ALF V1

CALGARY- Suncor's decision to unwind its natural gas business points to what could be a permanent structural shift that highlights the decreasing competitiveness of Alberta's natural gas patch, observers said Tuesday.

Canada's largest integrated oil company expects to cut about 1,000 positions as it moves to unload about $4 billion worth of natural gas assets in Canada and the United States, the majority of them in Alberta. It formally kicked off the process last week by selling Petro-Canada's former U.S. Rockies division to Noble Energy for $495 million US to focus on oilsands.

"I'm not surprised they're overhauling and downsizing that business," said FirstEnergy Capital analyst Michael Dunn.

"Even before the merger with Petro-Canada, production was declining and they hadn't been investing in that business. The conventional assets hadn't performed particularly well over the past few years."

The development comes a day after Talisman Energy said it will sell "significant" Alberta properties and production to redeploy the proceeds into emerging shale basins in British Columbia and Pennsylvania. As part of its restructuring, Talisman last year slashed about 18 per cent of its North American workforce as it moves away from conventional exploration and production to focus on shale.

The numbers are reflected in Alberta's jobless rate, which fell to 6.7 per cent in December, but remains near decade highs.

Alberta Federation of Labour president Gil McGowan noted that oilpatch jobs are well-paying positions that support families as well as the provincial treasury.

"A thousand jobs is a pretty big hit, especially in an industry that's already lost thousands of jobs in the last six to 12 months," he said.

"It's worth noting that these are not 'McJobs,' these are not jobs we can really afford to lose," said McGowan. "We hear Alberta has turned the corner, but these types of announcements tell a completely different story. We've got a long way to go before we dig ourselves out of this hole the recession has made for us."

Industry observers said the provincial government has to address the growing competitiveness gap between Alberta and other energy hot spots if it wants to maintain a healthy gas sector.

Speaking at the Calgary Chamber of Commerce on Tuesday, Energy Navigator president Boyd Russell insisted Alberta comes dead last when comparing the rate of return of shale gas developments across five major jurisdictions in North America. Policies such as the new royalty framework and the lack of incentives for high-cost, marginal wells are costing the province jobs and investment that are shifting into places like Louisiana, Texas and even B.C.

The Calgary-based engineering firm, which counts big producers such as Talisman among its clients, released a study that shows major shale gas developments in Alberta cost twice as much as similar projects in Texas. Boyd suggested the numbers are a clear indication of why companies like Talisman are selling conventional assets in Alberta and shifting dollars and jobs south of the border.

"Alberta is the only jurisdiction that doesn't have incentives for these types of wells," he said in an interview. "It's not enough to be economic; you also have to be competitive."

To address these and other issues, the Alberta government last year struck a competitiveness review panel that is expected to report on measures to improve the province's position in North America.

In addition to the review, Premier Ed Stelmach is widely expected to announce a cabinet shuffle that could result in the appointment of a new energy minister, news of which could come as early as this week.

Alberta Energy department spokesman Jerry Bellikka said the moves show the government is aware of the problem and taking steps to address the concerns.

"There's no hesitancy on our part to look at it. We know it (shale) is a game changer and that's why we have to look at our competitive position."

Michael Tims, chairman of Calgary-based energy investment bank Peters and Co. Ltd., said he agrees that Alberta needs to take a hard look at ways to strengthen the natural gas industry. "You can judge by their (gas producers') behaviour, they're certainly willing to sell an awful lot of assets."

He's sat in on various meetings and committees related to the review panel and said he thinks the message is finally starting to sink in.

"I think they are looking at all the issues and I think it's very clear to them what the relative economics are. I think we're all expecting there will be positive change," when the report is released later this year.

Calgary Herald, Wed Jan 13 2010
Byline: Shaun Polczer

Recovery could be smothered in its infancy by provincial budget and job cuts, warns AFL

Year-end employment figures released this morning by Statistics Canada paint a picture of an Alberta labour force that is still hurting even as the provincial economy begins to show signs of emerging from the recession.

