Stelmach's drilling program failed: Alberta Federation of Labour Program merely padded the profits of major oil and gas companies in Alberta: AFL president
Ed Stelmach's program to stimulate drilling during the recession cost taxpayers $2.9 billion and failed to create promised jobs, new wells or new investment in the oilpatch, says the Alberta Federation of Labour.
AFL president Gil McGowan said Friday the federation's research shows the program merely padded the profits of major oil and gas companies in Alberta while depleting the treasury of revenue that could have been used to fund health care and education.
He has passed on AFL's findings to Alberta's auditor-general and also requested the all-party legislature public accounts committee investigate the program.
"When Albertans learn about this they will see this for what it is, which is an outrageous misuse of government funds," he said.
The program contributed to 55 per cent of the provincial deficit during the two years it was in effect — a cost McGowan estimated was 10 times the annual budget of Alberta Environment.
McGowan said the program also created a "loophole" in the form of a "grey market" for royalty tax credits that enabled smaller companies that had more credits than they needed to sell them to bigger companies.
Those companies were able to defray the amount they paid in royalties owed to Albertans without having to hire workers or drill new wells, he added.
McGowan said Albertans won't know who cashed in the credits because Alberta Energy keeps that information secret.
He quotes former energy minister Mel Knight saying the program would create jobs for Albertans and generate additional royalty revenue and production over the next 10 to 30 years.
Using statistics from Statistics Canada and the Canadian Association of Oilwell Drilling Contractors, the AFL showed the number of new wells being drilled decreased steadily during 2009 and 2010 and over the same period the province lost about 8,000 jobs.
Capital investment in the oil and gas industry swooned, but industry profits increased, the AFL says.
Alberta's rate of well completions for that period mirrored Saskatchewan and B.C., which didn't have programs as generous, and seemed to climb and fall with the price of oil, despite the drilling stimulus program, the AFL reported.
University of Alberta energy economist Andrew Leach said the program was likely not as successful as the government claimed and likely not as dismal as the AFL contends because it can't be determined how many more jobs might have been lost without it.
"I think the truth is probably somewhere in the middle," Leach said. "What you really need is an account of what would have happened in Alberta in the absence of the program and to say that Saskatchewan and B.C. are exactly like Alberta with the exception of these programs isn't true."
But he said the provincial government has an obligation to be open and accountable to Albertans since they own the resource.
"I think the government should be providing information on who is drilling and what they are paying in royalties," he said. "I can't really see a downside in releasing those numbers."
Travis Davies, a spokesman for the Canadian Association of Petroleum Producers, said the programs were successful at keeping drilling rigs working during the downturn in the economy.
The hours of operation for drilling rigs jumped from 47,000 hours in 2009 to 76,000 hours in 2010, he said.
"I don't know how that equates to reduced employment in the oil and gas sector," he said. "If you increase operational hours, I don't understand how you have reduced employment."
He noted Alberta just set a record for sales of oil and gas leases.
"Obviously there is some attraction to this province in terms of investment and I think part of that was the work that was done on royalties," Davies added.
Calgary Herald, Fri Jul 15 2011
Byline: Darcy Henton
Expect cutbacks to the education system to be front-and-centre when a group calling for more money for education, health care, and other government services holds a public meeting in Edmonton Thursday night.
The 7pm meeting at Santa Maria Community Centre, at 11050 90th Street, marks the last one on a seven-city tour by Join Together Alberta. Public Interest Alberta, Alberta Federation of Labour, Friends of Medicare, and the Alberta Teachers' Association are among those taking part.
Both, Edmonton Public and Catholic School Boards are preparing to move forward with fewer teachers and other staff this fall, in an effort to balance their books. The public school board has already passed its budget, with cuts to 229 teaching positions. The Catholic board is forecasting 97 lost teaching positions, as it prepares to pass its budget next week.
iNews880am, Thurs Jun 23 2011
Fluctuating revenues lead to cuts when oil prices decline
In industries such as oil and gas, revenues can fluctuate, sometimes wildly, with the ebbs and flows of the market.
