Letter in response to "Hooray for C-377"
In response to Lorne Gunter's column on Saturday, Dec. 15
Unions are some of the most democratic and accountable organizations in Canada. Union Members have a right to know how their dues are spent – and they do, through annual reports, conventions, and audits. It should be noted that union leadership is elected by the membership and accountable to that membership.
Bill C-377 isn't about transparency – Canadian unions are already transparent. C-377 is a political bill that will divert union resources to fulfilling arcane accounting measures, and will mean they are less able to represent workers and Canadians.
Public policy should be used to promote and enhance the public good, not as a tool to punish, intimidate or weaken individuals or groups that don't agree with the government. Unfortunately, that's exactly what Bill C-377 does.
Gil McGowan, President
Alberta Federation of Labour
Sent to the Edmonton Sun on Monday, Dec. 17 2012
Re: "Voluntary safety rules for farms ineffective, experts say," Sept. 18.
It is hard to describe how disheartening, how damaging, how dreadful it must be for farm workers and their families to read the harsh words spoken recently by Wildrose MLA Jeff Wilson.
Imagine you are a child who has lost a parent in a farm accident, or a parent who has lost a child. Then imagine being told that applying the same health and safety laws to farm work sites that apply to all other work sites in the province is a "burden" or too "complicated" for farm operations.
From the biggest cities to the smallest hamlets, Albertans know that we must do all we can to make our workplaces safe. It is especially important on farms, where heavy industrial equipment mixes with vulnerable workers, often migrants and sometimes children.
Simple attempts to save lives cannot be callously dismissed as complicated or brushed off as burden-some.
The evidence from experts is perfectly clear.
Education alone will not save lives on our farms.
Occupational health and safety regulations must be applied.
These regulations aren't too complicated or too much of a burden for any other employers.
Are those who refuse to implement these rules really saying that Alberta farm operations are so backward that they can't do what other employers do, or what farms in other provinces do?
Alberta can and must do better. It's time to move past this dangerous 19th-century approach to farming.
Gil McGowan is president of the Alberta Federation of Labour.
The Calgary Herald, Thursday Sept 20 2012
This Labour Day, working Albertans have a lot to be thankful for. We have the highest wages, the best job prospects and the highest standard of living in Canada.
Life here in the land of oil is pretty good.
But before we get too comfortable, it's important to recognize that not everyone is pleased with how well working people are doing.
In fact, recently disclosed documents show that some of our country's most influential chief executives are asking the federal Conservative government to help them suppress wages.
This revelation comes from a Department of Finance briefing note that summarizes an economic policy retreat organized by Finance Minister Jim Flaherty last summer.
The retreat was attended by a long list of business leaders and representatives from right-wing think-tanks - all eager to advise members of the Harper Conservatives on how they should use their majority in Parliament.
The business audience told Flaherty that Canadian workers are overpriced and that Canada could only become truly competitive if the government addressed the "wage differential in labour markets between countries."
In order to drive down wages, participants pushed for American-style anti-union labour laws. They also called for deep cuts to public services and two-tiered health care - while asking for even more corporate tax cuts.
There are reasons why working Canadians should be concerned about this meeting.
First, there is no evidence that the government challenged the notion that Canadians are overpaid.
This is troubling because, after adjusting for inflation, wages for average Canadian workers have stagnated over the past 30 years, while corporate profits and incomes for the wealthy have increased. Even here in prosperous Alberta, nearly a quarter of all working people earn $15 an hour or less, not nearly enough for a decent home in Edmonton or Calgary.
Second, Canadians should be concerned because the wage suppression wish list outlined by business leaders has quietly, but clearly, become a central part the federal government's low-wage agenda. How else can we interpret the Harper government's decision to allow employers to use more temporary foreign workers and to pay them as much as 15 per cent less than Canadians?
Or rule changes that force many unemployed Canadians to take any available work even if it pays up to 30 per cent less than their previous job?
There's also the Harper government's decision to raise the retirement age to 67 and its ongoing attacks on unions designed to undermine the ability of workers to have a say in their own wages and working conditions.
Finally, working people should be concerned that Flaherty's secret meeting with business leaders is not an isolated case. The truth is that business leaders and groups like Merit Contractors (representing non-union construction companies) have ramped up their lobbying across Canada. With the most ideologically conservative prime minister in Canadian history leading a majority government, they see this as their political moment.
Some people may shrug and say "who needs unions anyway?"
