The Regina Municipal Election: A flood of candidates is one sign that residents are fed up

Act Up in Saskatchewan

The Regina municipal election will take place on October 24. In contrast to the election three years ago, there has been a remarkable increase in the number of candidates running for seats on City Council. Furthermore, there are nine candidates running for the position of Mayor. We may see a much higher turnout of voters this time and perhaps a different city administration.

Regina used to be a solid NDP town. But in the last municipal election the turnout of voters fell to 25%, which always benefits those with higher incomes. As a result, the political right re-elected Mayor Pat  Fiacco, a known Stephen Harper and Brad Wall supporter. Judging by their voting record on key issues, it quickly became apparent that the political right also swept City Council. However, a revolt against the incumbents began in 2011 when the Mayor and his business friends produced a plan to build a new football stadium.

The fallout from Regina’s boom economy
Over the past five years Regina has experienced a major boom, a reflection of the fact that people  have flooded into the province to work at the major expansions being undertaken by the existing potash mines and the new Bakken oil play. This has resulted in a serious housing shortage. The market price of existing single family dwellings has doubled over this time period. New houses are being build in new subdivisions, but almost all of them are in the range of $500,000, which is unaffordable for the majority of families and individuals.

Furthermore, rental alternatives are virtually non-existent, with the city having the lowest vacancy rate (0.6%) in the country. With virtually no direction from city planners, builders have constructed very few apartments over the past 20 years. Many existing apartments have been converted to condominiums. As a result, rental rates have skyrocketed, and it is now virtually impossible to find a one-bedroom apartment for less that $850 per month.

On top of this, the number of social housing units available has been declining for a number of years, as both the provincial and city housing authorities have been selling them off. There is now a desperate need for social and affordable housing. But this crisis situation has not led the Mayor and his passive supporters on City Council to take any serious action.

The media has named the stadium design "The Toilet Bowl."

We Need a New Football Stadium!
On the other hand, the Saskatchewan Roughriders want a new football stadium. Mayor Pat Fiacco needs a legacy project as he is not seeking re-election. The builders and developers want more land on which to build houses. Realtors want more houses to sell.

On April 19, 2011 Mayor Fiacco surprised everyone, including planners at City Hall, by announcing his own project, the Regina Revitalization Initiative. This was to include a replacement for Mosaic Stadium, expected to have a retractable roof. It would be built on the CP Rail lands on Dewdney Avenue, with links to the downtown area. Mosaic Stadium would be torn down, and the private sector would begin to build market housing on the Mosaic land sometime within the next fifteen years.

Ailing NDP Must Return to Its Historic Roots

Leader-Post

The Saskatchewan New Democratic Party is facing the most crucial decision in its history when it chooses its next leader. They have gone from being the “natural governing party” to a weak opposition party. Without a serious change of direction, it is doubtful if they will ever form the government again.

The vote in support of the NDP has fallen from 275,000 in 1991 to 127,000 in 2011. They are now down to only nine seats in the legislature. With the collapse of the Liberal Party in the 2011 election, their share of the votes cast fell to 32% while that of the Saskatchewan Party rose to 64%.  NDP membership has fallen from 46,000 at the time of the 1991 election to around 8,000 in 2011. The party is no longer even dominant in Regina.

The disillusionment of the population with the NDP is reflected in the turnout in the elections. In the 1991 provincial election, where the NDP received a majority of the votes, 83% of those who were enumerated went to the polls. This fell to 66% in 2011. But many people are no longer enumerated. Of those eligible to vote in 2011 (citizens 18 and older), only 49% voted.

This is not an unusual development. Similar trends can be found in all the advanced industrialized countries. Many former supporters of the social democrats are refusing to vote or shifting to new parties of the left, the Greens, and neo-fascist parties of the right.

The most important reason for this is the shift to the neoliberal right by the social democratic parties. Almost all of them have abandoned their historic social justice agenda for the free market and free trade policies advocated by big business.

Under the leadership of Roy Romanow and Lorne Calvert (1991-2007), the Saskatchewan NDP led the political change of direction in Canada. The new policies included cutting taxes on corporations and those in the higher income brackets, lowering the royalties and taxes paid by the corporations extracting our resources, privatizing state owned enterprise, deregulating the economy, and cutting and eliminating social programs.

