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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)

Anatomy of a Boom (May 2007)

Policy paper adopted at AFL 45th Constitutional Convention, May 10 - 13, 2007

Labour Economic Monitor (May 2007)

In fact, the 2007 Budget demonstrates clearly that the government has no idea of how to proceed. The basic economic strategy remains unchanged: sell off as many of the province's resources as you can as fast as you can, and use the cash you receive to lower taxes. In the long run this will leave the province with depleted resources, underfunded public services, and an inadequate tax base, but that's a long way down the road. In the mean time let's all have another drink, and put some Beach Boys songs on the karaoke.

[Edmonton] In a submission to the National Energy Board (NEB) on April 13, 2007, the Alberta Federation of Labour (AFL) argues that the Keystone pipeline project that is currently before the NEB for approval is not in the public interest.

"We have asked the Board to consider the broader, long-term impacts of approving the pipeline to connect suppliers of bitumen in Alberta to purchasers of bitumen in the United States," says AFL President Gil McGowan.

"We submit that Canadians should be getting the greatest value for their resources and that the Keystone project falls well short of providing maximum value in the areas of jobs, economic opportunity and long-term economic and energy security.

"According to a study by the economic consulting firm, Infometrica, 18,000 jobs would be created in Canada if the bitumen was refined here instead of being shipped to the USA in the proposed pipeline," says McGowan.

"But, more than jobs are at stake here," warns McGowan, "if Keystone goes ahead, we will miss a once-in-a-lifetime opportunity to create a broad healthy value-added and research industry centered around a rejuvenated refining industry."

"If final approval is given to Keystone, billions of dollars will be spent to retool and renovate current refineries in places like Illinois and the American Gulf Coast," says McGowan. "If, however, the pipeline is not approved, the same oil companies that are currently investing in American refining capacity will likely make very different decisions regarding investment in refineries in Canada - decisions which might be more in the public interest of Canadians."

The Federation also stressed the urgency of dealing with these public interest issues now at the National Energy Board. "The links in the supply chain are being forged now," warns McGowan, "they will become virtually locked into place if major pipelines like the one currently under consideration are approved."

"The National Energy Board cannot pass the buck on the broad public ramifications of Keystone to the federal and provincial governments," concludes McGowan. "Once the Board approves the building of the pipeline, construction will begin. They must either widen the scope of their hearings now to include the broader public interest or adjourn the hearings until such time as the federal and provincial governments and all stakeholders develop a comprehensive plan for the Canadian energy sector."

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The AFL�s submission to the NEB is available at www.afl.org/upload/keystonesubmission.pdf

For more information contact:

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

Labour Economic Monitor (February 2007)

After over a decade of almost uninterrupted growth, Alberta is now entering the fifth year of an economic boom. Despite the mismanagement of the Klein government, which ran the province without any real economic plan, despite the ludicrously royalty rates and the obsession with tax cutting, our economy continues to churn out jobs.

The Alberta Federation of Labour reacted today to a new study by Statistics Canada looking at work hours across the country. The study revealed that Albertans work the most hours of any province in the country.

"Albertans are working our fingers to the bone in this boom," says AFL President Gil McGowan. "I wonder what price we pay for these long hours."

"Everyone is pushing hard to get the work done, putting in extra hours. While this might be admirable on one level, I am left very concerned," notes McGowan.

"First, longer work hours are causing an increase in workplace accidents and fatalities. Tired, stressed out workers with bosses pushing them to work harder and longer create unsafe working conditions."

"Extra hours at work also mean fewer hours with your family. It means less time to be in your community with friends and neighbours. That negatively affects quality of life. Is this the kind of province we want to build?"

The study showed that Albertans averaged 1,880 hours at work a year � more than 36 hours a week, after removing vacation time. This is the highest in the country. More significant is the finding that 12.5% of workers - again the highest in Canada � work more than 2,300 hours. A whopping 6.4% work more than 2,700 hours a year, which equals more than 51 hours a week.

