An abandoned gas well (Photo: Environmental Law Centre).

The shocker isn’t that the awful “RStar” scam is a done deal.

Alberta Premier Danielle Smith (Alberta Newsroom/Flickr).

The old fixeroo for that dirty deal has been in ever since Danielle Smith was chosen last year as leader of the United Conservative Party, and therefore as premier of Alberta, with a little help from $1.4 million in donations from some of her anonymous friends. 

After all, less than a year ago Ms. Smith was employed as a lobbyist for the scheme, whereby multibillion dollar oil corporations will have at least $100 million of their royalty payments forgiven to compensate them for cleaning up dirty old oil and gas wells they’re already legally obligated to clean up.

So it isn’t hyperbole to say this, it’s a simple account of the facts. In her role as a lobbyist, Ms. Smith wrote a nice letter to then Energy Minister Sonya Savage promoting the dubious scheme.

As soon as she was sworn in as premier, she wrote implementing a pilot for the scheme right into Energy Minister Peter Guthrie’s mandate letter. He would, she instructed, “develop a pilot program to effectively incentivize reclamation of legacy oil and natural gas sites and enable future drilling.”

“You’ve got someone who was a paid lobbyist to promote this program,” Mount Royal University political scientist Duane Bratt told the Canadian Press wonderingly. “Then that paid lobbyist becomes premier and produces that same program she was lobbying for.”

Alberta Energy Minister Peter Guthrie (Photo: Facebook/Peter Guthrie).

Well, trust me, the UCP isn’t even mildly embarrassed by this. Nor are they embarrassed by the fact that the wells in question have been sitting around for 20 years or more with no effort to clean them up, instead of within the year to year and a half that’s normal in most jurisdictions. 

So, short of not re-electing the UCP in May, or whenever, there’s nothing that will stop this ugly deal, which is sure to be made permanent over time, depriving Albertans of the returns they’re owed on their resources. 

University of Calgary political scientist Lisa Young describes it as “raiding the kids’ piggy banks to give money to their rich uncle as a thank-you for not burning the house down.” And since Alberta is a petrostate now utterly captured by the fossil fuel industry, even a victory by the Opposition NDP can’t be taken as a sure thing it will be gone. 

No, the big surprise was when a report from one of Canada’s big chartered banks forcefully criticized the plan, which now that it’s moving toward implantation has been given a nice boring bureaucratic name by the UCP – the Liability Management Incentive Program.

According to the Scotiabank report, Canadian Natural Resources, Cenovus Energy, Paramount Resources and Whitecap Resources are expected to benefit the most from the giveaway. “In their last quarterly reports, those companies recorded a combined net income of nearly $5 billion,” the Canadian Press noted dryly. 

Mount Royal University political scientist Duane Bratt (Photo: David J. Climenhaga).

However, the report warned, “while we see the potential for select companies to benefit from  the program, we believe it has the potential to generate negative public sentiment toward the sector.” (Emphasis added.) 

D’ya think? Again, though, the UCP doesn’t care about that. Ms. Smith is as confident as ever she can talk her way out of anything. “We have to try something different,” she cheekily told a reporter in a news conference, omitting to mention that the Alberta government has never tried to enforce the industry’s clean-up obligations. 

The Scotiabank report authors continued: “Moreover, we also believe the program goes against the core capitalist principle that private companies should take full responsibility for the liabilities they willingly accept.” 

Now that’s something different! 

There are those, of course, who might be justifiably skeptical that taking responsibility is a core principle of capitalism, at least when liabilities extend to the environment. 

19th Century philosopher and economist Karl Marx (Photo: David J. Climenhaga).

As Karl Marx not so famously said of capital’s relationship to agriculture, and could as easily be said of resource extraction, “all progress in capitalistic agriculture is a progress in the art, not only of robbing the labourer, but of robbing the soil; all progress in increasing the fertility of the soil for a given time, is a progress towards ruining the lasting sources of that fertility.”  (Capital, Vol. 1.)

But this is 2023. Who cares what some old guy thought in 1867?

