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To Kevin O’Leary: Butt out of Alberta politics, you Bay St. ignoramus

May 7, 2015 | By | 23 Replies More

Kevin O’Leary is completely off base and Albertans should Tweet him at @kevinolearytv to express their displeasure

Social media is lighting up with news stories about Kevin O’Leary and his warnings to investors to stay away from Alberta now that the NDP are in charge.

Kevin O'Leary

Kevin O’Leary of Dragon’s Den fame. Photo: CBC.

Butt out, O’Leary, you’re not helping.

The issue is a campaign pledge by new NDP Premier Rachel Notley to hold a review of the provincial oil and gas royalties. You know, the oil and gas owned by the people of Alberta.

“It’s a horror movie unfolding,” O’Leary told a National Post reporter. “You never, ever tinker with royalty rates when you are at the low. You don’t do that.”

“If you are a fiduciary, you can’t put money in Alberta right now,” he added.

Last week I interviewed Gordon Sick, professor of finance at the Haskayne School of Business, hardly a bastion of socialist economic theory, about a royalty review. He said that since the last review in 2007, there is a new market-based method of valuing royalties. He thought using both the new and old methodologies would lead to some interesting insights and might – I emphasize might – identify value that should be captured for the resource owners.

Here is his common sense assessment of a review, which stands in stark contrast to the know-nothing bombast of reality TV star Kevin O’Leary: “I do agree with the NDP that it is worth having a look at what is going on. If nothing needs to be changed, then don’t change anything.”

Kevin O'Leary

Alberta Premier-elect Rachel Notley greeting supporters.

Thus far, Notley has said only that she wants a review. If you were a landlord and owned some rental property, say, wouldn’t you reassess the value of the property and the rent on a regular basis? What business owner doesn’t want to receive fair value for their assets?

Kevin O’Leary, apparently.

Now, I understand why an energy CEO like Steve Laut, president of Canadian Natural Resources Ltd., would tell Post, “Clearly, this is not good for the industry…The oil and gas industry is a global industry, and capital will flow to areas with the greatest return.”

As Beacon Energy News reported today, CNRL and other producers are working frantically to get their operating costs under control. Laut and his management team posted a $252-million first-quarter loss and he says his company is prepared to lop another $300 million from its $2015 budget.

Kevin O'Leary

Steve Laut, president of Canadian Natural Resources Ltd.

Notley needs to understand that those are big numbers and industry takes them very seriously. She has tried to calm the storm by reaching out to the Alberta oil and gas sector.

“I’m going to be making phone calls today to leaders within the energy industry to begin those conversations,” Notley told reporters at the legislature Wednesday. “They can count on us to work collaboratively with them.

“I’m hopeful that over the course of the next two weeks they will come to realize that things are going to be just A-OK over here in Alberta.”

Think about that. She wins a momentous victory Tuesday night and the very next morning is reassuring Big Oil that everything is going to be just A-OK. How Albertan of her.

And her actions put the lie to everything Kevin O’Leary is claiming in his outrageous statements.

Notley did not say she would raise rates, as the National Post claimed in its story, she said her government would hold a review of the royalty regime to make sure it was fair to Albertans. As Prof. Sick has already noted, that is a perfectly reasonable thing to do.

As far as I can tell, the only one riling up Alberta oil and gas executives is Kevin O’Leary.

So it’s time for Albertans to tell O’Leary to butt out of Alberta politics. His only contribution so far has been biased and inflammatory statements that misrepresent Notley’s campaign pledges.

Alberta has enough on its plate right now without Bay Street ignoramuses making things worse.

 

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Category: Markham

About the Author ()

Markham Hislop is the publisher of Beacon News and Beacon Energy News. He also reports and writes about Alberta and British Columbia energy issues.

Comments (23)

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  1. Andrew says:

    Yes Mr. Hislop. I believe you are absolutely right. Jumping to hysterical conclusions and creating a conflict when one does not exist is not helpful and the likes of Kevin O’Leary would be better advised to get the facts before jumping on Ms. Notley.

    • Patrick says:

      Kevin Who?

    • Loretta says:

      Kevin O’Leary has been yelling “wolf” loudly and obnoxiously without any factual basis for a long time… you have to ask yourself why. I think he is trying to scare investors into dumping all their Alberta energy stocks SO THAT HE CAN BUY EVERYTHING IN SIGHT AT THE DEEPEST POSSIBLE DISCOUNT. The stock market is a confidence game and he is creating a race between the lemmings…

  2. Trevor says:

    Hi. If you care about the readers of your blog, and you should, get rid of that floating social media share bar. I tried reading this post on my iPad, and it was impossible because of the stupid bar. Yeah, sure, works great on a desktop, but how many people are using a desktop these days? Now I really wanted to read this article, so I actually put my iPad down and went to my office to read the post on my computer. Not everyone is going to do that. Even less will take the time to tell you about it. You’re welcome.