"The main culprits in long work hours are agriculture and oil and gas. Agriculture is exempt from basic employment standards, which means there are no protections for workers. Oil and gas has become a wild west. We need to get a handle on these industries," observes McGowan.

McGowan believes we need to make quality of life a bigger priority, which includes reducing the number of hours we work. "What good is a big paycheque if your family is a mess and you have no time to enjoy the fruits of your labour?"

"We should see this study as a warning signal that our boom is unsustainable at this pace. We need to get smarter and more balanced."

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For more information contact:

Gil McGowan Tel: (780) 483-3021 Cell: (780) 218-9888

For those who missed it, that was one of the rationales Solberg gave when he announced new measures aimed at making it easier for employers in Alberta and B.C. to bring temporary foreign workers into the country.

Solberg's comment was obviously meant as a joke - but the policy direction he outlined at his news conference in Edmonton is no laughing matter.

In fact, by lowering the bar for employers and making it easier for them to hire temporary foreign workers as a first choice, rather than a last resort, I'm afraid Solberg has set Canada in motion down a very dangerous road.

In particular, I'm worried the federal Conservatives are laying the groundwork for the creation of an underclass of workers in this country - a class of guest workers who won't have the same rights and protections in the workplace that Canadian workers take for granted.

I'm also worried that by making it almost laughably easy for employers to import foreign workers in an eye-popping 170 occupational categories, the Harper government is handing employers a big stick that, at least in some cases, will be used to demand concessions, displace Canadian workers and keep wages down.

Think I'mover-reacting? Consider the evidence.

Just three months ago, the manager of a nursing home in Kelowna laid off 70 personal care aides when they refused to accept major rollbacks to their wages and benefits. He is now attempting to fill the vacancies he created with temporary foreign workers -and thanks to Solberg's new rules, his job just got easier.

Similar stories are also coming out of the oil sands. I've received numerous calls from tradesmen who say their work has mysteriously dried up at the same time that their former employers have taken on increased numbers of temporary foreign workers.

So when the government says temporary workers will only be brought into the country "when there is no one available to do the job in Canada", a growing number of Alberta workers are saying that doesn't mesh with their personal experience.

None of this should have come as a surprise to Mr. Solberg and his Conservative colleagues.

The experience from other countries that have relied on "guest worker" programs to deal with real or perceived labour shortages is as extensive as it is sobering.

Countries as diverse as the United States, Germany, France, Switzerland, Kuwait and Singapore have all experimented with these programs: and they've all had to deal with the same negative effects.

Among other problems, guest worker programs have led to the establishment of ethnically-based "job ghettos"; they have sparked tension between foreign and domestic workers; and they have resulted in often rampant exploitation and of foreign workers by employers.

The big reason why programs like the one Solberg is expanding have proven to be so problematic is that they bring workers into the country on temporary basis as opposed to welcoming them as full-fledged immigrants and prospective citizens.

Landed immigrants and citizens have rights - perhaps most importantly, the right of mobility. If they don't like the way an employer is treating them or how much they're being paid, they can vote with their feet.

Workers brought into the country under the temporary foreign worker program, on the other hand, have no such rights. In a sense, they are hostages to the employers that sponsored them - and as such they are vulnerable exploitation.

Solberg says we shouldn't worry about abuse by employers because federal regulations promise that temporary foreign workers will be paid the "going Canadian rate" and because these workers will be protected by the same employment standards systems that cover Canadian workers.

But who exactly decides the "going rate"? And does it include the value of benefits enjoyed by Canadian workers?

Also, given that Solberg has put absolutely no enforcement mechanisms in place, how can we be sure that employers aren't ignoring the rules and paying temporary foreign workers less than the minimum wage - as evidence suggests they were doing recently with imported construction workers on a Vancouver railway project?

As for Solberg's reassurance that foreign workers will be protected by provincial employment standards systems: is he kidding? Here in Alberta, we have 55 employment standards officers to police the concerns of nearly two million workers.

Even more importantly, investigations are only launched when an employee lodges a formal complaint. Does Solberg really think that any temporary foreign worker - in Canada at the pleasure of their employers - would actually ever do that?