Elections Alberta releases UCP leadership fundraising totals

Speaking of those donations to Ms. Smith’s successful leadership campaign, according to Elections Alberta yesterday, her $1.36 million in contributions compared to $1.2 million for the No. 2 fund-raiser, Finance Minister Travis Toews. 

As for the supposed third frontrunner, the other former Wildrose Leader, Brian Jean managed to raise only $388,750. 

That was less than the $485,497 raised by Rajan Sawhney and barely more than the $377,704 raised by Rebecca Shulz. Todd Loewen, who had been expelled from the UCP Caucus by Jason Kenney, raised $241, 896. 

With the exception of Ms. Smith, all of the candidates in the race to replace Jason Kenney spent more than they collected from donations.

NOTE: As the result of a transcription error (mine, with an assist from Spell Check) an incorrect word appeared in a quote from the Scotiabank report. It has been corrected. Many thanks to those who pointed it out to me.

Join the Conversation


  1. Our current Premier is quite the multi tasker. Of course we hear about her running a diner or something in High River and her time as a radio host. Somehow she doesn’t seem to talk much about her work as an energy lobbyist and all the conflicts that might involve, which would be even greater if some of those people she worked for also contributed to her leadership campaign. I suspect our generally talkative Premier will try to totally avoid these issues, at least definitely until after the election.

    It is of course a hare braned idea typical of Smith – have the government pay companies that already have the money to do something they are already legally supposed to do. I bet they are getting a lot more than the $100 a month, some but not all Albertans, are temporarily receiving. I don’t know if these large unnecessary corporate hand outs should be called corporate socialism or crony capitalism. However, I doubt Marx would like it. It does seem rotten to the core.

    Yes, after the election Is over and now that energy prices are down considerably from their 2022 peak, if they win the UCP will likely be back to cutting everything. Of course, safely after these companies cash their huge cheques. At least Ms. Savage isn’t the one implementing the scheme, so perhaps Smith has partly covered her tracks.

    I remember years ago when Smith as Wildrose leader constantly attacked the PC’s for their all their cozy, corrupt schemes involving political contributions and other payments to them. This current scheme of Smith’s might even make them blush.

    I don’t know if what is left of Alberta’s local mainstream media will be brave enough to pick up on this. So perhaps the only way we will hear more about this is due to the astonishment of some outside of Alberta about this.

  2. I love seeing corporations talking about… “ the core capitalist principle that private companies should take full responsibility for the liabilities they willingly accept.” In this age of the taxpayer closing the gap between what the worker is paid and what he/she needs to live, what about the corporation’s liability to their employees? We, the taxpayer, need to pay for and subsidize childcare, housing, transportation all of it to enable corporations increase profit through low labor costs. I fear the numbers of unfunded retirees my descendants will be called upon to support. Yeah, let’s talk about all core capitalist liabilities, not just expect them to clean up after themselves.

    1. A higher but less publicly-acknowledged capitalist principle, however, is that the costs must be socialized while the profits are privatized.
      These companies are observing that one religiously.

  3. Collectively, the candidates for the UCP leadership ran a deficit of a quarter of a million dollars, which illustrates again the real lack of business ability of them. Will they also need a special government program to help bail them out? No, wait, there’s appointments to cabinet for that.

  4. Privatize the profits. Socialize the losses. That has always been a core principle of capitalism. Smith is still a lobbyist for for the oil and gas industry. Being Premier of Alberta is her side hustle.

  5. A point that needs to be made is that this scheme will not address the challenge we hear the most about: orphan wells. Orphan wells are wells that were owned by companies that have closed their doors, so they cannot be called on to clean up the mess they created while they were in operation. Since these companies are no longer in operation, they cannot participate in this scheme, and their mess will remain.

  6. At this point it is worth remembering that Danielle Smith first appeared on the provincial scene when Ed Stelmach ordered a royalty review because a lot of people were thinking Alberta was not getting a good deal on its resources. It appears the oil industry installed her back in 2008 and she has been in their pocket ever since.

  7. There appears to be a typo mid-way down the article: In the paragraph beginning “However, the report warned…” I believe it should read “…generate negative public sentiment…” (negative, instead of native).

