ForsbergTheGreat Posted October 5, 2015 Share Posted October 5, 2015 Where else do revenues go? According to IHS CERA, economic benefits from oil sands can be measured by the jobs it creates, the goods and services it purchases from other services, and the royalties and taxes paid to government. The oil sands are often characterized as a future proposition, which will bring great economic benefits if development is allowed to continue and grow.The reality is that current levels of development are already boosting Canada’s economy. In 2014 research (PDF), IHS CERA estimated that in 2012, oil sands resulted in almost 480,000 jobs in Canada and $91 billion in Canadian gross domestic product (GDP), or about 3 per cent of total Canadian employment and 5 per cent of the GDP. Royalties and taxes collected from oil sands and spin-off activities in 2012 topped $28 billion (or about $812 per Canadian.)In 2013, Suncor alone contributed a combined $4 billion in royalties and taxes for governments. How else have the oils improved canadians lives, well how about providing jobs. In 2012, government revenues in the form of tax receipts and royalties totaled a combined $C28 billion. The federal share was more than half (C$ 15 billion) of the revenue and represented 6 percent of total federal income, equal to half of federal spending on healthcare transfers in 2012, the study says. Revenues would have been even higher had western Canadian crude oils not been subject to price discounts due to export bottlenecks, the study adds. That bottleneck is not being able to export through pipelines, Pipelines that NDP is against, even though it's a way cleaner way at transporting oil compared methods of rail and trucks. I'll go into that more in a bit. Still want to know where else the money is going and the people it's benefitting? In 2013, more than 2,000 companies from across Canada had direct business (goods and/or services) with the oil sands. Source: CAPP 2014Thanks to oil sands development, Fort McMurray has become one of the fastest-growing communities in North America, with average annual population growth of approximately 5% from 2006-2011. Source: Statistics CanadaAs of March 2011, 21,115 people were directly employed in oil sands operations jobs in Fort McMurray. Source: Regional Municipality of Wood BuffaloIn 2012, Wood Buffalo and Lac La Biche Aboriginal companies performed more than $1.8 billion in contract work with oil sands companies. Source: OSDG 2013Over the past 14 years, Aboriginal companies have earned more than $8 billion in revenue through working relationships with the oil sands industry. Source: OSDG 2013There were more than 1,700 Aboriginal employees in permanent operations jobs in the oil sands industry in 2010. Source: OSDG 2011In 2010, oil sands companies provided $5.5 million to support Aboriginal community programs. Source: OSDG 2011 What are Royalties Used For? What is a Royalty? Alberta’s natural resources belong to Albertans. In exchange for the right to develop these resources, companies pay the government a royalty. This is a percentage of revenues generated from the sale of oil and natural gas products, or in some cases takes the product in-kind for the government to sell. Royalties are just one way oil and natural gas producers contribute to government revenues. Many different government taxation policies affect exploration and development of Alberta’s natural resources. What are Royalties Used For? Alberta has attracted the people and the capital to develop a world-class economy that is integrated into all Albertans’ lives. Royalties are an important part of the Alberta economy and are used to: Fund provincial government operating and capital costs; Fund healthcare and education, build roads and pay for programs and services for Albertans Here's a beautiful explanation of the bottlenecking i was talking about earlier. I am writing this post in an attempt to inform & educate anyone who wants to understand the basics of how the Alberta government receives royalty money from Oil and Gas production in our province. I will also explain how Alberta has lost BILLIONS of dollars in royalties over the last 5 or so years (remember this is money that could have paid for new schools, healthcare, social programs, or “insert government funded program of your choice”). Lastly I will touch base on the impact this discussion has for all of Canada, and what we can ALL do about it. I will try to keep this high level, but provide enough detail to help understand the basics. So first – The Oil and Gas industry is divided into 3 main sectors: 1. UPSTREAM -Raw production from wells or open-pit mining. (this is the only area where Alberta gets paid a royalty) 2. MIDSTREAM -Transporting raw production or refined products – pipelines/trains/trucks/barge/storage tanks, etc.. 3. DOWNSTREAM -Refining of hydrocarbons (Oil and Gas) in to end-use-products– gasoline, jet fuel, heating oil, lubricants, this list goes on and on. In regards to royalties – Alberta