"The recovery seems to be coming, but Albertans are still hurting and the provincial labour market is still very fragile," says Gil McGowan, president of the Alberta Federation of Labour.

"The positive news in this report is enough to suggest that the Alberta economy - and along with it, provincial government revenue - will likely return to health sometime this year. But the negative news is enough to suggest that the government should think long and hard before introducing budget cuts that will throw thousands of nurses, teachers and other public sector workers out of work.

Not only are those kinds of cuts unwarranted when you look at the growing evidence of improving economic and revenue conditions, but, coming at a delicate time like this in terms of the labour market, they would only serve to make a bad employment situation worse. And they would almost certainly undermine the progress of the recovery."

The latest statistics show that Alberta had an unemployment rate of 6.7 per cent in December, down from 7.4 per cent in November. But while small month-over-month improvements are always welcome, comparison over the full course of the year - and with October 2008, which represented the top of the boom in Alberta - are much more sobering.

Just how bad have things been in the Alberta labour market since the boom went bust? Consider the following figures:

• Since December 2008, Alberta's population has grown by 71,600 - but the number of people with jobs has dropped by 28,600. The number of Albertans with jobs has fallen even more dramatically when you use October 2008 as your point of comparison (-44,700).

• The number of Albertans with full-time jobs has fallen even more precipitously. There are 52,400 fewer Albertans with full-time jobs today than there were in December 2008 - and 78,100 fewer than there were in October 2008.

• Young Albertans have been particularly hard hit by the recession. Employment for Albertans between the ages of 15 and 24 is down 22,400 since December 2008 and 34,800 since October 2008.

• Male, core-age workers (aged 25 and over) have also experienced a disproportionate share of job losses. 17,500 fewer men in this category are employed in Alberta today compared to December 2008 - and 23,600 fewer compared to October 2008.

• The hardest hit sectors include forestry, mining and oil and gas (down 29,000 jobs compared to December 2008); manufacturing (down 38,600 jobs since October 2008); professional, scientific and technical services (down 24,800 jobs since October 2008); and construction (down 17,100 jobs since October 2008).

• Over the course of the past year, Alberta is second only to B.C. in the number of jobs lost as a proportion of its provincial labour force. On a per capita basis, Alberta has lost more jobs than Ontario, Quebec, Saskatchewan, Manitoba, Nova Scotia, New Brunswick, Newfoundland and PEI.

"What all of these numbers tell is that Albertans are still hurting as a result of the recession," says McGowan. "What they also tell us is that Finance Minister Iris Evans was clearly looking through rose-coloured glasses 11 months ago when she predicted that Albertans would lose only about 15,000 jobs in 2009.

"The real job impacts of the recession have been much worse than the government predicted. But the good news is that things seem to be improving slowly. The last thing we need now is for the provincial government to smother the recovery with massive job and spending cuts before it even has a chance to take hold," McGowan concluded.

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For more information call:

Gil McGowan, AFL president @ (780) 218-9888 (cell)

EDMONTON - As the latest employment figures were released Friday, government critics suggest Finance Minister Iris Evans was looking through "rose-coloured glasses" last year when she predicted just 15,000 Albertans would lose their jobs in 2009.

Instead, the economic downswing appears to have caused a net 28,600 job losses between December 2008 to December 2009.

"What all of these numbers tell is that Albertans are still hurting as a result of the recession," Alberta Federation of Labour president Gil McGowan said in an issued statement Friday.

"What they also tell us is that Finance Minister Iris Evans was clearly looking through rose-coloured glasses 11 months ago. ...

"The real job impacts of the recession have been much worse than the government predicted."

Alberta Employment and Immigration spokesman Terry Jorden could not speak to the finance department's estimates Friday morning.

Last February, Employment Minister Hector Goudreau said the prediction of 15,000 would have been based on an estimated 50 jobs lost a day.

"Throughout 2009, for the first two-thirds of the year, we had a steady increase in unemployment month to month," Jorden said Friday.

"About four months ago, we seem to have turned the corner."

In fact, Alberta's unemployment rate fell by seven percentage points in December; in the capital region, the unemployment rate fell three percentage points in the same period.