For a province such as Alberta, whose revenue is heavily based on the oil and gas industry, such fluctuations are a major problem because the need for that money doesn't fluctuate. The need to fund areas such as health care and education is constant.
It's for that reason that Public Interest Alberta is campaigning to push the province to fix a revenue system it says is broken.
The organization is touring the province, holding town hall meetings - including one in Lethbridge tonight at 7 p.m. at Southminster United Church - to let Albertans know the province does have options for generating revenue that could eliminate the need for cuts.
Public Interest Alberta points out the province still has about $10 billion in rainy-day savings in the Heritage Trust Fund. The organization also says Alberta - the only province still using a flat tax - would be better served by switching to a progressive tax system which could generate up to extra $2 billion in revenue.
Alberta also overspent by $900 million on its energy stimulus drilling program which provides subsidies for the oil and gas industry.
The extra money in government coffers would come in handy now with school districts facing the prospect of budget shortfalls for next term.
"It's obviously well know that there's $100 million that's been cut out of the education budget even though they're looking at an additional 6,000 children from K to 12 going into our system next year," says Bill Moore-Kilgannon, executive director of Public Interest Alberta, which is helping to spearhead the "Join Together Alberta" campaign which demands Alberta change to a more consistent revenue model.
Moore-Kilgannon notes post-secondary institutions are also facing tough times because the zero per cent increase in their operating budgets the past two years effectively amounts to a cut because operating costs have risen.
He's right when he says the need for health care, education and care for seniors doesn't rise and fall with the price of oil, and that cuts made today ultimately wind up producing greater costs down the road. That doesn't include the social costs in terms of hardship for Albertans who rely on these services.
There's no need for Albertans to have to endure such hardship. We are fortunate to live in one of the "have" provinces; maintaining services essential to Albertans shouldn't be as difficult as it has become.
"Alberta is one of the wealthiest places in the world, blessed with an abundance of extremely valuable natural resources - and yet our government has manufactured a financial crisis that is likely to see 1,200 teachers laid off in the next few months and a still to be determined number of vital educational support staff," Gil McGowan, president of the Alberta Federation of Labour and co-chair of the JTA campaign, said in a news release at the campaign's launch. "Our education system is experiencing the same kind of chaos that has been inflicted on our health-care system, and that pain is also being felt in post-secondary education and in social services struggling to help vulnerable Albertans."
A more sustainable revenue system could ease that pain.
Lethbridge Herald, Thurs Jun 16 2011
With 331 jobs set to be lost in Calgary's public schools alone, Join Together Alberta (JTA) is holding a town hall meeting tonight in Calgary to challenge cuts to education, health care, and other vital public services, and to address the real issue: Alberta's broken taxation and royalty system.
"The Calgary Board of Education is losing 172 teaching positions, the Calgary Catholic Board is losing 90 positions and across the province 1200 teaching positions are being cut," says Alberta Teachers' Association President Carol Henderson. "Our schools are being short-changed by over $100 million and our schools cannot handle those types of reductions. Class sizes are increasing, special needs students are losing their supports and our immigrant and refugee students are falling through the cracks."
"Alberta is one of the wealthiest places in the world, blessed with an abundance of extremely valuable natural resources – and yet our government has manufactured a financial crisis that is causing massive layoffs in our schools," says Gil McGowan, president of the Alberta Federation of Labour (AFL), which represents 145,000 workers and co-chair of the JTA campaign. "Our education system is experiencing the same kind of chaos that has been inflicted on our health-care system, and that pain is also being felt in post-secondary education and in social services struggling to help vulnerable Albertans."
"Cuts to public services are not necessary at this time," says Diana Gibson of the University of Alberta's Parkland Institute, "the Alberta government is giving away billions in needless tax cuts."
