Statement By Premier Lougheed On Alberta Response To Federal Oil Export Tax & On New Oil & Gas Policies For Alberta
"On September 14th I stated in a public address that the Alberta Government considered the Federal Government's export tax on Alberta crude oil as clearly discriminatory action by the Federal Government against a particular province. Under the terms of Confederation, the provinces formed the union on the basis that the natural resources would be the exclusive jurisdiction of the provinces, and hence, able to manage their own natural resources. The imposition by the Federal Government of an oil export tax upon a province's natural resources is, in principle, contrary in our view to the spirit and intent of the essential terms of Confederation.
As Albertans and Canadians we are quite prepared to cooperate with the Federal Government and with Provinces to assure that adequate supplies of Alberta oil and natural gas are made available to Canadian consumers in preference to export markets, subject to two important qualifications:
- That we not be forced to sell depleting natural resources below world commodity prices or below fair value having regard to the cost of competitive energy sources.
- That national energy policies be developed in such a way to assure the maximum reasonable degree of processing and upgrading of oil and natural gas within Canada and in particular upstream in proximity to the wellhead in order to promote regional development throughout all of Canada.
It is then with this attitude towards working with the other Provinces and the Federal Government that we have sought a national conference of First Ministers on energy before major national energy policies have been finalized.
We reject completely the argument that in some way the National Oil Policy of 1961 was a favour to Alberta. Such a policy was a minimal national policy for Canada and if it had not been instituted, there would not now be any significant Canadian oil reserves to even discuss in terms of national policy. Further, if measured beside the cost to Western Canadians of historic national tariff and transportation policies which favour Central Canada, the scales are still heavily balanced against Western Canadian equity in Confederation.
We assess the impact of the principle of the Federal Oil Export Tax as an invasion of the Provincial Government's jurisdiction over its natural resources.
We understand that the purpose of the Oil Export Tax is supposed to be to protect Canadian consumers of crude oil products from the impact of the United States crude oil price exceeding world commodity prices on a free international market presumably at Montreal. As the Government of a province of Canada, we are naturally prepared to cooperate to assure such protection in the Canadian public interest as the supplier of the vast majority of Canada's oil and gas production. Clearly, if the United States foreign policy results in a situation that oil prices in the United States exceed world commodity prices then we as Albertans would be willing to cooperate in an effort to insulate and protect the Canadian consumer from such a situation.
However, the Federal Oil Export Tax will not only siphon off millions of dollars from the Alberta economy but more significant, is a clear invasion in our view of our basic jurisdiction over the managing of our provincially owned natural resources.
We assess the implementation of the Federal Export Oil tax as having even broader implications in terms of its extension to other areas of provincial jurisdiction specifically natural gas. In economic terms, we assess the tax as very detrimental to the Alberta economy and to the Alberta Government. Accordingly, we are forced in fact, have no choice but to respond with major revisions in Alberta's oil and gas policies, legislation and royalty arrangements which in our judgment will protect the Alberta and Canadian public interest.