Goudreau's department is using unadjusted job loss figures throughout 2009 to come to a total 25,200 jobs lost last year, compared to 53,900 jobs gained in 2008.

Jorden said it has been a challenging year for employees and employers, but the province may now be seeing the beginning of a "slow and steady" recovery.

Last year, members of Premier Ed Stelmach's government talked publicly about needing the federal government to change its formula for distributing unemployment benefits. Workers in Alberta typically need to collect more hours on the job to be eligible for benefits than their colleagues across the country.

"That's still on the table, and we'd still like to see that more equitable," Jorden said, but the provincial government's focus remains on creating jobs rather than the "safety net of unemployment insurance."

Edmonton Journal/Capital Notebook, Fri Jan 8 2010
Posted: Trish Audette

A retired lawyer's legal fight with the city and EPCOR ended after his lawsuit challenging EPCOR's multibillion-dollar sale of their power-generating assets was dismissed in court yesterday.

"I think I've done my duty as a citizen to bring this forward, put some sunlight on the situation," said Bill Pidruchney, former head of Alberta Securities Commission, outside the courthouse.

CLOUD OVER COUNCIL

"However, the unhappy thing is that there is a cloud hanging over city council and over the city with respect to this transaction."

The city and EPCOR were successful in their application to have Pidruchney's legal action dismissed. Pidruchney was also ordered in court to cover some associated legal costs.

Pidruchney had launched legal action after alleging that the city had made the April 17 decision behind closed doors to spin off its publicly owned Canadian and U.S. power-generation assets into a new local company called Capital Power Corporation.

He tried to obtain an injunction to stop the sale but was denied in July.

A trio of labour groups, including the Alberta Federation of Labour, later also tried to challenge the sale in court but were unsuccessful.

"There will be no more legal steps from my point of view, but there are plenty of practical steps that should be taken in dealing with council," Pidruchney said. '

"There are questions that must be answered before the next election. We'll keep digging from a citizen's point of view now and see what comes up."

UNMERITED CLAIM

EPCOR spokesman Tim le Riche said Pidruchney's claim was without merit and that the court has upheld the process used to create Capital Power.

"We uphold that the creation of Capital Power is a benefit to EPCOR and to its sole shareholder, the citizens of Edmonton," le Riche said.

Edmonton Sun, Thurs Dec 24 2009
Byline: Clara Ho

Polls have consistently shown that Albertans want to keep valuable oilsands upgrading and refining jobs in the province instead of shipping them down a pipeline to processing facilities in the U. S. Unfortunately, the widely-held dream of moving our province "up the value ladder" suffered two major setbacks last month.

The first came from an unexpected source: Suncor Energy.

For the past 40 years, Suncor has upgraded virtually all of the raw bitumen it extracts right here in Alberta. In the process, the company has created literally tens of thousands of short and long-term jobs for Albertans. But, Suncor CEO Rick George recently announced his company would break with tradition by exporting raw bitumen from its new Firebag 3 project to U. S. refineries. At the same time, he said Suncor's already postponed Voyageur upgrader will remain in mothballs for the foreseeable future.

George didn't even bother to mention the Fort Hills project, which Suncor has now inherited as a result of its merger with Petro-Canada. If that project proceeds, most analysts agree it will do so as an extraction-only operation.

When an industry stalwart like Suncor starts looking south of the border for processing, it's clear something significant has changed in the structure of Alberta's oilsands market. It's also clear alarm bells should be going off at the Alberta Legislature.

That brings us to this month's second setback. At almost the same time Suncor was announcing its plan to send upgrading jobs to the U. S., the government of Premier Ed Stelmach was announcing its long-awaited plan to keep upgrading jobs here.

For months now, the premier's rhetoric on this issue has been big. But the program that his government has delivered is shockingly small.
How small? According to government documents, the so-called Bitumen Royalty In-Kind program will make between 50,000 and 75,000 barrels per day of raw bitumen available for Alberta-based upgrading.

