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Alberta's jobless toll may be the highest in 13 years, but the worst is yet to come as companies continue to cut workers during a deep recession, say economists.

Alberta's unemployment rate rose to 7.2 per cent in July--a high not seen since June 1996, said Statistics Canada, which released unexpectedly grim labour market news Friday.

Canada lost 45,000 jobs--more than feared. Most economists were predicting 20,000 job losses in July.

Alberta lost 3,700 jobs compared to June, while the province's labour force increased by 5,600 in July as jobseekers moved to the province.
The number of full-time workers fell by 11,900 in Alberta; those working part-time increased by 8,100-- another sign economists say points to a weakening labour market.

"The current weakness in conventional oil and gas drilling, as well as the sharp retrenchment in construction and manufacturing activity, has left many companies no choice but to cut payrolls," said ATB Financial senior economist Todd Hirsch.

Job losses in Alberta will only get worse in the next few months, he predicted.

"Labour indicators ... are well-known to lag conditions in the overall economy. So even if the recession appears to be losing its grip, we don't expect the jobs market to reach a bottom until sometime in the fall or early winter."

Premier Ed Stelmach is confident oil and gas drilling incentives introduced this year will keep some Albertans from joining the unemployment ranks.

"The numbers are increasing more than originally predicted, and it's very concerning to me," he said.

"But I can assure all Albertans that we will maintain all the programs that are necessary to look after those who not only lost their jobs, but look at how we also can get them back into the workforce."

Alberta's unemployment rate could see improvement in September when many jobseekers leave the labour market for school or training, said Sally Stuike, a spokeswoman for Alberta Employment and Immigration.

"We are hopeful and optimistic that the jobless rate here in Alberta will improve," she said, noting the latest statistics at least show an increase in part-time jobs.

As well, the overall job picture wasn't bad in all parts of Alberta. The Lethbridge-Medicine Hat area's unemployment rate remained unchanged from June to July at 5.5 per cent. The Banff-Jasper-Rocky Mountain House area remained at 5.9 per cent. Wood Buffalo-Cold Lake's jobless rate actually declined to 5.4 per cent in July from six per cent a month earlier.

Compared to the same time a year earlier, there were 51,100 more people in Alberta's labour force--an increase the provincial government and economists attribute to an influx of people from other parts of Canada.

Meanwhile, since July 2008 Alberta has shed 26,100 jobs.
Between June 2009 and July 2009, finance, insurance, real estate and leasing sectors lost 7,600 jobs. Accommodation and food services lost 4,600 jobs in the same period.

Third lowest
Alberta maintained Canada's third-lowest jobless rate, behind Saskatchewan at 4.7 per cent and Manitoba at 5.2 per cent.
But since last fall, Alberta has been the hardest hit by job losses, said one economist.

"While the national jobless rate has climbed by 2.3 percentage points since the onset of the recession in October 2008, unemployment has surged the most in Alberta (a gain of 3.5 percentage points), Newfoundland (plus 3.3), British Columbia (plus 2.6) and Ontario (plus 2.6)," said Pascal Gauthier, an economist with TD Bank Financial Group.
The national unemployment rate remained flat in July at 8.6 per cent as some jobless stopped looking for work, the federal agency said. The country lost 45,000 jobs full-and part-time jobs in July.

"The current recession's job loss tally now sits at 414,000, or 2.4 per cent, and keeps inching closer to that experienced in the early 1990s recession (3.3 per cent)," Gauthier said.

"No one said it was going to be a smooth recovery, and especially not for employment," said Douglas Porter, deputy chief economist with BMO Capital Markets, which had been expecting something in the range of 30,000 job losses in July.

"The underlying picture still looks quite soft, and there's little sign here that the economy is quickly turning the corner."

Most job cuts Canada-wide were in the accommodation, food services and construction sectors, while the retail and wholesale trade sectors added workers.

Seven per cent
In Edmonton, the unemployment rate inched up to seven per cent in July, up from 6.5 per cent in June. Calgary's rate also rose, to 6.9 per cent from seven per cent. The economic region in Alberta with the highest unemployment rate was Athabasca-Grande Prairie at 8.4 per cent; the lowest was Wood Buffalo-Cold Lake at 5.4 per cent.

