Sunday, February 13, 2011
Planet Entrepreneur
CALGARY - Premier Ed
Stelmach will exit office with
a mixed legacy, business
leaders say, after helming
controversial royalty changes,
navigating a recession and battling a campaign that
targetted Alberta's economic
engine. "Certainly he had plenty of
good intentions, but the
quality and performance in
terms of executing policy was
often less than stellar," said
Richard Truscott, of the Canadian Federation of
Independent Business. University of Calgary
economics professor Frank
Atkins was more blunt. "His economic legacy is a
disaster," he said. "This is a
government that actually
governed by waiting for the
next boom." Stelmach announced Tuesday
that after a 25-year political
career, four of those as
premier, he will not run in the
next election, launching a race
to lead the governing party. His role in roiling the oil and
gas industry by changing the
royalty structure stands out
for many as the most
memorable of his tenure. Even before he was sworn in
as premier, Stelmach was
opening up the royalty
regime for review. Early support from the
industry for a review quickly
turned to alarm that the
proposed changes would
drive away investment. Within two years the scheme
was adjusted again, this time
to collect higher royalties
when prices are high and offer
breaks when they drop. The initial higher rates were
unpopular with the industry,
said Michael Tims, chairman of
Calgary-based Peters & Co.
energy investment dealer. "To my mind, I think he got
fully back in favour with the
oil and gas industry after the
changes were made to the
royalty program," he said,
referring to a second round of adjustments. "Clearly the
original royalty review and
the initial changes that were
made had a negative impact,
but I think I have to give him
points for having recognized that they went too far and he
has successfully brought back
equilibrium." Greg Stringham, vice-
president of the Canadian
Association of Petroleum
Producers, called Stelmach's
initial relationship with the
oilpatch rocky. But he credited Stelmach for a
one-on-one leadership style
that eventually resulted in a
competitiveness review and
steps to repair those frayed
ties. But while the industry is
willing to give the premier
credit for righting what they
saw as a wrong, others are
less generous. Truscott calls it "the royalty
reform disaster" and the U of
C's Atkins say the attempt "to
make political capital out of it"
prevented the government
from seeing "they would pick up the mobile capital and go
east and west and south. That,
no one seemed to think of." Dave Yager, past chairman of
the Petroleum Services
Association of Canada and a
Wild Rose Alliance candidate,
says it was the royalty
changes that convinced him to leave the Tory party he'd
supported for years. "My dissatisfaction came from
the royalty review and the
fact that the government of
Alberta, for whatever reason,
decided the best way to run
the province was to pick a fight with our most
important industry," Yager,
head of HSE Integrated Ltd. of
Calgary, said. Stringham credits Stelmach
with becoming a champion of
oilsands development as
international criticism over
"dirty oil" increased. "We've really seen that,
especially in the last year," he
said. "He's really tackled some
of the tough issues." Adam Legge, CEO of the
Calgary Chamber of
Commerce, said on selling the
reputation of Alberta oil to
the world Stelmach's
"beginning to move the needle." Atkins also takes issue with
Stelmach's handling of the
economy through the
recession, arguing he spent far
more than he should have. That point is echoed by the
Canadian Taxpayers
Federation's Scott Hennig,
who points out under
Stelmach the government
was spending faster than the rate of the boom. "Their spending was so over
the top you couldn't keep up
with it," he said, adding. "At
least he's not going to be
known as the premier that
raised any taxes."