At first glance, those figures may sound impressive. But compared to the increasing volume of raw bitumen being exported by companies like Imperial, EnCana, Conoco Phillips and Husky, it's clear that the BRIK program amounts to little more than a drop in the bucket.

In fact, if the program actually reaches its upper threshold, it would represent only about six per cent of the 1.2 million barrels per day produced from the Alberta oilsands. To put it another way, 75,000 barrels per day will, at most, provide feedstock for one new upgrader--and a small one at that.

The image that comes to mind is of someone trying to stop a torrent with a tin cup. The big irony here is that it was the Progressive Conservatives themselves who unleashed the torrent they are now trying to contain.

Some might argue that the Tories are simply bystanders watching helplessly as market forces make it more economical for energy firms to do their upgrading and refining south of the border. But this argument ignores the fact that government policies have an often decisive impact on the shape of markets.

In the case of Alberta's upgrading industry, the decisive moment came when the Klein and Stelmach governments decided to support the construction of massive pipelines designed to transport vast quantities of raw bitumen from Alberta to U. S. refineries. As a result of these pipelines (another of which is up for approval in September), refineries in the American Mid-West and Gulf Coast have been increasingly able to replace declining supplies from Mexico and Venezuela with heavy oil from Alberta. This, in turn, has increased the price that a barrel of raw bitumen can fetch and has dramatically narrowed the price differential that has traditionally existed between bitumen and conventional oil.
On the surface, this may sound like good news for Alberta. Who could complain about getting more for the oil we sell?The problem-- which, the provincial government either ignored or doesn't understand --is that when it comes to the oilsands, our domestic upgrading and refining industries rely on the price differential between bitumen and conventional oil to remain viable.

In other words, access to cheap feedstock is our competitive advantage, one that the Conservative pipeline policy is undermining.

So, Suncor's recent announcements shouldn't be seen as a surprising betrayal. Instead, it's simply the logical result of changes set in motion by the provincial government's one-price policy. In this context, the government's BRIK program starts to look more like a PR effort aimed at appeasing Albertans who were never consulted about the government's real policy, which in practice (if not word) focuses on raw exports.

The most frustrating part of this story is that there is a proven policy model that could have been employed to keep value-added jobs in the province.

In the '70s, the Lougheed government successfully used a mix of regulation and direct government investment to upgrade natural gas, and create a value-added petrochemical industry. A similar approach could have been taken with the oilsands.

So, will we learn the lessons of Lougheed?

Or, will upgrading and refining join the ever-growing list of industries that Canadian leaders have needlessly sacrificed on the altar of free market purity?

It's too early to tell . . . but the window of opportunity is closing.

Calgary Herald, Thurs Aug 6 2009
Byline: Gil McGowan

Opening Statement NEB Hearing Order OH-1-2007

Alberta's unemployment rate edged down to 7.4 per cent in November as 12,800 people found jobs --the largest monthly increase since October 2008.

The provincial jobless rate dropped 0.1 percentage points from October, Statistics Canada said Friday.

Edmonton's jobless rate in November was 7.7 per cent, unchanged from October. Calgary's rate was seven per cent, up from 6.9 per cent the previous month.

"It's another indication of the slow but steady economic recovery," said Terry Jorden, a spokesman for Alberta Employment and Immigration.

But the good news was tempered by the reality that 12,600 of those jobs were part-time. Alberta's largest labour group hammered the provincial government on the loss of fulltime jobs and increasing prevalence of part-time work.

"If this is what a recovery looks like, then I'd really hate to see a recession," said Alberta Federation of Labour president Gil McGowan.

"Economists and pundits may claim that the recession is over. But here in Alberta, the facts on the ground tell a different story. Working people and working families are still hurting."

The number of Albertans with fulltime jobs has dropped by 83,000 since the peak of employment in October 2008, and by 75,600 since November 2008, he noted.

While Alberta's overall employment has fallen by 52,000 jobs since November 2008, the AFL said the number would be far bleaker without 24,000 more part-time jobs created in the period.

Jorden said the provincial government would prefer to have seen more full time jobs created, but it remains optimistic about long-term employment growth. "We are still in the early stages of the economic recovery," Jorden said.