But as Nobel-Prize-winning economist Paul Krugman has said, unions are the only counterbalance we have to unbridled corporate power. They provide one of the only mechanisms we have to build and maintain a vibrant middle class.
So as working Albertans enjoy the Labour Day long weekend, it's important for them to understand that a battle rages around them.
Will the low-wage advocates who attended Flaherty's private policy summit win the day?
Or will Canadians reassert a traditional, progressive approach - fair taxation, investment in quality education and infrastructure, and policies that see unions as vital partners in the economy?
For the sake of Canada's middle class, let's hope that the high road vision prevails. Because if it doesn't, more of us may end up flipping burgers at McDonald's on Labour Day instead of flipping burgers at the lake.
Gil McGowan is president of the Alberta Federation of Labour
The Edmonton Journal, Mon Sept 3 2012
Byline: Gil McGowan
This Labour Day, working Albertans have a lot to be thankful for.
We have the highest wages, the best job prospects and the highest standard of living in Canada.
So, it's entirely appropriate for Albertans to be smiling as they fire up their barbecues for the last long weekend of the summer: life here in the land of oil is pretty good.
But before we get too comfortable, it's important to recognize that not everyone is pleased with how well ordinary working people are doing.
In fact, recently disclosed documents show that some of our country's most influential CEOs and business lobbyists are asking the federal Conservative government to help them suppress wages.
This revelation comes from a Department of Finance briefing note that summarizes the proceedings of an economic policy retreat organized by federal Finance Minister Jim Flaherty.
The retreat was held last summer and attended by a long list of business leaders and representatives from right-wing think-tanks - all eager to advise members of the Harper government on how they should take advantage of their long-sought-after majority.
The assembled business audience told the finance minister that Canadian workers are overpriced and that Canada could only become truly competitive if governments and businesses addressed the "wage differential in labour markets between countries."
In order to drive down wages, participants advocated the introduction of American-style anti-union labour laws.
For good measure, they also called for deep cuts to public services and the introduction of two-tier health care - while at the same time asking for more corporate tax cuts.
There are at least three reasons why working Canadians should be concerned about this meeting.
First, there is no evidence that the federal government challenged the notion that Canadians are overpaid.
This is troubling because, after adjusting for inflation, wages for average Canadian workers have stagnated over the past 30 years. In fact, the share of national economy going to wages for Canada's middle class has been dropping, while the share being gobbled up by corporate profits and incomes for the wealthy has been increasing.
Even here in prosperous Alberta, nearly a quarter of all working people earn $15 per hour or less. And the average hourly wage earned by permanent, full-time workers is $27. That's the best in the country, but barely enough to afford a decent home in either Calgary or Edmonton.
If there is a problem with wages, it's not that Canadians are overpaid - it's that a growing number are not paid enough to maintain to a secure, middle-class lifestyle.
Second, working Canadians should be concerned, because the wage-suppression wish list outlined by business leaders last summer has quietly, but clearly, become a central part the federal government's agenda.
How else can we interpret the Harper government's decision to allow employers to use more temporary foreign workers and to pay them as much as 15 per cent less than Canadians?
Or rule changes that force many unemployed Canadians to take any available work after six weeks on EI, even if it pays up to 30 per cent less than their previous job?
There's also the Harper government's decision to raise the retirement age to 67 (which is obviously designed to force older workers of modest means to keep toiling away in lower-wage jobs) and their ongoing attacks on unions and collective bargaining (which are designed to undermine the ability of workers to have a say in their own wages and conditions of work).
Taken together, these policy initiatives amount to what is essentially a low wage strategy.
The third reason why working people should be concerned about Flaherty's previously secret meeting with business leaders is that it is not an isolated case.
The truth is that representatives from groups like the Fraser Institute, the Canadian Federation of Independent Business and the Merit Contractor's Association (representing non-union construction companies) have dramatically ramped up their lobbying efforts in Ottawa and provincial capitals over the past year.
With the most ideologically conservative prime minister in Canadian history holding the reins of a majority government, they see this as their political moment.
Unfortunately for working Canadians, these lobbyists have been disturbingly effective. In addition to influencing the federal government, they've won allies at the provincial level.
For example, Saskatchewan Premier Brad Wall and Tom Hudak, leader of Ontario's official Opposition, have both been advocating U.S.-style union-busting laws.
Some people may shrug and say "who needs unions anyway?"
