Stop Building Bitumen Highways to the U.S.
CALGARY - Starting today and continuing tomorrow, lawyers representing the Alberta Federation of Labour (AFL) will grill executives from Enbridge Pipelines on their plans to build yet another massive "bitumen highway" to refineries and upgraders in the United States.
The cross-examination will take place at the offices of National Energy Board in Calgary as the Board considers Enbridge's application to build a new pipeline, dubbed the Alberta Clipper. If approved, the Clipper will have the capacity to transport more than 600,000 barrels of diluted bitumen from the Alberta oil sands to buyers south of the border each day.
"We're not opposed to new pipelines," says AFL president Gil McGowan. "But the big question is: what are these pipelines going to be used to transport? We should be shipping value-added products, not diluted bitumen. If these pipelines end up being nothing more than bitumen highways, then we'll be exporting literally thousands of high-paying, family-sustaining jobs along with our oil. That's simply not in the best interests of Albertans."
McGowan says the Stelmach government's recently announced plan to take an undetermined amount of bitumen in lieu of royalties and make it available for domestic upgrading is an "interesting idea" - but he says it doesn't come close to being the kind of comprehensive "Alberta first" upgrading strategy that the province needs.
"We'll be asking the Board to reject Enbridge's development application or at least delay making a final ruling until the Alberta government has put a comprehensive policy in place," says McGowan.
"If this project is approved - on top of TransCanada Pipelines' Keystone project that was approved in September - then it will be game over. Big energy companies will start investing in U.S. upgrading capacity and Alberta will have missed its opportunity. We simply can't afford to let these pipelines proceed until Alberta has put a value-added policy framework in place. If the pipelines come first, developing a policy will be like closing the barn door after the horse has already gotten out."
In addition to challenging the Alberta Clipper, the AFL is supporting the Communications, Energy and Paperworkers Union of Canada in its efforts to lobby the Federal cabinet to stop the Keystone pipeline from winning final approval. The cabinet has to give final approval to all recommendations from the NEB - something it hasn't yet done with the Keystone project.
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For more information call:
Gil McGowan, AFL President @ 780.218-9888 (cell)
Temporary Foreign Workers: Alberta's disposable workforce
An analysis of the 123 files handled by the Advocate reveals a troubling picture of how Alberta is treating this group of workers. Quite frankly, we are exploiting their vulnerability and taking advantage of their precarious position.
Conference Board Gets it Wrong on Wages
The Alberta Federation of Labour responded today to a Conference Board of Canada study, released this morning, stating that wages across Canada are on the rise due to wage pressure in Alberta. The AFL points out that the study is methodologically flawed and does not reflect the actual wage patterns in Alberta for the first part of 2007.
"The Conference Board has dressed up a survey of employers as a bona fide study," says AFL President Gil McGowan. "For all the talk of mythical wage increases, the reality for Alberta workers is one of stagnant real wages."
The AFL points out two flaws in the Conference Board analysis. First, it is not a report of actual wages, but is instead a survey of employer "forecasts" for the next year. Second, its reported wage increases do not factor for inflation, which is currently running at around five percent in Alberta.
"The actual data for wages in 2007 shows a different picture than the Conference Board conclusion," observes McGowan. "For the first seven months of 2007, average hourly earnings show no increase whatsoever - even before factoring for inflation."
According to Statistics Canada (CANSIM Table 281-0029) average nominal hourly wages in Alberta was $20.05 in January 2007. In July 2007 - seven months later - it was $20.04. If inflation is factored in, wages actually dropped during the period.
In fact, Alberta wages are not going up during this boom, says the AFL. "According to Statistics Canada data, average real hourly wages was lower in 2006 than it was in 1999," notes McGowan. "Workers are not getting ahead in this boom. They are, at best, treading water."
The problem, says McGowan, is that bad labour laws, aggressive employer tactics, the growing use of temporary foreign workers and spiraling inflation are preventing Alberta workers from benefiting from the boom.
"When it comes to wage data, I will put my trust in Statistics Canada over some employer survey any day," says McGowan.
"The real issue here is why wages are not going up and what we can do about," concludes McGowan.
