How long before Alberta has provincial sale tax?

[fluffy]

My take on this whole issue is that it is a fight for market share between global players. A few years ago when it was taken for granted that the bulk of the world's oil reserves was in the middle east, places with easily accessible oil like Alberta and Texas were small players in the big picture. Since the opening of huge reserves in the oilsands, and shale oil in the US the scales have tipped. Couple the new supply with dropping demand due to global economic slow-downs and you basiclly have an over-supply situation. OPEC's oil is cheap, poke a hole in the ground and put a tap on it, as opposed to oilsands and shale oil supplies which are comparitively expensive to produce. OPEC is willing to forgo profits in exchange for market share and they have the oil and cash reserves to maintain this strategy for some time, while eventually the more expensive oil will come closer to losing profitability, and OPEC regains their king-of-the-castle status literally driving some smaller players out of the game.

Oilsands producers are tightening their purse strings, shelving expansion plans in favour of maintaining production with some degree of profit. Layoffs are commonplace right now, people are running scared at every level wondering how long and how deep the price drops and accompanying slow-downs will last. It's not a nice feeling. Like the Alberta government, many were unprepared for the severity of the loss of revenue. If you're pulling down ten or fifteen grand a month a three thousand dollar mortgage payment is much of a burden. When that ten or fifteen grand turns into a two thousand dollar a month pogey claim it's a different story. The feeling in Ft. Mac is that it's going to be an interesting year, and the next few months will be tense. The rank and file workers are awash in helplessness, as the real battleground here are the big leather chairs of New York and Abu Dabi, a world apart from folks packing a lunchbox in the oilands.

[zerograv]

"CALGARY - Alberta Premier Jim Prentice says there's no chance that the province can ride things out while waiting for a rebound in oil prices.

Prentice says both financial and energy experts have made it clear prices aren't going to bounce back any time soon.

He says it's expected a barrel of oil could be selling for US$62 next year and maybe US$68 the year after that.

But he adds it isn't likely to move much beyond that for some time.

Prentice says talks with Albertans about making up the revenue shortfall will include a flax tax versus a progressive tax.

He says concern about a flax tax is that it is hard on lower-income individuals who are already struggling to make ends meet."

Funny, those same financial and energy experts didn't see the price drop coming, so how can they see that there won't be a rebound?

[fluffy]

Funny, those same financial and energy experts didn't see the price drop coming, so how can they see that there won't be a rebound?

Exactly. There's as many different theories as to what's coming as there are "experts" to spew them out. Mr. Prentice's statement sounds more like a little political two-step to pave the way to a sales tax than any credible financial forecast. Bottom line there is that government oil royalties, based on the per barrel price, have been cut in half. This means a few billion is missing from the revenue side of the provincial budget. Of course they're scared.