But as Nobel-prize-winning economist Paul Krugman has said, unions - as imperfect as they may be - are the only counterbalance we have to unbridled corporate power. They also provide one of the only mechanisms we have for ensuring the more equitable distribution of income necessary for the creation of a vibrant middle class.
So as working Albertans enjoy the Labour Day long weekend, it's important for them to understand that a battle of world views is raging around them.
Will the low-wage advocates who attended Finance Minister Flaherty's private policy summit win the day? Or will Canadians reassert their traditional preference for a more progressive approach - characterized by fair taxation, investment in quality education and infra-structure, and policies that see unions as vital partners in the economy?
For the sake of Canada's middle class, let's hope that the high-road vision prevails. Because if it doesn't, more of us may end up flip-ping burgers at McDonald's on Labour Day instead of flipping burgers at the lake.
Gil McGowan is president of the Alberta Federation of Labour.
The Calgary Herald, Monday September 3 2012
Op-Ed, Gil McGowan
It has become clear that the federal government, supported by a number of employer organizations, has a plan for transforming Canada's labour market in ways that will profoundly hurt Canadians.
It's a four-prong strategy which includes the dramatic expansion of the Temporary Foreign Worker Program (TFWP), the erosion of Employment Insurance, raising the country's retirement age, as well as a systematic effort to undermine the ability of unions to stand up for the rights of working people and improve their standard of living.
Taken together, these policies will suppress the wages and incomes of Canadians, rather than address the real problems in Canada's job market.
As provincial and territorial federation of labour leaders, representing over three million workers from coast to coast to coast, we are calling on the premiers to stand with the workers of Canada against this cheap labour strategy.
Canada's premiers touched on some of these issues when they met in Halifax last week at the Council of the Federation. We think it is critical that the following issues be front and centre when they come together this fall to talk about the economy.
Foreign Workers: The TFWP is not immigration. It's exploitation. These workers, many of whom are desperately seeking a better life, are being used to create an underclass to drive down the wages and working conditions of Canadians. It's not fair or just to them, or to their Canadian co-workers. The recent decision by the Harper Conservatives to allow employers to pay temporary foreign workers 15 per cent less than their Canadian co-workers is a blatant example of their low-wage strategy.
With 1.3 million unemployed, and several hundred thousand more discouraged or underemployed Canadians, our focus should be on providing opportunities for Canada's unemployed and underemployed.
Employment Insurance: Instead of tackling unemployment in many regions of our country, the Harper plan has been to attack the unemployed. The Conservative government's changes to EI are clearly designed to force workers to take low-paying jobs or have their unemployment benefits cut off. This is not about helping the unemployed find jobs — rather, it is about serving them up to low-wage employers.
Old Age Security: Increasing the country's retirement age to 67 has nothing to do with the sustainability of our social programs or with retirement security. It is about forcing older workers who have struggled with low and medium wages throughout their working lives to work two more years. It is about expanding the pool of desperate workers who have no choice but to work for less.
Attacks on unions: Unions are one of the few mechanisms to protect the rights of working people and improve their standard of living. What unions achieve at the collective bargaining table lifts the floor and improves living standards for all workers. Unions also fight for and are instrumental in making gains for all society, like the establishment of medicare, health and safety laws, and fair minimum wages.
But the Harper government has a clear plan to attack unions. The government has undermined collective bargaining in the federal sector, and emboldened employers to drive down wages and attack pensions in the private sector. In addition, through legislation like Bill 377, the Harper Conservatives are attempting to rob unions of the ability to use their resources to defend their members and civil society.
So, what is the solution? Canadians need our country's premiers to denounce this low-wage agenda and stand up for what is in the best interest of working people.
When the premiers meet this fall to discuss the economy, we believe the labour market ought to be front and centre in that discussion. They must denounce the exploitive expansion of the TFWP. They must collectively demand that Ottawa invest more in training to bridge the skills gap, so that unemployed Canadians can fill available jobs.
Premiers should also call for improvements to Canada's EI program, as fewer than 40 per cent of unemployed Canadians are currently eligible for benefits. We need our premiers to challenge the notion that Canada must increase its retirement age to 67. What's really needed is pension reform that will allow all Canadians to retire in dignity, such as improving and enhancing CPP. And finally, the premiers should recognize and defend the important role unions play in our society and our economy.
The provinces have power. Our premiers understand that Canada is more than the sum of its parts.
Canadians need our premiers to push back. And when they do, Canadians, the vast majority of us, will be with them.
