Our Alberta Advantage

BAIT AND SWITCH

One of the issues that is coming to the forefront in the debate over the Royalty Review Proposals is Alberta's credibility as a place to invest.

In Canada, it is against the law to lure people into your store with a low advertised price for an item only to charge them a higher price once they are in the store. This unfair practice is called 'bait and switch'.

Alberta, under Premier Stelmach, has pulled a bait and switch on investors.

During the late 1980s, Alberta was suffering from a lingering economic slowdown. The government was running a significant deficit and a massive debt load. The only way that was feasible for Alberta to regain its footing was to encourage investment in its oil fields.

Through the nineties, Alberta set up tax rates and royalty rates that were attractive to investors and they came into Alberta's economy in droves.

Alberta's fortunes changed rapidly with the province becoming completely debt free in 2003 and unemployment dropping to almost impossible numbers. On top of that, Alberta absorbed huge numbers of people from the rest of Canada and the world.

Alberta's future was indeed looking secure.

Suddenly, a switch occurred. Now that it had investors in the province developing the resources, Alberta decided to change the terms. People who had come to invest in Alberta believing that the royalty rates were set at a certain level, found themselves trying to deal with royalty rates being set at a different level.

A classic bait and switch.

I don't believe Albertans want to be party to a practice that is considered illegal in their own country.

I hope not.