EDMONTON - Alberta Federation of Labour president Gil McGowan will be available to speak to media this evening about the vote on Bill C-377.

The bill, which critics say will undermine the ability of unions to act as an effective voice for working people, is expected to reach third reading today. If it passes that vote, it could be ratified by the Senate early in 2013.

“This is a political bill. In the same way that they have cut funding to environmental groups and women’s groups, they are trying to weaken and muzzle a strong progressive voice,” Alberta Federation of Labour president Gil McGowan said. “Bill C-377 violates the Charter rights of Canadians, including the right to privacy and the right to association. It’s a badly written bill, and will likely not survive a challenge in the courts.”

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CONTACT: Gil McGowan, AFL president, 780-218-9888

CALGARY – Nexen Inc. began 2012 as a troubled oil and gas company struggling to meet its production targets and appease its shareholders.

It ends the year on the brink of being sold to China's CNOOC Ltd. for $15.1 billion – the Asian superpower's largest-ever overseas foray.

The transaction reverberated beyond Nexen's sleek glass office tower in downtown Calgary, past the pocketbooks of its investors, all the way to Ottawa.

It forced Prime Minister Stephen Harper to weigh whether foreign state-owned enterprises ought to own Canadian resource companies and, if so, which players are welcome and what extent of control is acceptable.

He ultimately decided that SOEs deserve more scrutiny than private ones, and that the oilsands – the third-biggest reserves on the plant – warrant greater protection than other resources.

"Harper was caught a little flat-footed in the sense that I don't think he fully understood both the political reaction to the CNOOC bid and that there might be subsequent bids from state-owned companies coming into the Canadian oilsands," said Queen's University business professor David Detomasi.

Nexen started 2012 in a rough spot. Marvin Romanow made an abrupt exit as CEO in January. The company's flagship Long Lake oilsands project had yet to come close to producing the volume of crude it was designed to, outages at a North Sea offshore platform were causing headaches and Yemen had just booted it out of a major oil project.

Investors' patience was wearing thin.

It would later be revealed that negotiations to sell Nexen to CNOOC began in earnest once Romanow was out the door.

CNOOC was rebuffed twice before Nexen (TSX:NXY), under the leadership of interim CEO Kevin Reinhart, accepted its offer.

But winning over Nexen's board of directors and shareholders would be the least of CNOOC's challenges.

Gordon Houlden, the head of the University of Alberta's China Institute, said the subject would not have been so prickly if it had been France or Norway bidding for Nexen, and not China.

"Certain state enterprises, certain countries, come with more baggage and China is that because of its size, because of its internal complexities, its history, its profile," said Houlden, a former diplomat with postings in China.

On Dec. 7, the CNOOC-Nexen deal was given Ottawa's blessing.

So, too, was the $6-billion acquisition of Progress Energy Resources Corp. (TSX:PRQ) by Malaysia's state oil and gas company. That deal would have been relatively uncontroversial under ordinary circumstances, but it had the misfortune of being announced right before CNOOC and Nexen dropped their bombshell this summer.

The approvals came with a key caveat for future deals – that state control in the oilsands will only be allowed in "exceptional" cases from now on.

The Harper government's handling of the Nexen-CNOOC file was "reactive in nature," said Wenran Jiang, a senior fellow at the Asia Pacific Foundation of Canada.

It's a stance Jiang found curious, given that the Conservatives had for years been actively courting Chinese investment – not the other way around.

CNOOC, having been burned by its unsuccessful bid for U.S. energy company Unocal seven years earlier, was getting the signal that perhaps the conditions were right to try again.

Instead, Ottawa found itself having to navigate around negative public sentiment toward Chinese investment that Jiang sees as largely "misinformed."

"Somehow we're the boy scout and the Chinese are just coming to invite themselves for dinner and then they're ready to roll us over," he said.

"It's not the case at all. We invited them for dinner. We invited them to come and they bought a big dinner ticket and that's why they thought they were coming – for a good party."

By contrast, Jiang praised Liberal leadership candidate Justin Trudeau for arguing in a newspaper column that foreign investment is good for Canada and that the Nexen takeover must go ahead.

It's an approach Jiang would have liked to have seen from Harper.

"You need to make a passionate, positive and proactive case for China needing energy. There's nothing sinister about it."

China is no stranger to Canada's oilpatch. For the past two decades its companies have been gradually building up their presence through joint-venture deals and small-ish acquisitions.

