Alberta Premier Ed StelmachJohn Ulan
Early Friday morning, a day after his government slashed royalty rates in the oil and gas sector, Alberta energy minister Ron Liepert pulled some lamb from his freezer. He planned on having a nice meal with his wife. A celebration?
"It's kind of just a relief that it's finally out the door," he said. "I feel good about it."
Despite his hopes, however, the Alberta royalty uproar seems far from over. Premier Ed Stelmach's government first proposed royalty rate hikes in 2007 with the promise of filling the province's coffers, and easily won re-election the next year. The rates came into effect last year, but amidst soaring budget deficits and a sagging economy the government has dropped them back down in hopes of encouraging new investment.
With the industry's good fortune has come a wave of political and public outcry over the flip-flop, made by a government already lagging in the polls - one this week showed them trailing the upstart Wildrose Alliance, 42 per cent to 27 per cent.
Opposition parties say the government is only trying to appease the oil industry, typically a major political and donor base that it risks losing to Wildrose.
All is not well in the Tory heartland.
"Clearly this is a strategy to reduce support for Wildrose and consolidate themselves with the industry," Liberal opposition leader David Swann said in an interview. "I think they are trying to build credibility with the oil industry first, and Albertans second. But nobody trusts this administration."
New Democrat leader Brian Mason, whose party is the only one that strongly supports higher royalty rates, said the move was purely political. "Stelmach is fighting for his political life," Mr. Mason said.
"The Wildrose Alliance has received a lot of funding since the last election from disgruntled elements in the oil patch, specifically to develop a threat to the Conservatives and bring them into line on royalties," the NDP leader charged. "It's a political strategy of the oilpatch when they don't like what the Tories are doing. It's worked like a charm in this case, because Ed Stelmach has folded like a cheap tent."
Now teetering on the edge of a full-blown political storm, Mr. Stelmach retreated to rural Alberta yesterday, appearing in tiny Drayton Valley. He left the interviews to Mr. Liepert, who in turn claimed there was no political motive to the royalty change, which came after a government review.
"It wasn't launched in reaction to any other political initiative. It was launched in reaction to industry saying, 'You've got to do better,'" he told The Globe. "Call me a liar if you want, but that was why it was launched."
The right-leaning Wildrose Alliance, which has consistently opposed the royalty hike, is attacking the Conservatives in two of its traditional strongholds: Calgary and the oil sector. It's working. An Angus Reid poll, taken in February but released Thursday, showed 48 per cent of Calgarians would vote Wildrose.
"They're trying to win back support that they've clearly lost," said Wildrose leader Danielle Smith, who nonetheless saw the about-face as an opportunity to further distance her party from the pack. "It's an absolute opportunity for us. It's not just this sector, I think Albertans have lost confidence in this government."
Angus Reid research director Hamish Marshall said his poll suggests Wildrose is riding more than a blip in support. "It has shown that people have changed their views and are sticking with the party."
Mr. Stelmach's royalty move was roundly criticized in newspaper editorials. "Ed rolls over for Big Oil," an Edmonton Sun column declared. The Edmonton Journal agreed, saying the "government has rolled over like a eager-to-please beagle."
David Taras, a professor of political science at the University of Calgary, said the perception of Mr. Stelmach is now one of unpredictability.
"Stelmach was chosen [as leader]largely because of his experience … He was steady Eddie," Prof. Taras said. "But what we've gotten is someone who appears to be completely inexperienced."
Lost in the political shuffle was the fact that many analysts do expect lower rates to kick-start the economy.
"Was the Premier trying to shore up his political base within the oil patch? Certainly. Did this result in poor public policy? No," said Roger Gibbins, CEO of the Canada West Foundation think-tank, in an e-mail.
The fate of the Premier and his party may be helped by the political calendar - the next election is two years away. It's plenty of time for Mr. Stelmach to win back support that has drifted over to the charismatic Ms. Smith. It's a fine line between the parties. Yesterday, for instance, both accused the other of stealing ideas.
The Wildrose leader doesn't mince words in placing blame.
"It's the Premier's mistake quite clearly," she says. "I think he has to go to the polls. I think Albertans would like to have an opportunity to render a decision on Mr. Stelmach's record. He'll have to run on his record, and we'll certainly run on his record."
With a report from Nathan VanderKlippe in Calgary