ALF V1

AFL to make final arguments against Northern Gateway Pipeline

EDMONTON – The Alberta Federation of Labour is making the case that the Northern Gateway Pipeline is not in the best interests of Canadians.

At a hearing today in Terrace, B.C., the AFL will argue that the pipeline, if approved, will ship some of our country's best potential jobs down the pipeline to China. In its presentation to the National Energy Board, the AFL will show that it makes economic sense to upgrade bitumen in Alberta – or at least in Canada – rather than exporting it raw to foreign markets.

"The proponents of this project have compared the pipeline to the CPR and called it an important piece of Canadian infrastructure. But the Northern Gateway Pipeline is a piece of Chinese infrastructure, not Canadian infrastructure," Alberta Federation of Labour president Gil McGowan said. "The ownership structure of the pipeline shows that the project will benefit China's state-owned oil companies, shipping good-paying oil sands jobs to Asia."

To date, evidence presented to the Joint Review panel considering the pipeline shows that:

• the pipeline will create only 228 permanent jobs in Canada
• only 1,500 construction jobs will be created for three years, then nothing more
• the Northern Gateway Pipeline will drive up costs for Canadian refineries more than $800 million, which could lead to refinery closures.

The AFL's evidence shows:

• At least 26,000 Canadian jobs would be created if we upgraded/refined the bitumen destined for China here at home.

"If we want Cadillac prices for our resources, then we have to sell a Cadillac product," McGowan said. "And that means selling upgraded bitumen, called synthethic crude, rather than raw bitumen. Some country is going to capture the value and create the jobs. We think that country should be Canada, not China."

The AFL's arguments against the Northern Gateway pipeline are the product of more than two years of sifting through evidence and participating in cross-examination on the economic benefits of the project.

The AFL represents 160,000 Alberta workers, including 25,000 in energy and energy-related construction.

"Governments at all levels pay lip service to wanting to keep good jobs in Canada," McGowan said, adding this is this is the AFL's fourth intervention against raw bitumen exports in recent years. "Through these pipeline hearings, Alberta's unions are holding governments to their word. Oil sands jobs belong to Albertans first."

AFL president Gil McGowan will be available for comment at 3:00 P.M. at the United Nurses of Alberta offices, 700-11150 Jasper Avenue, Edmonton.

AFL Backgrounder: AFL final arguments against the Northern Gateway Pipeline

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MEDIA CONTACT:

Olav Rokne, Communications Director, Alberta Federation of Labour at 780-289-6528 (cell) or via email [email protected]

2013 Backgrounder_Final Arguments against the Northern Gateway Pipeline

The Alberta Federation of Labour gave its final arguments against the proposed Northern Gateway pipeline on Monday, begging the joint review panel to reject the project.

At a hearing in Terrace, B.C., AFL president Gil McGowan argued Gateway will hurt Canada's economy, creating few jobs locally and more jobs in Chinese refineries.

"The proponents of this project have compared the pipeline to the (Canadian Pacific Railway) and called it an important piece of Canadian infrastructure. But the Northern Gateway pipeline is a piece of Chinese infrastructure, not Canadian infrastructure," said McGowan.

"The ownership structure of the pipeline shows that the project will benefit China's state-owned oil companies, shipping good-paying oilsands jobs to Asia."

McGowan states the pipeline will create only 228 permanent jobs and 1,500 temporary construction jobs during a three year period. He also argues that the pipeline will drive up operating costs for Canadian refineries by more than $800 million.

The AFL is not opposed to selling oilsands product to lucrative Asian markets, says McGowan. Instead, McGowan favours refining bitumen in Alberta before selling it to foreign markets. The labour orgainization estimates that at least 26,000 Canadian jobs would be created if bitumen sold to China was refined in Alberta.

"If we want Cadillac prices for our resources, then we have to sell a Cadillac product," said McGowan.

"That means selling upgraded bitumen, called synthethic crude, rather than raw bitumen. Some country is going to capture the value and create the jobs. We think that country should be Canada, not China."

The AFL represents 160,000 Alberta workers, including 25,000 in energy and energy-related construction.

The Monday hearings were the final arguments to either supporting or denouncing the $6.5 billion pipeline that, if approved, will link the oilsands to the B.C. coast. From a port in Kitimat, bitumen will be loaded onto tankers heading to California and Asia, on the B.C. coast.