"Join Together Alberta is touring the province, mobilizing people from various public service sectors and citizens across Alberta who care deeply about the fabric of our communities. Albertans know that our public services and communities are worth fighting for, and this campaign is going to help make that loud and clear to all political parties," says Bill Moore-Kilgannon, Executive Director of Public Interest Alberta and co-chair of JTA.
"Today's cuts to education will be felt for generations. In health care, we need excellence in education from early childhood to post secondary levels. These building blocks are crucial in developing the highly skilled health professionals we depend on. But not only is it important to health care, it is important for all sectors of society, for all our children, and all our citizens," says Elisabeth Ballermann, President of the Health Sciences Association of Alberta.
Time: 7 p.m. to 9 p.m., Wednesday, June 15, 2011
Location: Parkdale United Church, Conference Room, 2919 8th Avenue NW, Calgary
Panel Speakers and Media Spokespeople:
- Gil McGowan – President, Alberta Federation of Labour
- Bill Moore-Kilgannon – Executive Director, Public Interest Alberta
- Diana Gibson – Research Director, Parkland Institute
- Elisabeth Ballermann – President, Health Sciences Association of Alberta
- Carol Henderson – President, Alberta Teachers' Association
Please direct media inquiries to:
- Gil McGowan, Alberta Federation of Labour, 780-218-9888
- Bill Moore-Kilgannon, Public Interest Alberta, 780-993-3736
EDMONTON - After a day in which 326 Edmonton teaching positions were likely lost, school boards say they desperately need consistent funding.
Both Edmonton school boards passed versions of their budgets Tuesday that include severe cuts. Now, boards across Alberta say they need five years of sustained funding to escape the roller-coaster of finances that stunts long-term planning.
"It's critically important that the government provide predictable and sustained funding," said public board chair Dave Colburn. "We absolutely have to find a new funding model."
Debbie Engel, chair of the Catholic board, agreed with Colburn that five years of predictable funding would be ideal. "With three years, we could do a good job of planning for the future, but could do a better job with five."
Jacquie Hansen, president of the Alberta School Boards Association, said schools are at the mercy of oil prices and a boom-and-bust economy. The last few years of recession have been particularly bad. New programs fail because funding is pulled after the first year.
Hansen said a five-year plan, similar to funding for Alberta Health Services, would make education "more than a line item in the budget."
Tuesday night, the public board passed a budget that Colburn called "heartbreaking."
Within the $851 million budget, 345 full-time jobs will be cut, including 229 teaching positions.
The budget will use $21.5 million in reserve funding, which leaves no surplus for the public board by the time the next school year ends.
In 2009, the board's surplus fund, used for any unpredictable expenses in a school year, was $52 million. Now it's gone.
"The trend over the past three years has been disturbing," Colburn said. "It raises serious questions about the adequacy of funding from the province."
The budget signals a loss of nearly any flexibility as principals become teachers and lose time for professional development.
All 62 school boards in Alberta are reporting a net loss this year, Hansen said.
Earlier Tuesday, the Edmonton Catholic board passed a draft budget that will cost it 97 teaching positions in the next school year, as well as 63 support staff and 24 custodial positions.
Currently, the Catholic district has 1,848 full-time teaching positions. The public district has roughly 4,000.
Earlier this year, the province increased the overall education budget, but only enough to cover the promised 4.5-per-cent wage increase for teachers. It cut back many of its other programs, particularly the Alberta Initiative for School Improvement and English Language Learning program.
That led to a $9.6-million shortfall for the Catholic board. Its draft budget reflects a $1.8-million operating deficit, which leaves the district with a surplus of $2.4 million, half of what the surplus was three years ago.
Both boards have said class sizes will be affected because they have a growing number of students and fewer teachers.
Education Minister Dave Hancock said the potential number of teachers cut was higher than he expected, but he was "not overly" concerned.
Hancock said changes in class sizes will likely not affect education.