Jiang said it's hard to argue that their track record has been anything but good, but fears that China is up to something nefarious have nonetheless dominated the conversation.

Still, there are concerns that CNOOC's chain of command does ultimately end with communist government in Beijing.

While an ordinary corporation driven by commercial considerations alone would want to sell its oil for the highest price possible, the Alberta Federation of Labour says CNOOC and other Chinese-state-owned outfits are more interested in getting a lower price, so that the Chinese economy benefits.

AFL leader Gil McGowan brought that concern up during a question-and-answer session at a conference on Asian oilpatch investment, held in Calgary on the Monday after the Nexen-CNOOC verdict.

He bristled at the suggestion that anyone who raises those alarms just doesn't understand the issue.

"People who raise these concerns are not immature, we're not jingoistic, we're not xenophobic," he said.

"We're raising legitimate concerns about business ventures which are not business ventures in the way that we understand them."

One of the conference's speakers, the University of British Columbia's Paul Evans, said a more nuanced discussion needs to take place on the matter of what "state-owned" means.

"There's a view that to do business with China means that you are dealing with the Chinese state, and that when you're dealing with the Chinese state, you're dealing with the Chinese Communist Party," he said.

"When you're dealing with the Chinese communist party, you're dealing with a regime and an approach that is repressive on human rights, on espionage, a whole frame of things."

Evans, with UBC's Institute of Asian Research and Liu Institute for Global Issues, asked: "They're state owned but are they state controlled? What does control mean? What are the actual mechanisms for intersections with the Chinese Communist Party?"

There's been minimal hand-wringing within Alberta's oilpatch over what the government's decision will mean for investment going forward.

Provincial Energy Minister Ken Hughes did warn that "there is the potential for less investment coming into oilsands in Alberta and the impact of that is it will simply increase the cost of capital."

But John Zahary, CEO of early-stage oilsands company Sunshine Oilsands Ltd. said that while it's good to have all options on the table, his company will be able to fund growth through equity, debt and joint-ventures.

"We don't need a takeover, and so we don't feel exposed with respect to this decision."

Hal Kvisle, CEO of Talisman Energy Inc. (TSX:TLM), said foreign dollars will continue to flow into Canada through joint-venture partnerships, which he sees as a less disruptive way to do business than building a company only to sell it all to the highest bidder.

And so what if the oilsands have been singled out? There's "all sorts of good stuff going on there" even if all-out takeovers are mostly off the table, Kvisle said.

It's the natural gas players that are hurting right now, and there's no reason to believe they'll stop attracting Asian partners to help build liquefied natural gas facilities, like the one Petronas will be pressing ahead with now that its deal with Progress has closed.

"I think the government has played this brilliantly, actually," said Kvisle. "I think the Harper government deserves full marks for what they've done here."

Global Edmonton, Wednesday, Dec. 12, 2012
Byline: Lauren Krugel, The Canadian Press

Hoping to quickly close Canada's growing labour gap of tradespeople, federal Immigration Minister Jason Kenney has unveiled a new plan that would quickly turn skilled foreign workers into permanent Canadian residents.

Kenney says the Skilled Trades Stream will help fill a serious labour shortage caused by Canada's growing natural resource economy, particularly in the oilsands and remote areas of the country. The program will only admit a maximum of 3,000 people to avoid backlogs. Applications will be accepted after Jan. 2, 2013.

"For too long, Canada's immigration system has not been open to these in-demand skilled workers," said Kenney. "These changes are long overdue and will help us move to a fast and flexible immigration system that works for Canada's economy."

Applicants will not have to meet the criteria of the points system that is already used for prospective immigrants or other skilled foreign workers.

Instead, the new program will consider applicants who have a job offer in Canada, have a basic proficiency in English or French, can prove they have experience in an in-demand trade. They must also show that their occupation qualifies as a trade under federal regulations.

The need for skilled tradespeople is most dire in Alberta, where the province estimates that it will need an additional 115,000 skilled tradesworkers over the next 10 years.

A spokesperson with the Alberta Federation of Labour said the program will help the province's economic growing pains. However, the AFL is still concerned about employment protection for low-skilled foreign workers already operating in Canada.

Fort McMurray Today, Tuesday, Dec. 11, 2012

The Alberta Federation of Labour thinks the same people they say messed up the Temporary Foreign Worker program, can't be trusted to fix it.

Last week, the Harper government announced a review of the program. This after critics called foul on a BC mining firm for bringing in 200 Chinese workers to do jobs Canadians were qualified for.

