Wednesday, 12 December 2012

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.

No changes under the NDP
While many believed that the sell off of Saskatchewan Crown assets would end with the election of the Roy Romanow’s NDP government in 1991, this was not to be the case. Instead of moving to take back control of previous developments in the area of natural resources, the Romanow government completed the privatization of Sask Oil and removed the restrictions on foreign ownership that had been imposed by the Devine government. This was just the beginning of NDP privatizations in the resource sector. The worst case was the privatization of the Lloydminister Heavy Oil Upgrader.

Here in Saskatchewan people are looking for the NDP to provide an alternative vision on resource policy. This was very evident in the debate over the ownership and control of the Potash Corporation of Saskatchewan. The NDP’s pathetic policy position at the time no doubt contributed to their devastating defeat in the 2011 provincial election.

So we have four young men running to be the next leader of the NDP. Yes, education and health policy are important issues. But the key election issue will certainly be ownership and control of the province’s economy. Brad Wall has made that clear. The Saskatchewan Party has already begun an attack campaign on the NDP leadership candidates on this issue.

Of the four candidates, only Erin Weir has touched the issue, arguing that if elected leader he would cancel the tax breaks given to the oil and gas and potash industries by Lorne Calvert’s NDP government. The other three candidates have offered no specific policy proposals on this central issue. Who is going to represent the view that the people of Saskatchewan should own and control their own resource industries? We have demonstrated that we have the people right here who can do the job.

The Constitution of Indonesia: "Natural resources shall be under the powers of the State and shall be used to the greatest benefit of the people."  We wish.

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