Will Notley refine Alberta’s oil royalty regime or her election promises? – by Konrad Yakabuski (Globe and Mail – May 8, 2015)

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A few weeks ago, Rachel Notley stood in front of an oil upgrader in Edmonton and accused the governing Progressive Conservatives of squandering Alberta’s wealth “with a fire sale of our resources.” The PCs, she said, were more interested in creating jobs in Texas than at home.

Ms. Notley, leader of Alberta New Democrats and now premier-designate, promised that the NDP would introduce a new royalty regime that would “reward value-added processing” of Alberta’s oil within the province, producing thousands of new jobs and generating hundreds of millions of dollars in new taxes.

What seemed then like boilerplate NDP talk denouncing the “rip and ship” mentality of Alberta’s oil industry has taken on real currency with Ms. Notley’s stunning electoral victory. The vow to create a new Resource Owners’ Rights Commission to review Alberta’s royalty structure, with an emphasis on adding value, is sending shudders down the spines of oil executives but has Alberta’s top union exec “walking on air.”

It also constitutes Ms. Notley’s biggest challenge. She must balance the expectations of her supporters, who feel the province has not been extracting its fair share from its resources, with the harsh reality of capital mobility and already weaker investment in the oil patch.

How Ms. Notley handles this single file could well set the tone for her entire mandate.

Ask former Ontario premier Bob Rae. In 1990, he, too, came to power unexpectedly with an activist NDP caucus and a long list of progressive promises. None figured as prominently as the introduction of public auto insurance.

But faced with an onslaught of opposition from the business community, and a massive budget deficit, Mr. Rae abandoned the promise by his government’s first anniversary.

“This is a day of reckoning,” Mr. Rae said as he threw in the towel on insurance. “There’s only so much you can do. We can’t afford to govern with blinkers on.”

Mr. Rae’s base and caucus never forgave him for that flip-flop. His government never recovered the unity of purpose that might have allowed it to endure tough recessionary times. It went downhill from there, until the party’s defeat in the 1995 election.

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