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For more information call:
Gil McGowan, AFL President @ 780.218-9888 (cell)
No need to be sucked in by Big Oil's Big Jobs Scare
I agree and would add that the Premier should also start thinking like a negotiator.
Unfortunately, as our province's leading man in what is essentially a crucial set of negotiations over the price of our collectively-owned resources, Stelmach has so far failed to inspire confidence.
He doesn't seem to grasp the notion that the goal of negotiations is to get the best possible deal for his side (Alberta citizens) no matter how many feathers that might ruffle on the other side (Big Oil).
In particular, Stelmach seems to be falling into the trap that swallows up many rookie negotiators who mistakenly believe that negotiation automatically means "cutting it down the middle."
Big Oil has exploited this weakness admirably.
By inundating Albertans with an almost daily barrage of hysterical reports and dire predictions, they have successfully established their stated position (that Alberta can't afford any major royalty changes) as one pole in the debate and the recommendations of the blue-ribbon Royalty Review Panel as the other pole.
The problem with this is that the panel recommendations were already a compromise between what the panelists thought Albertans deserved and what they thought industry would be willing to pay. So any move to "cut it down the middle" would, in the memorable words of one of the panelists, be a "compromise on a compromise."
This tactic of taking extreme positions in order to "move the goalposts" at the bargaining table is the oldest trick in the book - yet the government seems to be falling for it.
The truth about negotiating is that compromise is sometimes necessary - but not always.
It depends on your goals and, even more importantly, your bargaining power.
When it comes to the royalty debate, the government's goals should be clear.
Both the royalty panel and the Auditor General have demonstrated that, when compared to the citizens of other oil-rich jurisdictions, Albertans are not getting their fair share.
In fact, both the panel and the auditor proved that Alberta has forgone literally billions of dollars in potential revenue over the past decade - revenue that could have (and many would argue, should have) been used to help our schools, hospitals and communities cope with the pressures of growth.
That leaves us with the crucial question of bargaining power. On this score, it seems Big Oil has, once again, bamboozled the Premier into thinking they have us over a barrel.
As a labour leader, I would be the first to raise the alarm if I thought thousands of jobs might actually be lost in Alberta. But, I frankly don't buy Big Oil's scare tactics - and neither should the government.
We in the labour movement have sat across the bargaining table from many of these energy corporations - and we've seen these kinds of threats and ultimatums before.
Based on that experience, we feel the questions the Premier should be asking is not: "Would job losses be bad?" Of course they would be. The real question is: "Are the threats being made by industry credible?"
Looking at the world energy market and Alberta's increasingly important role in it, I think it's clear that Big Oil would never leave the province - even if all of the royalty panel's recommendations were implemented.
They won't leave because what really matters when it comes to investment decisions is price - and the price for oil is clearly going nowhere but up.
They won't leave because other oil-producing jurisdictions have also been raising their royalty rates - often much more dramatically than what's being proposed here in Alberta.
They won't leave because, the royalty panel's recommendations aren't really that radical - for example, they keep in place the infamous penny-on-the-dollar royalty for oil sands and guarantee that more than 80 percent of gas wells will pay lower royalties at current prices.
Finally, they won't leave because about 80 per cent of the world's proven petroleum reserves are under the control of national oil companies - and thus out of reach of reach for Big Oil. Unless they want to get out of the oil business altogether and start manufacturing toothpaste, Alberta is one of the few places left for them to invest.
Taken together, all of this is called bargaining power. If anyone is over a barrel, it's Big Oil.
Alberta's bargaining position is so strong, in fact, that we should ask for more than what was proposed by the royalty panel, not less.
One obvious target would be the one-cent oil sands royalty, which is an unnecessary incentive when oil is trading at $90 per barrel.
Another target could be the panel's proposed "upgrader royalty credit."
Most Albertans agree that steps are needed to stop unrefined bitumen from being shipped to upgraders and refineries in the U.S. But is the best way to encourage domestic upgrading really to provide billions of dollars in public subsidies to developers?
