Robert Nabloid

Canadian Royalty Trusts Will Never Return to Their Former Glory

Steve Ward... Harper was much better than the alternative from an investors standpoint. If you follow Canadian politics you would know why investors re-elected Harper!!! If you knew about the other proposals by the opposition parties, you'd be happy Harper was back in office and not them! Do you know? Or do you have to google it first? (Dion and the Carbon Tax ring any bells? His campaign was against evil Alberta and was a massive tax grab to take Alberta money (from oil companies) and spread it around everywhere but ALberta (primarily the East) - the guy was an idiot.). I wonder how that would have done for your investment? Harper was the right choice, especially if you invest in Oil and Gas.

As for provincial politics... Even "honest" Ed, as much of an idiot as he is, was a better choice than our alternatives on the provincial side - The provincial Liberals would have done more damage and raised rates higher than he did. That said, I wish we had a different conservative in office - Ed was third best, and only won nomination of his party because the top two runners were so close (and their supporters each wanted their own guy to win, not the other top runner) that they held a special vote in which conservative members vote for their favorite and also a second vote for who they consider 2nd best. Both of the top two guys got more "favorite" votes, but "honest" Ed got the most "second best" votes, which were added up to give him a victory... A really stupid way to elect a leader for a political party... But soon after his victory - he was pressured by "media' (which is liberal in Canada), which made it seem like the average Albertan wanted royalty rates increased (they didn't) when they asked a flawed and leading question, "Are you getting YOUR fair share of the Oil Royalties?" Of course people answered no. That's like asking, "Are you getting your fair share of corporate tax money?" Most Albertans were mad at the tax increase when it went through. The Liberal media, seeing that Ed is weak, went on to say he isn't a leader (they are right, he's not!) and said that he wouldn't stand up to big oil. Then the provincial liberal party started to say they would increase oil and gas royalties. So, weak Ed, had to say, "I'm a leader" (what true leader has to tell you they are a leader?) and promised he would stick up to big oil and raise the oil and gas rates. Thus, the liberal media and the liberal party virtually backed him into a corner. Why raise taxes now? Our province is 100% debt free and has surplusses as it is!!!! We don't need to incrase taxes, so why do so? It doesn't make any sense and is completely anti-Albertan and the result is that a lot of Albertans lost their jobs in the drilling sector. Forgive us, we live in a liberal country with liberal media and we've had a massive influx of liberals from other parts of the country that have come here for jobs and they now get to vote too. The newcomers don't realize that for decades, Alberta struggled with stupid economic policies from the Liberals controlling the country . The newcomers don't realize that we closed most of our hospitals and cutback almost every department there was in order to balance the budget and work our way to debt free status. The newcomers beleive the LIberal media, that Alberta got debt free purely because of oil - we didn't - we sacrificed for decades with less hospitals and other goverment programs that a province like Ontario and Quebec continued to spend on - even if they didn't have the money, while we CUT back to spend only what we could afford. We were fiscally prudent even in hard times. We worked our way out of the mess we were in - and then oil prices surged and only made things better for our province.

Most Eastern Canadians don't remember Trudeau or his energy policies that almost bankrupted Alberta. In fact, most liberals still love Trudeau.

At least "honest" Ed (the idiot that he is) has rolled back some of the royalty increases (about $1.8 billion worth), though much of the damage has already been done. Did you mention the partial rollback? I don't think your article did... www.oilweek.com/news.a... Too bad it's not a complete and permament rollback...

As for Harper - He is the best man we could choose. He is an Albertan. He knows oil. He has a Masters in Economics. None of us liked it when Flaherty killed the Income Trusts - well, except the Liberal media and those in the East who despise Alberta and big evil corporations that "don't" pay taxes (lie). Flaherty got rid of the Income Trust sector because ALL companies can be Income Trusts in Canada, not just Oil & Gas... And many companies were trying to become Income Trusts to avoid taxes and increase share prices. Flaherty's tax reasoning was flawed because those corporations would pay taxes, as would investors, it would just be delayed due to the portion of dividends that is considered return of capital - but you can only return so much capital before that runs out and it the entire portion of dividends becomes fully taxable - Plus any capital gains on the corporation are taxable. But anyways, LARGE corporations from every sector of the economy were threatening to become Income Trusts, like Bell Canada (BCE). Instead of having EVERY company under the Sun convert to an Income Trust, they decided to reduce Corporate Taxes and make the Corporation structure more competitive. Do I agree with it all? No. Was some of their information faulty? Yes. The media acted like the Income Trusts pay no taxes - which is absurd! Do I want the Corporation structure to be more competitive so every company under the Sun isn't forced to turn into a Income Trust? Yes.