  3. terry says:

    As an Albertan. Thank you Kevin O’Leary. This will be a learning lesson for Alberta. It may set us back a few decades, but it will set back the “left” for the rest of this century.

    • Tana Farrell says:

      Kevin O’Leary is only interested in increasing the wealth and prosperity of Kevin O’Leary. And he’s getting LOTS of free press with his inflammatory comments which – I would suggest – will increase the “worth” of his name on reality-tv shows. He is the male version of Kim Kardashian. As a billionaire – of course he doesn’t want to see any government gain ground if they are looking to reduce the ever-increasing gap between the very wealthy and the working poor. His attitude towards people who do not have buttloads of money is that they are miscreants and lazy no-good, uneducated, leeches looking for a handout. Well, Mr. O’Leary, there are many, many people who fall in between those two extremes. And THEY are who elected this new government in Alberta – where you do NOT live. You are certainly not concerned about the middle class folks – so who are you trying to warn off – the vastly wealthy? Me thinks you protest too much. What are you really afraid of? That the NDP will succeed?

    • Brian says:

      Interesting…right-wingers crying wolf before the government is even sworn in. The NDP brought a boom to Saskatchewan…became a “Have” province in 2004 under the Calvert government…left 2.5 billion in the bank after 16 consecutive balanced budgets and paying down 8 billion of the debt left behind by the last “Free Enterprise” government. The cash is gone, the debt is up by 7 billion in seven years…so much for the ridiculous assertion that New Democrats are anti-business and bad fiscal managers.

      Might be a good idea to check facts before you spout off.

      • Mitch says:

        Hi Brian. Any way you could point me in the direction of the sources for those facts? Have a lot of folks here in Alberta trying to argue that NDP governments are bad for the economy. Would like some hard facts to refute that notion.
        Thanks!

        • DMD says:

          From Wiki, Andrew Thomson, “As Minister of Finance during a period of rising resource revenues, he introduced the largest tax cuts in the province’s history by lowering sales taxes, capital taxes, and corporate income taxes in 2006. This was followed in 2007 by introduction of the graduate tax credit and a cap on prescription drug costs for seniors.[13] Despite concerns by the opposition that the cuts were too deep and unsustainable,[14] the province posted a $2 billion surplus that year and remains in a strong financial position.[15] His time in Finance was also marked by an ongoing battle with the federal government over the impact Saskatchewan’s growing oil wealth had on equalization payments.[16][17] [18]”
          Thomson is now running for the fed. NDP. He was in the Lorne Calvert NDP government.

      • Frazier says:

        |Your optics are a bit off. The Sask Boom happened after the Saskatchewan Party won it’s leadership. The Sask Party was created in 1997 by a coalition of former provincial Progressive Conservative and Liberal party members and supporters who sought to remove the Saskatchewan New Democratic Party (NDP) from power, which they did in a sweeping majority in 2011. The Boom became a real thing almost immediately after the NDP were removed from office. Saskatchewan’s GDP during the NDP years averaged about 40 million. Last year under the Conservative/Liberal coalition almost 60 BILLION a 12 month growth of 4.2% second only to Alberta. Soo….NO. The NDP did not create the Sask Boom. The party created to successfully get rid of the NDP created the huge boom. You just have to ask someone from Saskatchewan (like me) who lived through the NDP years….your facts are a bit off. While you may not like what KO is spouting off your facts are as skewed as his insight. I suggest you research your stats with a clearer lens.

      • Patrick says:

        Interestingly enough, I am or was a lifelong Tory in Alberta. My favourite premier was Mr. Peter Lougheed, who in my opinion built this great province. While I was ranting and raving about an NDP win, my dear wife, the voice of reason, made me read Mr. Lougheed’s ideaology. Then she made me read Rachel Notley’s. Wow! I think Klein and his successors drifted from the PC ideaolgy that Mr. Lougheed laid down. I’m prepared to give her a chance, and I consider myself very right wing. The wealth of the province belongs to Albertans, not CEO’s and billionaire investors.
        Absolute power corrupts.

    • Richard says:

      Terry, I’m surprised you’re willing to have your fellow Albertans suffer economically just so your suspicions can be vindicated. Capital flight can often cause the very problems a government was trying to improve. How about a little “benefit of the doubt” before jumping to conclusions? My impression is Ms. Notley is more “Roy Romanow” than “Ché Guevara”.

