People sometimes do a double-take when I let it slip that I’m a journalist covering the Alberta business scene from Edmonton. After all, Calgary is the undisputed business capital of Alberta.

Although I spend a lot of time on Highway 2 going back and forth between the two cities, I am convinced that covering business from homely, blue-collar Edmonton gives me one important advantage: perspective.

Calgary, or more specifically, the downtown Calgary of the Plus-15s (the network of enclosed walkways between buildings) and public companies, can be an insular place full of people who spend most of their waking lives at work surrounded by like-minded people. They seem oblivious to what their own daughters and retired parents are thinking back in the suburbs.

This has rarely been as evident as in the recent furor over the Alberta Royalty Review Panel report released in late September.

The review was born during the Progressive Conservative leadership race to replace Ralph Klein a year ago. Incoming Premier Ed Stelmach, a rural northern Albertan who seemed to slip through the middle on the strength of not being from Calgary, appointed a panel of six current and retired businesspeople and academics to review the royalty system for extracting oil and natural gas. (Never mind that the energy ministry already had its own internal review mechanism, according to a concurrent review by auditor general Fred Dunn, that had been ignored during the Klein years.) The panel held a series of public hearings in which the only consistent argument was from the oil and gas companies seeking to preserve the status quo.

The resulting report thus came as a shock. “Albertans do not receive their fair share from energy development,” the report began bluntly. It concluded that resources rents in Alberta are among the lowest in the world and the royalty system was needlessly complicated. It recommended a series of rate increases and decreases for different resources that would have the net effect of raising the government’s take by 20% — or about $2 billion at the current level of activity.

A howl rose from Calgary, from energy companies large and small, support industries, financiers and professional associations. The review’s assumptions were flawed, they thundered. It did not take into account increases in their costs. If its recommendations were adopted, there would be an industry-wide slump. Several companies said they’d cancel investments or take their rigs across the provincial border to Saskatchewan.

These sounded a lot like threats. But the rest of the province wasn’t impressed. A poll commissioned by the Calgary Herald and Edmonton Journal reported that 88% of Albertans agreed they were not getting their fair share; and 67% thought the Stelmach government should adopt the royalty review’s recommendations in their entirety. Even the non-oilpatch business community tended to side with raising royalties.

In this polarized atmosphere, the Tory government is caught between defying a clear majority of voters and alienating a key constituency and source of party funding — not to mention appearing to precipitate an economic downturn already evident in depressed natural gas drilling and slipping big-city home prices. It will probably try to split the difference.

Regardless, this rift between downtown Calgary and the rest of Alberta will remain until the industry and its hangers-on stop assuming that the people who dry-clean their shirts think the way they do. While downtown Calgary thinks that the boom has been an unmitigated good, for many, it has meant unaffordable housing, traffic, lousy customer service, no family doctor or the desecration of wild spaces. And many of us disagree with the notion that Albertans owe the oil and gas complex a living subsidized by royalty rates concocted when a barrel of crude cost less than US$20.

If I lived in Calgary and covered the business scene there, I just wouldn’t get it. IE