Saskatchewan's Natural Resources and the NDP

Stephen Harper loves Chinese capitalism

This past week Stephen Harper’s government announced that they had approved the takeover of Nexen Corporation by CNOOC Ltd., a Chinese state-owned oil corporation, as well as the takeover of Progress Energy Resources Corporation by Petronas, Malaysia’s state-owned oil corporation. The details of these foreign takeovers had been well known for a long time. Brad Wall’s government had approved of the takeovers. One would have expected the Saskatchewan NDP to have worked out a position, but there has only been silence. Do any of the four candidates for the leadership of the NDP have a position on foreign ownership and control of our natural resource industries? 

The takeovers approved
Stephen Harper, while approving these two takeovers, announced that in the future state-owned corporations would be limited to minority ownership in corporations operating in the Alberta tar sands. Foreign-owned corporations dominate this sector of the Canadian eonomy. The message from the media's financial analysts was that "it is business as usual outside of the oil sands."

The federal NDP under the leadership of Thomas Mulcair opposed the takeovers. But they have taken a position no different from that of the Liberal Party. The Harper government did not hold public hearings. They are ignoring public opinion on the issue. There is no guarantee that these state-owned corporations will keep their promises. The public does not know the record of the operations of these corporations in other countries.

But the federal NDP has no general natural resource policy that is different from that of the Harper government. Peter Julian, speaking for the NDP in the House of Commons, has stated that “foreign investments are crucial for re-enforcing our economy.” Is this true of the oil and gas industry? How do they finance their new investments in Canada? Why has the NDP been unable to come up with a real alternative national energy policy? The Parkland Institute in Edmonton has produced one. In the past, public opinion polls have indicated that a high percentage of Canadians would support a policy goal of Canadian ownership and control of the oil and gas industry. Is this too radical for the NDP?
   
Saskatchewan policy on natural resources
Stephen Harper told the press last Friday:  “To be blunt, Canadians have not spent years reducing ownership of sectors of the economy by our own governments only to see them bought and controlled by foreign governments instead.” This reference would seem to include the decisions by the Grant Devine, Roy Romanow and Lorne Calvert governments to privatize the Saskatchewan Oil and Gas Corporation, the natural gas sector in the province developed by Sask Power Corporation, as well as the developments by the Allan Blakeney NDP government (1971-82) to gain some ownership and control of the potash, uranium and forestry sectors.

Nexen currently owns and operates 1322 natural gas wells in Southwest Saskatchewan. These natural gas wells were part of Sask Oil when it was a Crown Corporation and are now going back under state ownership. In 1986 majority control of Sask Oil was privatized by Grant Devine’s Conservative government. The new owners changed the name to Wascana Energy. In 1988 the Devine government sold Sask Power’s natural gas holdings in Alberta to Wascana Energy for $325 million; the market price at the time indicated that the natural gas was actually worth $984 million. Wascana Energy was then bought by Occidental Petroleum Corporation of California. Nexen was spun off in order to use it to invest in Yemen, which prohibited ownership in the oil and gas industry by U.S. corporations.

Moving to a Post-neoliberal Democracy

Is there an alternative to the neoliberal political economy model that is so dominant in all the advanced industrialized countries? There used to be an alternative – one which was committed to the expansion of democracy and the creation of a universal welfare state. This was the role of the social democratic and labour parties. In the USA this progressive element was found in the Democratic Party and in Canada in the Liberal Party.

The big change came in the 1990s, when the social democratic and liberal parties shifted to the political right. The key here was their decision to give strong support to the various free trade agreements promoted by the organizations representing big business. The treaties were designed to prevent governments from returning to the activist Keynesian policies that had been the norm from the end of World War II to 1975. We know this only too well in Canada.

With the free trade agreements came the package of neoliberal policies, often referred to as The Washington Consensus:  privatization of state assets, the deregulation of the economy and finance, the contracting out of government services, the introduction of regressive taxation systems, the cuts to social programs, and the broad attack on trade unions. Transnational corporations won the right to produce anywhere in the world, sell their products and services anywhere, repatriate their profits without any government interference, and to hide their capital in the numerous off-shore tax havens.

Latin America has been the testing ground
The struggle to create an alternative to the politics of neoliberalism in Latin America is recounted by Emir Sader in his recent  book: The New Mole: Paths of the Latin American Left. (London: Verso, 2011). Sader is Emeritus Professor of Political Science at the University of Sao Paolo and author of a well known book on Lula and the Workers Party in Brazil. As he points out, Latin America was where the neoliberal model was first applied. But it is also the region where political movements and parties are creating the first post-neoliberal political parties and governments.

Sader stresses the need for political movements and political theorists to carefully ground their analysis in concrete reality. The models that were first tried in Latin America were from outside the area, where conditions were quite different. The Communist Parties, which were very important in building the trade union movement, had a model that was based on the experience of the Soviet Union. The Maoist peasant revolution in China, supported by some elements on the left, could not be repeated in Latin America. The Trotskyst analysis did not fit a region where the large majority of the people were in the informal economy and not employed by anyone. The guerrilla strategy worked in Cuba in 1959, but in the era of large armies with virtually unlimited support from the USA, it quickly failed to be a viable alternative.

The key is understanding the fundamental characteristics of the Latin American region. It was a colonized less developed area. After independence, the local bourgeois class was based in resource extraction and large scale agribusiness production, both for export to the offshore industrial centres. Politically, these interests were based in the Liberal parties with close ties to the U.S. government and transnational corporations.

The dominant political reality for the Latin American left has for a long time been the hegemony of the United States, seen most directly in its support for ugly dictatorships. Today the unipolar world of the US domination is based on its unchallenged military power, the economic and political power of finance capital and its support system, and the control of the international mass media with its portrayal of the “North American Way of Life,”middle class affluence.

Creating a new alternative
In the 1990s there was an attempt to revive the social democratic parties in Latin America.. Sader argues that they made a comeback “as the standard-bearer of globalization,” especially in their support for free trade agreements. However, the social democrats have not had a significant political impact because they lack the class base found in the advanced industrialized countries.

The World Social Forum had its start in Latin America as defenders and promoters of local resistance movements. But this attempt at change was doomed to fail. As Sader argues, “as long as the social movements limited themselves to the social sphere, they remained on the defensive, unable to create the instruments needed to fight for political hegemony.” Only new structures of power could possibly create “the other possible world.”

The shift against the dominant neoliberal agenda began in 1998 with the election of Hugo Chavez as President in Venezuela. Most important was the defeat of the Free Trade Area of the Americas, pushed by the U.S. government and big business. Instead, Chavez and other progressive governments undertook the development of an important alternative: Latin American economic co-operation. This began with Mercosur and moved to the Alianza Bolivariana para los Pueblos de Nuestra America (ALBA), the Bank of the South, the continental gas pipeline, and the Union of South American Nations. Venezuela’s oil, shared on a socialist basis, has been important to this development.