While Colburn agrees there are differing views on how class sizes affect education, he said the number of students per teacher is always a priority concern for parents.
The Catholic board's draft budget, which is scheduled for an approval vote on June 28, is $353 million.
Decisions about which schools will lose teachers won't be made until enrolment numbers are known in the fall.
The Alberta Federation of Labour and other groups held a town-hall meeting in Calgary Wednesday night to address public sector cuts, especially cuts to education. A similar meeting will be held in Edmonton on June 23.
Edmonton Journal, Wed Jun 15 2011
Byline: Ryan Cormier
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
June 2011: Join Together Alberta campaign; minimum wage; AB govt code of silence; workers at risk in AB
Join Together Alberta launches campaign to save education, health and social services
- Alberta is one of the wealthiest jurisdictions in the world, and yet up to 1,200 teachers and hundreds of school support staff facing layoffs. Meanwhile, post-secondary education and social services are also facing funding cutbacks. The math just doesn't add up – and that's because Alberta's revenue system is broken. Join Together Alberta, a coalition of community groups, social-services agencies and unions has launched a campaign to reform the province's revenue system – and save our services. For AFL Release, Our Alberta Declaration, Town Hall Tour List and http://www.jointogetheralberta.ca/
AFL pushes minister to raise minimum wage
- After two years with minimum-wage levels stuck at $8:80 per hour, and a concerted AFL campaign to push for more, Employment and Immigration Minister Thomas Lukaszuk finally announced an increase was coming. Unfortunately, he introduced a two-tier system - with liquor servers who earn tips getting a lower rate than other workers. In a 'mean-spirited' move, the minister revealed that workers would have to wait three more months for the raises to kick in. For more and "Message to Minister Lukaszuk" release
Alberta government's code of silence exposed
- Edmonton Journal writer Sheila Pratt revealed the code of silence that the government of Alberta attempts to impose on critics. She quoted AFL president Gil McGowan: "So the message has been crystal clear – toe the line and you get access. Refuse to play along and you get added to the long list of Albertans who are excluded." Want an example of how Alberta politics works? Pratt says doctors who wanted to improve health care in ways at odds with government policies were told "if you go public, you won't get anywhere." For more information and for Edmonton Journal story
Government continues to put Alberta workers at risk
- An Edmonton murder trial heard that workplace health-and-safety problems played a role in the slaying of the accused's wife, but when called upon to investigate, the Ministry of Employment and Immigration's initial response was to say it could do nothing because a complaint had not been filed. It was only after media reaction that minister Thomas Lukaszuk ordered his investigators to take action. "The government's complaints-driven process is a failure," says AFL president Gil McGowan. "The only way to keep workplaces safe is for a proactive campaign of vigorous and frequent random inspection by inspectors with real powers to punish violators. Instead, this government chooses to wait for complaints to be filed and reacts to them – literally waiting until people are hurt before taking action." For more information ...
- Support your postie – by dancing! - The Canadian Union of Postal Workers (CUPW) has filed strike notice and its members may stop work as early as Thursday, June 2. They are fighting against proposed cuts in wages and benefits and for safer working conditions and an improved public postal service. Whether or not a walkout has begun, show your support for your local posties by going to a public rally/dance in Edmonton at 8 p.m. on Friday, June 3. For more Stay tuned for updates in the coming days and weeks at www.afl.org, www.cupw.ca, www.cupwedm.net and www.cupwcalgary.org
- Five reasons to support postal workers – and how:
- June 2-3: HSAA Annual General Meeting
- June 4: International Day of Innocent Children Victims of Aggression
- June 5: World Environment Day
- June 6: Join Together Alberta Town Hall, Red Deer
- June 7: Join Together Alberta Town Hall, Medicine Hat
- June 9: Join Together Alberta Town Hall, Grande Prairie
- June 11: Edmonton Pride Parade
- June 15: Join Together Alberta Town Hall, Calgary
- June 16: Join Together Alberta Town Hall, Lethbridge
- June 20: World Refugee Day
- June 21: Join Together Alberta Town Hall, Fort McMurray
- June 21-22: AFL Executive Committee and Council Meetings
- June 23: Join Together Alberta Town Hall, Edmonton
- June 27: AFL Joint Standing Committee Meeting: Education, Human Rights & Int'l. Solidarity, Pride and Solidarity, Workers of Colour and Aboriginal Workers, Political Action
- June 28: AFL Joint Standing Committee Meeting: Environment, Health and Safety, Women, Young Workers
- July 1: Canada Day
- July 3: International Day of Co-operatives
- July 11: World Population Day
Did you know ...