The big irony in all this is that the current push for increased foreign workers is coming from a Conservative government that purports to be a "defender of the market".

What the market in Alberta is telling employers today is that they need to increase wages to attract and retain employees. And it's also saying that businesses should be putting some projects on hold until prices come down.

Unfortunately, Solberg only has ears for business owners who want him to intervene in the labour market. In a sense, they've convinced the government to help them defy the economic laws of gravity.

As usual, the market is the wise, all-knowing force that can't be ignored - except of course when it's actually helping average working stiffs.

So in the end, what can be done to address Alberta's tight labour market? Contrary to those who support beefed-up guest workers programs, there is no silver bullet.

Part of the answer lies in better training for Canadians to meet the demand for skilled workers and increased wages to attract people from parts of the country with higher levels of unemployment.

Another part of the answer lies in slowing the pace of development - especially in the oil sands.

Finally, any real solution needs to include increases in real immigration, as opposed to ill-conceived guest worker programs: because if foreign workers are good enough to come here and serve us coffee or build our homes, they're good enough to stay as citizens.

By Gil McGowan, AFL President
November 2006

Labour Economic Monitor (Fall 2006)

The general picture of the Alberta economy is very positive: sources from the business press to Statistics Canada are celebrating the boom, and the data seem to bear them out. On the other hand, there are some serious questions about how much benefit average working Albertans are actually reaping from all this activity. Wages do not seem to be growing as fast as they should be, and inflation is eating up what gains workers do make.

So are we all getting rich? Apparently not. The story seems to be: huge profits for the corporate sector, and longer hours of work for employees. There's something wrong with this picture, and we will try to figure out what it is in the next edition of Labour Economic Monitor.

The first issue of a new quarterly publication from the Alberta Federation of Labour finds that weekly wages in Alberta are only up 1.4% in 2006, after accounting for inflation. The AFL launched Labour Economic Monitor today, which will track economic indicators and trends in Alberta.

"Everywhere we turn, we are told the boom is causing a spike in wages across Alberta. Business is complaining about the rising cost of labour," says AFL President Gil McGowan. "Yet, the statistics don't seem to be backing that complaint. On average, workers' wages are increasing only slightly ahead of inflation."

According to wage figures from Statistics Canada, in the first quarter of 2006, weekly earnings were up 4.9% over the first quarter of 2005. However, inflation in Alberta is running at 3.5%, meaning that workers are only seeing a 1.4% increase in their real wages. Weekly earnings measures how much a worker takes home at the end of a work week - not how much they are paid for each hour of work.

"Alberta workers have had stagnant wages for the better part of 15 years - all through the 1990s and early 2000s," observes McGowan. "And now at the height of the boom, we would expect workers to catch up a little bit, take advantage of the prosperity through larger wage increases."

"Quite frankly, it is not happening yet. Much of the small increase could be attributable to workers working longer hours and more overtime - rather than an increase in their hourly wage."

McGowan blames the small increase on two things. "First, the cries of labour shortage are overblown. If there was a widespread labour shortage crisis, we would see wages increase significantly. While there are pockets of shortages, on the whole the labour market seems rather stable."

"Second, the benefits of the boom are not working their way down to all working families in Alberta. Once again, large corporations enjoy a huge feast during a boom, and most workers are left with table scraps."

The AFL's new Labour Economic Monitor is intended to offer workers and average Albertans up-to-date economic information and analysis. It will be released quarterly on the AFL website. The first issue can be read here.

"The government and large corporations have access to the most up-to-date data about Alberta's economy to help them make decisions. Until now, working families have had no such information. Labour Economic Monitor is designed for them - to give them some of the same information that their employers' have," says McGowan.

"The AFL wants Alberta workers to receive their fair share of our prosperity. It is long overdue." McGowan concludes.

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For More Information call:

Gil McGowan, AFL President  @  (780) 218-9888 (cell)

When it comes to discussions about the labour force in Alberta, it's hard not to be reminded of the old children's fable, Chicken Little.

No matter who you talk to - in government, business or media circles - they all seem to be saying "the sky is falling."

