Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Monday, January 25, 2016

Kevin O’Leary on NDP’s stunning win in Alberta: ‘It’s a horror movie unfolding’ Republish Reprint

Influential Canadian investor Kevin O’Leary has some blunt advice for international institutions in the wake of the Alberta election: Pull out.

“It’s a horror movie unfolding,” O’Leary said in an interview from New York where he is meeting investors, referring to the election of the New Democratic Party under Rachel Notley.  “Until we understand what the [oil and gas] royalties and taxes are there won’t be any material fund flows – it’s a disaster.”

The benchmark Canadian energy index retreated again Thursday, falling 1.56%, after the NDP won a majority in Alberta on Tuesday on pledges to raise corporate taxes and to set up a commission to review the royalty regime. Notley expects to make a decision on the commission’s findings within the first year of her rule.

International investors should “wait and see what happen with [oil] prices undoubtedly going lower,” O’Leary said. “You never, ever tinker with royalty rates when you are at the low. You don’t do that.

“Not only are taxes going up, why would you take a whole year to guarantee that no capital flows into the province — that is beyond irresponsible,” O’Leary said. “That is un-Canadian — that’s what that is.”

That is un-Canadian — that’s what that is
Notley has tried to soothe the energy industry’s nerves, promising they will be “A-OK over here in Alberta.” But investors remain concerned that royalty rate hikes would raise business costs when oil prices have slid 40% in the past year, with many operators being forced to shed jobs and cut spending to protect their balance sheets.

“If you are a fiduciary, you can’t put money in Alberta right now,” said Leary, who shot to fame as a caustic investor grilling budding entrepreneurs seeking funds in CBC TV’s popular Dragon’s Den show.

His Montreal-based O’Leary Funds manages a number of Canadian and global mutual funds. Energy stocks made up just under 10% of the $89.4-million O’Leary Canadian Dividend Fund, according to the latest quarterly filing.

O’Leary said he can not comprehend the NDP’s decision to abandon the promotion of flagship pipelines such as Enbridge Inc.’s Alberta-to-British Columbia Northern Gateway project and TransCanada’s Keystone XL pipeline heading south to the Gulf Coast.

“No disrespect to her — she is basically saying: ‘I don’t want any economic upside… Let’s just shut the province down, let’s turn the lights out’. That’s what I am hearing.”

O’Leary said it’s unlikely the Premier-elect will backtrack on her pledges, but he is hoping that the NDP “petri dish” would serve as a cautionary tale, similar to the Bob Rae-led NDP government in Ontario in 1990.

“It is going to be a horrible experiment. The whole world will watch it. The only upside I see is this is if she [Notley] goes with these mandates, she will have the light shining on her around the world. It will collapse the economy in Alberta — and the NDP will never get a federal mandate.”

O’Leary said the new government’s focus on raising cost of capital is counter-intuitive to job-creation during a severe economic downturn.

A survey of 1,800 Canadian oil and gas employees by human resource consultancy Mercer LLC published in April, showed that for the first time oilpatch workers were more concerned about job security than base pay.

“In prior surveys that crossed industries, base pay has overshadowed all other elements by a significant margin,” Mercer said.

Steve Laut, president of Canadian Natural Resources Ltd., the country’s largest heavy oil producer also expressed concerns about the new governments’ desire to raise taxes and royalties.

“Clearly, this is not good for the industry,” Laut said at a conference call Thursday, noting that the higher government takes would lead to “a lose, lose” outcome for both the industry and government.

“The oil and gas industry is a global industry, and capital will flow to areas with the greatest return.”

Original Article
Source: business.financialpost.com/
Author: Yadullah Hussain

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