Alberta's latest jobless increase prompted Alberta Federation of Labour president Gil McGowan to call on provincial and territorial leaders to pressure Ottawa for swift reform of the national employment insurance system.
"Albertans are losing jobs at a faster pace than workers in most other provinces," McGowan said. "But the system that is supposed to provide a safety net is failing us miserably. Only about 40 per cent of Alberta's unemployed are getting EI benefits --the lowest rate in the country."

The AFL and other labour groups want a uniform system of EI eligibility to replace the current system that requires people to work different numbers of hours to qualify for benefits depending on which region of the country they live.

"We think it's nothing short of a scandal that a prime minister from Calgary continues to drag his feet when it comes to EI reform, even when Albertans are the ones who are being the most discriminated against."

Edmonton Journal, Sat Aug 8 2009
Byline: Bill Mah

Premiers should demand an end to federal dithering on efforts to fix Canada's broken unemployment insurance system, says labour leaders

REGINA-As Alberta's unemployment rate soars to levels not seen since the recession of the early 90s, the need for fundamental reform to Canada's Employment Insurance system becomes even clearer and more urgent, says the leader of Alberta's largest labour organization.

"Albertans are losing jobs at a faster pace than workers in most other provinces," says Gil McGowan. "But the system that is supposed to provide a safety net is failing us miserably. Only about 40 per cent of Alberta's unemployed are getting EI benefits - the lowest rate in the country. And even when Albertans do receive benefits, they're eligible for fewer weeks than workers in other provinces. This kind of discrimination needs to end."

McGowan and other labour federation leaders are in Regina this week to lobby the Ed Stelmach and other provincial and territorial premiers as they gather for their annual premiers meeting.

The labour leaders' campaign for EI reform took on an increased sense of urgency today as the latest official unemployment numbers were released.

Figures released this morning by Statistics Canada show that Alberta lost another 9,300 jobs in July, bringing the province's total of net-jobs lost since October 2008 to 75,600. As a result, Alberta's official unemployment rate has jumped to 7.2 - the highest it's been since 1995.

Alberta actually lost 11,900 full-time jobs in July - but this was offset somewhat by an increase in precarious part-time work. The province's unemployment rate has now nearly doubled in the past 8 months (from 3.7 per cent in October 2008 to 7.2 per cent today).

"The employment picture in Alberta is more dismal than it's been in years - and despite happy talk from politicians and business leaders, it's continuing to get worse," says McGowan. "That's why we're calling on the premiers and federal government to fix our country's broken EI system immediately. Unemployed workers need help now, not six months or a year from now."

The AFL, other provincial and territorial labour federations and the Canadian Labour Congress (CLC) are calling for a uniform system of EI eligibility to replace the current system that requires people to work different numbers of hours to qualify for benefits depending on which region of the country they live in. The labour movement is also calling for increases to benefit levels and to the length of time that unemployed workers can collect benefits.

"It shouldn't matter if Canadians lose their jobs in Calgary or Cape Breton - people who have lost their jobs should get the unemployment benefits they've paid for," says McGowan. "The best way to help Canadians weather this economic storm and boost the broader economy is to put money in the pockets of those who have lost their jobs. That's why we need EI reform now. The system isn't delivering on its promise - and Canadians are suffering needlessly as a result."

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

REGINA - Labour groups from across the country say Canada's premiers need to pressure Ottawa to change the employment insurance system.
The Canadian Labour Congress says new job numbers show the recession if far from over for workers.

Statistics Canada says the country's labour market shed another 45,000 jobs in July as more people struggled to find work.

Labour groups want a uniform system of EI eligibility to replace the current system that requires people to work different numbers of hours to qualify for benefits depending on where they live.

The Alberta and Saskatchewan federations of labour are also calling for EI changes.

AFL President Gil McGowan says only about 40 per cent of Alberta's unemployed are getting EI benefits - the lowest rate in the country.

570 News, Kitchener, On, Fri Aug 7 2009

The Alberta Federation of Labour is calling for changes to the Employment Insurance Program following the latest jobless numbers.

The stats, which were released this morning, show Canada's jobless rate stayed steady at 8.6 percent.