"Canroys", an American term, can grow and acquire quite a bit under the new (and stupid) rules before converting to a Corporation. These are barely limitations, and most companies will not be restricted by it as they still have PLENTY of room to grow and acquire. The true tragedy is that the Income Truts are being abolished in the first place. How many Canadian retiree's could have lived off the dividends? With 10%-15% dividend rates and a sustainabable business model (which some are very sustainable), even a $200,000 portfolio of diversified Income Trusts could generate $30,000 a year - and $200,000 isn't very much money!

By the way, Oil and Gas Income Trusts do a lot of drilling!!! I've been to driling rigs at 3 in the morning. Do they acquire exploration companies? Absolutely. But they also drill on their own properties. I've also been to Fort McMurray (Oilsands territory) and had a tour of operations - it is quite remarkable. Income Trusts play an important part in Canada, and now that they are being tossed aside, I'm interested to see how the transistion to corporations will be. The ony good thing - if it actually happens - will be the lower Corporate tax rate for all Canadian Corporations... Unfortunately, I don't think the LIberals, once in power, will honor the corporate tax decreases.


On Nov 24 09:09 PM steve Ward wrote:

> To Thor: I'm not bearish on the Canadian Trusts if they change their
> model, unless they already have a DDA of greater than one. Or can
> achieve that figure in 12 months or less.
>
> To Xiang2chu and searcher:: Canroys cannot make the large acquisitions
> due to Safe Harbor Rules. They have to become corporations. Frankly,did
> youn read the article? It clearly states that assets are becomming
> cheaper but Canroys are limited in buying them. And PGH and PWE did
> not share your concerns of high priced asset purchases when they
> bought several billion dollars worth of high priced assets from Chevron
> and Canetic respectively in the last 15 months..
>
> To Harley the Brave: I have a direct ancestor that fought on the
> winning side in 1776. Entire family has a phobia about the word Royal
>
>
> To paultaut: I have enjoyed your bullying over the last few months,
> now it is my turn: Youn are a partial idiot. I won't call you a complete
> idiot because it appears you know how to type. The Canadians already
> had their election on October 14th and they re-elected Harper. The
> anger of Canadian investors--where. Show me the grass roots ground
> swell that will roar the Canroys back. Also, I am pleased to hear
> that currency rates and swaps will soon stop the bleeding of production
> in the 5 Canroys I mentioned.
>
> ToThor_9128, your argument is not with me on the numbers but rather
> with CIBC World markets and other Canadian houses that publish the
> data. Also, I've owned BPT for my account and for my moms.
> I am saying this gently, unlike to paultaut. BPT is a blow down model
> and it is 100 percent oil and NG liquids. There is now gas portion
> to stink up payouts on wild fluxes. Also, it does not have debt and
> it it is guaranteed a percentage of the "First" 90,000 barrels pumped
> which generates approximately 14,500 barrels a day for BPT. So, it
> does not matter one whit to BPT that Prudhoe production has slid
> dramatically. It will never matter as long as 90,000 BOED are pumped.
> BPT Royalty holders will always receive their full and not a partial
> share. Thank you for bringing up BPT, it dramatically shows the benefit
> of a blow down or pure royalty trust without hedging and outrageous
> costs in management. BPT proves my point.
>
> To: paultaut: stimulus will be pushing on a string. Stimulus won't
> kick but hyper inflation will. Like I said, you have a wait of until
> the last quarter of 2010. Most of these trusts are gassy. US has
> a lot of gas comming on stream in 2009 and 2010. Good luck.
>
> To: yank: you have valid points. Ottawa wanted the wealth spread
> out to the other provinces. Kill the Trust structure first than have
> your buddy "Honest" Ed Stelmach whack conventional production to
> push it even further out. Stelmach gambled on unconventional oil
> and gas production that is why the Alberta hike favors un conventional
> producers like Ember and the deal Marcel Coutu got from Alberta this
> last two weeks. It was a sweetheart.
> The whole thing was planned. It was planned, it was planned and it
> was planned. It was a conspiracy. Just look back and see how all
> the pieces fit together so well. This was not happen stance, it was
> deliberate. And so far it has worked to perfection with Harper winning
> re-election one month ago and Honest Ed getting re- elected earlier.
>
>
> China will not take over Canadian assets in Canada unless the Harper
> government invites them in. Harper has hung out a "Chinese Not Welcomed"
> sign. The Chinese have been burned with the Northern Lights ptroject
> and find doing business with Chavez and African dictators more rewarding.
>
>
> Also, many investors I have spoken to have used the words E&P
> in describing the Canroys. That is the only reason I mentioned it.
> But these investotrs, mostly novices, are not idiots. The Canroys
> constantly use the word, "sustainability&am... in their presentations
> so an investor would logically assume an E&P type company.