    There’s a long story behind Alberta’s lack of a time limit on non-producing wells. The underlying reason is undoubtedly the large number of low-productivity gas wells that are only economic when prices are high and sit idle the rest of the time. There are many such wells, especially in southeastern Alberta, and the owners would have balked if politicians or regulators hinted at time limits. There were two major revisions of reclamation regulations, in the 1970s under Lougheed and the 1990s under Klein, but obviously a time limit did not make it into them. Other jurisdictions like Texas have short time limits, although it’s routine for owners to get multiple extensions. Those places have plenty of low-productivity wells, so there’s really no excuse for Alberta’s lack of a limit. My suggestion is to start with a lax limit, say 5 or even 10 years, and then ratchet it down annually.

    Yet another reason to hope the stars are properly aligned on May 29.

    1. Thanks, Robert. The Scotiabank report said negative public sentiment. The transcription error was mine, although I got an assist from Spell Check, and the proofreading error was mine too. It’s been fixed and noted. Thanks to everyone who pointed this out to me. DJC

  8. As the UCP moves to remove the tax burden for all the so-called Wealth-Creators, it’s mindful to remember that this is just shifting the tax burden onto the larger society. This will mean that individuals will have to bear more and more of the cost of what were once public resources. Of course, the UCP will swear up and down that it’s not true: there will always and continue to be support for public resources. It’s just that these public resources will be provided by private contractors (Serving the public interest, of course) and the UCP will provide support for people needing the services. Your little healthcare spending account is going to have to go a long way to cover those fees.

    Of course, as the size of the tax base is decreased, there will be calls for new taxes. How about a consumption tax? I mean the O & G industry thinks such a tax is a great idea because they intend to not pay it. Albertans, who have been considered for generations to believe all taxes are evil and satanic, will freak at the notion of such a levy. Okay. The alternative is to pay your own way when you need a service. How does that sound?

    That’s the world that Alberta is plunging into, with not even a single thought as to what the outcome will be. Albertans can’t see past their next ATV or pick-up truck, so don’t count on any wisdom showing up when it’s needed.

    1. Mark: The Scotiabank report said negative public sentiment. The transcription error was mine, with an assist from Spell Check, as was the proofreading error. It’s been fixed and noted. Thanks to all of you who pointed this out to me. DJC

  9. Yeah! And let’s pay them to clean up the tailings ponds. And while we’re at it, let’s pay the forestry companies to reforest the land where trees were harvested.

    1. Section 88 of the BC Forests Act used to do exactly that: Tree Farm Licences wrote silviculture costs off against stumpage owed —the cost of tree planting, juvenile spacing, branch pruning, fertilization, and silviculture surveys (stocking assessments, survival surveys, pre harvest silvicultural prescriptions —including ecosystem mapping—, &c) were deducted from stumpage owed for logging Crown timber.

      The rationale for Sec. 88 was to encourage TFLs to tend to regeneration of Crown timber which they managed in their tenures—a then-novel approach implemented in the 1950s (RE: Sloan Commission). When timber prices were high, TFLs were only too happy to spend large on silviculture, sometimes more than the stumpage owed—that is, the public was effectively paying logging companies to haul away its forests, the supposed benefit to the public being employment and income tax thus derived. The companies loved it, back when BC had several of the largest sawmills in the world integrated with some of the largest pulp mills in the world.

      In the late 80s, premier Bill Vander Zalm eliminated Section 88 to preclude so-called “negative stumpage” (which it only did partially—which is a whole other byzantine saga)—probably to stem his flagging popularity as the practice was becoming a political hot potato. Thenceforward expenditures on silviculture dropped down to nothing more than the bare minimum required—usually just tree planting. Spacing and other silvicultural practices withered and many small contractors went out of business. Federal grants run through the UI system—basically an extension of benefit-coverage for laid-off workers— kept some silviculture projects going, but few of the participants put any back into their work because the pay was so low and the prospects temporary anyway. I think it was Mulroney’s government which nixed this programme, as well.