But here in Alberta it rose nearly half a percent to 7.2 and in Calgary it jumped from 6.6 to 6.9 percent. The AFL says only 40% of the Albertans applying for EI are actually receiving the cash they need.

AFL president Gil McGowan says the reason for the low eligibility is because of regional differences in the current system.

He adds it's not fair that a person in Calgary and a person in Cape Breton aren't getting the same help even though both have lost their jobs and both have put the same amount of money into the system.

660AM News, Calgary, Fri Aug 7 2009
Cormac MacSweeney and Kelly Turner

CALGARY - Suncor expects to move quickly to complete its merger with Petro-Canada and trim overlap between the two companies, its newly minted CEO said Tuesday.

That includes addressing the issue of job cuts at the two companies, which employ about 12,500 people. In an exclusive interview with the Herald, George candidly admitted there will be layoffs, but refused to say how many.

"I don't want to commit to a number and have to change it later. I expect to be in a position to tell you in two to three weeks," he said.
"What I've told employees is that they'll know first. As an employee, that's about respect. What I'm trying to do is humanize this process."

While most Albertans were enjoying the long weekend, the new CEO of the combined Suncor and Petro-Canada was poring over reams of data and figuring out ways to assemble the individual pieces of Canada's largest integrated oil major, which officially came into existence at the stroke of midnight on Friday.

"You have to remember, until Friday, there were parts of these companies that we couldn't have access to," he said.

"There are sections that we did not have access to data."

"What we haven't had time to do is to take a really good look around at what may or may not fit," George said.

The final shape of the company will be determined over the next 100 days or so, when George and his new management team will decide which assets will form the basis of the merged company, whether to keep Petro-Canada's international operations and what development projects will take priority.

In addition, it will be required to sell 104 retail gasoline outlets in southern Ontario, in accordance with the Competition Bureau's July 22 decision to formally approve the $20-billion merger with conditions.
In late September or early October, George will present a capital budget to Suncor's board of directors that is expected to eliminate some $1 billion of direct spending and $300 million of operating expenditures.
That document will indirectly address the issue of job cuts as the companies seek to streamline administration and staffing levels.
The Suncor CEO has been meeting with groups of employees to outline a strategy in what he described as an attempt to "humanize" the process of eliminating positions.

"What we told employees is that everybody should know whether they have a position in this new company and, if so, what it is and, if not, when they will be leaving the company."

Last week Petro-Canada chopped about 50 senior executive and managerial positions ahead of the formal closing of the merger on Friday.

But Gil McGowan, who heads the Alberta Federation of Labour, said the various unions that operate Petro-Canada's Edmonton refinery and Suncor's Fort McMurray upgrader have been assured there will be no layoffs for unionized hourly employees.

"In these mergers it tends to be executives and senior managers that become redundant," McGowan said.

"We're not anticipating any significant layoffs among hourly employees. Regardless of the corporate structure, the newly expanded company is going to need the same number of people to run the refinery and the upgrader."

Levi Clarke, who heads Local 707 of the Communications Energy and Paperworkers union, which represents 2,900 oilsands workers in Fort McMurray, said Suncor officials assured him there would be no job cuts at the mine or upgrader.

"They talked to us very early," he said. "It's a good thing to know that your members aren't going to be affected by such a big undertaking."
Shares of the new company began trading in New York on Monday, where they promptly gained seven per cent. On Tuesday they lost 71 cents US to finish the day at $33.94. The Canadian shares will begin trading in Toronto later this week. On Tuesday they each gained about five per cent on the Toronto Stock Exchange; Suncor gained $1.60 Cdn to close at $36.44 while Petro-Canada jumped $2.20 to $46.69.

Justin Bouchard, an oilsands analyst with Raymond James in Calgary, said Suncor — as the largest Canadian energy company, with a market capitalization of about $40 billion — is now a "must-own" for institutions and investment funds. "The only question is whether you're overweight or underweight," he said.

Calgary Herald, Tues Aug 4 2009
Byline: Shaun Polczer

EDMONTON — Three parallel investigations have been launched by the Alberta government into the fatal stage collapse at the Big Valley Jamboree during Saturday's severe storm in Camrose, Alta.

Occupational Health and Safety had previously ordered Panhandle Productions, the promoter of the annual music event, to hire experts to determine what caused the collapse and how to avoid a similar event.

