Dear members of the Shale Gas Committee,
Natural gas is incredibly cheap this year (Empire FX analysis). Low prices should continue for the foreseeable future because fracking has made the resource plentiful (EIA storage report). At these prices, there would be little or negative value in extracting the resource (pollution). More importantly, companies do like to take our resources because the provinces do not charge real world prices for Royalty Taxes. If a company is in the US, they have to pay the property owner a royalty % based on world prices, and the State and Federal government Royalty rates. In Canada, companies pay wellhead royalties based on a fictitious price set by head office in a tax avoidance structure. Essentially, for Canada the resource goes for the few jobs that are created. In third world countries, the government/dictator takes a healthy percentage and may even “nationalize” the company. From the era of Mulroney, there has been incredible effort to bind Canada into resource “giveaway” deals. Your committee is looking at another in a long series of deals that have eroded our country.
Submitted by: Mark Bradley