by Gary Porter
Jason Kenney, the United Conservative Party (UCP) Premier of Alberta, has been campaigning hard to get Canadians to hand out big money to the oil and gas business, and to tighten the screws of neo-liberal austerity on working people. He argues that the lack of pipelines carrying Alberta oil to Atlantic and Pacific ports is undercutting Alberta’s “energy” business. Oil cartel hacks like Kenney seldom mention oil. They call it energy, and he never talks about the thick tar sludge from which Alberta oil is extracted, in a carbon-heavy energy process.
Since the recent federal election in which the prairie-based Conservative Party lost to scandal ridden Justin Trudeau, leader of the central Canada-based Liberals, the alienation of the west has been flaunted in the Canadian business media, continually and in high dudgeon.
This campaign is filled with lies and half truths, but it finds support among many Albertans whose incomes depend on the oil business, and whose social services are undergoing severe cuts under the Kenney UCP government.
Alberta workers are told that the opposition of British Columbia on the Pacific to the twinning of the existing Trans-Mountain pipeline (TMX), and the opposition of Quebec to the Energy East pipeline to the Atlantic, are the reason oil jobs are at risk in Alberta.
Connected to this is the fact that Alberta’s provincial GDP is the highest in Canada by far, followed by neighbouring Saskatchewan, and then by Newfoundland, the three main oil producing provinces. In the Canadian constitution there is a mandatory equalization process by which rich provinces pay into a fund and poorer provinces draw from the fund to reduce inequality.
Kenney, in an effort to get massive new oil infrastructure projects built with heavy public tax reduction and public subsidies, is demanding this equalization formula be changed or dumped. It all seems as if Canada is just a bad deal for Alberta.
Another facet of Kenney’s fact-challenged campaign is his assertion, with no evidence, that the anti-climate change movement is a creature of foreign funding by those in the United States who stand to gain by hurting the oil business in Alberta. Global warming is not the issue. Global competition with unfair tricks is the issue, according to Kenney. Of course, the massive foreign-based oil cartel pouring hundreds of millions into pro-oil propaganda, is the real story here.
Only 1 in 4 Albertans buy into this hype. The other 3 want to remain in Canada. The big threats to Alberta are not working people in other provinces and especially not from the poorer provinces. The real enemies are the automation of bitumen production which has cost a lot of jobs, and will continue to do so, the high cost of turning tar-based oil into useable product compared to oil from other sources, the accelerating turn away from fossil fuels globally, and the increasing unwillingness of the majority of Canadians to invest in new infrastructure to extract more oil and gas which threatens our very survival.
But what about the claim that the oil patch is hurting financially?
The Big Five, which control 79.3 per cent of Canada’s productive capacity of bitumen, are still posting profits, some with profit margins of upward of 13 per cent. In Canada, the Big Five are Suncor Energy, CNRL, Cenovus, Imperial Oil and Husky Energy.
In 2016, the average profit margin for all industries in Canada was 7.8 per cent. Three of the Big Five — Suncor, Cenovus and CNRL — had net profit rates above 13.5 per cent in 2017, and Cenovus’s profit margin was an impressive 19.4%.
Alberta’s collections from the major oil companies amounted to a royalty rate of approximately 23 per cent, while other countries see government returns that are much higher — including Saudi Arabia (85 per cent), Norway (78 per cent), China (63.5 per cent) and Australia (58 per cent). Small royalties severely limit provincial income, while Kenney is busy
cutting back education, health, infrastructure renewal and welfare to offset his largesse to some of the biggest, richest corporations in the world — corporations ruining climate and nature for profit.
Last year, Prime Minister Trudeau spent $450 million of workers’ tax money to take the troubled trans-mountain pipeline project off the hands of Kinder Morgan, founded by former Enron executives — another example of the capitalist system acting as a guarantor of private profit at the expense of the working class. Then the pipeline was stalled by a court decision that ruled consultation with indigenous Canadians (over unceded land the pipeline traverses), had not been adequate. Trudeau hurried through the additional consultation process and then issued licenses for pipeline construction to begin. But opposition to the pipeline remains significant and militant. We shall see what happens.
The Alberta tar sands produce the dirtiest oil in the world. It should be nationalized and phased out as quickly as possible. But the right wing government of Alberta offers no economic alternatives for Albertans, no new economic prospects; it remains completely committed to the oil cartel.
The campaign to save ‘poor’ Alberta has nothing to do with separation from Canada, and everything to do with oil profits.
By the way, there is a tiny Wexit (West Exit) movement in Alberta. It was founded in Edmonton by Peter Downing, a right wing conspiracy crank who thinks Trudeau is promoting pedophilia. Downing is an anti-Muslim activist as well. He is a former soldier and cop. Wexit has grown since the federal election, but it is very unlikely ever to be an important political force.