only receives a royalty on raw production that takes place in the Upstream Sector. This is because the majority of Oil and Gas reserves in Alberta (80%) are located on Crown-Land (the government and people of Alberta own the surface/mineral rights). We allow companies to invest money (billions) and establish their operations here to extract that Oil and Gas. We do however set a specific percentage (royalty) that companies must pay to us for every barrel of oil that is produced (I’m really just going to focus on Oilsands because that is where the majority of our Oil and Gas royalty money is generated from. We also receive royalties from natural gas, crude oil and liquids ). There are two basic formulas for Oilsands royalties: PRE PAYOUT - this is when a company has not yet recovered their initial investment. While the company is still working to make their money back on their startup costs, we charge a royalty between 1-9% of their gross revenue. This percentage is dependent on the price of oil (the higher the price of oil, the higher the percentage we take). POST PAYOUT – at this point the company has recovered their initial investment, so now we (Alberta) take between 25-40% of the company’s net profits. Again – this percentage is dependent on the price of oil. The higher the price of oil, the higher the royalty percentage we take. This is a VERY HIGH LEVEL explanation of royalties, but I hope it at least helps you to understand the basics about how we make money as a province from our Oil. To give you an idea – in 2014 and early 2015, Alberta was paid approx. 8.3 BILLION in royalty money (see link in comments for breakdown). That pays for a lot government funded services. Now – I mentioned that I would also explain how Alberta has lost BILLIONS in royalty revenue over the last 5 or so years. I think many of you will be very shocked to hear the following facts: Alberta oil production has been growing quite fast over the past 15 years. In the year 2000 we were producing approx. 600K barrels/day. Now in 2015 we are producing around 2.3 Million barrels /day. That’s almost a 400% increase in production! Unfortunately, while we have increased production, we have NOT built the infrastructure (pipelines) to help transport this increased production to end markets. I’ll try to provide an analogy to make my point: you know how at the end of the year when a clothing store has excess inventory, they throw a massive clear-out sale to get rid of their excess inventory? (They have too much inventory, so they sell it at a discount to get rid of it). This is essentially what is happening to Alberta Oil! We have more product than we can fit into pipelines, so we sell it at a significant discount to help get rid of it. The price discount applied is anywhere from 10-40%! Remember, we get paid a royalty based on gross revenue (pre-payout), or net profit (post payout). ALBERTA IS LOSING ROYALTY DOLLARS BECAUSE OUR OIL IS LANDLOCKED, CAUSING A DRAMATIC DISCOUNTED WHEN WE SELL IT! That 8.3 Billion in royalty revenue I quoted should have been substantially greater, but we sold our oil at a discount because we don’t have the infrastructure to ship it to end markets. I hope this makes sense how we have truly taken away money from ourselves by challenging pipelines (the safest method of transporting oil, a product we ALL use every single day). I don’t think that many people understand this. This discussion of royalties and pipelines has implications for ALL of Canada as well. If what I have mentioned above does not move you, I hope the following facts will: Canada has the 3rd largest oil reserves in the world, yet we DO NOT provide our entire Country with oil!! EASTERN CANADA IMPORTS MILLIONS OF BARRELS of Oil every year from countries like SAUDI ARABIA, NIGERIA, IRAQ, VENEZUELA, and ALGERIA. People claim to fight pipelines in Canada because they are protecting human rights and the environment. Yet we’re completely okay with importing oil from overseas countries that have atrocious human rights violations, and next to no environmental regulations compared to Canada……this is mind boggling and completely illogical. Again – I don’t think that many people understand this. By protesting pipelines (specifically Energy East), Canadians are saying they would rather import oil from countries with atrocious human rights violations, and little to no environmental regulations compared to Canada (taking away jobs from Canadians and losing additional income tax). And back to royalties – by protesting pipelines we are losing BILLIONS in royalty dollars, because we can’t ship our products to end markets, so we sell it at a discount (which lowers the royalty we receive). If you’re a true environmentalist and humanitarian, you would push to buy ONLY CANADIAN OIL! Canada’s Oil industry has some of the tightest environmental regulations in the world! We’re also a world leader in renewable energy (which many people don’t realize). Link to comment Share on other sites More sharing options...
