If the province’s New Democrats form the next provincial government, they’ll have to look somewhere else besides the Hebron oil project for their three percent surtax on crude oil.
Under the 2008 Hebron fiscal agreement, then Premier Danny Williams and his natural resources minister, Kathy Dunderdale agreed to a clause that prevents the government from introducing any new oil revenue charges besides royalties for the life of the Hebron agreement.
Clause 9.1 states that “no additional tax, levy, fee or charge shall be imposed by the Province solely on a Development Project or on the
Proponents solely in relation to their interest in the Lands.”
The term “development project” means:
(i) exploration, development and production of oil resources from the Lands;
(ii) ancillary thereto, the production of gas from the Lands for use solely for the purpose of production of oil from the Lands, not for commercial production and sale; and
(iii) the ownership, construction, operation, maintenance, decommissioning and abandonment of all the assets in which the Proponents hold an undivided interest in relation to such activities.
While Hibernia has a good few years left in it, Terra Nova and White Rose won’t last as long. That means we can only count on having two oil fields in production offshore. As revenues dwindle and government spending pressures mount, there might be a day when a future provincial government would need to look at how it taxes resources for the benefit of the people of the province.
Thanks to the provincial Conservatives the future government will be screwed over when it comes to Hebron. They’ve given away the provincial government’s power to adjust the way it collects rent on behalf of the resource owners – you and your humble e-scribbler – for this lucrative non-renewable resource.
That’s in addition to the royalty giveaway up the front end that the Conservatives attacked before they got into office and when oil prices were low and then gleefully agreed to once they had the power and oil prices skyrocketed.
And even that is in addition to the clause in the Hebron deal that compels the provincial government to side with the oil companies on any regulatory changes the companies think might hurt their interests offshore.
That one – incidentally – is a give-away of incalculable proportions.
Anyway, someone at the NDP office needs to get out the calculator and rework the financial part of their election platform.
While he or she is doing that, the rest of us can wonder what other details they missed entirely in their amazingly low cost platform document.
And some other people will start wondering what else Danny and Kathy gave away without telling us.
- srbp -