      Gordon Campbell, BC Liberal premier, sweetened the pot for logging companies by allowing then to disintegrate (get rid of pulp mills, the primary consumer of sawmill tailings and low-value timber) and greatly increase raw log export—that is, export value-added jobs. Whole towns and small cities have been gutted by the result. But the companies love it.

      Christy Clark, Gordo’s successor, was a match-girl at half a dozen annual Independent Truck Loggers Association celebrations. Longer hauls to fewer mills—up to 400km, one way—are now common in the Interior. She almost allowed logging high-value timber in provincial parks to, she said, “compensate” loggers for losing so much low-value lodgepole pine to the mountain pine beetle kill —as if they owned it. Lemon gin, I heard.

  10. You know who can be initially blamed for this very costly mess of epic proportions? Ralph Klein. Albertans have to cough up an astronomical sum of $260 billion to handle this matter. This is something Peter Lougheed would never have allowed to transpire. Here we are. Danielle Smith wants us to hand over $20 billion to try and solve this problem. This is absurdity at its worst.

  11. The sleaze never stops, which explains the urgency for the UCP to ditch the RCMP and move to a provincial police force that will do the bidding of the government. So, what happened to the 1.7 billion the feds paid for orphan well cleanups a few years ago that would also create 5200 jobs? Most of that money has been distributed with no tangible results. Now we need to give them an additional tax break?

    You would think heads are exploding over at the Canadian Taxpayer’s Federation (previously run by Jason Kenney) over this flagrant display of corporate welfare. A quick check indicates they are much too busy petitioning for the defunding of CBC to worry themselves over a few hundred million bucks split between a handful of UCP donors.

  12. Clearly the government is taking our money and redistributing it to extremely profitable oil companies. Surprised? Not e.

    In a similar manner but on a smaller scale the same thing is happening with the $50 energy rebate. I hear radio ads and I see print ads trumpeting how the UCP government is helping me and all Albertans with the affordability crisis. Giving me $50 to defray my energy costs.

    I don’t see the $50. I certainly don’t get to put $50 into my pocket. No the money goes directly to a large energy company. Then the energy company charges the government to take the $50 payment. Wow, it costs money to accept $50. Who knew? Give me a break.

    Forgive municipal taxes for oil and gas companies. Give the same companies income tax breaks and then watch them layoff tens of thousands of employees.

    I live in a province where my government’s first priority is feathering the nest of large corporations. The taxpayers of this province are treated like fools. It remains to be seen if we will accept the role at the next election. I won’t.

  13. It isn’t hard to understand why Danielle Smith was so hellbent on getting elected as premier. This will likely put millions in her pockets helping her rich friends steal billions from the people. As a politician pointed out to me years ago. You can bet it won’t happen for several years until after it dies down and people forget about it.

  14. After watching Smith tell her stupid supporters what a jerk Trudeau is dozens of time , with nothing to prove it, while he is the one pouring billions of dollars into Alberta to save us proves what a fool this woman is. Sadly the fools who support her aren’t any smarter than she is. As a guy in Calgary told me years ago that he had over heard Ralph Klein saying to one of his MLAs at a fund raising dinner in 2003 “ I could tell these idiots anything and they would believe it” . Knowing how stupid Albertans were certainly helped Klein destroy us, but these are different times and if the young people bother to vote I don’t think they are as dumb as Smith wants them to be.

  15. Big surprise in a crony capitalist [“an economic system characterized by close, mutually advantageous relationships between business leaders and government officials.”] environment of easy money, power, and influence intersecting with and operating on a subset of ethically compromised, purely self interested individuals. Proving once again that, the privileged and the economically well off in society get the government that they both paid for and ‘deserve’. [i.e., “According to the Scotiabank report, Canadian Natural Resources, Cenovus Energy, Paramount Resources and Whitecap Resources are expected to benefit the most from the giveaway.”]

    Also, see for example,

    Because, as has already been stated and noted,

    “I find this extremely useful as an indicator of what she’s going to do,” said Laurie Adkin, a political scientist at the University of Alberta. “These are her people. These are the people she worked for.” “They now have their president as premier,” said Adkin. “Whose premier is she?”

