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Part One: Offshore Royalty Criticisms Unfounded

Since Atlantic Canadian offshore oil and gas production became a reality in the 1990s, criticism of the royalty regimes and associated agreements has been a regular occurrence in both the media and the respective provincial legislatures. As a result, the public is subject to considerable uncertainty and anxiety about whether returns from resource exploitation are fair. AIMS has now released a study entitled “Atlantic Petroleum Royalties: Raw Deal or Fair Deal?”, This report is the first independent investigation to determine if the criticisms and anxiety are justified. The author, noted oil and gas expert Dr. G. Campbell Watkins, concludes that, although there is room for improvement, the regimes in fact stand up to close examination: they do provide a fair return to the provinces and citizens while not, in themselves, discouraging further development of the industry.

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Part Two: Newfoundland’s Curious Attitude to Private Property

Peruvian economist Hernando de Soto argues, most recently in his award-winning book “The Mystery of Capital”, that the world’s poor often possess considerable capital which could be used to generate wealth, income and employment. Unfortunately, because that wealth is tied up in things like self-built houses to which no formal title exists, it cannot be used as collateral and no bank will lend against it. It is, in de Soto’s words,
“dead capital” – capital whose value has been destroyed by the absence of clear, simple and defensible property rights. In his Commentary, former AIMS Director of Communications, Peter Fenwick, applies these insights to Newfoundland and its perennial problems of economic underdevelopment. He writes: “Although Newfoundland is far from a third world country when it comes to property rights, long-held attitudes towards the commons have severely stunted any attempt to use the natural wealth of the province as the grubstake to build prosperity.”

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Part Three: Calgary Herald endorses AIMS Equalization paper

In endorsing the conclusions of a recent AIMS paper on equalization, a Calgary Herald editorial stated that Albertans know intuitively that “windfall” oil revenues should be used to retire debt, shore up savings or spent on one-time projects, not for regular program spending. In “Taking Off the Shackles: Equalization and the Development of Nonrenewable Resources in Atlantic Canada”, Ken Boessenkool argued that royalties should
not be considered part of a regular income stream and should be excluded from the equalization formula. The Calgary Herald has agreed. It states: “The transfer calculations should be made on the long-term, stable sources of provincial revenue – such as corporate profits, personal income and sales taxes – not volatile royalty revenues. “

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Part Four: Law, strikes and the public interest

The Nova Scotia government’s decision to forestall by legislation strikes in the healthcare sector, and to impose a settlement on their workers, raises the thorny question whether public sector workers in essential services should be allowed to use the strike weapon. In his regular column, AIMS President Brian Lee Crowley says that, while there are arguments on both sides, on balance the public interest is better protected by a no-strike rule. But that doesn’t mean that governments should be able to do just whatever they please – if workers lose the right to strike, the government must also give up the right to impose wage settlements unilaterally. As Crowley writes:

“If the government wants to restrict the right to strike of public sector employees, there are sound reasons for doing so. But it should do so as part of a formal review of labour relations in the field, and state its policy in legislation that the government then applies in all circumstances, with appropriate safeguards for the rights of workers and the public interest. It shouldn’t just change the rules in the middle of the game, or it is guilty of the kind of contempt for the law that it rightly deplores in workers who defy labour legislation.”

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Part Five: Equalization and natural resources: Bill Watson on AIMS’ paper

William Watson has taken a thoughtful look at a recent AIMS paper on equalization and offers his positive comments in a National Post column. In addition to being a regular columnist at the Post, Watson is the editor of Policy Options, the magazine of the Institute for Research on Public Policy, and a professor of economics at McGill University. Watson is the latest in a series of national writers to enter the debate that has been sparked by “Taking Off the Shackles: Equalization and the Development of Nonrenewable Resources in Atlantic Canada”, by Ken Boessenkool. In his article, Watson explores each of Boessenkool’s arguments in favour of
excluding nonrenewable natural resource revenues from the equalization formula.

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Part Six: Health care system needs Swedish massage

Indifferent service, long waiting lists, poor management, low employee motivation, low pay and widespread recruitment difficulties – a description of the situation in Canada’s health care system? No, this is what the Swedish health care system used to look like. With the break-up of the public monopoly and an increase in the number of both public and private suppliers of health services, the Swedish system now offers better health
care with the same or lower costs. Swedish nurses, doctors, unions and industry all agree that the increase in independent health care organizations offers Sweden very large gains over the public monopoly model.

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Part Seven: AIMS-inspired national debate on equalization goes on-line

In his latest column for Canoe Money, an on-line media outlet, economist and author Tim Whitehead expresses high praise for “Equalization: Milestone or Millstone?” by Roland Martin, former AIMS Fellow in Public Finance. Whitehead refers to the equalization clawback as a “tax on success” and comments positively on the recommendations to improve the formula that have been put forward by Martin. Whitehead’s piece adds to the growing national debate that has been inspired by the release of the first two papers in AIMS new series on equalization: “Equalization: Milestone or Millstone?” and “Taking Off the Shackles: Equalization and the Development of Nonrenewable Resources in Atlantic Canada” by Ken Boessenkool.

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