Time for change — in Alberta leadership?

Stelmach government faces owly, disaffected voters, with province’s largest city poised for Liberal breakthrough; one opposition leader wants to copy Alaska’s tax

Gary Park

For Petroleum News

There is one thing you can say about Albertans.

When they make up their political minds they’re tough to budge.

In the 103 years since the province joined the Canadian confederation it has been ruled by just four political parties — Liberals from 1905-21; United Farmers 1921-35; Social Credit 1935-71; and Conservatives since 1971.

When the previous three dynasties were finally unseated they never again threatened to regain power.

That knowledge hangs like a menacing cloud over the head of Premier Ed Stelmach, who has called an election for March 3 at a time when voters have seldom been so unsure of themselves.

One recent poll showed 46 percent of Albertans believe it’s time for a change of government, but 32 percent of them backed the ruling Conservatives, 18 percent the Liberals, 7 percent the New Democratic Party and 5 percent the Wild Rose Alliance, leaving a significant 38 percent undecided.

Unhappiness deep in Calgary

Caught in an industry backlash, with companies pulling billions of dollars out of their 2008 capital budgets, Stelmach is in a desperate struggle to preserve that stronghold, while Liberal leader Kevin Taft is boldly forecasting that the day after the election “people are going to wake up and see that Calgary’s a Liberal city.”

That would require a shift of tectonic proportions, given that the Liberals hold only four of Calgary’s 23 seats in the provincial legislature.

But it has Stelmach worried to the point where he is trying to rebuild bridges to a disaffected industry.

He told industry leaders his government will do all it can to protect a “thriving energy sector” and a “cornerstone of the province’s economy,” promising that the new royalty framework will remain a work in progress until legislation is adopted before the changes are implemented on Jan. 1, 2009.

“We need to be prepared to constantly adapt to changes,” said Stelmach, just a few months after declaring that the framework was open to discussion, not negotiation.

A hint of how much he is feeling the heat came when the government signed a new contract with oil sands producer Suncor Energy that many pounced on as a sellout.

Tax hike won’t hit 20%

In a speech to open a new session of the legislature — now effectively the Conservatives’ campaign platform — the government said it remains committed to ensuring Albertans receive a “fair return” from their natural resources.

But it said thousands of jobs and a strong economy depend on Alberta being an “internationally competitive location for new investment and sustained development.”

In addition, the government promised a new savings strategy through a revitalized Alberta Heritage Savings Trust Fund, created in 1976 as a nest egg for surplus resource revenues, but neglected for many years.

Although the fund is expected to grow by about C$1 billion in the current fiscal year, it currently stands at only C$16.1 billion. Over its lifetime, the fund has generated about C$30 billion in investment income.

If elected, the Liberals say they will rejig the royalty regime to help struggling natural gas producers, while the New Democrats want a complete overhaul of the framework, especially in the oil sands, to dig even deeper into the industry’s pockets.

Brian Mason, leader of the New Democrats, has frequently called for Alberta to copy Alaska’s Oil and Gas Production Tax, estimating that would yield an additional C$4 billion a year.