The largest hurdle is a coalition of aboriginal groups who argue they were poorly consulted by Enbridge, and that the pipeline will run through territory seen as culturally vital.

Enbridge and company supporters have spent approximately $500 million on environmental and engineering studies, as well as public and aboriginal consultations for the project. Enbridge also argues B.C.'s oil and gas industry could gain more than $18 billion in additional investments if the project is approved.

The joint review panel is expected to finish the hearings within two weeks and make a recommendation on the project's future to the federal government by Dec. 31.

AFL Final Written Argument Northern Gateway Pipeline

8,600 jobs lost in 2010, but government approves whopping 22,992 TFW positions

Edmonton – Over the past four years, Alberta has brought in thousands more temporary foreign workers (TFWs) than jobs created.

In a new report, the Alberta Federation of Labour (AFL) compares the number of new jobs created in municipalities throughout the province to the number of temporary foreign workers arriving each year. There is no correlation; thousands of temporary foreign worker permits are being granted to businesses in good times, in bad times, and even when the economy is shedding jobs.

“The temporary foreign worker program has to be scrapped,” AFL president Gil McGowan said. “Employers are clearly turning to it as a first-choice so they can hire people who have fewer legal protections, can be paid less than their Canadian counterparts, and who can be kicked out of the country if they make a fuss.”

The report, titled “From Last Resort to First Choice,” shows that throughout Alberta during the recession, the economy lost 8,600 jobs in 2010, but the government approved the hiring of 22,992 TFWs. In the big city, the situation was a bit worse, with the economy shedding 13,000 jobs in Edmonton and Calgary, but 12,995 TFWs arriving in 2010.

“Canada needs immigration — but this program isn’t immigration, it’s exploitation,” McGowan said. “Canada’s immigration system needs to be expanded and made accessible to lower-skilled immigrants. And people arriving in Canada to work should be treated the same as any other Canadians. But the TFW program gives them second-class status, and makes them beholden to employers.”

Medicine Hat may have fared worst over the past four years, shedding more than 10,000 jobs, while more TFWs arrived. Throughout the province, thousands of work permits for TFWs were issued for very small rural centres and towns in Alberta.

“It’s difficult for someone to put down roots in a community if they’re defined as temporary,” McGowan said. “They’re not going to gain long-term wage improvements from seniority, and this keeps standards down for all low-wage workers.”

“When employers get easy access to vulnerable groups of lower paid workers, wages and benefits don’t have to keep pace with economic growth,” McGowan said. “The Conservative government talks a big game about free markets, but they’re more than willing to meddle with the market when it comes to driving down wages.”

Under the Conservative government of Stephen Harper, the TFW program has doubled in size, and has become a business subsidy that lets frequent users avoid increasing wages to attract workers or to invest in training.

This research clearly shows that jobs are being lost, and yet government is approving thousands of TFW permits for greedy employers who would rather not pay what the market demands.

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MEDIA CONTACTS:

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].

When Alberta's oil sands started being commercially developed almost 50 years ago, the biggest challenge for companies was finding cost-effective production technologies. Producers such as Sun Oil Company (now Suncor Energy) and Syncrude focused on securing capital rather than launching public relations campaigns.

Industry and the Alberta government might have some regrets in that regard. As opposition to the carbon-intense development of the massive resource mounts, even seemingly benign pipelines have become vehicles in the battle over bitumen.

Energy corporations, as well as provincial and federal politicians argue the ability to move bitumen — either raw or upgraded — to markets is vital for Canada's economic prosperity. First Nations, environmental groups and landowners believe blocking pipelines will halt further development of oil sands and reduce the risk of oil leaks polluting land and water.

Lack of access to markets has Canadian crude trade at a massive discount to U.S. oil benchmark West Texas Intermediate, reaching a record $42.50 per barrel discount in December.

"If we do not go ahead with infrastructure, with pipelines to move our resources to tidewater and on to markets that want the resources, we will see them stranded and our legacy lost," federal Energy Minister Joe Oliver said in a recent interview. "The people who will be hurt by this will be Canadians and we don't want that to happen and we are determined it will not happen."

The gap between Canadian and U.S. crude prices is expected to narrow substantially by 2014 when pipeline expansions in Canada and the U.S. start flowing, increasing the value of exports by an estimated $8-billion per year. The discount currently hovers around $22 per barrel.

