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EDMONTON - The Supreme Court of Canada has upheld an Alberta law that forbids teachers and other school employees from seeking election or serving as school board trustees.

In an 8-1 ruling Friday, the country's top court found the provincial legislation does not violate the Charter of Rights and Freedoms.

It dismissed an appeal from four Alberta teachers -- three of whom were serving on school boards and a fourth who wanted to seek election -- and the Alberta Teachers' Association.

One of the teachers, Ron Baier of Camrose, called the ruling ridiculous and an infringement of his right to serve as a Catholic trustee.

Baier is principal of Holy Family Catholic School in Waskatenau, part of the Lakeland Catholic School Division. For 15 years, he has been a trustee with Elk Island Catholic Separate Regional Division.

"This is a travesty of justice -- it's absurd, it's asinine, it's unbelievable," Baier said. "How can we stand for something like this?"

Another of the four, Liam McNiff of Sylvan Lake, said the ruling effectively ends his trusteeship with the Red Deer Catholic Regional School Division.

McNiff, who teaches at Lacombe Composite High School in the Wolf Creek School Division, said he is disheartened by the ruling and won't seek a third term in the Oct. 15 school board elections.

"I'm disappointed because I would like to continue out the term and, in fact, I was planning to run for the next one," McNiff said.

"Both of those options are now out, at the moment, if I continue on as a teacher. My option now, if I want to run, is I can ask for leave from the board to run in September, and if elected then I would have to resign (from teaching) in October. It's not a feasible option at this point in time."

ATA president Frank Bruseker slammed the ruling, which he said robs teachers of a vital avenue of political activity.

"What it says is if you're a teacher, it's simply not financially worthwhile to give up being a teacher to go and be a trustee because trustee salaries are just not comparable," Bruseker said. The ATA will continue to lobby the government to change what it sees as "oppressive legislation," he said.

The case focused on amendments to the Local Authorities Election Act passed by the legislature in 2002 after a provincewide teachers strike.

The changes deny teachers and other school board employees the right to run for school board trustee in districts other than those in which they work. Under the amendments, any employee who is elected as a trustee in any school jurisdiction is deemed to have resigned from his or her employment.

Other Alberta legislation, which wasn't at issue before the Supreme Court, already prevents teachers and other school employees from running for office as trustees in the districts in which they work.

The amendments in question began as Bill 205, a private member's bill proposed by then St. Albert Conservative MLA Mary O'Neill, who argued the changes were needed to avoid conflicts of interest on budgets and other financial issues.

Four teachers -- Baier, McNiff, George Ollenberger and Evelyn Keith -- successfully challenged the legislation. At the time, Baier, Ollenberger and McNiff were trustees and Keith was planning a run for office.

The Alberta government won on appeal, after which the teachers appealed to the Supreme Court. They argued that the legislation violated their equality rights and interfered with their fundamental right to freedom of expression.

In delivering the Supreme Court's reasons for judgment, Justice Marshall Rothstein noted that the charter protects voting and candidacy rights, but only in relation to the House of Commons and provincial legislatures.

It is not up to the Supreme Court "to create constitutional rights in respect of a third order of government where the words of the Constitution, read in context, do not do so," he said.

Rothstein also said the teachers did not establish that excluding them from being trustees interferes with their ability to express themselves on matters relating to the education system.

The amendments "may deprive them of one particular means of expression," but "school employees may express themselves in many ways other than through running for election as, and serving as, a school trustee," Rothstein said.

He also rejected the teachers' argument that the legislation infringed on their right to equal protection and equal benefit under the law. Section 15 of the charter doesn't protect teachers or other school employees against discrimination based on their occupational status, Rothstein said.

Four judges agreed with Rothstein, while three others dismissed the appeal for different legal reasons. In a lone dissenting opinion, Justice Morris Fish held that seeking and holding office as a school trustee is a "uniquely effective" means for a person to express views on education policy. Fish found the legislation violates the charter right to freedom of expression.

"It is cold comfort indeed for school employees, who are barred from themselves serving as trustees, to be told that they nonetheless remain free to talk to those who can, or to write letters to their local newspapers," Fish said.