"Some of these part-time positions, particularly those in construction, could become full-time when economic conditions improve."

ATB Financial senior economist Todd Hirsch said the trend to lower-paying part-time work will affect consumer spending.
"Those jobs are better than no jobs at all, but if full-time work is preferred, it may put a crimp on some household budgets," Hirsch said.

Alberta posted the third-lowest rate in the nation, behind Saskatchewan's 5.2 per cent and Manitoba's 5.3 per cent. Canada gained 79,000 jobs, inching its rate down 0.1 percentage points to 8.5 per cent.

TD Bank economist Pascal Gauthier called it, "a stunning display of unexpected strength" with job gains in every province except New Brunswick.

"Encouragingly, Alberta--which had been lagging behind the nationwide employment stabilization seen in recent months--joined the fray," Gauthier said.

"Furthermore, this was well distributed among the province's services and goods industries."

Statistics Canada noted the bleeding of jobs in Alberta has slowed since late last year.
"Since March 2009, employment in the province has edged down by 7,000, a much smaller loss than the 48,000 observed during the five months following the peak of October 2008," said the national agency.

Hirsch said it's too early to suggest Alberta's job market has found solid footing because employment statistics lag economic trends and can fluctuate month-to-month.

"Several consecutive months of gains in full-time employment would give more compelling evidence that Alberta's labour market is growing strongly once again," Hirsch said.

Alberta's gain in jobs came despite its labour force growing by 10,900 people.

Most of the province's employment gains came in construction with 5,000 jobs; accommodation and food services with 2,900 jobs; professional, scientific and technical services with 2,800; and manufacturing with 2,300.

Edmonton Journal, Sat Dec 5 2009
Byline: Bill Mah

Labour leader in Calgary today to talk to Alberta manufacturing workers, one of the groups hardest hit by recession

Please note that, due to weather conditions in Alberta today, Gil McGowan is not able to attend the USW meeting in Calgary. He is available for comment at 780-218-9888.

CALGARY - But before anyone starts popping champagne corks to celebrate the end of the recession, Alberta's largest labour organization would like them to consider the following facts about the Alberta's labour market.

• It's true that according to the Statistics Canada survey 13,000 jobs were created in Alberta in November. But 12,600 of those jobs were part-time.
• Alberta's population has grown by 73,000 since November of 2008 - and the pool of available workers (the provincial labour force) has grown by 33,000. But the number of people who actually have jobs has gone down by 52,000. 
• Even worse, the number of Albertans with full-time jobs has dropped by 75,600 since November 2009 (and by 83,000 since the peak of employment in October 2008). The only reason that overall employment is down by "only" 52,000 is because we have 24,000 more part-time jobs today than we did last year at this time.
• As a result of these troubling trends, there are 85,000 more officially unemployed people in Alberta today than there was one year ago. In other words, both the unemployment rate and the absolute number of unemployed people have more than doubled over the last year. No other province has seen such a dramatic spike in unemployment in such a short time.
• The unemployment rate in some Alberta communities hardest hit by the recession, most notably the Red Deer and Grande Prairie areas, has more than tripled since last year.

"If this is what a recovery looks like, then I'd really hate to see a recession," says Alberta Federation of Labour president Gil McGowan. "Economists and pundits may claim that the recession is over. But here in Alberta, the facts on the ground tell a different story. Working people and working families are still hurting."

"The really perverse part of the story is that the Stelmach government's response to the jobs crisis seems to be a plan to thrown thousands of additional people out of their jobs with deep cuts to public services. Given the current jobless numbers, why on earth would the government attack the one sector that's still generating stable employment?"

McGowan will be in Calgary today to speak to a western regional meeting of the United Steel Workers union (USW). The Steelworkers represent tens of thousands of workers in the manufacturing sector - which is the sector of the Alberta economy that has experienced the largest number of lay-offs since the beginning of the recession.

The USW meeting is being held at the Glenmore Inn (Foothills Room) which is located at 2720 Glenmore Trail S.E., Calgary. McGowan is scheduled to speak at 11 a.m. and will be available to answer questions from reporters afterward. A number of Alberta manufacturing workers from workplaces that have been hit hard with lay-offs will also be on hand.