AFL President Gil McGowan says the Harper Government "created a monster" when it relaxed requirements for companies to prove foreign workers were needed.

"They no longer have to keep records of Canadians that have applied." he says. "They no longer have to explain why the Canadians were not picked. All they have to do is post an on-line ad, and they don't have to demonstrate that Canadians have actually applied or not."

McGowan adds that the program has expanded to cover menial labour and other jobs.

And, he says, because workers are sent home after four years, the program has created an exploited, disposable workforce.

i880News, Tuesday, Dec. 11, 2012

Edmonton activists stage 'wait-in' at MPs office

Union activists in Edmonton participated in a national 'wait-in' to protest the punitive anti-worker Bill C-377 today.

The private members bill, which targets unions through punitive accounting regulations, is expected to be voted on this week, and could go to the senate by Thursday. In Edmonton, labour activists, including members of the Alberta Federation of Labour, camped out for several hours in the office of James Rajotte asking to speak to the Conservative MP.

"This is a political bill. In the same way that they have cut funding to environmental groups and women's groups, they are trying to weaken and muzzle a strong progressive voice," AFL president Gil McGowan said. "Labour groups all over Canada are visiting their Members of Parliament today to let them know that this bill is unacceptable."

The bill has been slammed by the Canadian Bar Association because provisions in the bill violate guarantees of freedom of expression and association, making it vulnerable to a court challenge under the Canadian Charter of Rights and Freedoms.

"Bill C-377 casts a wide net," McGowan said. "It's targeted at unions, but will also harm other organizations, including companies that do business with unions, legal associations, professional associations and charities. It's a complete mess."

Last Friday, amendments to the bill were being debated, but time ran out for debate. Under normal circumstances, the bill would have been put aside until the New Year. But backbencher Alberta MP Earl Dreeshan gave up the time that had been allotted to his private members bill so that C-377 could get an additional hour of debate. The bill goes for a second hour of debate today at 5:30 PM Central Time (3:30 MT).

"This is straight out of the Tea Party playbook: undermine unions and defund anyone who disagrees with them," McGowan said. "We're fighting this because Canada needs progressive voices who will stand up for health care, for seniors, for workers, and for the kind of society that Canadians are proud of."

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MEDIA CONTACT:

Gil McGowan, President, Alberta Federation of Labour at 780-218-9888 (cell)

Olav Rokne, AFL Communications Director at 780-289-6528 (cell) or via email [email protected]

Hoping to quickly close Canada's growing labour gap of tradespeople, federal Immigration Minister Jason Kenney has unveiled a new plan that would quickly turn skilled foreign workers into permanent Canadian residents.

Kenney says the Skilled Trades Stream will help fill a serious labour shortage caused by Canada's growing natural resource economy, particularly in the oilsands and remote areas of the country. The program will only admit a maximum of 3,000 people to avoid backlogs. Applications will be accepted after Jan. 2, 2013.

"For too long, Canada's immigration system has not been open to these in-demand skilled workers," said Kenney. "These changes are long overdue and will help us move to a fast and flexible immigration system that works for Canada's economy."

Applicants will not have to meet the criteria of the points system that is already used for prospective immigrants or other skilled foreign workers.

Instead, the new program will consider applicants who have a job offer in Canada, have a basic proficiency in English or French, can prove they have experience in an in-demand trade. They must also show that their occupation qualifies as a trade under federal regulations.

The need for skilled tradespeople is most dire in Alberta, where the province estimates that it will need an additional 115,000 skilled tradesworkers over the next 10 years.

A spokesperson with the Alberta Federation of Labour said the program will help the province's economic growing pains. However, the AFL is still concerned about employment protection for low-skilled foreign workers already operating in Canada.

Fort McMurray Today, Tues Dec 11 2012

— Today staff

Harper’s new ownership guidelines won’t stop Chinese from exerting control in Alberta’s oil sands,
according to new AFL report

CALGARY – Albertans concerned about the future of the oil sands should not be reassured by new guidelines for state-owned enterprises (SOEs) unveiled by Prime Minister Stephen Harper late Friday afternoon.

A new report prepared by the Alberta Federation of Labour entitled “China’s Gas Tank” shows that the Chinese have a plan for the oil sands – a plan that is not in the long-term best interests of the citizens of Alberta who are the real owners of the resource.