The Alberta Federation of Labour had intervener status in the case. President Gil McGowan said Friday the legislation at issue wasn't ever necessary.

"Our position is that effective measures to deal with conflict of interest were already in place," McGowan said.

"From our perspective, the changes were nothing more than a mean-spirited attempt at payback (for the teachers strike.) The changes were aimed at teachers but they ended up affecting all school-board workers, and they were clearly intended to stop those workers from having the ability to participate in the electoral process and flex their democratic muscles."

Alberta Education Minister Ron Liepert wasn't available for comment. But spokeswoman Shawna Cass maintained the position that the amendments were needed to reduce instances of school trustees falling into conflicts of interest.

"Having a full board consider important issues promotes good decision-making, and is in the best interests of all Albertans," Cass said.

"We look forward to continuing to work with the teachers of this province and the ATA to ensure that Albertans enjoy the best possible school system."

Edmonton Journal, Page B5, Sat Jun 30 2007
Byline: David Howell

EDMONTON - Today's Supreme Court decision upholding controversial changes to Alberta's Local Authorities Election Act may be a narrow technical victory for the provincial government - but it's a real setback for democracy in the province, says the president of the Alberta Federation of Labour.

Up until 2004, teachers and other school board employees were prohibited from running for election in the school districts where they worked on the grounds that, if elected, they would be in a position of conflict of interest. School board workers never challenged those restrictions.

But in the wake of the province-wide teachers' strike of 2004, Klein government MLAs successfully rammed through an amendment to the Act that now prohibits school board employees from sitting as trustees on any school board in the province.

"Effective measures to deal with conflict of interest were already in place - so the amendment was never really about that," says AFL president Gil McGowan.  "Instead, it was a mean-spirited 'payback' law - plain and simple. It was aimed at teachers but ended up affecting all school board workers. And it was clearly intended to stop them from flexing their democratic muscles."

In an 8-1 decision, the high court ruled that, since the provincial government "created the opportunity" for people to run for office as school trustees through provincial statute, it has the right to take that opportunity away. Provincial governments have the right to take these steps, the court said, because municipal and school board governments are not subject to the same protections and guarantees about who can stand for and hold public office as federal and provincial governments.

The majority also ruled that school board employees have other avenues available to them to express their concerns or political beliefs - like writing letters to the editor.

"This decision should be an eye-opener for all Canadians," said McGowan. "Most people assume that our municipal governments and schools are truly independent and open to participation by all qualified citizens. What this ruling shows is that, by being excluded from mention in the Constitution alongside provincial and federal governments, local governments are truly the poor cousins of our democracy."

McGowan says that if whole categories of people can be unilaterally excluded from participation at the whim of a provincial legislature, it calls into question the legitimacy of all local governments.

"This time it was school board workers who they came after," says McGowan. "Who will it be next time?"

McGowan agreed with Justice Fish who wrote in his dissent that the right of school board workers to freedom of expression should extend to the right to run in school board elections:

"Seeking and holding office as a school trustee &  is a uniquely effective means of expressing one's views on education policy.  It is cold comfort indeed for school employees, who are barred from themselves serving as trustees, to be told that they nonetheless remain free to talk to those who can, or to write letters to their local newspapers.  The voices of school employees are simply unlikely to be heard over the din of those who actually run for office and serve if elected." (Baier v. Alberta, 2007, para. 107)

McGowan says he will write a letter to Premier Stelmach asking him to amend the election act again to return to its pre-2004 approach to dealing with questions of conflict-of-interest.

"The Supreme Court has ruled that it's within the Alberta government's power to do what it has done. But that's not the same thing as saying what they've done is right or morally defensible," says McGowan. "Given all his promises about the need to promote greater accountability and democracy in this province, I'll be asking the Premier to do the right thing and tear up this amendment."

The challenge against the amendments to the Local Authorities Elections Act was launched by the Alberta Teachers Association on behalf of several of its members. The ATA won at the lower court level and lost at the Appeal level before appearing before the Supreme Court in November.

