EDMONTON - Premier Ed Stelmach, the man supporters call Honest Ed, is trying to sell the idea that Albertans never received less than their fair share on energy royalties, the levy companies pay the province as they extract oil, natural gas and other energy reserves.
But the auditor general, an economist, and Stelmach's own hand-picked review panel disagree -- leaving Albertans wondering whom to believe on this multibillion-dollar issue with an election expected within months.
"I can't see where this province of Alberta was shortchanged,'' the premier told the legislature recently. "We've seen tremendous growth. We're on the world stage.''
Alberta Liberal Leader Kevin Taft describes the position taken by the premier as "outrageous, misleading and unbelievable.''
But Energy Minister Mel Knight has joined the premier in saying Albertans should be "looking forward'' on the royalty issue rather than focusing on what happened in the past.
"It would be my opinion that there was never a point in time ... when we did not receive a fair share for Albertans,'' Knight said recently, before dashing away when reporters asked why he was contradicting the auditor general.
New Democrat Leader Brian Mason says the government was clearly advised to collect higher royalties and refused to do it, costing Albertans billions of dollars. He says it's not surprising the energy minister doesn't want Albertans to look back carefully at this issue.
"I'm reminded of the scene from Jurassic Park where you see this giant Tyrannosaurus rex chasing the Jeep,'' Mason said in an interview.
"They've got a big meat-eating dinosaur chasing them and they don't want to look in the mirror.''
Royalties were paramount in Auditor General Fred Dunn's annual report last month. His findings were a blunt indictment that suggested Albertans have been kept in the dark for several years about the need to increase royalties.
"Beginning at least three years ago...the (Energy) Department estimates that it could collect an additional $1 billion more per year without stifling industry profitability,'' said the report.
"However, neither this information nor the reasons why the changes have not taken place were made public.'' Dunn reported. "The minister of energy has final responsibility and is accountable for these decisions.''
Dunn says he began his investigation after hearing Greg Melchin tell the legislature last year while he was energy minister that a royalty review had been completed.
Melchin declined an interview request, saying he's been asked to defer all questions to the current energy minister. But Dunn says his digging found that "a royalty review had not been done,'' at least not one thorough enough to meet the criteria outlined by experts consulted by the auditor general.
When he dug deeper, Dunn found that the energy ministry's own annual reports confirmed that total royalties collected fell well short of targets set by the government.
"They haven't achieved (the targets) for the last four years,'' Dunn told The Canadian Press. "That's the evidence.''
The royalty review panel was equally damning in a Sept. 18 letter to the finance minister.
"Our review revealed that Albertans do not receive their fair share from energy development and they have not, in fact, been receiving their fair share for quite some time,'' chairman Bill Hunter wrote on behalf of the six-member panel.
Hunter and other panel members did not respond to interview requests.
But economist Mike Percy says the "paradox'' for the Alberta government is that it left royalty caps in place for natural gas and oil even after prices rose above the caps, making it more difficult to reach its own royalty goals.
"The debate is whether they should have left those caps in place, because it meant their royalty take fell below the targets.''
Percy also rejects the position taken by the premier that Alberta achieved an equal amount of economic rent for its energy reserves without increasing royalties. "Whether they captured all of it -- it's unlikely that they did,'' Percy said in an interview.
The premier dismisses any suggestion that the government should have listened to its own internal advice and increased royalty rates.
"Policy decisions are made by elected officials,'' Stelmach told reporters Friday. "There may be various pieces of advice that come forward to a minister, but at the end of the day the government, the cabinet, makes that decision.''
But the premier candidly admitted in a radio interview last week that the royalty reports mentioned by the auditor general never came to his attention while he was in cabinet.
Mason says this makes a mockery of the premier's own statements, because it suggests the government never got to make a decision on royalties, since the cabinet was kept in the dark.
Stelmach dodged the issue for several minutes when confronted by reporters Friday.
"I'm not ducking questions,'' he said after ignoring several questions before saying "it's not an issue whether it came to cabinet.''
"The policy was correct for Albertans. We collected billions of dollars in royalties during that period of time.''
Stelmach has said he'll probably call an election by next fall and royalties are expected to be a key issue.