"The so-called 'bitumen bubble' is having serious consequences for government finances in Alberta and the rest of Canada and is costing the Canadian economy at least $20-billion per year," says Alex Pourbaix, TransCanada president of energy and oil pipelines. "Narrowing this price gap will ensure that Canadians and Americans realize the best possible value for their precious natural resources."

The so-called 'bitumen bubble' is having serious consequences for government finances in Alberta and the rest of Canada and is costing the Canadian economy at least $20-billion per year

Mr. Pourbaix says Keystone XL will also support job growth through increased corporate and tax revenues, adding there will be an estimated 2,200 jobs building the line through Alberta and Saskatchewan. The pipeline also is projected to add $3.5-million per year in Alberta property taxes and $1.3-million in Saskatchewan.

While TransCanada and the Alberta government are focused on trying to convince the U.S. public of Keystone's economic benefits, the pipeline is more important to Alberta and Canada, adds Frank Atkins. economics professor at the University of Calgary.

"If we don't get this, it's a big blow," he says. Keystone will help producers continue the expansion of the oil sands, while its delay — and uncertainty over accessing the U.S. — has some producers slowing or temporarily capping investments in the region.

The benefits of oil sands development extend far beyond Western Canadian borders, Mr. Atkins notes. Within the next 25 years, just under a million people will hold oil sands related jobs, up from 75,000 two years ago, and 126,000 of the total will be held by people outside of Alberta, according to a 2012 Conference Board of Canada report.

But for union leader Gil McGowen, Keystone XL would allow more than the movement of bitumen to market. The president of the Alberta Federation of Labour sees the pipeline drain jobs from Alberta and Canada, high-paying, long-term work associated with upgrading and refining bitumen in the province. "We think that pipelines like Keystone XL will simply act as conduits to take high-paying jobs in upgrading and refining out of the country, down the pipeline, to places like the American Gulf Coast and perhaps to China," he says.

Workers in upgraders and refineries earn about two-thirds more a week than the average worker in Canada, notes the association, which represents 145,000 unionized workers in Alberta.

The province of Alberta's own efforts to promote its bitumen royalty in-kind program in 2009 outlined the benefits of an upgrading, refining petrochemical hub as increasing provincial and municipal revenues by $748-million, adding almost 2 million jobs and increasing the GDP by more than $5-trillion over two decades.

Taking all into account, the loss of refinery jobs and spin-off jobs triple the loss for each dollar gained on exporting bitumen, Mr. McGowan argues.

The Canadian Association of Petroleum Producers notes oil sands employ 112,000 people across Canada, from which goods, materials and services used to build oil sands operations are sourced. But with a tight labour market expected to become more acute as boomers retire, the issue of jobs flowing south is a non-issue, says spokesman Travis Davies.

"This isn't about jobs. The oil sands are going to be supplying more jobs that we can handle," he says. "The economic case for building brand new refineries is a tough one; we have existing product and existing customers that want our product on the Gulf Coast and to the degree that we should take advantage of that [Keystone] is clearly good for Alberta and good for Alberta workers."

Getting the stuff to the U.S. is important, but we would still be a seller with one customer, which is not good for any business

Why go south? The region between Texas and Louisiana has the most oil refining capacity in North America at 8.5 million barrels a day, including about three million barrels of daily capacity for heavy crude. Producers such as Suncor, a major backer of Keystone, much prefer to flow bitumen to existing facilities rather than invest billions of dollars in developing their own. The veteran oil sands producer is expected to red light its $11.6-billion Voyageur upgrader project any day now after warning the economically challenged project was not a "strategic investment."

Mr. Atkins points out Enbridge Inc.'s Northern Gateway pipeline project, from Alberta to Kitimat, B.C., is also an important option for producers and Canada.

"If you can get to the west coast, you can get it to Asia and Asia has huge demand we've got to capitalize on it because if we don't we miss out on a big market," he says. "Getting the stuff to the U.S. is important, but we would still be a seller with one customer, which is not good for any business."

Production of non-upgraded bitumen is expected to increase by 17% to 1.04 million barrels per day. Bitumen upgraded to refinery-ready feedstock is slated to rise to 1.03 million barrels per day.

And come what may, the product will ship to markets, either by pipeline, railcar, truck or barge — all alternatives being used and expanded on by Canadian producers.

The debate on bitumen pipelines out of Alberta could cool down once Keystone XL's future is determined, but don't expect the issues around transportation to go away, says analyst Phil Skolnick, managing director with Canaccord Genuity.