“Now that they own Nexen, the Chinese government will have control over the marketing of about 300,000 barrels of bitumen a day and they will increase their control of Syncrude, Canada’s largest oil sands producer, which will now have representatives from Sinopec and CNOOC on its board wielding veto power,” says AFL president Gil McGowan.

AFL president Gil McGowan will be available for media at the Canadian Council of Chief Executives conference in Calgary at the Palliser Hotel.

Where:
Outside the Alberta Ballroom
Palliser Hotel Calgary
133 - 9th Ave. SW, Calgary

Monday, Dec. 10, 12:30 p.m.

Who:
Gil McGowan, President, Alberta Federation of Labour (780) 218-9888

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China’s Gas Tank

Three Steps Toward Selling Out Canadian Energy Security

December 17, 2012

Chinese-Canadian business relations are being redefined, as we cede decision-making power about our natural resources to state-owned foreign businesses. These businesses are not bound by market pressures and will not act in the best interests of Canadians.

The economic relationship between Canada and China is being redefined.

Over the past year, three major events have dominated the headlines on Canadian business pages. These stories are each part of a larger picture in which Canada’s national interests are being subverted, and the country’s strategic energy assets are being taken over. From exploration and production to transportation and marketing, control of the oil sands is being ceded to state-owned foreign companies.

The China National Offshore Oil Corporation (CNOOC) takeover of Nexen gives a Chinese state-owned oil company marketing control over several hundred thousand barrels per day of oil sands bitumen. Marketing control gives CNOOC power over the price – which means we are handing over control of Alberta’s most important source of royalty revenue to a state-owned enterprise.

At the behest of funding partners that are backed by Chinese state-owned oil companies, the Northern Gateway Pipeline locks in a future where Alberta’s resources leave the country in their rawest form possible. This will ship good paying jobs to China.

Harper’s new ownership guidelines won’t stop Chinese from exerting control in Alberta’s oil sands, according to new AFL report

CALGARY – Albertans concerned about the future of the oil sands should not be reassured by new guidelines for state-owned enterprises (SOEs) unveiled by Prime Minister Stephen Harper late Friday afternoon.

A new report prepared by the Alberta Federation of Labour entitled “China’s Gas Tank” shows that the Chinese have a plan for the oil sands – a plan that is not in the long-term best interests of the citizens of Alberta who are the real owners of the resource.

“Now that they own Nexen, the Chinese government will have control over the marketing of about 300,000 barrels of bitumen a day and they will increase their control of Syncrude, Canada’s largest oil sands producer, which will now have representatives from Sinopec and CNOOC on its board wielding veto power,” AFL president Gil McGowan said.

“The Chinese government doesn’t need majority ownership of the oil sands to exert a significant degree of control. It’s already happening. And if more isn’t done to protect the interests of Canadians, we can kiss goodbye to our hopes and dreams about moving up the value ladder.”

The AFL report is based on new documents and testimony about Chinese ownership released as part of the ongoing regulatory hearings into the proposed Northern Gateway Pipeline, as well as documents that CNOOC and Sinopec have been required to file with the U.S. Security Exchange Commission (SEC).

The report makes a number of significant revelations about the Chinese government’s practices and intentions, including the following:

• The Chinese are attracted to the oil sands because they want access to cheap feedstock for their refineries. Specifically, they want to lock in an alternative to high-priced oil from Saudi Arabia. As a result, selling to Chinese SOEs won’t result in an “Asia Premium” for Alberta producers: China wants to pay less, not more.

• Nexen will help China reach its goals because the company’s marketing arm handles about 300,000 barrels of bitumen a day. Nexen’s marketing expertise is currently used to get the best (i.e. highest) prices for shareholders. But it could easily be used to get the lowest prices for Chinese refiners – and that means downward pressure on bitumen prices for Canadian producers and the Alberta public.

• CNOOC in their own words in their April 2012 filing to the SEC: “We sell a significant proportion of our production to CNOOC-affiliated companies Sinopec and PetroChina.”

• The Nexen deal means the Chinese will strengthen their influence over Syncrude, Canada’s largest oil sands producer. Sinopec already owns nine per cent of the company and they have used their stake to veto any new Canadian upgrading projects. Nexen owns seven per cent of Syncrude, meaning that the Chinese government’s stake in the company will now increase to 16 per cent.

•  Rumors continue to swirl that the Chinese intend to buy significant stakes in Canadian Oilsands Ltd., which owns 36 per cent of Syncrude. If this happens, China could move from a position of significant influence to one of outright control at Canada’s largest oil sands producer.