Halifax Chronical Herald, 2012 July 26
Submitted by the presidents of the provincial and territorial Federations of Labour: Rick Clarke, Nova Scotia; Lana Payne, Newfoundland and Labrador; Michel Boudreau, New Brunswick; Carl Pursey, Prince Edward Island; Sid Ryan, Ontario; Kevin Rebeck, Manitoba; Larry Hubich, Saskatchewan; Gil McGowan, Alberta; Jim Sinclair, British Columbia; MaryLou Cherwaty, Northern Territories.
In the Harry Potter stories, characters are too afraid to utter the name of the villain, Voldemort.
Something similar appears to be happening in the Alberta election when it comes to two key issues related to the oil sands: upgrading and royalties.
Albertans clearly want to talk about these issues, but for some reason, most of our politicians seem unable or unwilling to speak.
Consider the results of two recent polls:
A Leger Marketing poll shows that about 60 per cent of Albertans don't think they're getting fair value for the sale of our province's collectively-owned energy resources. A ThinkHQ poll shows an even greater majority (81 per cent) would support some kind of government intervention to encourage upgrading and discourage raw bitumen exports.
Despite the clear weight of public opinion, only one of the five parties contesting the race (the NDP) says it would even consider increasing royalty rates. Most are also silent on the subject of upgrading.
Why the remarkable disconnect between what voters want and what parties are willing to offer? The answer can be summed up in two words: power and fear.
Everyone knows that oil and gas is Alberta's most powerful industry – and they have aggressively used that power to get a sweetheart deal for themselves.
They've also used their power to make sure that it's industry – not ordinary Albertans or their elected representatives – who decide how and when to develop our province's resources.
It was the industry, for example, that actually wrote the oilsands royalty regime that Ralph Klein implemented in mid-90s – a regime which, in most important respects, is still in place today.
How sweet is the deal? Oil companies pay a token royalty of as little as one per cent on gross revenues until all of a project's costs are paid off. Even after pay-out, royalties are dramatically lower than rates in other jurisdictions.
No other industry in Canada enjoys this kind of special treatment. It means developers get their main input – bitumen – virtually free.
To put it another way, it means that ordinary Albertans (who own the bitumen) are actually paying for the construction of all those oilsands facilities (in the form of foregone revenues).
In a similar way, the energy industry has been successful in discouraging government from implementing policies aimed a increasing value-added production – even though such measures were instrumental in creating Alberta's successful petrochemical industry in the 70s and 80s.
To defend the status quo they've created, the industry and its defenders employ several fear-based arguments. For example, they say that ultra-low royalties are needed to attract investment to a high-cost sector like the oilsands. This argument may have carried some weight when the oilsands were a marginal industry and oil was trading at $15 a barrel, as it was when the current royalty regime was introduced in 1997. But should we continue the giveaways when oil is trading at $100 a barrel and the industry is making profits of $32 billion a year, as it did in 2010?
The industry also argues that their prescription of low royalties, limited government oversight and quick project approvals (a strategy recently embraced with gusto by the Harper government) means "jobs, jobs, jobs" as far as the eye can see.
But this strategy has several obvious downsides. For example, it means that more and more potential jobs in upgrading will be sent down the pipeline to place like Texas and China. It also means that the province doesn't get the revenue it needs for things like high-quality health care and education and care for seniors and the kids of working parents.
Ever wonder why Alberta, Canada's wealthiest province, is running multi-billion deficits and saying it can't afford to maintain middle-of-the-road spending on vital public services? Or why the Heritage Fund is worth less on a per capita basis today than when it was established 35 years ago?
That's what happens when you sell your most important assets for a song. So why won't Alberta politicians speak out and demand a better deal on royalties and jobs?
The problem is that they are taking their cue from Ed Stelmach when they should be looking for inspiration in bolder (and much more successful) former Conservative premiers like Peter Lougheed and Newfoundland's Danny Williams.
Unlike Stelmach – who didn't fight back when a recession-induced slowdown in investment was used by industry as proof that royalties should never be raised– Lougheed and Williams both understood that you have to bargain the best possible deal with energy companies, not simply cater to their every whim.
As Lougheed famously said, Albertans need to think like owners. Owners know that sometimes they need to accept less. But they also know that, when conditions improve, they can and should demand more. Anything less would amount to being played for a sucker.
These are the keys to breaking the spell that has rendered most of our politicians mute: they need to remember that Albertans, not oil companies, are the owners of their resources and they have to find the will to bargain hard on behalf of the people they represent.