The result of that investigation would then be reviewed by health and safety authorities to determine if it was complete.

On Tuesday, amid criticism from the Alberta Federation of Labour and after government investigators had spent more time at the scene near Camrose, located about 85 kilometres southeast of Edmonton, a second, separate investigation was ordered by the department.

This one will attempt to answer the same questions as Panhandle's experts do, but will be paid for and staffed by the government.
Winds hit speeds of 100 km/h when the stage collapsed.

Municipal Affairs has also asked for an investigation from Panhandle Productions, due in a month, because a temporary stage falls under provincial building codes.

"We're looking to know whether a permit was granted, whether inspections were carried out and how the stage was designed and built," said spokeswoman Jessica Spratt.

The provincial government's practice of asking companies to do their own investigations, as two out of the three are, was criticized Tuesday.
"It's outrageous that an employer would be the one doing the investigation," said Nancy Furlong, Secretary-Treasurer of the Alberta Federation of Labour. "It's a conflict of interest. It's craziness."

Furlong said an investigation partly paid for by those who are potentially responsible fails to hold up public faith. However, Chodan said the final decision on charges, and if all reports are comprehensive, still rests with the government, not the private sector.

Donna Moore, 35, of Lloydminster, Alta., was killed by falling equipment when the stage gave way.

At least 75 people were hurt during the storm late Saturday afternoon. Camrose Police have concluded their investigation with no charges.
The company responsible for the stage, Premier Global Production, has said there was nothing that could have prevented the collapse because of how quickly the wind arrived.

Brian Andrews, general manager of the Nashville-based company, said the three minutes of warning his workers received before the wind hit was simply not enough. It takes at least 20 minutes to bring down the sails, lights and other roof apparatus in case of approaching extreme weather.

"There just wasn't time," said Andrews, who was at the scene. "That was the worst wind I've ever seen."

Edmonton Journal, Tues Aug 4 2009
Byline: Ryan Cormier

CALGARY - Sunshine Village Corp. has been ordered to pay more than $250,000 in fines and penalties in connection to the 2004 death of a ski hill worker.

Judge Manfred Delong handed down the sentence Wednesday in Banff provincial court after he found the company guilty in January of failing to ensure the health and safety of its workers.

Sunshine was found not guilty of three additional charges it faced under the Occupational Health and Safety Act.

The charges stemmed from an Aug. 31, 2004, incident on the Mount Standish chair lift when 25-year-old lift maintenance helper Karl Stunt sustained a head injury that led to his death six days later.

"A young man of great promise who was obviously loved by friends and family died from what I characterize as the result of momentary inattention or carelessness of three employees of Sunshine Village at the same time," Delong said. ". . . In my view, the level of negligence of the accused corporation was more than minimum, but not high."

The judge ordered Sunshine to pay a $5,000 fine plus $750 victim fine surcharge. He penalized the company further to establish a $250,000 endowment in Karl Stunt's memory at Selkirk College in B. C. Selkirk is the only college in Canada that offers programming directly related to the ski industry.

Karl's father, Bill Stunt, said it is a relief for his family to be at the end of the legal process, but the fact it has taken so long sends a bad message about workplace safety.

"It is ridiculous," Stunt said. "I have nothing but respect for the inspectors and prosecutors, but the fact it took five years is beyond the pale."

A spokesman for Alberta Employment and Immigration said safety investigations are complex and take time to complete before going to court.

Last year, there were 22 companies convicted of breaking worker safety laws, with a total of $5 million in penalties handed out.
But the president of the Alberta Federation of Labour says he believes delays stem from the province not putting enough resources into occupational health and safety.

"The bottom line is they don't put their money where their mouth is in terms of either inspection or enforcement," Gil McGowan said.
Sunshine Village could not be reached for comment.

Calgary Herald, Thurs July 30 2009
Byline: Tanya Foubert, Rocky Mountain Outlook

Gil McGowan, President of the Alberta Federation of Labour

Good afternoon. In a way, I am here today in two capacities.

I'm here first as the President of the Alberta Federation of Labour, which is our province's largest labour organization, representing 29 unions and 115,000 members.

As a provincial advocacy organization, our focus is usually on issues of provincial policy.