Wouldn't it be cheaper and more efficient to simply impose export regulations favouring local upgraders, as former Premier Lougheed did in the 70s to promote the development of a homegrown petrochemical industry?
The bottom line is that even if the government acts aggressively on royalties, Big Oil will continue to invest in Alberta because there's still be lots of money to be made - and because there's nowhere else for them to go.
Playing this kind of hard-ball with the province's dominant industry may make some people feel a little queasy. But it worked for Premier Lougheed in the 70s; it worked for Alaska's Republican governor last year; and it's working for Newfoundland's Conservative premier Danny Williams right now.
So instead of dismissing the royalty panel's proposals as unwarranted "government intervention," Albertans should look at them for what they really are: good business and the bare minimum we should accept for the sale of our assets.
Calgary Herald, Wed Oct 24 2007, Page A19
Gil McGowan, AFL President
It's Big Oil 'over the barrel' in bargaining
I agree and would add that the premier should also start thinking like a negotiator.
Unfortunately, as our province's leading man in what is essentially a crucial set of negotiations over the price of our collectively owned resources, Stelmach has so far failed to inspire confidence.
He doesn't seem to grasp the notion that the goal of negotiations is to get the best possible deal for his side (Alberta citizens) no matter how many feathers that might ruffle on the other side (Big Oil).
In particular, Stelmach seems to be falling into the trap that swallows up many rookie negotiators who mistakenly believe that negotiation automatically means "cutting it down the middle."
Big Oil has exploited this weakness admirably.
By inundating Albertans with an almost daily barrage of hysterical reports and dire predictions, they have successfully established their stated position (that Alberta can't afford any major royalty changes)
as one pole in the debate and the recommendations of the blue-ribbon royalty review panel as the other pole.
The problem with this is that the panel's recommendations were already a compromise between what the panellists thought Albertans deserved and what they thought industry would be willing to pay. So any move to "cut it down the middle" would, in the memorable words of one of the panelists, be a "compromise on a compromise."
This tactic of taking extreme positions in order to "move the goalposts" at the bargaining table is the oldest trick in the book -- yet the government seems to be falling for it.
The truth about negotiating is that compromise is sometimes necessary -- but not always.
It depends on your goals and, even more importantly, your bargaining power.
When it comes to the royalty debate, the government's goals should be clear.
Both the royalty panel and the auditor general have demonstrated that, when compared to the citizens of other oil-rich jurisdictions, Albertans are not getting their fair share.
In fact, both the panel and the auditor proved that Alberta has forgone literally billions of dollars in potential revenue over the past decade -- revenue that could have (and many would argue, should have) been used to help our schools, hospitals and communities cope with the pressures of growth.
That leaves us with the crucial question of bargaining power. On this score, it seems Big Oil has, once again, bamboozled the premier into thinking they have us over a barrel.
As a labour leader, I would be the first to raise the alarm if I thought thousands of jobs might actually be lost in Alberta. But, I frankly don't buy Big Oil's scare tactics -- and neither should the government.
We in the labour movement have sat across the bargaining table from many of these energy corporations -- and we've seen these kinds of threats and ultimatums before.
Based on that experience, we feel the question the premier should be asking is not: "Would job losses be bad?" Of course they would be. The real question is: "Are the threats being made by industry credible?"
Looking at the world energy market and Alberta's increasingly important role in it, I think it's clear that Big Oil would never leave the province -- even if all of the royalty panel's recommendations were implemented.
They won't leave because what really matters when it comes to investment decisions is price -- and the price for oil is clearly going nowhere but up.
They won't leave because other oil-producing jurisdictions have also been raising their royalty rates -- often much more dramatically than what's being proposed here in Alberta.
They won't leave because the royalty panel's recommendations aren't really that radical -- for example, they keep in place the infamous penny-on-the-dollar royalty for oilsands and guarantee that more than
80 per cent of gas wells will pay lower royalties at current prices.
Finally, they won't leave because about 80 per cent of the world's proven petroleum reserves are under the control of national oil companies -- and thus out of reach for Big Oil. Unless they want to get out of the oil business altogether and start manufacturing toothpaste, Alberta is one of the few places left for them to invest.