    “There are a lot of practices that were approved by government that would not be acceptable today,” she [Danielle Smith] said. “We think there’s a joint obligation, especially for the wells, because environmental rules changed over time.”

    Who is the “we” that is driving this bus? Certainly not the current Premier that is still acting like she is still a paid lobbyist.

    Is it possible that influence peddling and conflicts of interest could exist in an environment where regulatory capture as a standard business practice is both endorsed and embraced by the the political class? [Where it appears that the public office holder[s] are directing and implementing public policy for the the direct benefit of an exclusive private group specifically, at the expense of the public more generally.]

  16. I’m out in front of the hearse! Now just bear with me, my brothers and sisters! This is the greatest thing we have ever left behind. I don’t know or care what you believe, but believe me when I say! Joni Mitchell? Now she deserves the best! Listen to what she told us, then let your eye balls rest!

  17. The Polluter Pays Federation (PPF) is an Alberta based, not-for-profit organization, that provides insight into the impact industry’s efforts of Alberta’s oil and gas industry have on Landholders throughout the Province. The Federation’s mandate is to use its in-depth insights and expertise to provide recommendations into the Province’s oil and gas regulatory regime for the purpose of achieving more safe and fair interactions between the Province’s landholders and the industry. Our membership includes Alberta landholders, former energy production experts, former AB energy regulators, researchers, academics, and former Provincial politicians. We have worked with the AER in the past, on their Proceeding 410, their review of Directive 06, and other AER related Directives. We have participated with the Energy Futures Lab, along with the Canada West Foundation, as a key stakeholder in regards to their Leads Project: Leveraging our Energy Assets for Diversification. We requested an invite to the stakeholders meeting at which Minister Guthrie would announce the RScam pilot project. Our request was made 10 days prior the Feb. 09th meeting date. Two days before the meeting, we were refused an invitation, being told that the meeting was for stakeholders only. It appears that dissenting stakeholders to the RScam program are not welcome to be heard. That disappoints me. I’m not only the PPF Chairperson, I’m a landowner with an orphaned well on my land. The Minister’s definition of a stakeholder must be different from mine.

    1. @Dwight
      There is an article in the Edmonton Journal you may want to read – “premier smith defends orphan well pilot project”.

      The article indicates that the orphan well fund is now sending out letters indicating that the $3000 payment per well per year to farmers with orphan wells is now being dropped by as much as $2000 per well. This is being done to cut costs.

      I wonder if smith will claim she didn’t know that this was being done – just as she claimed ignorance about the powers in the sovereirgnty act?

  18. Amusing to see bankers, of all people, criticize someone for being a lawful evil business criminal, but I definitely take issue with this statement:

    “Moreover, we also believe the program goes against the core capitalist principle that private companies should take full responsibility for the liabilities they willingly accept.”

    Yeah pull the other one bankerboy, I was born at night but it wasn’t last night. “Core capitalist principle?” Yeah right. I guess they try to reconcile this with the idea of “externalities” by saying that companies have the right to decide whether to accept liability for their actions, and it is only immoral for them to avoid responsibility for their actions if they have publicly committed to being responsible for them.

    Have a comic that explains about externalities, which are still considered a valid principle of capitalist economies today:
    The grey box at the bottom is worth a read, too.

  19. This is another white collared crime committed by the oil and gas industry and their employees and subordinates, the UCP. But this is just proof that Alberta lives in a corporatocracy, not a democracy, where the corporate class owns and controls the economy, the mass media and the political arena. You might remember that under Kenney, oil and gas royalties were cut in half, pilfering the citizens of Alberta of their resources. Not a word was said in the mass media about it btw. They were too occupied with petty crime. It’s time to nationalize this industry in Alberta and charge these criminals for their crimes against the people of Alberta.

  20. We the public own the resource. Royalties are OUR income, not the UCP. Royalty breaks when there are record almost obscene profits show me that Big Oil truly runs this ultra right government we are stuck with. And as a declared Libertarian, Premier Smith is a threat to our social capitalism democracy. Libertarians view profits over people.