Canadian Royalty Trusts Will Never Return to Their Former Glory

Uh, Steve Ward, I think you must read Damian Black's comment. US investor's get the same treatment. Oh, and your buddy Obama wants to raise dividend taxes and capital gains taxes anyways within the US... You think he wants to help individual US investors? But read the below quote.


"I also forgot to add the the tax statements for US investors are completely bogus. The taxes levied are on the corporate entity and impact all investors north and south of the border equally. This kind of mistake shows Ward to be clueless on even the most basic of issues - the tax one pays on the dividends received..." - Damien Black


On Nov 25 08:35 PM steve Ward wrote:

> Onre final thought then I'm out of this blog.
> Our Canadian friend Webby said something important about foreign
> ownership. Non-Canadians cannot own a majority percentage of these
> trusts. Coutu of Syncrude fought to increase that foreign ownership
> percentage several years back. Coutu was partially successful. <br/>
>
> Coutu is a true internationalist in that in his eyes all investors
> are "created equal".
>
> The Canroys came to the US in dire need of equity capital. They couldn't
> get it in Canada for the price and the amount they wanted. That's
> why they put up with the paper work of dual international listings.
>
> So we bought in.
> Canada is a soverign country that has an inalienable right to change
> the rules and derive the benefits and the consequences of the action.
>
> But what they don't have a right to do is to take our money and then
> put us on an inferior footing with a Canadian investor.
> President Elect Obama has stated that part of his mission is to smooth
> out un fairness in free trade. He can start here with the little
> guy who put his money on the table and then had the table rigged.
>
> Obama can tell Mr. Harper that we in the US have no problem with
> Canadian Soverignty but if you come here looking for money we want
> equal treatment.
> The same benefit a Canadian receives holding these units in an approved
> pension or retirement account.
> President Obama then should say to Mr. Harper that many middle class
> Americans placed trust in their Canadian investments and that trust
> is in trouble. That many Americans who bought these units need the
> extra income to pay everday bills and food on the table.
> President Obama should futher say to Mr. Harper that while the price
> of commodities will fluctuate and company fortunes can wane, if you
> ask for our money do not make us second class investors. Which Harper
> has done.
>
> This is one area where President Elect Obama can do something for
> the little guy and free trade.

Canadian Royalty Trusts Will Never Return to Their Former Glory

Most Albertans were NOT in favour of the increased royalty rates the provincial government passed. The liberal media pushed it through by conducting a survey based on the question, "are YOU getting YOUR fair share of the oil royalties?" Of course, most people said, "no" the way that question was structured because none of it ends up in my pocket (like it might if we had an Alaska style payout). But that doesn't mean we wanted the royalty raised! Even if we raise it, we still won't get OUR fair share... because the government will waste it on stupid projects designed to make special interest groups happy.

Just so you know, the idiot Premier who passed the royalty increase is now taking back some of that increase... Read here: www.oilweek.com/news.a...