Taken together, all of this is called bargaining power. If anyone is over a barrel, it's Big Oil.
Alberta's bargaining position is so strong, in fact, that we should ask for more than what was proposed by the royalty panel, not less.
One obvious target would be the one-cent oilsands royalty, which is an unnecessary incentive when oil is trading at $90 per barrel. Another target could be the panel's proposed "upgrader royalty credit."
Most Albertans agree that steps are needed to stop unrefined bitumen from being shipped to upgraders and refineries in the U.S.
But is the best way to encourage domestic upgrading really to provide billions of dollars in public subsidies to developers?
Wouldn't it be cheaper and more efficient to simply impose export regulations favouring local upgraders, as Lougheed did in the 1970s to promote the development of a homegrown petrochemical industry?
The bottom line is that even if the government acts aggressively on royalties, Big Oil will continue to invest in Alberta because there's still lots of money to be made -- and because there's nowhere else
for them to go.
Playing this kind of hard-ball with the province's dominant industry may make some people feel a little queasy.
But it worked for Lougheed in the '70s, it worked for Alaska's Republican governor last year, and it's working for Newfoundland's Conservative Premier Danny Williams right now.
So instead of dismissing the royalty panel's proposals as unwarranted "government intervention," Albertans should look at them for what they really are: good business and the bare minimum we should accept for the sale of our assets.
Calgary Herald, Wed Oct 24 2007
Byline: Gil McGowan
High Court Overturns Labour Board Decision
EDMONTON-In an important and strongly-worded decision released yesterday, the Alberta Court of Appeal overturned a controversial Labour Relations Board (LRB) decision which allowed Finning International in 2005 to rid itself of a union collective agreement by establishing a new company for part of its operations. At the time the decision was considered by many to fly in the face of available evidence. (Please backgrounder below on issue, including a timeline.)
"This is an important decision by the three Justices of the Court of Appeal," says AFL President Gil McGowan. "It reverses a terrible decision by the Alberta Labour Relations Board (LRB). Finning had created a new blueprint for union busting, and the LRB was letting them get away with it. Thankfully the Court of Appeal saw through it and has stopped it."
The unanimous decision pertains to a dispute in 2005, in which Finning International created a new entity, OEM Remanufacturing, to take over Finning's component rebuilding operations. In the transfer OEM evaded the existing contract with the International Association of Machinists (IAM) and instead signed a contract with the Christian Labour Association of Canada (CLAC).
An original LRB decision ruled OEM was a successor to Finning and that the two companies were, in fact, a common employer. Normally this would have meant that IAM would have maintained its status as official bargaining agent and the workers would have been protected by the existing IAM collective agreement with Finning.
Two months later, adopting a highly unusual procedure, the Labour Relations Board reconsidered the decision at the request of the employer. In that reconsideration, a five-person "superpanel" consisting of the LRB Chair Mark Asbell, two Vice-Chairs and two Board members overturned the original ruling. IAM then appealed to the courts.
"It was a thinly-veiled attempt to bust our union, and we were determined to fight it," says IAM Lodge 99 President Bob MacKinnon. "This is an important day for us, the Machinists, and for all unionized workers. It is also a great day for the democratic process: the Court has recognized that where workers have voted to be represented by a union, that decision must be respected by employers in Alberta."
In its decision, the Appeal Court criticized the LRB superpanel for substituting its opinion for the factual findings of the original panel. The Appeal Court also found that the panel had deviated from well-established successorship principles clearly evident in the Boards own previous rulings and in court decisions. It ruled the decision was "patently unreasonable" and ordered the original decision re-instated. "Patently unreasonable" is a legal term indicating that the decision was "clearly irrational" or "bordering on the absurd."
"Quite frankly, the LRB messed up on this," says McGowan. "It speaks to ongoing problems at the LRB and will deepen the growing mistrust unions have with the Board's lack of visible objectivity. It is gratifying that the Court of Appeals recognized the superpanel's rush-to-judgment for what it was."
The decision leaves the IAM free to pursue its attempt to ensure that the successorship decision leads to full remedies for its wronged members.