LaBamba Posted October 5, 2015 Share Posted October 5, 2015 ontinued with the initial design of the fund, that number would have been around 50.8 billion.nothing near the 170 billions you are mentioning. You would also realized that the money was being spend on improving the current generations lives, again (ie ...health care, schools....) , not just as you say "in the pocket of lobbyists for private enterprise" It also stated that </span></span> Nicely done, nothing better than waking up to a NDP rant reduced to rubble. Link to comment Share on other sites More sharing options...
LaBamba Posted October 5, 2015 Share Posted October 5, 2015 You are mistaken. The NDP government has made it clear that there will be no changes to rates until 2017 at the earliest.http://www.cbc.ca/news/canada/edmonton/alberta-royalty-review-no-changes-to-rates-before-2017-1.3207381 Both Saskatchewan and Alberta have the same tax rate as of the new changes, and there isn't any 'uncertainty' about the tax rate or the royalty rate. It's a stupid argument even if there was uncertainty, simply because the price of oil has been cut by more than one half since February. It's funny that you use Crescent Point as your example, because they are basically profiting off of another company selling off its assets for pennies on the dollar BECAUSE of the drop in oil prices. Taxes and royalty rates having piss all to do with it. Would you buy a car for 10% of it's value because the previous owner went broke? I sure as hell would, and that's what Crescent Point did. By IS, you mean WAS. The difference was the $100 barrels of oil, which no longer exists, and is likely not to rise again to that level anytime soon. Don't address the arguments of the present with facts from the past. There's a new Stampede in Calgary, the scurrying of oilfield workers leaving to find jobs somewhere else. Blame it on NDP if you like, but that's just BS. It has everything to do with falling oil prices and you know it. Because those resources belong to Alberta, and as such a percentage of any resource extracted should go to the government to pay for the public services and infrastructure they provide. Because the government (supposedly) represents the will of their constituents, the citizens of Alberta. Would you rather the people entrust their needs to private enterprise? Should we have a crappy mandatory private insurance healthcare system like the US? Make it so that I have to 'buy a policy' from a company who will try their damndest to find a way to deny my claim when I get sick? No thanks, Ayn Rand. We can always elect a new government if we don't like the current one. We can't 'fire' corporations. And I quote: "Between 1980 and 2014, although non-renewable resource revenues (NRR) in Alberta generated almost $190 billion, the value of the Heritage Fund in 2014 was only $17.3 billion." http://albertaventure.com/2014/05/non-renewable-resource-revenue/ My problem isn't with the oil companies...it's with the government that squandered the money. The Progressive Conservative government, you know, the ones who espouse 'great fiscal management'. THEY did this, not the 'evil' NDP. Now I ask, where's the missing 170+ billion dollars?? WHERE IS IT? Probably in the pocket of lobbyists for private enterprise...forgive me if I don't shed a tear for them because their tax rate went up 2 whole percent.... You have absolutely no idea what the average albertian is and what the average albertian wants. I am the Oil companies. Right now I'm consulting for a KNOC subsidiary. We have 300M of capital in limbo because of the royalty uncertainty. Are you seriously that stupid to think these projects are completed, sold, and reclaimed by 2017? The capital we spend today will be directly effected by the 2017 royalties. In Saskatchewan we know what we are paying and we know what is profitable. You are trying to tell ME that it's all a bunch of BS when my job is to lower costs to continue drilling!! I'm right here!!! Right in the middle of this!!!! I'm currently on my phone on a Nabors drilling rig, looking at it from the inside of my office. When commodities are low in a commodity driven environment, it should be the governments responsibility to stabilize the peaks and valleys, not to exasperate them. That is the very definition of governing Link to comment Share on other sites More sharing options...
Ryan Strome Posted October 5, 2015 Share Posted October 5, 2015 Golf clap? Golf clap. Bravo You golf clapped a little early. Given that Mustapha and yourself have very little understanding of the oil industry I'm not surprised. Labamba is absolutely correct that uncertainty has left Alberta in a very slow time, that's seems like a smart thing to do while oil is under 50$ a barrel. Lol. We directly work in the industry and have seen first hand the uncertainty in Alberta. But hey j.r wants to talk federal election hippy, so let me ask you how is your ndp party making out these days? :) Link to comment Share on other sites More sharing options...