Gil McGowan is president of the Alberta Federation of Labour, representing 145,000 unionized Alberta workers.
Edmonton Journal, Wed Apr 4 2012
Byline: Gil McGowan
The Occupy Calgary Movement has been legally evicted by the city. Whether the justification of the verdict is the invalidity of the protesters' cause, the cleanliness and accessibility of Olympic Plaza, or the safety and health of the protesters, the majority of Calgarians are pleased with this outcome.
Perhaps that is the wrong perspective to take.
It is important to note that protests are not intended to win friends; they are intended to be inconvenient. People forget that out of everyone inconvenienced, it is the protesters that suffer this the most. This small group of people stood up for what they believed in, and they continued to stand in spite of public ridicule, police pressure, legal repercussions, and winter weather. How many people reading this have ever displayed that strength of will?
We forget - and many of us never knew - that these protesters were standing for something that is much bigger than Calgary. Due to the high standard of living and low unemployment rate, locally the Occupy Calgary cause was lost before it even started.
But this never had anything to do with Calgary.
The Occupy Movement is first and foremost a global movement, and every Canadian must recognize that we are damn lucky that we are not living elsewhere. If you've ever spent a substantial amount of time in South America, Eastern Europe, Asia, or Africa - basically the majority of the world - you know exactly what I'm referring to.
Most importantly, the occupiers of Olympic Plaza were protesting the corruption and inequality that currently plagues this world. Each day that the protest was set up was a day that Calgarians were forced to think about events happening outside of their borders. With how quickly the world forgot about Haiti, I would say reminders are important. It's easy to forget when we live in such a prosperous city, but this is a human issue that should be on everyone's radar.
I find it remarkable that Canadian Occupations popped up by choice, not by necessity. Those protesters were not starving. They had access to clean drinking water. They had access to shelter. Most had jobs. They were educated. So why protest? Considering the following facts - one in seven humans do not have enough food, one in four people live without electricity, one in two children live in poverty - and the choice between "that's just the way it is" and "that is unacceptable, this can't continue" is all too easy for many of us. It may not mean much to Calgarians, but having Occupy Movements sustained in Canada, regardless of size and local popularity, is inspirational to those people protesting in parts of the world where the cause is not lost, such as New York and Cairo.
Calgary has shut down a small but persistent thorn in its side. It didn't like that tiny, prickly reminder of the discord occurring in the global community. Now Calgary can return to its bubble, insulated by the oil and gas industry, and there is at least one Calgarian who is saddened by this.
Labour Day is a holiday to honour the contributions that workers make every day to the economy and the communities in which they live. It's supposed to be a day when working people can put down their tools, spend time with their families and take satisfaction in what they've built.
Unfortunately, this Labour Day, instead of honouring the people who build and maintain our province's economic engine, the Alberta Conservatives are considering new ways to give them the shaft.
In particular, Employment Minister Thomas Lukaszuk, is - yet again - rolling out the welcome mat for an industry group that wants the government's help to lower wages for working Albertans. Last time around, it was the Canadian Restaurant and Foodservices Association that lobbied Lukaszuk for a lower minimum wage for workers who serve alcohol.
This time, it's an association of non-union construction firms. Calling themselves the Construction Competitiveness Coalition, they've asked Lukaszuk for changes to the provincial labour code that would make it difficult for unions to represent skilled tradespeople working on oilsands-related construction projects.
The motives of the coalition are clearly suspect. If they succeed in getting the changes they want, it would give non-union contractors an upper hand in bidding wars with unionized contractors (who, despite higher wages and benefits, continue to get half the work on Alberta's big industrial construction projects).
What the non-union lobby group is really asking the Tories to do is to use their legislative power to help one group of employers corner the market on industrial construction projects at the expense of another group of employers. They're also trying to transform the construction labour market so that skilled tradespeople have no choice but to work for non-union companies, even if those workers don't like the way the non-union firms deal with things like wages, benefits and safety.
Coalition spokesman Stephen Kushner says that Alberta needs to weaken unions because the province is "becoming known as a high-cost jurisdiction" and that this reputation is driving away investment. He even suggested that unions are to blame for the fact that 12 upgrader projects have been shelved.
These are what I call "snake-oil arguments": arguments that sound plausible on one level, but which rely on half-truths and leaps of logic.