"It is a shame that workers need to rely on judges to uphold our democratic rights," notes McGowan. "That is supposed to be the job of the Labour Relations Board."
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For more information call:
Gil McGowan, AFL President @ 780.218-9888 (cell)
Bob McKinnon, AIM Lodge 99 President @ 780.218-9888 (cell)
BACKGROUNDER:
High Court Overturns Labour Board Decision
Blueprint for Union Busting Now Off the Table: The Significance of the Decision
- It is rare for LRB decisions to be overturned by the courts. The bar for doing so is very high.
- The case was a controversial one. It related to a new technique for union busting, and included the involvement of CLAC, a bargaining agent mistrusted by mainstream unions.
- The decision by the Appeal Court raises serious questions about the process used by the Reconsideration Panel.
- Unions have been growing increasingly frustrated at the LRB for its lack of transparent objectivity.
- The Alberta Court of Appeal does not have a reputation for progressive decisions.
Timeline of Finning/OEM Case
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Why are Finning & OEM "Common Employers"
- OEM did not demonstrate sufficient legal and operational independence from Finning International.
- Finning Canada, a wholly-owned division of Finning International, paid the total costs (approximately $87 million) for the construction of the new OEM plant
- Finning Canada financed all of the money for the creation of OEM through the purchase of two existing independent firms
- Finning International controls 100% of the Class A (controlling) shares in OEM's parent company
- All CRC work was subsequently transferred to OEM
Stand Up to Big Oil Scare Tactics
Since the release of the Royalty Review Panel's report and final report (click here): big oil companies have been making threats about the "economic disaster" that will ensue in Alberta if the Stelmach government adopts recommendations to increase energy royalties.
Companies like Encana, Canadian Natural Resources Ltd., Exxon and Petro-Canada have all threatened to slash investment and lay-off thousands of workers if any changes are made to Alberta's now infamous penny-on-the-dollar oilsands royalty regime.
The AFL has been working on this issue for a long time and we know that these are empty threats. We need to stand firm and not be intimidated by Big Oil's scare tactics.
During the Klein years, the energy industry grew accustomed to getting its way and paying royalties which both the government's own expert royalty review panel and the provincial auditor general now describe as ridiculously low by international standards.
What that means is that ordinary Albertans - as owners of our province's energy resources - have been losing out on literally billions of dollars in revenue every year for almost a decade.
Instead of being available to pay for education, health care, infrastructure and other important public services, this money has been used to line the pockets of corporate investors and managers.
So the question isn't really "can we afford to increase royalties?" The real question is "can we afford not to?"
The bottom line is that, even if the proposed royalty reforms are implemented, oil companies will continue to invest heavily in Alberta - because it will still be one of the best places in the world for them to make money and because, frankly, they have nowhere else to go.
What you can do:
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Contact your MLAs and the Premier. Tell them that working Albertans don't buy Big Oil's scare tactics - and neither should the government. Tell them that the royalty panel's recommendations should not be watered down and that, in fact, the government should go further. You can use this sample letter or write your own.
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Learn more about the issue: See the Alberta Federation of Labour's presentation to the Royalty Review Panel. The Parkland Institute published a report, "Selling Alberta Short" on 17 October 2006 - both the report and the summary point out that the Royalty Review Panel's recommendations don't go far enough in helping Albertans get a fair share of resource revenues in this province.To see the report, summary and accomanying news release, go to the Parkland website. The Pembina Institute published a Resource Royalty Primer at the beginning of October - click here to read it.
Federation organizes royalty rally in Ft. McMurray so workers in Alberta’s oil sands heartland can speak for themselves
EDMONTON-If you want to know what rank-and-file oil industry workers really think of about energy royalties, don't go to the so-called "Grassroots Oil Workers Rally" at the Legislature tomorrow – go to the rally being held Thursday night in the heart of Alberta's oil sands country.
"Despite it's billing, tomorrow's rally isn't really a grassroots oil workers rally – it's a rally for the bosses and managers of small to medium-sized energy companies," says Gil McGowan, president of the Alberta Federation of Labour.