Ryan Strome Posted October 5, 2015 Share Posted October 5, 2015 Are you kidding, NDP supporters are far left supporters of Socialism?The NDP promised a balanced budget. That is hardly left wing. If anything it is the Liberals who aremoving to the left by saying they will runs deficits and making the rich pay more tax. Balancing a budget doesn't immediately mean you're right wing. As far as Trudeau goes he has promised to raise taxes on individuals making over a 150,000$ a year BUT will NOT raise corporate taxes. Clearly you understand the difference right? Trudeau seems to understand lower taxes grow the economy while the ndp wants to raise corporate taxes and scare business out. As far as massive spending in infrastructure, I support that actually. Link to comment Share on other sites More sharing options...
inane Posted October 5, 2015 Share Posted October 5, 2015 Site where you can search by MP or bill or whatever and find their voting record. https://www.votes.mp Link to comment Share on other sites More sharing options...
TOMapleLaughs Posted October 5, 2015 Share Posted October 5, 2015 It's really too bad most of the money from the oil boom went out of country. Now common Canadians are talking austerity while a certain few non-Canadians profited hundreds of billions. Norway, meanwhile, has a trillion dollars to spare.http://www.huffingtonpost.ca/2014/01/11/oil-fund-norway-millionaires_n_4576887.htmlAlberta was just greedy and decided that a drunken, blow-out dance party today was better than a string of candle-lit dinner parties down the road, writes noted economics reporter Eric Reguly in Corporate Knights. What a pathetic waste. Link to comment Share on other sites More sharing options...
one-x Posted October 5, 2015 Share Posted October 5, 2015 Seems like Libs are pulling support from the NDP and the Cons base is keeping steady? It'll be interesting to see if this keeps up until election day. Liberals also released their full platform today on facebook earlier today. That might even add more momentum for them? Link to comment Share on other sites More sharing options...
aGENT Posted October 5, 2015 Share Posted October 5, 2015 I don't understand why you are against discussing the way the oil industry is handled. Because it's already been discussed ad nauseam and is at best a footnote in the election. Link to comment Share on other sites More sharing options...
Webster6 Posted October 5, 2015 Share Posted October 5, 2015 Because it's already been discussed ad nauseam and is at best a footnote in the election. J.R would you be interesting in bring that brain of yours onto a podcast of mine to discuss some interesting subjects/events, including major election topics? Link to comment Share on other sites More sharing options...
aGENT Posted October 5, 2015 Share Posted October 5, 2015 J.R would you be interesting in bring that brain of yours onto a podcast of mine to discuss some interesting subjects/events, including major election topics? Sounds terrifying Link to comment Share on other sites More sharing options...
LaBamba Posted October 5, 2015 Share Posted October 5, 2015 It's really too bad most of the money from the oil boom went out of country. Now common Canadians are talking austerity while a certain few non-Canadians profited hundreds of billions. Norway, meanwhile, has a trillion dollars to spare.http://www.huffingtonpost.ca/2014/01/11/oil-fund-norway-millionaires_n_4576887.html What a pathetic waste. How many times does this have to be explained to you? WE DO NOT HAVE NATIONALIZED OIL. THIS DIED 30 YEARS AGO. WE DO NOT HAVE $10,000,000,000 TO BUY BACK THE OILSANDS. STOP COMPLAINING ABOUT SOMETHING THAT COULD NEVER HAVE, AND NEVER WILL POSSIBLY EVER HAPPEN. Do you have a mental blockage? Why can't you piece this together? Link to comment Share on other sites More sharing options...
TOMapleLaughs Posted October 5, 2015 Share Posted October 5, 2015 How many times does this have to be explained to you? WE DO NOT HAVE NATIONALIZED OIL. THIS DIED 30 YEARS AGO. WE DO NOT HAVE $10,000,000,000 TO BUY BACK THE OILSANDS. STOP COMPLAINING ABOUT SOMETHING THAT COULD NEVER HAVE, AND NEVER WILL POSSIBLY EVER HAPPEN. Do you have a mental blockage? Why can't you piece this together?Seriously, save your capslock for somebody who takes you seriously. Link to comment Share on other sites More sharing options...