The AFL joined the ATA at the Supreme Court as an intervener speaking on behalf of unionized Alberta school board employees who are not teachers.

To see the Supremem Court decision, go here

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For more information contact:

Gil McGowan, President Bus: (780) 483-3021 Cell: (780) 218-9888

Many Albertans get prickly at the prospect of oilsands bitumen flowing to the U.S. for refining. And rightly so -- for how can the province make most of its finite resource if low-priced bitumen and high priced refinery jobs go south? Last fall, Ed Stelmach raised exactly that concern when two major exporters, BP and Encana, announced plans for two large-scale export projects. Stelmach likened bitumen exports to selling off topsoil, clearly a bad idea.

As it turns out, more than a dozen U.S. refineries want to gear up to accept bitumen.

Some forecasts say 1.5 million barrels a day will be going south by 2020 -- more than today's entire oilsands production of 1.25 million barrels a day. About one-third of the bitumen produced today is exported.

The crucial first steps to implement in this export strategy are already being taken. This month, the National Energy Board started hearings into the $2.1-billion Keystone pipeline proposed by TransCanada Pipelines to carry around 435,000 barrels of bitumen a day to Illinois and Oklahoma.

Enbridge is also putting together a pipeline proposal, the Alberta Clipper, for U.S.-bound bitumen.

Approval of a new export pipeline is an irrevocable decision about the use of Alberta's oil reserves, and there's been no opportunity for a public discussion about what's at stake for the province.

The proposed bitumen exports, for instance, are already creating thousands of jobs in Texas to renovate aging refineries, for instance. What other opportunities will flow south? A group of Alberta labour unions is trying to raise that red flag at the NEB hearings. The Alberta Federation of Labour says 18,000 upgrading and refining jobs will be lost if the pipeline is approved, as well as the opportunity to build a more diversified economy.

AFL president Gil McGowan asked the NEB to delay its approval until Albertans and policy makers have a chance to address those issues in a public forum. Because once the pipes are in the ground and the billions invested in re-tooling U.S. refineries, there's no turning back. Alberta and Canada will be tied into the "limited role of miner and extractor." "We're at a crossroads and decisions we make now will affect Alberta and Canada for generations to come. We can't afford to get it wrong," said McGowan in an interview.

"I was asked at the hearing what is the right proportion for export and I said that's what the public should be discussing. These are the resources they own collectively." "The public should be setting the course, not just narrow interests of the big industrial players." The NEB sent a message earlier this year that it does not want to consider the labour federation's concerns: "these are matters of broad public policy that are properly under the purview of federal and provincial government," it said in a February report.

Albertans have heard the NEB refrain before. The Alberta Energy and Utilities Board last fall declined to consider Ft. McMurray's request to delay approval of the three giant projects on the same grounds.

Municipal problems coping with boom are not an EUB responsibility.

That's correct, strictly speaking. But in this deregulated environment, Alberta has no public forum for raising these issues around energy projects. There's no discussion of what's an appropriate target for domestic upgrading nor a policy to promote refining in Western Canada, for instance.

Alberta Energy Minister Mel Knight, like his boss, has backed off earlier concerns about selling off the topsoil. Large-scale exports have the advantage of creating a bigger demand for bitumen, says the department. That will help raise the price (about one-third to half of the price of oil) and that in turn means higher royalties.

The Alberta government is content to delegate these difficult decisions to regulatory agencies, or the market. If a proposal for a nuclear power project came forward, would that too be delegated to the EUB? Or how about the issue of water exports? But elected representatives should remind themselves that delegating these tough decisions doesn't make the MLAs less accountable for the impact of these decisions and the direction they take this province.

Edmonton Journal, Tues June 12 2007, Page A16

CALGARY - If approval is granted to the proposed Keystone mega-pipeline, literally thousands of potential Alberta jobs in upgraders and refineries will be lost and Alberta will miss out on an historic opportunity to build a more diversified economy.

That was the message delivered today by Alberta Federation of Labour president Gil McGowan as he testified before the National Energy Board in Calgary. The NEB is currently considering an application from TransCanada Pipelines to build a major new pipeline to transport huge volumes of unrefined bitumen from the Alberta oil sands to upgraders and refineries in the United States.