But every once in a while, a local issue comes along that has the potential to affect a broad range of our members, not just as workers and union members, but also as taxpayers and citizens.

The proposal in front of us today - to transfer $8 billion of City owned and controlled assets to EPCOR - is one of those issues. That's the first reason I'm here.

The second reason I'm here is more personal. As some of you may remember, up until very recently, I was chair of community planning for the Strathcona Community League. Even though I've moved on from that position, I'm still a proud Edmontonian and issues of municipal planning and development are still near and dear to my heart.

Given my background, and the magnitude of the decision Council is about to make, I simply could not remain on the sidelines.

At this point I'll admit that there are probably many other people better versed in the technical details of this proposal. So I won't try to delve into the intricacies of the transfer.

Instead, I simply want to raise a few questions that continue to float in my head (pardon the pun).

The first question is this: why are we trying to fix something isn't broken?

The Drainage Branch is a very well run city service. It's regarded as one of the highest quality systems in North America. The Goldbar plant is one of the best examples of environmental stewardship and effective water treatment on the continent. And even more importantly, Edmontonians, are very satisfied with the service.

So why, if we've got such a good thing going, do we want to mess with it?

EPCOR has indicated it wants to combine its expertise with the expertise from the Drainage Branch to create a Centre of Excellence. What I don't understand is why we need amalgamation to have cooperation. Surely EPCOR and the Drainage Brach can collaborate within the existing corporate structures.

My second question comes in two parts: why does EPCOR want the assets? And what's in it for citizens?

Reading the Price Waterhouse report and hearing the discussions up to this point it seems to me that this proposal is about two things - getting lower interest rates on loans for EPCOR, and making EPCOR more competitive for contracts outside of Edmonton.

But, is what's good for EPCOR necessarily good for the citizens of Edmonton? Is it really worth giving up direct control of our City's largest asset in order to help EPCOR shave a quarter point off the loans they need for corporate expansion?

On the subject of loans, I'm also concerned that any gain for EPCOR might be balanced by a loss for the City. If they get lower interest because of increased assets couldn't the city face higher rates because of reduced assets?  Just as importantly, this proposal would essentially mean that our public assets would be turned into debt to help finance corporate expansion. I'm pretty sure that most taxpayers would feel justifiably uncomfortable having their public assets used to underwrite potentially risky business ventures.

The third big question I have is: how is all of this going to affect the City's future development planning?

If EPCOR owns the drainage assets, then they control the decisions about how those assets will be deployed, expanded and updated.

This has huge ramifications for Edmontonians for future development.

What leaves me feeling particularly unsettled is knowing, as I do, that not a single City Councillor sits on the EPCOR board - and that all interaction between EPCOR and City Councillors as shareholders is secret.

As a citizen, I would feel much more comfortable knowing that decisions about the future development of the city will be made here in this chamber, in an open forum and by people who are directly accountable to voters - rather than by corporate managers behind closed doors.

The fourth unanswered question I have is this: how is this transfer in the public interest?

When preparing for this presentation, I went searching for tangible ways that Edmontonians would benefit from the transfer. And you know, I was hard pressed to find any.

Will it lead to lower rates for taxpayers? Apparently not.

Will it lead to better service? I've seen no evidence it will. EPCOR's plan is to use the new assets to build its portfolio outside of Edmonton. Improving service here in the City is secondary.

Will it help us plan for our future better? No, it will actually take planning power away from accountable, elected officials and put it in the hands of unelected corporate managers whose interests may not coincide with the public's interest.

In the end, I think there are simply too many troubling questions attached to this proposal.

I urge you to think about these questions, and only move forward if you are completely confident about the answers. Let's not sacrifice public control over development for the sake of corporate empire-building.

Thank you.

Canada is still bringing in temporary foreign workers at a near-record pace despite the recession, but a new study argues our immigration policy's increasing focus on filling jobs will hamper the economy over time by squeezing out qualified permanent immigrants.

A record 193,000 temporary foreign workers received Canadian work permits last year to fill labour shortages - 80,000 more than came in 2004 - as Ottawa expanded the intake to respond to employers' demand for staff.