It's true, for example, that costs are high in the oilsands. But union wages are not the problem. In fact, the recent agreement negotiated between unions and unionized construction firms provides exactly the kind of longer-term cost certainty that developers have been asking for.
The real challenges lie elsewhere. As a recent report from the consulting firm KPMG points out, costs are going up in the oilsands for several reasons, including increased costs for building materials like steel and cement; delays in engineering and project management; and the cost pressures that come with having too many major projects on the go at one time.
Most importantly, KPMG pointed out the obvious: the oilsands are expensive because it's hard to wring oil out of sand, especially in remote locations and in an inhospitable climate.
The suggestion that union wages caused upgrader projects to be shelved is equally ludicrous. Those projects were postponed because of falling oil prices during the global recession and they were mothballed for good because the Alberta government switched from promoting Alberta-based upgrading to acting as a cheerleader for mega-pipelines like the controversial Keystone XL, which make it more attractive to upgrade south of the border than in Alberta.
In the end, it can be argued that Alberta is a high-cost jurisdiction. But it can't be honestly argued that unions are to blame.
Busting unions won't make steel any cheaper and it won't improve our weather.
What it will do is enrich the owners of non-union construction firms at the expense of the owners and workers at other firms.
For the sake of the thousands of Alberta tradespeople who help keep our economic engine running, let's hope that all of the Tory leadership contenders see the non-union lobby group's proposal for what it is: a load of self-serving clap trap.
Gil McGowan is president of the Alberta Federation of Labour.
Calgary Herald, Mon Sept 5 2011
Edmonton Journal, Mon Sept 5 2011
"Union-busting no way to mark Labour Day: Construction lobby group only concerned with itself, not Alberta's economic health"
Alberta Energy Minister Ron Liepert has billed the meeting as a potentially historic gathering at which politicians will begin long-overdue discussions towards the creation of a truly pan-Canadian energy strategy.
But are Liepert and other members of the Alberta government really interested in using the meeting in Kananaskis to develop an energy strategy that works for Canadians in all regions of the country?
Or is this whole exercise an elaborate attempt on the part of the Alberta government and its patrons in the oil patch to win support from other provinces and the federal government for their controversial plans to build bitumen export pipelines to the U.S. Gulf Coast and the port of Kitamat in B.C. (the "gateway" to China)?
It's clear that some groups involved in the process are sincerely committed to a wide-ranging discussion about what's really best for Canadians when it comes to energy policy (the respected and even-handed Canada West Foundation is particularly notable in this regard).
But it's also clear that a number of extremely influential individuals and groups have already made up their minds: they want bitumen pipelines, no matter how many good jobs in upgrading, refining and petrochemical production those pipelines might end up exporting to the U.S. and China.
Unfortunately, Minister Liepert appears to fall into the category of pipeline salesmen rather than the category of big-picture policy thinkers.
The same can be said for the Canadian Council of Chief Executive Officers and EPIC, a new think tank created by a coalition of major oil companies, which have both recently released reports calling for – you guessed it – more bitumen export pipelines and quicker approvals for oil and gas projects in general.
Instead of slapping together a plan for a couple of questionable pipelines and calling it an energy policy, Canada's energy ministers should set their sights much higher. Here are a few issues that cannot be ignored if federal and provincial politicians are serious about doing more than putting a bow on the status quo and declaring their work done.
Value-Added Jobs: Former Alberta Premier Peter Lougheed is right when he says that, when it comes to the oil sands, the real jobs are in upgrading and refining. According to a study done by the forecasting firm Informetrica for the Communication, Energy and Paperworkers union (CEP), if the volume of raw bitumen expected to be sent down the Keystone XL pipeline were instead upgraded here, it would create more than 40,000 direct and indirect Canadian jobs. It would also generated hundreds of millions of dollars in additional tax and royalty revenue for Canadian governments – revenue that could help pay for services that Canadians value like education and health care.
Now that the world is teetering on the verge of yet another recession, we simply can't afford to lose so many jobs and so much potential revenue "down the pipeline."
In order to avoid this fate, Lougheed has been exhorting Albertans to "think like owners" and demand long-term job creation as a condition of development in the oil sands. Unfortunately, our current policy makers continue to focus on "ripping and shipping" our resources instead of finding ways to move up the value chain. In fact, if you add up the bitumen export capacity of the XL pipeline and the existing Keystone and Alberta Clipper pipelines, energy companies will be able to export ALL of the expected increase in oil sands production for the next 20 years. In other words, we'll be closing the door on a real value-added strategy for a generation.