The AFL - along with groups like the Communication Energy Paperworkers union and the U of A's Parkland Institute - is attempting to stop or delay the project until policies can be put in place to promote Alberta-based upgrading and refining of bitumen from the oil sands.

"Every barrel of  bitumen shipped down the Keystone pipeline or other similar proposed pipelines is a barrel of oil no longer available for value-added production and job creation here in Alberta," said McGowan.

McGowan argued that as many as 18,000 jobs could be "shipped down the pipeline" if Keystone is allowed to proceed. He pointed out that more than a dozen proposed Alberta upgraders and refineries are on the books - more than enough to handle projected increases in oil sands production. But he said he's worried those local projects "may never see the light of day if their potential feedstock is sent to refineries in places like Illinois, Texas and Ohio."

"Why should we settle for the 17 long-term jobs that Keystone would create at a handful of pipeline pumping stations when we could have 18,000 jobs in upgraders or refineries?" asked McGowan.

"Why should we sit on the sidelines while big, U.S. controlled integrated oil companies use our oil to revive their aging refineries in the U.S. mid-west and on the Gulf Coast - when that oil could be used, instead, to transform Alberta into North America's newest hub for upgrading and refining?"

McGowan reserved some of most scathing criticism for the Alberta and federal governments - who are not appearing at the NEB hearings and who have not raised any objections to the Keystone proposal.

"Where are our governments? Who's protecting the public interest? The failure of our governments to be here and promote Canadian-based, value-added production and protect Canadian jobs is nothing short of a travesty," said McGowan.

"I'm particularly disappointed in Ed Stelmach. During the leadership race he promised to be a champion for Alberta-based upgrading and refining. But the silence from his office is deafening. He and his energy minister, Mel Knight, are missing in action on an issue of critical importance to our province's economic future."

McGowan urged the NEB to use the power granted to it under federal legislation to put the pipeline on hold until a "Canada first" approach to managing the oil sands is developed.

"If you follow our advice, a few pipeline and oil companies might face short-term financial setbacks," said McGowan. "But Albertans, the real owners of the resource, have little to lose and much to gain."

McGowan will be available to talk with the media outside the NEB hearing room after the hearings wrap up today at 1:30 p.m. The hearings are being held on the 2nd floor, 444-7th Ave SW, Calgary.

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For more information call: AFL president Gil McGowan @ 780-218-9888

Note: Full transcripts of the hearings can be obtained by calling Kristen Higgens, NEB Communications Officer, @ 403-292-4800

CALGARY - Under heavy cross-examination from union lawyers, the man in charge of the proposed Keystone mega-pipeline admitted he doesn't really know how much raw bitumen from Alberta will be shipped down his pipeline to refineries in the U.S.

In response to questions from lawyers representing the Alberta Federation of Labour (AFL) and the Communication Energy Paperworkers union (CEP), Robert Jones, Vice President of TransCanada Pipelines, said the amount of bitumen going down the pipeline will be up to oil companies contracting with the pipeline, not TransCanada as owner of the pipeline.

Jones' admission was made shortly after National Energy Board dismissed a motion from the AFL and CEP to subpoena witnesses from Big Oil. The Board ruled that evidence from oil companies with contracts to use the pipeline would not be necessary for the purposes of the hearing currently underway at the NEB's office in Calgary.

"This really makes you wonder who's looking after the public interest," said AFL president Gil McGowan. "The pipeline company says it's only the oil companies who can tell us how much unrefined Alberta bitumen will be shipped to the U.S. - and yet the so-called watch dog agency says it's not necessary to make Big Oil answer those questions. This is no way to make pubic policy."

McGowan was originally slated to appear before the Board on Wednesday (tomorrow), but is now scheduled to give evidence on Thursday, along with Tom Pearson a retired Dow Chemical executive and Diana Gibson, research director of the University of Alberta's Parkland Institute.

McGowan, Pearson and Gibson will all argue that the Keystone pipeline will result in the loss of literally thousands of potential Alberta jobs as upgraders and refineries are built in the U.S. instead of Alberta.