LaBamba Posted October 5, 2015 Share Posted October 5, 2015 Because it's already been discussed ad nauseam and is at best a footnote in the election. Hahahahahahahahahavahavahahzvjfdvkddhklhdvjygrh Link to comment Share on other sites More sharing options...
LaBamba Posted October 5, 2015 Share Posted October 5, 2015 Seriously, save your capslock for somebody who takes you seriously. What is it going to take to mKe you understand this? Please let me help you, what do you need? Link to comment Share on other sites More sharing options...
bobb Posted October 5, 2015 Share Posted October 5, 2015 Wanted to vote Liberal, but the local guy seems to not want to win. So, I guess the next best thing is to vote the NDP guy to defeat the evil empire! Link to comment Share on other sites More sharing options...
TOMapleLaughs Posted October 5, 2015 Share Posted October 5, 2015 What is it going to take to mKe you understand this? Please let me help you, what do you need?Of course your overly stated issues are only part of the problem. I'd like you to acknowledge some additional problems. These problems have been stated before though, so I'm not sure if this is a conversation worth having, nor is it even the correct thread. I am merely pointing out that the pro-oil circle jerk mentality has large cracks. In the meantime it appears that the majority of Albertans have acknowledged the problem and are at least open to methods of solutions. Cheers. Link to comment Share on other sites More sharing options...
Webster6 Posted October 5, 2015 Share Posted October 5, 2015 Sounds terrifying Nooo it's all in good fun and to bounce in depth thoughts/ideas off each other and share the results of brain storming/debating with the internetz. You can use a code name if you'd like Link to comment Share on other sites More sharing options...
Hugor Hill Posted October 5, 2015 Share Posted October 5, 2015 Balancing a budget doesn't immediately mean you're right wing. As far as Trudeau goes he has promised to raise taxes on individuals making over a 150,000$ a year BUT will NOT raise corporate taxes. Clearly you understand the difference right? Trudeau seems to understand lower taxes grow the economy while the ndp wants to raise corporate taxes and scare business out. As far as massive spending in infrastructure, I support that actually. Manufacturing is gone. Service has to stay here to do business, so they can't go anywhere. Link to comment Share on other sites More sharing options...
TOMapleLaughs Posted October 5, 2015 Share Posted October 5, 2015 Latest government WTF moment: Canada quietly pulls out of UN anti-droughts convention Canada is now ONLY country not part of agreementThe Harper government (yes, it's called The Harper government) is pulling out of a United Nations convention that fights droughts in Africa and elsewhere, which would make Canada the only country in the world outside the agreement. The federal cabinet last week ordered the unannounced withdrawal on the recommendation of Foreign Affairs Minister John Baird, ahead of a major scientific meeting on the convention next month in Germany. The abrupt move caught the UN secretariat that administers the convention off guard, which was informed through a telephone call from The Canadian Press. The cabinet order "authorizes the Minister of Foreign Affairs to take the actions necessary to withdraw, on behalf of Canada, from the United Nations Convention to Combat Desertification, in those Countries Experiencing Severe Drought and/or Desertification, particularly in Africa." Canada signed the convention in 1994 and ratified it in 1995. Every UN nation 194 countries and the European Union is currently a party to it. UN research on how to stop spread of droughts The UN body has a research committee dedicated to finding ways to stop the spread of droughts that lay waste to farmland across the planet, particularly Africa. Scientists, governments and civil society organizations are headed to Bonn next month "to carry out the first ever comprehensive cost-benefit analysis of desertification, land degradation and drought," says a notice from the United Nations Environment Program. "Also, for the very first time, governments will provide concrete data on the status of poverty and of land cover in the areas affected by desertification in their countries." The issue of encroaching deserts has become urgent because of renewed droughts that have plunged millions into poverty in Africa's Sahel belt last year and in East Africa the year before. The Bonn-based secretariat for the UN body said no Canadian official had contacted them about the withdrawal. "We cannot comment on something that is not communicated officially to the secretariat or to the United Nations," said a spokeswoman, who added she planned to contact the secretariat's legal office for advice. Convention was 'costly,' says Fantino spokesperson Baird's office referred questions to the Canadian International Development Agency, which rejected a request for an interview. A spokesman for International Co-operation Minister Julian Fantino said in an emailed statement that "membership in this convention was costly for Canadians and showed few results, if any for the environment." Fantino's office refused to answer follow-up questions, including how