The big question from the Canadian labour movement's perspective is this: once the construction jobs on pipeline and extraction-only oil sands projects are complete, where will the jobs for Canadians come from? A real Canadian energy strategy simply must have an answer to this question.
Energy Security: Like it or not, we live in a world that runs on oil. For the time being at least, individuals and businesses simply can't make do without the stuff. Yet Canada is the only major oil producing jurisdiction in the world that doesn't have a coherent national strategy that puts their interest of its citizens first.
The results are perverse. Despite our status as a net energy exporter, Ontario, Quebec and the Maritime provinces import roughly 700,000 barrels of crude oil a day from places like Saudi Arabia, Algeria, Nigeria and Venezuela. In fact, Quebec and the Maritime province import more than 80 percent of the oil they use from outside Canada. Why? Because almost all of our pipelines run north-south. Shockingly, we don't have the infrastructure to send western oil to our fellow citizens in the eastern half of the country.
Minister Liepert and others are right when they say we should be looking for new markets for our oil: after all, demand from our biggest costumer, the U.S., is stagnating and quirks of the U.S. distribution system mean we're not getting world price for what we sell.
But if new markets are what we're looking for, doesn't it make more sense to build pipelines connecting west and east within our own country before building pipelines to supply refineries in Texas and China? Building pipelines to supply the Canadian east as opposed to the Far East also has the benefit of keeping the jobs, profits and tax revenue associated with upgrading and refining within Canada.
Economic Impact of Oil: Driven by massive investment in the oil sands, Alberta's energy sector has become the driving force behind the Canadian economy. This has been great news for Albertans and the hundreds of thousands of other Canadians who have flocked to our province to participate in the boom. But from a national perspective, by relying too heavily on the energy sector, we run the risk of developing what economists call Dutch Disease. This is an economic condition in which a booming energy sector drives up the currency and oil-related investment but, in the process, drives down investment, profits and jobs in other sectors, particularly manufacturing.
Any national energy strategy worth its salt would recognize this threat and take steps to deal with it. One possible solution is the one offered by former Alberta premier Peter Lougheed: set a slower pace for development in the oil sands. By proceeding with five or ten projects at a time (instead of the sixty-plus that are currently on the books) we would reduce the likelihood of developing a full-blown case of Dutch Disease. As added benefits, a more reasonable pace for development would also make it easier to address cumulative environmental impacts and it would reduce (perhaps eliminate) the need to bring thousands of temporary foreign workers into the country to supplement the domestic construction labour force. In other words, a slower pace for development would ensure that it would be Canadian workers who would benefit most from the construction of major Canadian resource projects.
Royalties: Royalties are not taxes. They are the price that forestry, mining and energy companies pay to develop resource assets owned by Canadian citizens. The good news is that royalties generate billions of dollars each year, especially in resource-rich provinces like Alberta, Saskatchewan and Newfoundland. This is money that we use to build need infrastructure and fund vital public services like education and health care. The bad news is that we don't always (or even often) get the best possible price for the sale of our assets. In Alberta, for example, under the Stelmach government we're actually collecting fewer royalties as a share of our overall energy oil and gas sector's revenue than the Social Credit government did in the late sixties (and less than a third of the proportion that was collected under Lougheed). To rectify this problem, and ensure Canadians get the best possible price for the sale of their assets, a national energy strategy could introduce a truly national process for setting and bargaining royalty rates, so that energy companies could no longer play one jurisdiction against the other. The bottom line is this: in an environment characterized by historically high oil prices and rapidly declining options for oil companies in other parts of the world, provinces like and Alberta, Saskatchewan and Newfoundland hold all the cards. By cooperating, we can play those cards more aggressively and successfully. Energy companies won't fold or leave the table, because they have nowhere else to go.
Transition: A post-carbon economy is years away, but make no mistake: it's coming. It's coming because the science around global warning is real and frightening; because a global political consensus has emerged in support of a greener economy; and because, more practically, the world is running out of oil (at least cheap oil).
This doesn't mean that we should stop developing our oil resources. The oil sands are one of our countries most valuable assets at the moment and it would be foolish not to exploit them. However, what the coming of a post-carbon economy does mean is that we're going to have to start looking at the oil sands in a different way. In particular, we should very consciously start thinking of the oil sands as a transitional resource: a resource that will help provide us with the revenue necessary to build the next, greener economy in Canada.