The NEB hearings on TransCanada's application to build the Keystone pipeline will be held in the NEB Hearing Room, 2nd Floor, 444 Seventh Avenue S.W. Calgary AB. Hearings start at 8:30 a.m. and wrap up at 1:30 p.m. each day.

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For more information call:

Gil McGowan, AFL President at 780.218-9888 (cell)

NEB Hearings on pipeline to move unrefined oilsands to U.S. begin

CALGARY - Hearings begin this week before the National Energy Board in Calgary to determine whether or not the first of several "mega-pipelines" designed to move unrefined bitumen from the Alberta's oilsands to refineries in the United States will be allowed to proceed.

The pipeline under consideration is called the Keystone pipeline and is being developed by Canada's largest pipeline company, TransCanada Pipelines (TCP).

The company's application is being opposed by the Alberta Federation of Labour (AFL), the Communications Energy Paperworkers union (CEP) and the University of Alberta's Parkland Institute on the grounds that it would deprive Albertans of literally thousands of high-paying, long-term jobs in upgrading and refining.

The NEB hearings begin today, Monday, June 4, with the board considering a motion from the AFL and CEP to subpoena witnesses from major energy companies such as Conoco-Phillips and Suncor who plan to ship up to 450,000 barrels of bitumen down the Keystone pipeline to the U.S. each day.

The NEB has the power to subpoena such witnesses, but has rarely done so in previous hearings. Lawyers from the AFL and CEP will argue that testimony from companies planning to use the pipeline will be crucial in determining whether or not development of the Keystone pipeline is really in the public interest.

The hearings on the Keystone application will be held in the NEB Hearing Room, 2nd Floor, 444 Seventh Avenue S.W. Calgary AB. The schedule for the hearing is as follows (but may be subject to change). On June 4th hearings will begin at 9:30 am. All other days, hearings will begin at 8:30 am.

Monday, June 4: Motion for AFL and CEP to subpoena major bitumen shippers; cross examination of witnesses from TransCanada pipeline relating to environmental impact, commercial feasibility and socio-economic impact of pipeline.

Tuesday, June 5: Cross examination of witness from TransCanada pipeline continues.

Wednesday, June 6: Cross examination of TransCanada witnesses concludes; cross examination of intervenor witnesses begins; highlights: Gil McGowan, AFL president, will give evidence and be cross examined as will Tom Pearson, a retired Dow Chemical executive who is appearing in support of the AFL's intervention. McGowan will call on NEB to postpone a decision on the application until the federal and provincial governments develop a clearer policy about upgrading and refining Alberta bitumen in Canada.

Thursday, June 7: Evidence from the AFL's McGowan and Pearson continues. Evidence will also be heard from other intervenors.

Friday, June 8: Evidence from CEP National President Dave Coles and Mike McCracken, President of economic forecasting firm Infometrica. McCracken will present results of economic modeling which shows that if the bitumen planned for shipping through the Keystone pipeline were upgraded within Alberta, 18,000 Alberta jobs could be created.

The NEB hearing will then move to Regina for two days of hearings (June 13 and 14) with aboriginal groups. These hearings will be held at the Delta Regina, 1919 Saskatchewan Drive, Regina Sask.

The hearings will then return to Calgary on June 18 for a cross examination of TransCanada witnesses on technical and engineering issues. The hearings are expected to wrap up by June 21 or 22.

Note: The schedule for hearings is subject to change based on the length of testimony, length of cross examination and number of witnesses.

For information about the intervenor's cases and schedule call AFL president Gil McGowan at 780-218-9888. Copies of the AFL's initial submission to NEB can be viewed on the AFL's website, www.afl.org.

The hearings themselves can be viewed live on the NEB website at: http://www.neb.gc.ca/hearings/hearingwebcast_e.htm#oh_1_2007

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For more information call:

Gil McGowan, AFL President at 780.218-9888 (cell)

If this isn't a political slap up the side of the head I don't know what is.

But will Ed Stelmach and the Alberta Tories get the message?