The NDP surrendered the vote in rural Saskatchewan when they supported rail line abandonment and the closing of grain elevators, closed 51 hospitals under the “wellness model,” cut grants to municipalities and school boards, abolished the Gross Revenue Insurance Plan, and shifted their support from the co-operative movement to corporate agribusiness.

Secondly, they adopted an authoritarian, liberal party system. The leader set the policy agenda, and everyone else was to toe the line. Open public debates on important issues were no longer tolerated. The platform for elections was set by the leader and professional spin doctors. There was a strong move away from the democratic process.

The NDP was ready for a serious renewal following their defeat in the 2007 election and the resignation of Lorne Calvert as leader. Instead, the party’s caucus and a few key trade unions brought back Dwaine Lingenfelter from Nexen Corporation and mobilized to get him elected leader. Everyone knew that he represented the old neoliberal order. The results were a disaster for the party.

If the NDP is to seriously try to win enough votes to form the government it must make a clean break with the Romanow-Calvert years. We already have one party representing big business, the Saskatchewan Party. The NDP must once again become a broad democratic party pushed from the bottom up. It must return to a policy agenda that represents the interests of the large majority, the “Saskatchewan Way,” which was the co-operative social democratic agenda.

John W. Warnock is a Regina political economist and political activist and author of Saskatchewan: The Roots of Discontent and Protest.

What Happened to Social Democracy?

Anyone who has followed the current economic and financial crisis in Europe knows that social democratic governments and parties have consistently lined up on the side of the banks and the rich in the ongoing political conflict. The policies they have implemented while in government have been nearly identical to those advanced by the traditional right wing parties and governments. In several counties, the social democrats have formed political alliances to govern with the right wing parties. What is going on here?

It is hard to get answers from social democrats who hold office. The leaders of the larger trade unions make excuses or remain silent. Those who have traditionally voted for these parties, or taken out memberships, are mystified. But you can find some answers in a new book edited by Bryan Evans and Ingo Schmidt: Social Democracy After the Cold War, recently published by Athabasca University Press.

The Third Way  - revised
I can remember when Sweden was referred to as the “Third Way” – the alternative to the Anglo-American version of unfettered and rapacious capitalism and the totalitarian version of state socialism that was the Soviet Union. Sweden was a deeply democratic country with the great majority of workers in trade unions, a solid base of democratic social organizations, where the Social Democratic Workers Party formed the government between 1932 and 1976. With a progressive system of taxation, they had created a society with a comprehensive, universal welfare state that had all but eliminated poverty.

Now the Third Way is identified with the neoliberal package of policies implemented by the same social democratic parties. This includes greatly reduced taxes on corporations and the rich, major cuts to universal social programs, privatization of state-owned enterprises, deregulation of the economy and the backing of the “free trade” treaties as advocated by the largest corporations and financial institutions. US President Bill Clinton and British Prime Minister Tony Blair led the way in deregulating the financial sector and refusing to regulate the new derivatives markets, directly leading to the financial collapse and the Great Recession which began in 2008.


Social democratic parties as we know them emerged after 1919 with a split in the broad working class  movement. Parties which backed the new Soviet Union formed the Third International Workingmen’s Association. They wanted to replace the capitalist system with a government of the working class, implementing a socialist alternative. The remaining parties stayed in the revised Second International. While some of these parties hoped to create a socialist society through the electoral route, most sought simply to reform the system, to create a “capitalism with a human face.”

The high point for this reformist social democratic vision was the period between 1945 and 1975. The world economy was booming, workers were expanding the trade union movement, and governments were introducing the new welfare state. This boom period ended when Paul Volker and the central bankers raised interest rates and created the major world recession of 1980-2. The election of Margaret Thatcher’s government in 1979 and Ronald Reagan’s presidency in 1980 turned the tide, leading an all out war against the Swedish Third Way.