Immigration Minister Jason Kenney said the sharp recession that struck Canada in late 2008 has hardly put a damper on employers' requests for temporary foreign workers in the first half of 2009, nor have new restrictions, such as a requirement that all jobs be advertised in Canada first, imposed by the government this spring.

"I expected to see a decline, but I was quite surprised to actually see demand for temporary foreign workers steady in the first quarter of this year, and down only slightly in the second quarter," he said in an interview.

Mr. Kenney said the numbers of temporary workers are not expected to squeeze out people recruited as permanent skilled workers, but that more highly skilled temporary workers will eventually stay.

An immediate job allows many immigrants to hit the ground running and have a better shot at success, he said.

A new study sponsored by Toronto's Maytree Foundation, however, argues the growth of temporary work permits is part of a shift in immigration policy to filling short-term job gaps that has gone too far, and will hurt Canada's economy in the long run.

An increasing number are coming as temporary workers or foreign students, some hoping to stay, while the number of those recruited permanently as skilled workers has stayed flat.

Author Naomi Alboim, a Queen's University fellow and former senior bureaucrat, said that diverting resources to temporary workers slows processing of permanent skilled workers, hampering Canada's ability to recruit the best.

In 2008, for the first time, the combined numbers of temporary workers and foreign students, 272,520, surpassed the number of new permanent residents, 247,202. However, there are now more ways for them to stay under provincial programs or a new Canadian Experience Class program.

In the past, Canada typically brought in the lion's share of its immigrants under the Federal Skilled Worker program - which rates applicants with points for things like university degrees, job experience and whether they can speak English or French. Last year, the Conservative government decided to limit the processing of applications under that category to 38 job descriptions.

But research shows those with better overall qualifications do better in the long run than those chosen to quickly fill a job - because they adapt better to economic changes, and find new work faster if they lose a job, Prof. Alboim said.

"We're reducing the number of people assessed on human capital, who we know do best, in favour of a whole lot of temporary people - and, by the way, an increasing proportion of those people are low-skilled people," she said.

In the first six months of 2009, Canada issued 95,060 work permits for specific jobs - almost half of last year's record total, though 9,000 less than in the first half of 2008.

The numbers of temporary workers had already mushroomed by more than 70 per cent from 2004 to 2008, from about 113,000 to 193,000.
Many came under perennial categories such as nannies and seasonal farm workers. But statistics for 2005 to 2007 show large increases in trades like carpenters, welders and pipefitters, and, especially in Alberta, unskilled labourers such as meatpackers, food-plant workers and kitchen staff.

Statistics don't yet show why demand remained high as unemployment rose from 6.2 per cent a year ago to 8.6 per cent last month, or how many temporary foreign workers already in Canada have been thrown out of work.

Those who lose jobs can stay in Canada until their work permits run out, often two years, and usually they aren't eligible for employment insurance. They can only take a job from another employer who has convinced the government that it faces a labour shortage.

Alberta Federation of Labour president Gil McGowan said there have been two trends: highly skilled temporary workers at stalled oil sands projects and construction sites suffered heavy layoffs, but service-sector workers "flipping burgers and changing beds in hotels" have not.
More Canadians are willing to take those jobs now, but some employers feel guest workers work uncomplainingly for less, he argued.

Mr. Kenney said the government has taken steps to better align immigration to the job market, and many companies would have gone out of business without temporary workers - such as an immigrant in his riding who two years ago feared he'd have to shut his two Subway stores because he couldn't keep up with the wage expectations of Calgary teenagers.

Globe and Mail, Wed July 23 2009
Byline: Campbell Clark

A move by the province to increase bitumen upgrading on this side of the border has at least one labour group saying it's too little to be of any significance.

The Alberta Federation of Labour has long been asking the government to plug what it calls a "bitumen superhighway" taking Alberta jobs and bitumen south to the U.S., and says this plan does little to stem the flow. However, the Canadian Chemical Producers Association and Alberta's Industrial Heartland Association are applauding the government's action on the value-added program. But the Canadian Association for Petroleum Producers doesn't see it having much of an impact yet for oilsands operators.

On Tuesday, the provincial government issued a request for proposals to process a share of royalty bitumen in-kind in a move it says will increase bitumen upgrading capacity, enhance Alberta's value-added activity and strengthen Alberta's economy.