Calgary pollster Bruce Cameron released his latest survey this week. Complete with a headline that screamed "Stelmach stumbles in big cities."

He talked about how the premier's disapproval rating in Edmonton and Calgary has jumped from 15% to 29% since the Steady Eddy days in January when Stelmach was still enjoying his political honeymoon.

After the Cowtown figures are broken out, the picture goes from bad to worse. Cameron noted a "significant and growing discontent" in Alberta's second city where the premier's disapproval rating now stands at 39%.

In Redmonton - where Stelmach's Ukrainian roots were supposed to win back the PC's popularity - the thumbs-down factor doubled from 13% to 29%.

And when Albertans were asked if the Stelmach government was "leading Alberta in the wrong direction," 30% agreed. The same question was put to them in January and only 10% answered "wrong."

In Calgary, 41% said Ed is leading us down the garden path.

This is troubling for the Tories for sure - especially now that the byelection in Ralph Klein's old Calgary Elbow riding appears to be turning into an Ed-a-rendum.

This is not the end of the Tories as we know them. When Cameron asked the crucial "if an election were held tomorrow" question, the PCs still got 47% support province-wide, but were down nine points in Edmonton and a disturbing 19 points in Calgary.

Sadly, Cameron doesn't put a finger on what's bugging Albertans.

But you can bet the Stelmach PCs' growth management blunders rank right up there.

And there was more where that came from yesterday after Enbridge CEO Pat Daniel filed his provocative plan to build the Alberta Clipper big inch oil pipeline from Hardisty to the U.S. Midwest.

This project could hit 800,000 barrels a day if proposed future expansions are built.

Daniel called the application "timely," mainly because of the "growing supplies of crude oil from Alberta's oilsands."

Which sounds like more bitumen and jobs down the pipeline to the States.

It's the thing Ed Stelmach compared to stripping the "topsoil" from a farm when he was on his game during the PC leadership race. But since winning the job, he's done diddly squat about it.

On Monday, crucial hearings begin before the National Energy Board on another job-stealing raw bitumen line to the U.S.

The Alberta Federation of Labour has already branded TransCanada's Keystone pipeline a "devil's bargain."

"Why, we ask," AFL president Gil McGowan blasted in his submission, "should Canadians settle for 17 jobs when they could have 18,000?

"Labour's interest is in keeping industry and good jobs in Canada," McGowan boomed.

Shouldn't that be the government's job, too?

And what applies to Keystone clearly applies to the Alberta Clipper, too.

Meanwhile, the Alberta Tories plan on sending one lowly market analyst to monitor the Keystone hearings.

Another Stelmach government boondoggle blew up right on schedule yesterday when the Fraser Institute released its "business case" for the carbon dioxide "backbone" pipeline from the tarsands to a bunch of old Alberta oilfields like Pembina and Swan Hills/Judy Creek.

This is the magic wand technology first dreamed up by Ottawa Liberal Leader Stephane Dion - but later endorsed by the Stelmach government - to pump oil-sands plant emissions down oilwells to hopefully enhance recovery, and solve global warming, all at the same time.

The price tag going in is $1.5 billion with none of the engineering actually done. So you can bet your mortgage that it will be at least triple that amount.

The right-wing think-tank determined that "current demand is very small."

And no wonder, considering these target oilfields are up to 50 years old, and there will be more than enough COC generated from Edmonton-area upgraders to satisfy that market.

Which led study authors Gerry Angevine and Dara Hrytzak-Lieffers to conclude that building the pipeline "does not make sense from a business perspective," and "cannot be justified on the basis of the economics." But more to the point: "public support for a backbone project does not appear to be justified."

Except that's clearly the direction the Stelmach government appears to be headed and in all likelihood the Backbone Pipeline will end up joining the wrecks from the bad old Peter Lougheed/Don Getty days like NovAtel and the Canadian Commercial Bank.

Which is what the Cameron Strategy poll seems to be already signalling.

Edmonton Sun, Fri June 1 2007, Page 54
Byline: Neil Waugh

[Edmonton] With Alberta facing a growing number of labour disputes, the Alberta Federation of Labour said today that it's time for employers to take a reality check before they enter negotiations.

