Alberta will move forward with its royalty review and corporate tax hike despite oil prices falling to a six-year low and the provincial economy slumping, Premier Rachel Notley said Friday.
The premier rejected opposition and oil industry calls to defer the tax hike and royalty review after attending a ceremony to mark the anniversary of Treaty 6 at Edmonton City Hall.
“We’re still going forward with those,” Notley told reporters following a ceremony in which she was wrapped in an ornate First Nations blanket. “Alberta still has by far the most competitive tax regime in the country, and so when times get tough those who are profitable should be paying just a little bit more.”
The premier noted the corporate tax, which was hiked 20 per cent by her NDP government this spring, is applied to profits rather than losses and any companies struggling in the slumping economy will see their taxes go down.
Oil plunged below $40 a barrel in New York for the first time in more than six years on signs the supply glut will be prolonged, Bloomberg reported Friday. Prices have tumbled almost 35 per cent since this year’s peak in June and West Texas Intermediate grade oil could drop to US$32, according to a recent Citigroup Inc. report.
But Notley said the massive drop in oil prices won’t delay the promised royalty review, chaired by banker Dave Mowat. Mowat is expected to announce his panel and its mandate next week.
“We’ve said all along that the review will be done within the context of both the current economic climate as well as the future, and recommendations that come out of it will be present day as well and look forward to the future and different circumstances,” Notley said. “I expect very much that in our conversations with industry we will hear and we will respond to their concerns about the current state of the price of oil and we have no intention of doing anything that would make things more difficult.”
Wildrose Leader Brian Jean called Notley’s comments “disturbing.”
He said now is not the time to be increasing taxes or putting oilpatch jobs in jeopardy.
“This is the time we need to help those people that are being affected,” he said, noting the large increase in the amount of unemployment claims in Calgary and across Alberta. “I think this is the time that government should step forward and make sure they protect those jobs as well as they possibly can in the oil and gas sector.
“These are people’s lives and they have to make mortgage payments; they have to provide food and make sure their children receive the proper things they deserve.”
PC Leader Ric McIver accused the premier of falling asleep at the switch.
“She seems to be diddling while Alberta jobs burn,” he said. “It’s unbelievable that the premier, who is responsible to look after four million Albertans, won’t back off on her job-killing policies in the midst of the lowest commodity prices and the highest unemployment rate that this province has seen in years, if not decades.”
McIver said that if Notley remains on the present track she runs the risk of driving the bulk of Alberta businesses out of the province and killing the futures of Alberta’s children and grandchildren.
With files from Erin Sylvester, Calgary Herald