But is the situation really that bad? Is the future prosperity of Alberta really at risk?

The short answer is: no - at least not yet.

It's true, of course, that high commodity prices have led to unprecedented levels of investment in Alberta. And it's also true that the rapid pace of economic growth has created a very tight labour market.

However, many of the worst predictions about labour shortages are based on questionable assumptions.

Like the assumption the Alberta economy will continue to grow at its current blistering pace; or that workforce participation rates will decline and that current levels of migration to Alberta from other provinces will remain roughly the same.

As with any prediction, overly pessimistic assumptions lead to overly pessimistic conclusions.

Business pundits also hit a sour note when they sound the alarm about wage inflation in Alberta.

After more than twenty years of income stagnation, pardon me for asking an obvious question: aren't wage increases a good thing? What's the point a strong economy if it doesn't bring an improved standard of living?

It's also important to note that higher wages aren't just good for workers. Good wages lure people. So, if employers want to convince more Canadians to take jobs in Alberta, higher wages should be seen as part of the solution, not part of the problem.

Having said all that, while the problem may not be as bad as some of the doom-sayers would have us believe, there still is a problem.

Several large oil companies - most notably Husky Energy - are now musing aloud about building new oil sands upgraders in the U.S., instead of Alberta. And they're pointing to Alberta's tight labour market as the reason.

At the same, time there is no doubt that the booming energy sector has created a problem by "poaching" employees from other parts of the provincial economy.

So how do we build a "Goldilocks" labour market - one that's not too hot, and not too cold? The answer comes in two steps.

First, we have to come to grips with a basic question: is there such a thing as too much growth?

The "labour shortage" crowd assumes that Alberta should keep growing at its current break-neck pace. But do we really need to build all these projects at once?

Certainly most skilled tradesmen would prefer to have twenty years of stable employment rather than seven or eight years of frantic development followed by a jobs bust.

More reasonably paced development would also allow public infrastructure to catch up with growth; it would reduce the energy sector's "poaching" of workers; and it would make it easier to address the environmental concerns associated with oil sands development.

The good news is that the Alberta government has control of policy levers that could make this happen.

For one thing, they could simply stop doling out oil sands leases like they were water.

In addition, the time has clearly come to revisit Alberta's infamous one-percent oil sands royalty. This corporate give-away is over-heating the Alberta economy. And with oil at $70 a barrel, such "investment incentives" are obviously no longer needed.

Given the strong international demand for oil, even if steps were taken to slow the pace of development, the Alberta economy would still remain strong - we'd just be replacing a "runaway freight train" with one that chugs along more happily.

That leads to the second part of the equation.

If the freight train can be brought under control, then we can move past panicky "quick-fix" solutions like dramatically increased use of temporary foreign workers and instead focus on the kind of longer-term solutions that Alberta really needs.

For example, we should be tapping the labour force potential of aboriginal communities; increasing permanent immigration levels; and using government programs and incentives to convince workers to move from high unemployment regions like Newfoundland to low unemployment regions like Alberta.

Most importantly, any serious labour force development plan can't ignore the issue of apprentice training.

We'll never be able to keep up with demand for tradesmen unless employers actually provide jobs for apprentices. And that's the problem - even in Alberta's hot economy where so many employers are crying "labour shortage" - employers are not holding up their end.

According to the Construction Owners Association of Alberta, there are more than 20,000 "trades" employers in the province - but only 11,000 have actually taken on apprentices. This helps explain why less than half of young Alberta apprentices complete their training in the prescribed timeframe.

The perversity of this situation cannot be over-emphasized.

The businessmen who say they can't find skilled workers and who are calling for permission to import thousands of guest workers are often the same ones who helped create the problem by not taking on apprentices. Clearly, this has to change.

In the end, policy makers looking for ways to deal with Alberta's labour market woes need to re-learn the lesson of the Chicken Little fable: don't panic.

What Alberta needs is to carefully apply the brakes on future oil sands development. We also need measured reforms in areas like training and education.

Gil McGowan, AFL President
July 2006