Apple, Steve Jobs and Capitalism in the Era of Free Trade: A Note for Labour Day

On August 20, 2012 the business press announced that Apple Inc. had become the largest company in history based on a market capitalization of $665 billion. Its long time CEO, Steve Jobs, was widely seen as a technological genius and had become the popular personification of the modern American capitalist. But as Labour Day approaches, Apple’s success also explains why the organizations which represented large corporations and their political and academic supporters have been so determined to push through the “free trade” agenda.

Apple is a classic American success story. Founded by three friends in 1976, it went public in 1980, sold its first Mackintosh computer in 1984, and it first portable computer in 1989. It has held its own in competition with Microsoft. Today it leads the technological industry with its Mackintosh computers and its personal electronics: the iPod, iPhone, and iPad.

In the early days Apple proudly proclaimed that its products were “Made in the USA.” But this has changed with the competitive drive to maximize sales and profits. Production was shifted abroad. By 2002 it only had one production unit in the USA, the plant at Elk Grove, California. Its call centres are still based in the USA, and its head office remains in the Silicon Valley. Today it reports 43,000 employees in the USA and 20,000 overseas. But through contractors for the production, it employs another 700,000, all of them overseas, mostly in China.

Foxconn workers for Apple. Inc.

Using offshore tax havens
 Walter Isaacson’s biography of Steve Jobs has been on the best seller’s list for a long time. Strangely, it ignores the importance of utilizing the features of the “free trade” agreements to the economic and financial success of the corporation.

Apple established subsidiaries in well-known tax havens: Ireland, the Netherlands, Luxembourg and the British Virgin Islands. The headquarters for Apple’s operations in Europe, the Middle East and Africa were established in Cork, Ireland. Like other large transnational corporations, Apple has used all the tricks to maximize its profits in these countries and to get around paying taxes on its profits. In the business this has been referred to as “A double Irish with a Dutch sandwich.”

Shifting production to China 
Apple does not own production facilities abroad. Instead, it uses contractors. The most important by far is Foxconn International, a Taiwanese corporation with extensive operations in Shenzhen, China and elsewhere. Foxconn has around one million employees and produces around 40% of the world’s consumer electronics.

The reasons for the shift in production to China are clear. In 2010 the Asian Development Bank reported that the iPhone cost $178 to manufacture and sold in the United States for $500. This produced a gross profit of 64%. Overall, the profit rate for Apple has been around 40%, compared to the 10% to 20% which is the range for other high tech corporations. Recently the Chinese government raised the minimum wage for Shenzhen to the equivalent of US$238 per month, with employees working six days a week. Foxconn is now moving its factories to other areas of China and South Asia where wages are lower.

In February 2011 President Barrack Obama had dinner with Steve Jobs and other key figures in the high tech industries in Silicon Valley. Obama asked Jobs why this industry could not be brought back to the USA. “These jobs are not coming back,” he replied. Much lower wages are a major factor. But as the New York Times reported, “Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that ‘Made in the U.S.A.’ is no longer a viable option for most Apple products.”

 Of course this was what the “free trade” agreements have been all about. Trade in itself was already largely free, as tariffs had been radically reduced as had other barriers to trade. What corporate executives wanted was the freedom to invest anywhere in the world and to repatriate profits without government interference. The results were as expected: the steady decline of manufacturing in all of the advanced industrialized countries.

Remembering Sask Oil: It Can Be Done!

This past week it was revealed that one of China’s state-owned oil corporations has made a bid to take over Nexen, one of the remaining four large oil corporations operating in this country that are deemed to be Canadian owned and controlled. Nexen is based in Calgary, but it is known that around 65% of its stock ownership is foreign. In recent years there has been a steady disappearance of major Canadian corporations as they are being swallowed up by larger transnational corporations. This is very noticeable in Saskatchewan.

Erin Weir, an economist with the Steelworkers, has reminded us that the Saskatchewan Oil and Gas Corporation (Sask Oil), once a Crown corporation, was privatized beginning with Grant Devine’s Conservative government, became Wascana Energy, and then was taken over by Occidental Oil corporation, which then became Nexen. So much of Nexen’s land holdings and oil and gas wells in Saskatchewan will now end up as Chinese assets. How did this happen? Are Canadians incapable of running their own economy? Do all of the profits from the extraction of our non-renewable resources have to flow out of the country? Does anyone care any longer?