"These are people who have bought into the scare tactics currently being used by Big Oil. Obviously, they have a right to speak for themselves. But let's be clear: they don't speak for anything close to a majority of Albertans working in the oil patch or related industries."
In an effort to give the thousands of people working in Fort McMurray a platform of their own, the AFL – along with the International Brotherhood of Electrical Workers and the Communication, Energy Paperworkers union – will be hosting a rally and information forum at the Timberline Ballroom in the Sawridge Hotel, starting at 9 p.m.
What: The Real Oil Workers Rally and Forum
Where: The Timberline Room, Sawridge Hotel, 530 MacKenzie Boulevard, Fort McMurray
When: 9-10:30 p.m., Thursday, October 18
Speakers at the union-sponsored event will include McGowan, IBEW's Barry Salmon and others. There will also be an open mike for people to speak from the floor.
"It's always scary when the people who sign your paycheques start talking about job loss," says McGowan. "But it's clear that a strong majority of workers in this province – regardless of what industries they happen to be in – want a much better deal on the resources that we all own collectively as citizens. And they're not about to back down just because a few cranky CEOs have been rattling their sabres."
"Right now, Big Oil is behaving like a kid throwing a tantrum," concludes McGowan. "They're stamping their feet and making threats. But they're not about to leave the sandbox – because there's too much money to be made and, frankly, because there's nowhere else for them to go."
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Gil McGowan, AFL President @ 780.218-9888 (cell)
Labour Economic Monitor (October 2007)
Labour Economic Monitor (October 2007)
As the economic boom in Alberta reached its crest over the last two years, employers and the business media alerted the public to a new problem: the "labour shortage". At first this was described as a shortage of skilled labour, especially in the construction and health care sectors. Very quickly, however, the "hospitality sector" was identified as another area of the economy starved for labour.
New Data Shows Workers Not Getting Ahead in the Boom
New research produced by the Alberta Federation of Labour and the Parkland Institute shows that wages in Alberta are lagging behind the rate of inflation. As well, inequality is on the rise in the province. The numbers reveal a disturbing trend that suggests average Albertans are not benefiting from the boom.
The research is one of the highlights of Treading Water: Workers, Wages and the Boom, a conference this weekend co-sponsored by the AFL and Parkland Institute. The conference runs Friday evening and all-day Saturday at the downtown campus of Grant MacEwan College.
Some of the data to be presented at the conference include:
- After factoring for inflation, the average hourly wage in Alberta in 2006 was $19.30. In 2001 it was $19.37. Decreases were found in many industries.
- Real wages in construction have dropped, from $25.28 in 2001 to $23.35 in 2006.
- Preliminary data for the first part of 2007 shows stagnant and declining wages.
- Despite the boom Alberta has become the province with the highest percentage of employed clients visiting food banks.
- Corporations are benefiting from the boom. In current dollars, Alberta corporate profits rose from $12 billion in 1998 to $54 billion in 2006
"The bottom line is that average Albertans are not benefiting from Alberta's boom. Wages are stuck in neutral," says Parkland Executive Director Ricardo Acuna. "Inflation is eating up any minimal wage gains being made by workers and as a result inequality is on the rise."
"Basically the claim that wages are skyrocketing in Alberta is a myth," says AFL President Gil McGowan. "The boom is only working for oil companies and a handful of people at the top of the pile. For most of us, the struggle to make ends meet continues."
The conference will also highlight how the boom is making things worse for some groups. For example, Aboriginal unemployment is on the rise, and young workers are falling farther behind.
Other highlights of the conference include:
- Friday 7:00 pm. Keynote Speaker, Sam Gindin: "The Politics of Wages: Who's Holding You Back and Why."
- Saturday 9:00 a.m.: Official release of new wage research by AFL and Parkland
- Saturday 3:30 p.m.: "Getting More In Your Wallet: Policy Solutions"
The media are welcome during all portions of the conference.
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For more Information:
Ricardo Acuna, Parkland Institute Executive Director, (780)492-8558, (780)951-7180 (cell)
Gil McGowan, AFL President @ 780.218-9888 (cell)