"Keystone is a big fix but it's not a permanent one," Mr. Skolnick says. "We'll run into that situation again when other oil sands projects come online in 2020-2021."

Edmonton Journal, Friday Apr 12 2013
Byline: Dina O'Meara, National Post

Labour unions in B.C. and Alberta are pushing for reforms to the Temporary Foreign Worker (TFW) program, as a judicial review begins in Federal Court into the process that allowed HD Mining to hire Chinese nationals at a coal mine in northeastern B.C.

"This judicial review of the HD Mining permits will be the most comprehensive examination of Canada's Temporary Foreign Worker Program ever conducted," said Brian Cochrane, business manager of the International Union of Operating Engineers (IUOE) Local 115.

"We know that there are over 300,000 Temporary Foreign Workers employed in Canada today and 70,000 of those in B.C., but we've never seen the internal workings of how the federal government makes decisions on granting work permits to companies requesting them,"

The IUOE and the Construction and Specialized Workers Union (CSWU) Local 1611 unions will be in Federal Court in Vancouver for a judicial review between April 9 and 11.

The judicial review will investigate the process within Human Resources and Services Development Canada (HRSDC) that granted HD Mining permission to import 201 Chinese nationals at the $300 million Murray River underground coal mine, near Tumbler Ridge, B.C.

The unions argue HRSDC failed to ensure there were no Canadians to do the work. In addition, they claim that the TFWs are being offered wages far below prevailing rates.

HD Mining received at least 300 resumes from Canadian citizens or permanent residents, who applied to work at the proposed project.

The company did not hire one Canadian applicant to work at the mine, claiming they were not qualified.

"The documents we have already obtained through our court action clearly show the Temporary Foreign Worker Program is not working for Canadians," said Mark Olsen, business manager of the CSWU Local 1611.

"I suspect that other documents being disclosed for the first time in court this week – likely on Wednesday when we make our arguments – will provide even more evidence that our concerns are just the tip of the proverbial iceberg."

Given all the problems that have already been revealed in this case, Olsen wants the federal government to make several significant changes to the TFW program.

"Available jobs need to go to Canadians first and Canadians need to be skilled up in order to do the work," he said.

"There has to be a real shortage determined and that is where unions come in. Unions should be involved to determine if there is a real shortage."

Once a real shortage is identified, Olsen said the foreign workers have to be brought into the country properly, not by brokers or companies that will exploit them.

Once in Canada, foreign workers need to be paid to the full Canadian wages and benefits standard, he said.

In addition, there needs to be enforcement by the federal and provincial government.

Finally, there needs to be a path toward citizenship.

"That's what needs to happen across the country," said Olsen. "The federal and provincial governments need to get their act together."

After obtaining a list of fast-tracked TFW applications using an Access to Information request, the Alberta Federation of Labour (AFL) agrees that the problems with HD Mining are just the tip of the iceberg.

The document lists all approved TFW applications in the first eight months of the new Accelerated Labour Market Opinion (ALMO) process.

According to the AFL, more than 2,400 ALMO guest-worker permits were granted to fast-food restaurants, convenience stores and gas stations between April 25 and Dec. 18, 2012.

These permits are supposed to be reserved for highly-skilled employment.

The AFL is calling on the Auditor General of Canada to conduct a full audit of the ALMO approval process.

"Alberta is leading the way in misusing this approval process," said AFL president Gil McGowan.

"This isn't being used as a stop-gap, and it isn't a last resort for employers."

More than 54 per cent (2,640) of the ALMO approvals in the country were for Alberta-based employers. Of these, AFL researchers said more than 58 per cent (1,542) were questionable.

The list of businesses in Alberta who received ALMO approvals included 33 A&W restaurants.

The Journal of Commerce, Monday, Apr. 08, 2013
Byline: Richard Gilbert, staff writer

The government saw it coming according to documents

The Alberta Federation of Labour claims the Alberta government was warned in 2010 a cut in energy royalties would result in a budget deficit. A government document titled "Energizing Investment Phase 2: Royalty Curves and Adjustments," demonstrated how royalty reductions would create budget deficits in the 100s of millions of dollars from 2010 to 2013, while without the reductions, the then Stelmach government was predicting a $500 million surplus for 2013. The document was dated May 25, 2010. Two days later, the provincial government reduced royalty rates.