Simply put, Alberta will be taking up to 75,000 barrels of bitumen as royalty payment instead of cash and selling it to an operator at commercial prices to upgrade it in Alberta at no additional costs to taxpayers.

"If we take our royalty in cash, we get the cash, and that's the benefit the tax payers get out of it. That's it," said Jerry Bellikka, Alberta Energy spokesman. "If we take it in kind, like we do with conventionals, we have the opportunity to leverage that not only in jobs and economic growth, in upgrading potential, but also some downstream, some petro-chemical potential there as well. So we have the opportunity to leverage it several times and that's what we're trying to do."

Dec. 2 is the deadline for proposals.

"We've been waiting for two years for the Stelmach government's new plan for the oilsands, and now that we've seen it, the best word to describe it is 'underwhelming,'" said Gil McGowan, president of the AFL, one of the province's strongest proponents of an Alberta-first oilsands policy. He predicts thousands of jobs will continue to be "lost down the pipeline" to places such as the U.S. Midwest and Gulf Coast as a result of government's failure to adopt more aggressive policies.

Admitting he didn't have high hopes for the program to begin with, McGowan added he thought once it was rolled out it would provide larger volumes of bitumen for Alberta-based upgrading.

"When I saw the figures, 50,000 to 75,000, I was completely shocked because that's ... a drop in the bucket when it comes to the overall volume of oilsands production." He points out that it represents only 6.25% of the 1.2 million barrels per day produced annually from the Alberta oilsands. McGowan added bitumen collected under the program will, at most, provide feedstock for one new upgrader, and a small one at that. Comparisons with the capacity of existing upgrading facilities put the government's promised bitumen reserve in perspective: Syncrude Canada currently processes 300,000 barrels of bitumen per day; Suncor Energy processes 275,000 barrels and Shell Albian Sands-Scotford processes 155,000 barrels.

"The government's rhetoric on this issue has been big but the program they delivered is shockingly small," said McGowan. "If this is all the Stelmach government has to offer, then Albertans should get used to losing refining jobs to the U.S. because this program is not going to turn the tide."

But Bellikka defended the amount, saying, "We don't want to be the sole supplier of product to an upgrader. ... This is a reasonable figure to look at as an initial supply. It would guarantee a base level of supply to an operation. We would expect that they would go out there and find other sources as well, well beyond the 75,000 we're going to guarantee."

He explained the program has been introduced because it's an opportunity to build some more economic growth into the province to stimulate value more so than the industry hurting in this economic downturn.
Initially, bitumen volumes will not include Alberta's integrated operations such as Petro-Canada, Shell Albian and Syncrude Canada but there's some discussion with industry which may broker change to the program slated to start in 2012.

With the government getting in the upgrading game, Bellikka says government doesn't see it as competing with the major energy players.
"Looking out at the volumes that are being forecast five, 10, 20 years out, he sees a lot of room for a lot of players here," said Bellikka of Energy Minister Mel Knight's take on Alberta's participation.

Even if the program is successful in kick-starting one small upgrader, McGowan predicts it won't do anything to move the province toward the more ambitious goal of refining a greater proportion of Alberta oil into more valuable products like gasoline, diesel and jet fuel. He said the program sets its sights too low both in terms of volume and in terms of how high the government wants to climb the value ladder. He is still calling for more aggressive policies are needed, policies such as export restrictions, conditional lease agreements for companies working in the oilsands and even the creation of a Crown energy corporation to spearhead the construction and operation of Alberta-based upgraders and refineries.

With two-thirds of oilsands bitumen already being upgraded in Alberta, CAPP oilsands and markets vice-president Greg Stringham said the plans are to continue on as a number of operators plan to have upgraders included in expansion plans.

Meanwhile, Alberta's $13.3 billion a year petro-chemical sector is looking to bitumen upgrading as a opportunity to provide valuable feedstock for existing chemical facilities plus potential new investments.

"We recognize the challenges of implementing this vision," said Richard Paton, CCPA president, in a statement. "But a firm commitment to upgrading bitumen here in Canada is a step towards what we hope will be a sufficient series of projects that in the aggregate will represent world scale feedstock opportunities for the petrochemical industry."

Fort McMurray Today, Thurs July 23 2009
Byline: Carol Christian