Letters October 8th

Up in the air

Calgary Herald

Published: Monday, October 08, 2007

Oilpatch - Re: "Public wants oilpatch to pay more," Oct. 3.

To Alberta's oil and gas companies: Due to the punitive royalty review recommendations, your future is uncertain. You will not be able to justify any unnecessary expenditures to your shareholders. Stop buying tickets to $200-a-plate charity galas and buying exorbitant silent auction items. The money and energy you put into your annual United Way campaign and other corporate giving can no longer be justified. Expense accounts and business lunches will have to be curtailed, along with lavish Christmas parties.

As responsible employers, inform your workers this is not a good time to engage in home improvements, higher education for their children, property deals, vehicle purchases or other large expenditures.

If you feel unable to do this out of compassion for all the people who will be hurt by it -- the restaurant and business workers, builders, car dealers and everyone relying on charitable organizations, not to worry! I am sure Bill, Ed and Lyle, with their all-encompassing knowledge of economics and social theory and their ability to foresee all the long-term effects of their drastic policies, have a plan to take care of them.

Vicky Badger,

Calgary

Fatal flaws

Calgary Herald

Published: Monday, October 08, 2007

Royalties - During the 1990s, the federal government played a nasty trick on taxpayers. The marginal tax brackets were not indexed. As your income rose to match inflation, you were punished by paying taxes in the higher brackets.

The proposed royalty structure is equally flawed. It increases as a percentage as the price of oil and gas increases. As inflation drives up the value of oil and gas, the government's percentage of the actual production increases.

For example, the tax rate on natural gas increases by five per cent from $6/mcf to $7/mcf. If gas was $6/mcf today and inflation remained constant at 2.5 per cent per year, then in seven years, the government would take an additional five per cent from producers, while these producers' costs would have risen by 16 per cent in the same time span. It would be the same as GST going from six per cent today to 11 per cent in seven years.

I hope the Stelmach government does not destroy the largest employer in Alberta with this flawed structure.

Paul J. Gagnon,

Calgary