  4. Gerard says:

    Oleary is a smart man, but he is sensational and shameless and often ridiculous. He is the biggest apologist for greedy individualism and he has been wrong in arguments many times in the past. Like a Don Cherry he is colourful and fun to listen to, at times. But his thinking is extremely biased toward maximizing profits for shareholders, often, as in this case, at the expense of both common sense and the public good. Good on Notely. It is thoroughly embarrassing on the Alberta government to have so little to show after 40 years of enormous wealth generation as a result of the excessively low royalties. Signed, an average Alberta who thinks Oleary can kiss his ass.

    • Richard says:

      If Mr. O’Leary is unwilling to buy Alberta oil stocks because of the invasion of the NDP Barbarians (sarc.), then fine… many other will. I know our firm picked up some Suncor and other beaten up stocks for a good price last week. O’Leary Fund investors’ loss will be others’ gains.

  5. Thank you Kevin for this message…even if you went to Nashville this past month..I still respect you 🙂

    I have to agree..just look at some of the immature NDP MLA’s now…especially the one in Calgary flipping off the Canadian flag. These people are going to run Alberta.

    I am thankful I got back to Ontario before this happened. Prepare for suffering!! Ontario is still climbing out of the Bob Rae years.

    Stuart Crawford

  6. Mike says:

    I have no problem with having a review and having complete transparency within the government. My issue and problem is with the NDP’s platform and mission to increase taxes (you cannot tax your way out of problems), and increased government control and spending of our lives. The majority of people in Alberta wanted change. But they failed to realized that giving control to the NDP will hurt businesses, reduce investments, and penalize individuals who invest in themselves to improve their life and income by taxing them more and more, because they work too hard to get ahead (you work hard to get head, so the government will now punish you by increasing your taxes).

  7. Sydney says:

    I’m confused, where does Kevin warn investors from not investing in Alberta. I just watched an interview where he said he personally wouldn’t invest in Alberta, and where he said big capital won’t invest until they know what the new mandates would be with this government, but not anywhere could I find him warning investors not to invest. Can you please show me where he is? If he didn’t then your article is made up and not news worthy, but if it is then some of the interview should be up for us to see the whole story, and see if he really is an ignoramus. On top of this, you have him stating that the royalties are worth taking a look at and if nothing needs to be changed, then don’t change it ( “I do agree with the NDP that it is worth having a look at what is going on. If nothing needs to be changed, then don’t change anything.”) That’s a far cry from him saying they shouldn’t be changed.

  8. Barb says:

    As a proud Albertans who voted NDP, how can I write to O’Leary to express my thoughts?

    Thanks.

    Barb

  9. Jim says:

    Big Money likes certainty. And long term stability. Big oil and utility investments tie up money for a long time. Change brings uncertainty. Kevin is right, big money will stay away until this change plays out and certainty returns.

  10. Marcel says:

    Well stated, Kevin!
    Several comments/feedback noted above are clearly either pure NDP rhetoric or extremely naïve. Conducting a Royalty Review was one of the top 4 NDP items on the election platform for one reason alone. It clearly implies that the NDP believes that money is being left on the table, and that they now have received a mandate from Albertans to “go out and get it”. Yikes!
    The last time a critical review and rework was conducted, it was done via an extremely in-depth and inclusive process. Just because Ed Stelmach was the one to usher it into law is no reason to discredit the process or the outcome. The royalty framework that was put into place was design to balance a fair royalty revenue stream (you may remember that the findings of the study were actually called “Our Fair Share”) with adequate incentives to attract capital investment to our province. Specific provisions were tailored for each of the emerging high-capital-cost plays: shale oil/gas, deep gas, and bitumen.
    Alberta’s competitiveness within the Western Canadian supply basin was an absolutely key outcome.
    And finally, establishing standardization, certainty, and stability of economic conditions for investor was established. Alas, that has now been shattered, and at the worst possible time within the commodity price cycle.
    I think there is a high likelihood that, although she is not yet Premier, we can already confidently predict what Rachel Notley’s “legacy” will be…sigh…

  11. Thanks for calling BS on Kevin O’Leary!

    Although I doubt that even he believes what comes out of his mouth.
    He is just playing up his bombastic controversial image for the
    publicity.

    Kevin O’Leary is to insightful commentary what WWE Wrestling is to
    the Olympics. Not to be taken seriously because it is all made up.

    O’Leary is not a financial adviser but he plays one on TV!

  12. Chris says:

    O’Leary may be right or wrong. He is and always will be a blowhard. But……..as someone who personally lived through four years of absolute hell and financial ruin created by the NDP government in Ontario, I say to all ” be very,very careful in how you invest because the lights just might go out”. put some cash in the pillow case, it will come in handy four years from now. l

  13. terry says:

    Actually I want to hear what Kevin O’Leary has to say.

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