Watchdog IDs $6B shortfall, Taxpayers shortchanged by up to $2B in energy revenues annually over past 3 years: auditor general by Jeremy Loome, Legislature Bureau, October 2, 2007
Albertans were shortchanged by as much as $2 billion annually over the last three years because the government failed to act on its own energy department’s royalty recommendations, the auditor general has reported.
That’s despite both former premier Ralph Klein and former energy minister Greg Melchin claiming at the time that studies showed Alberta’s share was fair.
In fact, it was anything but. In a scathing annual report, auditor general Fred Dunn said a 2004 internal department review identified changes to the royalty and energy revenue structures that could net taxpayers another $1-2 billion annually from royalties. Instead, burdened by an administration that lacked transparency and accountability, it chose to do nothing, Dunn said. And it did nothing to publicize the fact that it was holding onto reports that would have made that decision questionable, he said.
“The principles of transparency and accountability, I believe, were not followed,” he said. “The department should demonstrate its stewardship of Alberta’s royalty regime and provide analysis to support that stewardship, and that is not happening.”
That’s despite both former energy minister Greg Melchin and former premier Ralph Klein saying publicly that the government’s studies showed Alberta was getting “a very generous” return, as Klein claimed on June 12, 2006.
On the contrary, said Dunn, the province knew it was far below the norm. “They had a lot of very good reports. We didn’t create these numbers, we just picked them out of the reports,” he said. “Those numbers were available and could have been made public much sooner. There was a reluctance to share it, yes.” [Emphasis added]