If Alberta can agree to a national energy strategy that uses the oil sands as a bridge to a better future for the entire country, then not only will our countriy's economic prospects be brighter, we may also be able to manage the "politics of envy" that inevitably come from one province having so much more wealth than other.
In the end, Minister Liepert is right about one thing: the meeting in Kananaskis has the potential to be historic. But that will only happen if he and other provincial energy ministers dare to think and dream big. Most importantly they have to understand that a true national energy strategy has to be much more than a plan to build a couple of pipelines that export jobs along with our oil. We can do so much better. In fact, for sake for future generations of Canadian, we need to do much better.
Gil McGowan is president of the Alberta Federation of Labour. The AFL represents 145,000 unionized Albertans, including about 25,000 who work in energy related jobs in Alberta.An edited version of this column appeared in Calgary Herald, Tues Jul 19 2011
People such as Premier Ed Stelmach and Education Minister Dave Hancock want Albertans to believe that these are tough times.
They want us to believe that the recession has left them with no choice but to trim budgets and cut funding, even for vital services like education.
But ordinary Albertans know in their hearts and their guts that there is something seriously wrong with this picture.
They see mega projects ramping up, they see glitzy office towers rising, they see the economy springing back to life -and they wonder: Why?
Why, amid such plenty, should we be laying off teachers and other education workers?
Why should we be under-funding our universities, colleges and technical schools?
Why should we be cutting services for the needy and the disabled?
The truth is: There is no good reason.
Facts are sometimes inconvenient for politicians. They get in the way of the stories they tell voters and tell themselves.
But when we're talking about our schools and our hospitals, about services for our kids, our grandparents and the most vulnerable members of our society, then we can't afford to ignore the facts.
What do the facts tell us? They tell us that Alberta is one of the most prosperous jurisdictions, not only in Canada, but in the entire world.
They tell us that we have no public debt and that we have billions tucked away for rainy days in the Sustainability Fund.
They tell us that, on a per-person basis, our provincial economy is 75 per cent larger than the Canadian average; that corporate profits in the province have increased by more than 400 per cent over the past decade; and that tens of billions of dollars in investment continue to pour into the oilsands each year.
These are not tough times. We are a province that can think big and dream big. We are certainly a province that can afford to provide adequate, stable long-term funding for core services, including education.
There is another part of the government story that doesn't stand up to scrutiny. That's the part where they say we have a spending problem -that costs are out of control for public services. But, once again, the facts tell a different story.
The truth is that Alberta's per-person spending on public services is bang on the national average.
The truth is that overall spending on public services has barely kept up with our province's robust population growth.
The truth is that, as a share of our province's overall economic pie, spending on public services has actually gone down over the last 20 years -and not just by a little bit.
All of this raises the question: If we can afford our services (which, clearly, we can) and if spending is under control (which, clearly, it is) why, then, is the Stelmach government still recording deficits?
This is the real question Albertans need to be asking themselves and their politicians, especially during the Tory leadership race and in the run-up to the next election.
The answer is clear. The reason our cupboard is bare is because our provincial government has decided to make it bare.
Successive governments in Alberta have deliberately stopped collecting a reasonable and responsible share of our province's economic pie to fund the public services that Albertans need. Years and years of ill-conceived tax and royalty cuts have left us with an inadequate and unreliable revenue base.
Alberta is like a rich guy with a big hole in his pocket. He keeps shoving the money in, but his pockets are always empty at the end of the month. The answer is not for the rich guy to sell his house, or tell his kids they're going to live on Kraft dinner. The answer is to fix the hole.
The good news is that thoughtful members of our provincial community are starting to wake up and speak out.
Former premier Peter Lougheed understands the problem and is calling for revenue reform. So are members of the premier's own advisory panel on economic strategy and academics from think-tanks including the Parkland Institute and the Canada West Foundation.
Politicians don't like to talk about taxes. And our current crop of leaders have been successfully bullied by the oil industry away from any talk about fair royalties.
But for the sake of our kids, our communities and our future, this is a discussion we have to have.
We need to demand that our politicians stop preaching austerity when it is clearly unwarranted.
And we need to call on leaders to deal with the real problem, which is Alberta's broken system for revenue generation.
Gil McGowan is president of the Alberta Federation of Labour, which represents 145,000 unionized workers in the province. This article is adapted from the speech he gave at the launch of the Join Together Alberta campaign.
Edmonton Journal, Thurs Jun 9 2011
Byline: Gil McGowan