  21. So, instead of being fined for failing to live up to their legal obligations, oil & gas companies will be paid by the taxpayer to fulfill those obligations. Do I have that right?

    Perhaps we can see if the Canada Revenue Agency will adopt a similar policy & pay us to file our taxes on time … or if Alberta Registries will pay us to renew our vehicle registrations on time … or if municipalities will pay us to pay our property taxes.

    Jeez Louise, can it get any crazier?

  22. I really question the political wisdom of implementing this scheme so close to the (scheduled) general election. Surely this will turn off more voters than it will please, as the Scotia Bank report says.

    Is this just a political blunder? Is David correct that Ms. Smith thinks she can just talk her way out of it? My worry is that she wants the pilot started now, so that if it looks like the election is a lost cause anyway, in the dying days of her government she can declare the pilot a success and implement the program on a large scale.

  23. Textbook regulatory capture. Government wants to install a regulator? Fill the regulator jobs with industry pros, who look like great hires with their experience, but just swing everything in favour of industry. This is just step 2: install an industry insider into the government itself.

  24. In a weird way, the off-loading of the liabilities of the O & G industry is a form of nationalization by stealth. The public takes on more and more of the financial burden of the excesses and damage caused by the industry, however, while receiving none of their gains. At some point, the O & G industry will soon received subsidized, or even free labour, not to mention having their R & D backed by the government. While the industry will be lavished with funding from the government, public resources will languish and collapse. Of course, the UCP’s position on all this is will be the industry must be protection from Ottawa’s predation, and for that Alberta will provide the industry with a blank cheque.

  25. There is a never-ending list of corruption, shenanigans, wasted money, and nefarious spiderwebs of connections within this party. This is a given.

    What troubles me is there are many people who don’t know about these facts. Seriously. They don’t. Unless people seek out the information, it is not getting out to a wide enough swath of people. And they will vote UCP in the next election because they think the UCP is doing a good job or they dislike the NDP because they’re socialists or something. In the region of AB I live, people identify very strongly with Dani’s posturing and rhetoric (especially against Trudeau).

    There has to be reasons for a traditionally conservative voter to decide to vote differently. There are many reasons to do this with the UCP, but those reasons need to be broadcast loudly and repeatedly in as many formats as possible. And right now, I don’t think they are.

  26. Like Bob R, I too think this policy is boneheaded so close to an election.
    But I always said: Danielle Smith doesn’t have a political bone in her head—at least not with respect policies that are good for the public interest she is supposed to preserve and promote. Again and again she seems to be oblivious to what is politic—almost as if her job is simply to get in (she’s in, for now, anyway, thanks to what looks like generous —uh-shall we say, ‘inducements’ she accepted as a private lobbyist) and get something done that’s irreversible for—it looks like—the benefit of her benefactors and her apparent scheme to sabotage the public weal before voters terminate her government. Presumably it’ll be too late by then—a “done deal.”

    I hope my Alberta friends put an end to this disastrous first-term government—that is, make this its last, as well as its first term before it damages your beautiful province even more than Kenney did.

  27. The laffs continue. Two of the four companies named in the Scotiabank report were created by partners of the Calgary Flames ownership. It amuses me to no end to see the people in the province still failing to grasp the simple facts about “who rules”. During the Interregnum at the end of the last decade, the accidental government demonstrated very clearly that while their constituents may not get it, they themselves understood very clearly just ‘oo own da Province.
    Capitalism literally ceased to exist with the implementation of Quantitative Easing after the melt-down in 2008. The major financial institutions do not seek profit, the system is entirely predicated on bail-outs. This was done in Canada as well, where the major banks were at that time all essentially cross-owned, and slid the bail-out through CMHC. The banks went broke again in 2019, and began the bail-outs in September of that year. Covidmania was then used as the mechanism to send the bail-outs to levels that could not have been imagined in 2007. But you know, conspiracy theories.
    On the subject of Marx, when the accidental government assumed the chairs in 2015, the single most revolutionary act they undertook was to raise minimum wage. Does the minimum wage turn up anywhere in Das Kapital or the Manifesto? Asking for a friend.

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