"We face the prospect of two strikes in the province this week," notes AFL President Gil McGowan, "a public sector strike by transit workers in Calgary and a private sector strike by brewery workers in Edmonton."

"In both cases, the employers have come to the table looking for thinly disguised concessions from workers. At Molson it's two-tiered wage and benefit systems, and in Calgary it's a shift towards lower paid shuttle bus jobs," says McGowan.

McGowan says employers have to get their heads around the idea that concession demands won't fly - and don't make sense - during economic boom times.

"The Alberta economy is booming, inflation is seriously eroding everyone's earning power, employers everywhere are saying how hard it is to attract and retain new staff - but both the Molson Coors Brewing Company and the City of Calgary pretending the new economic realities of Alberta don't count at the bargaining table."

"Employers across the province should take a long look at the consequences of living in that kind of dream world," says McGowan. "Both CAW Local 284 at the Molson Edmonton brewery and ATU Local 583 representing Calgary transit workers are either taking strike action or are on the verge of taking strike action - with the full support of the province's labour movement."

"I urge these employers to take their unrealistic concession demands off the table and to begin negotiating the level of settlement workers need and deserve in an economy with a 5% inflation rate, an unemployment rate at 3.4% and no end to the boom in sight," concluded McGowan.

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For more information call:

Gil McGowan, AFL President at 780.218-9888 (cell)

CALGARY - Wholesale changes to Alberta's royalty regime could threaten the viability of natural gas production in the province and raise rates for consumers, industry insiders told the Alberta government's Royalty Review Panel meeting in Calgary Wednesday.

Rising costs, falling prices and an uncertain regulatory environment are already leading to reduced rig counts, lower production and ultimately, lower government revenues, said Tailisman Energy Inc. CEO Jim Buckee.

"You have a zero-per-cent royalty you get zero; with a 100-per-cent royalty you also get zero," Buckee told the province's travelling review panel. "The current regime has worked and is best left alone."

Where previous sessions have focused on the government's share of oilsands revenues, Wednesday's discussions revolved around conventional royalties and how they relate to natural gas.

Buckee argued higher royalties would discourage activity at a time when high costs and falling prices are putting the bite on an already margin-squeezed segment of the oil and gas business.

According to the Canadian Association of Oilwell Drilling Contractors (CAODC), 107 of 885 rigs were working this week, down from 342 active rigs at this time last year.

Likewise, the number of new well licences issued by the province are off a third from last year.

According to Buckee, declining field activity is a leading indicator of the overall economic viability of natural gas.

Talisman, along with Canadian Natural Resources Ltd. and EnCana Corp. earlier this year reigned in gas spending in response to higher costs and lower prices. An additional financial load in the form of higher royalties will inevitably lead to lower drilling, lower production and in turn, lower government royalty payments.

If major oil companies balk at paying higher royalty rates on oilsands projects, then the Alberta government should consider developing the resource itself by working in equity partnerships with more co-operative companies, says Gil McGowan, president of the Alberta Federation of Labour.

"I think we should learn a lesson from other oil-rich jurisdictions, especially Norway. And that lesson is that if private sector firms aren't willing to develop our resources in the public interest we shouldn't be afraid to do it ourselves. Royalties are one way to guarantee returns for the public, but ownership is another."

McGowan's remarks were made as part of his presentation to the Alberta government's the government panel.

The hearings continue through today.

If major oil companies balk at paying higher royalty rates on oil sands projects, then the Alberta government should consider developing the resource themselves by working in equity partnerships with more cooperative companies, says Gil McGowan, President of the Alberta Federation of Labour.

"I think we should learn a lesson from other oil rich jurisdictions, especially Norway. And that lesson is that if private sector firms aren't willing to develop our resources in the public interest we shouldn't be afraid to do it ourselves.  Royalties are one way to guarantee returns for the public, but ownership is another."

McGowan's remarks were made as part of his presentation to the Alberta government's Royalty Review Panel meeting in Calgary today.

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Gil McGowan, AFL President  at 780.218-9888 (cell)