Main menu:

History of RPE Thought

Posts by Tag

RSS New from the CCPA

  • A critical look at BC’s new tax breaks and subsidies for LNG May 7, 2019
    The BC government has offered much more to the LNG industry than the previous government. Read the report by senior economist Marc Lee.  
    Canadian Centre for Policy Alternatives
  • The 2019 living wage for Metro Vancouver April 30, 2019
    The 2019 living wage for Metro Vancouver is $19.50/hour. This is the amount needed for a family of four with each of two parents working full-time at this hourly rate to pay for necessities, support the healthy development of their children, escape severe financial stress and participate in the social, civic and cultural lives of […]
    Canadian Centre for Policy Alternatives
  • Time to regulate gas prices in BC and stop industry gouging April 29, 2019
    Drivers in Metro Vancouver are reeling from record high gas prices, and many commentators are blaming taxes. But it’s not taxes causing pain at the pump — it’s industry gouging. Our latest research shows that gas prices have gone up by 55 cents per litre since 2016 — and the vast majority of that increase […]
    Canadian Centre for Policy Alternatives
  • CCPA welcomes Randy Robinson as new Ontario Director March 27, 2019
    The Canadian Centre for Policy Alternatives is pleased to announce the appointment of Randy Robinson as the new Director of our Ontario Office.  Randy’s areas of expertise include public sector finance, the gendered rise of precarious work, neoliberalism, and labour rights. He has extensive experience in communications and research, and has been engaged in Ontario’s […]
    Canadian Centre for Policy Alternatives
  • 2019 Federal Budget Analysis February 27, 2019
    Watch this space for response and analysis of the federal budget from CCPA staff and our Alternative Federal Budget partners. More information will be added as it is available. Commentary and Analysis  Aim high, spend low: Federal budget 2019 by David MacDonald (CCPA) Budget 2019 fiddles while climate crisis looms by Hadrian Mertins-Kirkwood (CCPA) Budget hints at priorities for upcoming […]
    Canadian Centre for Policy Alternatives
Progressive Bloggers

Meta

Recent Blog Posts

Posts by Author

Recent Blog Comments

The Progressive Economics Forum

Agreeing with Hoback’s Headline

I have the following letter in today’s Prince Albert Daily Herald (page 4):

Reinvest Resource Wealth in Saskatchewan

To the editor: I strongly agree with the title of MP Randy Hoback’s letter: “Siphoning money out of the west is wrong” (June 9). My proposal is to keep more money in Saskatchewan by collecting more provincial royalty revenue from the extraction of non-renewable resources. These additional funds could be invested in needed infrastructure (like a new bridge across the North Saskatchewan River) and used to establish a provincial savings fund for future generations.

Provincial resource royalties are deductible in calculating federal corporate taxes. Therefore, increasing royalties would shift some revenue from Ottawa to the Saskatchewan government — the opposite of what Pierre Trudeau attempted. Mr. Hoback invokes Mr. Trudeau’s spectre to avoid actually addressing my provincial policy proposal or NDP Leader Tom Mulcair’s federal proposals.

Premier Brad Wall is siphoning money out of Saskatchewan by keeping royalties at rock bottom despite high commodity prices. The Canadian Association of Petroleum Producers reports that Saskatchewan received only $1.8 billion of royalties from $10.3 billion of oil sales in 2010. By comparison, Newfoundland and Labrador collected $2.2 billion of royalties from $8.3 billion of offshore oil sales.

The corporate profits from this giveaway of Saskatchewan resources accrue overwhelmingly to shareholders outside the province. Taxes on these profits flow more to Ottawa than to the province. In 2010, the Potash Corporation of Saskatchewan paid less corporate tax to Saskatchewan than to Trinidad.

Giving away provincial commodities attracts foreign investors to take over local resource companies. To buy equity in Canadian corporations, they must first buy Canadian dollars. This demand for loonies bids up the exchange rate, making our exports less competitive in foreign markets.

An overvalued Canadian dollar hurts Saskatchewan. The province has lost 5,200 manufacturing jobs since Premier Wall took office.

Because commodities are priced in American dollars, the higher exchange rate further reduces Saskatchewan resource revenues in Canadian dollars. The provincial budget estimates that each U.S. cent of appreciation in the loonie reduces non-renewable resource revenue by $34 million.

On manufacturing, Mr. Hoback blames the former NDP government for the closure of Prince Albert’s pulp mill. In fact, New Democrats had signed an agreement with Domtar to reopen it. The Wall government tore up that agreement, costing Prince Albert hundreds of jobs.

The mill, which processed renewable resources, went out of business largely because the giveaway of non-renewable resources pushed the exchange rate too high. The MP for Prince Albert should be concerned about an overvalued currency damaging local manufacturing.

In cheerleading for resource companies, Mr. Hoback claims, “The natural resource sectors directly employ more than three-quarters of a million Canadians.” Statistics Canada’s Labour Force Survey reports that only half that many people — 378,900 as of May — work in “natural resources” including “forestry, fishing, mining, quarrying, oil and gas.”

Through better management of resource royalties and the exchange rate, we can maintain jobs in resource industries, collect more provincial revenue and facilitate manufacturing employment. My offer to debate these issues with Mr. Hoback stands, although his letter indicated that he is unwilling to explain and defend his positions in a public forum in Prince Albert.

Erin Weir, Economist, United Steelworkers, Regina

Enjoy and share:

Comments

Comment from Paul Tulloch
Time: June 21, 2012, 7:32 pm

Bring on the debate, this guy loves taking shots at you instead of taking the gloves off and having a discussion.

The question is why- why do we never see a tory actually sit down and debate anybody- why are t hey ordered not to talk to anybody in a public forum.

And to think they have the nerve to accuse people of being communists! At least even the communists had to hold public discussions- Harper and crew are afraid of their own shadows- why, because they are to busy sending each other name calling and sending emails calling each other “assholes”.

Come on Randy be a mensch and get off the soap box and have a discussion with Erin- I am sure the CBC would accommodate it- Trust me Erin has had all his shots and does not bite, his hair is mighty dangerous, but really he is a nice guy!

Comment from Elaine Hughes
Time: June 25, 2012, 7:27 am

Harper’s mantra: governance by bullying! We see it on everything he touches!!

Plus, why would we EVER expect democratic discourse in a dictatorship, anyhow?!

Write a comment





Related articles