same geological formation that lies under Fort McMurray stretches across the border, into Saskatchewan's Clearwater River Valley. It was explored to some degree in the 1970s, but not developed for economic and political reasons. But new technology has made once-uneconomic oil sands profitable -- and oil at US$90 a barrel helps, too. Combine that with a new, property-rights-respecting Saskatchewan Party and hundreds of experienced oilmen returning home from Alberta, and you've got an interesting possibility. A company called Oilsands Quest is back out there already, drilling exploratory wells.
Don't get me wrong; Saskatchewan has 60 years of catching up to do. But it looks like 2007 alone will close that economic gap by about a decade.
The full article is below.
The next prairie powerhouse
For the first time since 1984, Saskatchewan had net in-migration
Lyle Dunkley And Ezra Levant, Special to the National Post
Published: Saturday, October 27, 2007
Saskatchewan looks set to end 16 years of NDP rule on Nov. 7, with the free-market Saskatchewan Party ahead in the polls. Combine Saskatchewan's move to the right with Alberta's dramatic hike in oil and gas royalties this week, and the once-unthinkable is now happening: Saskatchewan is the next economic powerhouse of the prairies.
The trend has been visible for a little while; housing prices, a good barometer of economic activity, jumped 50% this year in Saskatoon, and almost as much in Regina. By comparison, new home prices in Calgary actually declined by 1% last month, and that was before the oil boom in Alberta was officially euthanized.
It may seem hard to believe, but for a long time Saskatchewan used to be the more prosperous of the two provinces. Alberta and Saskatchewan joined Canada on the same day in 1905, and for a generation, Saskatchewan had a bigger population and bigger economy. The Depression hit both provinces hard, but it wasn't until Saskatchewan elected North America's first socialist government in 1944 that Alberta started to move ahead. Since then, the CCF/NDP has won 12 of Saskatchewan's 16 elections, while its Western neighbour slowly settled into Conservative rule. The result: Saskatchewan's population remains at just under a million people, essentially unchanged from 1931. During the same period, Alberta grew from 730,000 to 3.3 million people. And Alberta's GDP is nearly five times larger than Saskatchewan's.
There will be no Newfoundland-style exodus from Alberta; even under the new tax regime, things are still good. But it's not just the tax hike that has rattled the economy; it's the brazen threat that the government of Alberta will unilaterally break its contracts with the big oilsands producers. Governments of any stripe can raise taxes; but violating the rule of law and dashing the sanctity of contracts is a whole different species of government interventionism. It would make Tommy Douglas proud.
Already strange things are happening. Crescent Point Energy Trust announced that it was considering diverting $150-million in spending from Alberta to Saskatchewan next year. Some Saskatchewan-born oil patch workers, having made their fortune in Alberta, are returning home for sentimental reasons and the lower cost of living. This year for the first time since 1984, Saskatchewan had net in-migration from other provinces.
A few thousand people and a few hundred million dollars are one thing. But what about the tens of billions of dollars locked into Alberta's oilsands?
The oilsands are the hardest-hit by the province's tax hike -- and the premier hasn't revealed what he will do if the companies go to court to uphold their contracts. "The government will take other measures to ensure a level playing field," said Ed Stelmach, a not-so-veiled threat.
Alberta's oilsands can't be moved. But what about oil sands and oil shale in Saskatchewan? The same geological formation that lies under Fort McMurray stretches across the border, into Saskatchewan's Clearwater River Valley. It was explored to some degree in the 1970s, but not developed for economic and political reasons. But new technology has made once-uneconomic oil sands profitable -- and oil at US$90 a barrel helps, too. Combine that with a new, property-rights-respecting Saskatchewan Party and hundreds of experienced oilmen returning home from Alberta, and you've got an interesting possibility. A company called Oilsands Quest is back out there already, drilling exploratory wells.
They were betting on new technology and high oil prices. It's unlikely they ever thought their best promoter would be a socialist from Alberta named Ed Stelmach.
ezra@westernstandard.ca - Lyle Dunkley is chairman of Rider Resources. Ezra Levant is publisher of Western Standard online.
© National Post 2007
