Province Needs Higher Oil Royalties |
In his March 27 column, Bruce Johnstone took aim at a Canadian Centre for Policy Alternatives (CCPA) paper. As the author of this paper, Saskatchewan at a Crossroads (available at www.policyalternatives.ca/sk), I write in response to his criticisms.
Johnstone presents two quotations from two different documents but refers only to “the CCPA study,” creating the impression that both are from my paper. The first quotation, in which he points out an error by inserting “sic,” is from a news release put out by the CCPA office in Saskatoon . Only the second is from my paper. As Frank Mentes noted in a letter published here on March 23, Johnstone similarly attributed a quotation from one document to another in his March 13 column.
Among other things, my paper argues that higher oil and gas royalties would allow the government of Saskatchewan to collect significantly more own-source revenue and retain somewhat more equalization revenue while conserving more of the province's finite fossil-fuel reserves for future use. Johnstone writes, “This sort of analysis blithely ignores the economic benefits of a healthy oil and gas sector - which employs 22,000 people . . .”
Statistics Canada figures for December 2003, the most recent data available, show that 2,105 people were employed in oil and gas extraction in Saskatchewan and 4,065 more in support activities for mining and oil and gas extraction. It is not clear how Johnstone arrives at the 22,000 figure unless his definition of “oil and gas sector” includes employment in refineries and other operations not directly affected by this province's royalty rates, employment in unrelated types of mining, or an inflated number of spin-off jobs.
My analysis does not overlook the probability that higher royalties would reduce employment in the oil and gas industry. However, any job loss would be far less than Johnstone's phantom statistic implies. The benefit of hundreds of millions of dollars in additional public revenue - and the thousands of jobs that the corresponding additional public spending would create - would far outweigh the cost of a few hundred lost jobs in the oil patch.
Clearly, there is a tradeoff to be made, but increased royalties would better serve the public interest. Johnstone presents no alternative assessment of this tradeoff.
I recognize that Johnstone probably has more to say on this issue and it should be subjected to more public scrutiny. I would welcome the opportunity to debate Saskatchewan 's resource policy with him in a public forum.
ERIN M. K. WEIR
Regina