much money was being saved by the move, and when Canada planned to notify the UN of its decision.Government documents show Canada provided a $283,000 grant to support the convention from 2010 to 2012. NDP foreign affairs critic Paul Dewar said the decision "shows ... that the government is clearly outside of what is international norms here. We're increasing our isolation by doing this." He also questioned why the government didn't announce the decision. "The questions are Why are we doing this? Who is behind this? And it would appear they just got caught doing this. They didn't make an announcement about this," said Dewar. "Was this something they were hoping no one would notice?" Maude Barlow of the Council of Canadians said drought is now "a life and death issue" for millions around the world."Pulling out of these talks is simply the worst thing Canada could do and this is the worst time for the Canadian government to be pulling a stunt like this," Barlow said in an email. Harper government's environment record The decision could stoke more criticism of the Harper government's record on the environment. Canada, along with Japan, Russia and New Zealand, joined the United States in opting out of the Kyoto Protocol to reduce greenhouse-gas emissions. The government has also faced widespread criticism for muzzling scientists, leading to a recent complaint to the federal information commissioner to look into the matter. Its decision to cut the funding for the National Round Table on the Environment and the Economy has also sparked an outcry. Baird has suggested the closure of the think-tank was because the government did not want to pay for advice that did not fit with the government's general direction. The roundtable had warned repeatedly that the federal government would not be able to meet its targets for cutting greenhouse-gas emissions without putting a price on carbon, an idea the Conservatives vehemently oppose. "Desertification, along with climate change and the loss of biodiversity, were identified as the greatest challenges to sustainable development during the 1992 Rio Earth Summit," says the secretariat's description of the 1994 convention. It calls the convention the "sole legally binding international agreement linking environment and development to sustainable land management." Canada once a 'strong supporter' of convention Canada has also been an active participant in the convention, and has said it was in the country's national interest to be a party to it. The Canadian International Development Agency soon to be merged into the Foreign Affairs Department has administered Canada's participation and affirmed that fact in an undated, 40-page report, titled "Canada's First Report on Domestic Activities Relevant to the United Nations Convention to Combat Desertification." The report says that Canada is an "Affected Party" under the treaty because of "the existence of drylands in the Canadian prairies." The convention, the report states, requires Canada "to ensure that desertification issues are integrated into its national sustainable development plans and policies." The convention also obliges its parties "to report on activities undertaken to address the problem," says the CIDA report. "Our status as Party to this Convention is in our national interest because this Convention (and related issues like biodiversity), and the global thinking which is emanating from it, will benefit our own vision and approach of how we address our own, and the world's drylands," the report concluded. In a May 2008 speech to the United Nations Commission on Sustainable Development, Canada's representative said in a prepared text that "Canada has been a strong supporter" of the convention. The text said that "Canada applauds" the efforts of the convention's executive secretary "to elevate the profile of desertification as a key environment and development issue, and will continue to support activities to combat desertification, land degradation and drought" in keeping with the goals of the convention.http://www.cbc.ca/news/canada/canada-quietly-pulls-out-of-un-anti-droughts-convention-1.1388320 Okay, we know The Harper Government doesn't give a crap about the environment, but to be the only country in the world to back out of this? wtf? As for the cost of it, I guess it was okay to hand millions to all those religious friends of his, or billions in oil subsidies, or the joke of a $2mil fake lake for the G20 summit, not to mention an early election campaign that utterly wasted $125mil while we're subjected to a fear mongering parade of misinformation. You want to be the pigs at the trough here, don't ya. Otherwise, SEE ya Jack. Re: "The Harper Government"Tories re-brand government in Stephen Harper's name Add to ... And lest anyone forgets, a directive went out to public servants late last year that "Government of Canada" in federal communications should be replaced by the words "Harper Government." He's the only Canadian PM in history to do this. As if their policies are just Harper, and nobody else. I hope Canada isn't blind to the Reform Conservatives remaining as-is even though Harper will ultimately get replaced. Link to comment Share on other sites More sharing options...
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