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For more information call: Gil McGowan, AFL President @ (780) 218-9888

 

MLA wages will be frozen for a second straight year but an all-party committee-- dominated by Tories--has rejected a proposal to strike up an independent panel to review politicians' pay and perks.

The proposal was raised Wednesday by NDP Leader Brian Mason and supported by the Liberals, but Conservative politicians on the members' services committee argued an autonomous probe of MLA compensation would be a waste of taxpayer dollars. Tory whip Frank Oberle suggested an independent panel would likely recommend a substantial hike to politicians' pay, as was the case in the mid-1990s.

In addition to annual raises tied to the growth in Alberta's average weekly earnings, backbench Tories and opposition members were awarded greater compensation for attending committee meetings.

Meanwhile, Premier Ed Stelmach and cabinet granted themselves, behind closed doors, raises ranging between 30 and 34 per cent. The boost hiked ministers' salaries by $42,000 and the premier's wages by $54,000 -- an increase that, at the time, made Stelmach the highest-paid provincial leader. (In 2008-09, Stelmach earned almost $225,000 in total remuneration and benefits, while each of his 23 cabinet ministers snared about $200,000 in overall compensation.)

Proponents of an independent review of MLA pay and perks blasted the committee's decision to reject Mason's motion calling for an external probe."There's clearly a need to remove the conflict of interest that exists when MLAs set their own salaries and benefits," Liberal Leader David Swann said.

Alberta Federation of Labour president Gil McGowan contended most Albertans would favour an autonomous probe."Virtually no one has what MLAs have, which is a system that allows them to essentially set their own wages," McGowan said.

While the members' services committee voted against launching an external examination of MLA compensation, it approved extending a freeze on politicians' pay for 2010-11.Wages were frozen for this fiscal year as the Alberta government plunged into deficit, most recently projected at $4.3 billion in 2009-10.

But Scott Hennig of the Canadian Taxpayers Federation-- which is advocating the province strike up a citizens' assembly made up of randomly selected Albertans to review MLA pay -- criticized the freeze as paltry. Hennig said MLAs should have rolled back their wages to mirror modest cuts made in October to overall compensation paid to the premier and ministers (a six per cent cut for the premier and three per cent reduction for ministers).

A third of all MLAs' base salary is tax free."It's ridiculous," Hennig said of the freeze. "It's frankly not a huge sacrifice after they gave themselves huge raises in 2008."

McGowan dubbed the MLA pay freeze a "political ploy" to wrestle wage freezes from the public sector, while Ken Kobly, president of the Alberta Chambers of Commerce, called it a prudent move in light of the government's fiscal state.

The deficit-laden Conservative government is holding the line on manager salaries for two years and has said it wants public-sector workers, including teachers and medical workers, to follow suit.

"They're showing leadership" on the salary front, said Kobly, who believes the province's process for assessing politicians' pay is fair.

In lieu of an autonomous probe, Speaker Ken Kowalski, chairman of the members' services committee, is conducting an internal review of MLA compensation, comparing Alberta politicians to their provincial counterparts.

Both he and Tory MLA George VanderBurg, who represents Whitecourt-Ste. Anne, said they haven't heard a backlash from their constituents over MLA pay. "I've never once been asked in my constituency about being overpaid. Never once," VanderBurg told the committee. "Maybe it's a city thing. I don't know.

"In arguing for an autonomous probe, Mason said politicians have an obligation to address public concerns over the model used to set pay.

Hundreds of Edmontonians are gathering today to celebrate the life of an active labour activist in our community.

Thomas Olenuk most recently served as the president of the Edmonton and District Labour Council.

In his career, Olenuk also worked on the Alberta Federation of Labour board, served as director of the Alberta Environment Network and sat on the city's Community Foundation committee.

Olenuk was 57 and said to have been battling some health issues.

The memorial is being held at NorQuest College starting at 1:00 this afternoon.

iNews880, Sat Nov 28 2009