- Corporate profits in Alberta are up 400 per cent
- The provincial economy is 75-per-cent larger than the national average
- The provincial government has missed its targets on collecting royalties from oil and gas companies, missing out on about $37 billion in revenue
- Corporate tax cuts are costing the Alberta government about $1 billion per year
- Alberta has no public debt
- Alberta's spending on social services is barely keeping up with population growth
- Provincial spending is declining as a share of the total economy
Alberta labour, social agencies unite to fight provincial budget cuts: Higher taxes, energy royalties would stablize funding for education, social services, health care, group says
EDMONTON — Raising taxes will reduce provincial budget cuts and save more than 1,000 teachers from losing their jobs in Alberta, say unions, community groups and social-services agencies, which have banded together to push for more funding.
Collecting more revenue will help the government provide more stable and long-term funding to programs and services that Albertans need and rely on, said Gil McGowan, president of the Alberta Federation of Labour.
To that end, McGowan's group and dozens of other organizations have launched a campaign called Join Together Alberta to press the government for more funding for education, social services and health care.
"Why should we be skimping on the services and programs that we need to build a stronger foundation for the future of our province and its citizens? The truth is: there is no good reason," McGowan said. "We need to talk about higher royalty rates for the development and sell of our collectively owned natural resources."
Alberta also needs to talk about reducing corporate tax breaks and increasing taxes for higher-income earners, he said.
Join Together Alberta's initiative comes on the heals of an announcement from Edmonton's public school board that provincial budget cuts will cost nearly 350 jobs, including more than 200 teaching positions. The Calgary board is expected to trim 358 teachers and support staff. The government committed this week to spend $550 million on new schools.
How the government fixes the problem is its decision, said Sharon Armstrong, vice-president of the Alberta Teachers' Association.
"The children that are in our schools right now are entitled to a proper education in a province that is this wealthy," she said. "They need to put $100 million back into the education system now for this fall."
Armstrong said if the cuts are made, it will lead to larger class sizes, less teacher attention per student and more difficulty improving graduation rates.
Diana Gibson, research director for the Parkland Institute, said the provincial government should stop tying social services to oil and gas prices. That system isn't working and hasn't been for a long time, she said.
"Our social spending goes up and down. It's very volatile because oil and gas is volatile. To have some form of stability in our education, health care and social programs, we need to rely on stable, predictable revenues."
Politicians have long boasted that Alberta has the lowest taxes in Canada, Gibson said, but Alberta should be beating other provinces by a yard, not a mile. The province can raise taxes to provide adequate funding for services and still have the lowest tax rates, she said.
The rest of the provinces are collecting between $11 billion to $20 billion more in taxes than Alberta.
"That gap is so big," she said. "Why the difference? We could capture $10.9 billion and still be the lowest tax jurisdiction in Canada and one of the lowest in the G7."
McGowan agreed, adding the change won't affect industry.
"People in businesses don't come to Alberta because of the low tax rates. They come to Alberta because of the oil and gas."
So why is Alberta laying off education workers; under-funding universities, colleges and technical schools; and skimping on other services,s he asked.
"The answer is clear: the reason our cupboard is bare is because provincial government has decided to make it bare."
Edmonton Journal, Thurs May 26 2011
Byline: Miranda Scotland