• The Chinese also have what is likely a controlling interest in the proposed Northern Gateway Pipeline. The project has ten funding partners, only six of which have been named publicly. The publicly-named partners include: Sinopec; Nexen (now owned by CNOOC); MEG (owned 15 per cent by CNOOC); Total E & P Canada (in joint venture partnership with Sinopec); Suncor (in joint venture partnership with Teck Resources, which is 17 per cent owned by state-owned China Investment Corporation); Cenovus.

“What’s happening here is an elegant plan to gain control of all steps in the oil sands production chain: from extraction to marketing to transportation,” McGowan said. “Once that’s done, the Chinese will be able to keep prices low and keep the raw bitumen flowing to refineries in China. This will mean lower profits for Albertans who own the resource, lower royalties for Canadian governments and the loss of thousands of potential Canadian jobs in upgrading.”

McGowan says that stopping the CNOOC takeover of Nexen would have been one tool to protect the interests of Canadians. But now that the Harper Conservatives have dropped that ball, he says it’s even more important to stop the Canada-China investment treaty (FIPA) and the Northern Gateway pipeline.

“Northern Gateway would provide the plumbing to drain profits and jobs from Alberta and FIPA would tie the hands of future governments who might want to change the rules,” McGowan said.

“At the end of the day it’s clear that China’s interests are at odds with Canada’s interests. It’s also clear that we can’t rely on the so-called free-market companies to save the day, because they’re all in bed with the Chinese. What we need is a government that’s willing to step in and impose a national energy strategy that puts the interests of Canadians ahead of the interests of foreign governments and profit-seeking corporations that focus only on their short-run self interest.”

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MEDIA CONTACT:

Gil McGowan, President, Alberta Federation of Labour at 780-218-9888 (cell)
Olav Rokne, AFL Communications Director at 780-289-6528 (cell) or via email [email protected].

“Harper is saying what Canadians want to hear while doing what they don’t want” - AFL president

Edmonton – Prime Minister Harper’s supposedly “tough new conditions” for foreign takeovers are nothing more than a public relations ploy aimed at masking the fact that he has just allowed a foreign government to seize unprecedented control over Canada’s energy resources.

In an announcement late Friday, Dec. 7, Prime Minister Stephen Harper green-lit Chinese oil giant CNOOC’s $15-billion takeover of Alberta-based Nexen, but claimed that new conditions would prevent such deals in the future. 

“The Conservatives are spinning this as a ‘sweeping overhaul’ of foreign investment rules,” McGowan said.“The new ‘guidelines’ for foreign takeover decisions will still see the process take place behind closed doors and be conducted by the Industry Minister.”

“The ‘new process’ Harper has proposed is the same as the old process, which just brought us the largest foreign oil patch takeover in Canadian history,” McGowan said. “They’re saying what Canadians want to hear, but doing exactly what Canadians don’t want. It’s the Republican Tea-Party playbook: tell a bald-faced lie, and hope no one questions you.”

Under the new conditions proposed, the federal government will weigh how much influence state-owned foreign takeovers will have over their acquisitions and an industry, and how much control over Canadian resources this will give the foreign government. Regulators will examine this in private, behind closed doors, and with no public input required.

 “How do you measure this influence? What is the measurement on which this will be evaluated? These are meaningless rules – it’s just a smokescreen,” McGowan said. “Sinopec only has a nine per cent stake in Syncrude…but they used that nine per cent stake to veto upgrading projects. Is there a measurement of how bad that is for Canada?”

The proposed CNOOC takeover has been criticized by Canadians across a broad political spectrum, including Preston Manning, the New Democratic Party and the Communications Energy and Paperworker’s Union.

“CNOOC is not your typical oil company. It doesn’t operate on market principles, and it isn’t beholden to investors. If they had been serious about defending the interest of Canadians, they would have nixed the deal outright,” McGowan said. “They had a good pretext already – Harper’s 2006 campaign pledge ‘not to export more raw bitumen to countries with laxer carbon standards than North America’s.’ If they had cared about state-owned foreign ownership, they would have scuttled this deal.”

The AFL will release a comprehensive report on China’s involvement in Alberta’s Oil Sands on Monday in Calgary.

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MEDIA CONTACT:

Gil McGowan, President, Alberta Federation of Labour at 780-218-9888 (cell)
Olav Rokne, AFL Communications Director at 780-289-6528 (cell) or via email [email protected].