"They've been acting like this year's deficit came as some kind of surprise to them, and they've tried to point fingers at bitumen prices," Alberta Federation of Labour president Gil McGowan said in a press release. "But the deficit was predictable, and was predicted in this report to the minister. Royalty reductions were to blame, and were blamed in this report."

Premier Alison Redford has for several months explained the deficit in this year's budget was an unavoidable result of a "bitumen bubble" — unanticipated low bitumen prices due to an over-supplied market. The AFL points to this document as evidence the deficit is unrelated to supply and demand; rather, it is the foreseeable result of royalty cuts.

Fast Forward News, FFWD, Thursday, Apr. 04, 2013
Byline: Suzy Thompson in News

The impoverished, war-torn African nation of Angola rakes in more oil profits than Alberta, argues the Alberta Federation of Labour.

According to an April 2011 government review obtained by the labour group, the province gains 55% of windfall industry profits, compared to 78% for Angola and 69% in Russia. AFL president Gil McGowan says this proves Alberta's low oil prices are "ripping off" taxpayers, while being asked to endure spending cuts at the provincial and federal level.

"The big argument from industry groups is that we shouldn't worry about our low royalty rates, because the industry generates lots of jobs and that's what we should be concerned about," he says.

Organizations like the Canadian Association of Petroleum Producers, for instance, boast that the oilsands has provided thousands of jobs across the country, is the largest employer of aboriginals in Canada and offers some of the highest-paying salaries in Canada.

"But other oil producing countries have managed to balance both," says McGowan.

While McGowan acknowledges Alberta's standard of living is significantly better than a country like Angola — that country is still recovering from a decades-long civil war that killed more than 500,000 civilians — he says other developed countries command higher royalties without discouraging investment from the oil industry.

Norway, for instance, demands 81% of windfall energy profits and has a reserve savings account worth $700 billion, despite having smaller oil reserves and neighbouring oil-rich Russia. Alberta's Heritage Trust Fund is worth $16 billion after 37 years.

"Even the United States, where most of the big oil companies doing business are based, charge higher oil rates than Alberta," said McGowan. "Lately, there's been a lot of news about the jobs being generated in North Dakota's oil fields. They charge higher than Alberta."

Both the Tories and Wildrose Party have no interest in raising Alberta's royalty rates, arguing the prices keep the oilsands competitive on the global market and are fair. A 2008 attempt to do so caused massive criticism, but McGowan says the outrage is misguided.

"Royalties are not the same as high taxes that could drive away investment," he says. "They are a price for companies to develop our resources and any business owner knows it doesn't make sense to give away assets for next to nothing. Could you imagine if Ontario's auto industry asked the government to provide discount steel to make cars in exchange for more jobs? Canadians would be up in arms. But if we give away raw bitumen at low prices, that's fine?"

Fort McMurray Today, Wednesday, Apr. 03, 2013
Byline: Vincent McDermott

Internal report in 2010 warned of fiscal consequences from royalty cut

Edmonton – Recently uncovered internal reports show that the Government of Alberta had long predicted this year’s deficits and budget cuts.

The confidential draft document “Energizing Investment Phase 2:  Royalty Curves and Adjustments,” shows the government projected a 2012/2013 surplus of $505 million in 2012/2013 without the reductions to royalty rates for unconventional oil and gas production, or a $142 million deficit if the rates were reduced.

On May 27, two days after this document was created, the government went ahead with the royalty reductions.

“They’ve been acting like this year’s deficit came as some kind of surprise to them, and they’ve tried to point fingers at bitumen prices,” Alberta Federation of Labour president Gil McGowan said. “But the deficit was predictable, and was predicted in this report to the minister. Royalty reductions were to blame, and were blamed in this report.”

The document projects that those royalty reductions will have larger revenue impacts in 2013/2014 and 2014/2015, though it does not show adjusted budget surpluses or deficits for those years.

“Royalty rates are part of the adult conversation Albertans need to have about revenue,” McGowan said. “Let’s start with looking at what royalty giveaways have already done to this province.”

The document goes on to show that the low rate on royalties mean that in some cases, oil and gas companies can recoup their capital costs in under a year.

“The decision to lower royalty rates in 2010 was a panic decision,” McGowan said. “And you don’t make good choices when you’re panicking. The royalty rates were unwarranted.” 

AFL Backgrounder:  Unconventional Royalty Breaks caused last year’s deficit confidential government documents

MEDIA CONTACTS:

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].