Moving to take control of our economy
The New Democratic Party under the leadership of Allan Blakeney was elected in 1971. The platform pledged that if elected they would create a Crown corporation in the oil and gas area. In 1973 the NDP government was faced with the major increase in world oil prices created by the OPEC producers' cartel. Oil prices rose dramatically in Canada. Rather than let the private oil companies capture this windfall gain, the Blakeney government, in tandem with Peter Loughheed’s Tory government in Alberta, introduced a new excess profits tax which would capture all the increase for the general public.

Of course, the oil corporations fought back, and the federal government took their side in the dispute. They went to court against the two provinces. In 1977 the court ruled the action taken by the NDP government, which took the form of a royalty surcharge, was ultra vires. Not backing down, the Blakeney government then introduced a new income tax on oil revenues and made it retroactive. Those were certainly different times. Governments were actually willing to stand up for their constituents.

In 1973 the NDP government created Sask Oil. There was no nationalization; it bought the assets of other oil corporations. By 1981 Sask Oil had assets of $191 million, gross revenues of $60 million, and paid $26 million in royalties to the government. The Blakeney government also raised the oil royalties significantly. The share of the economic rent (excess profits) going to the general population rose form 13% in 1972 to reach a high of 65% in 1982. The oil corporations did not pack up and leave as they were still making good profits.

Grant Devine's Tory government
But the trend of expanding democracy ended in 1982 then Grant Devine’s Conservative government took office. They were committed to turning over the Crown corporations in the resource sectors to private investors. In October 1985 they began selling off Sask Oil: 100 million shares were offered for one-third of the company, at a price of $9 per share. The majority of the stock in Sask Oil was sold by the end of 1986. At the end of this process, 75% of the new owners of Sask Oil lived outside Saskatchewan, a majority in the United States.

In 1988 the Devine government sold Sask Power Corporation’s natural gas holdings in Alberta to the now privatized Sask Oil for $325 million, and all but $124 million was financed by Sask Power. These reserves represented a 15 year supply for the Saskatchewan market.  At market prices at the time, these assets were worth $984 million. Privatization always represents the theft of public goods by private investors.

Regina's Co-op refinery can't be privatized

No change with the new NDP government
Many hoped that when the NDP under Roy Romanow was elected in 1991 this trend would be reversed. But this was not to be the case. The new NDP government simply completed the privatizations that had been begun by the Devine government. This included selling off the remaining shares of Sask Oil still owned by the government. They also removed the restrictions on foreign ownership imposed by the Devine government. Following the trend set by the Conservatives, the NDP governments of Roy Romanow and then Lorne Calvert further reduced the royalties on the extraction of our oil, down to only 15% of the economic rent collected.

The experience of the NDP government under the leadership of Allan Blakeney demonstrated that the people of Saskatchewan have the ability to run their own economy. A Heritage Fund was created, and part of the royalties collected from the extraction and export of our non-renewable resources was used to finance further local ownership and control. However, it seems that these days only Third World countries have the confidence to stand up to international capital as well as their local comprador bourgeois class and their right wing political allies.

The Fraser Institute's Global Energy Survey

 Act Up in Saskatchewan

Near the end of June 2012 the Fraser Institute released their latest survey of the oil and gas industry. They reported that 623 managers and executives from 529 oil and gas companies had ranked Manitoba and Saskatchewan near the top of 147 political jurisdictions as good places to invest. In contrast, New Brunswick and Quebec were given fairly low ratings.

A great deal of the reporting was of no surprise and the results were not that controversial. For example, the political turmoil, international wars, and civil wars naturally led corporation representatives to warn about investing in much of Africa and the Middle East. There was also the issue of government corruption, well known in many of the countries surveyed.

The level of taxes and royalties
More important for the Canadian public was the judgement that corporation officials had on the fiscal terms of investing in various jurisdictions: what is the level of royalties and taxes imposed on the oil and gas industry?  Here Manitoba and Saskatchewan ranked very high, along with Oklahoma, Texas, North Dakota, Ohio and Louisiana, as political jurisdictions with the very lowest taxes on petroleum corporations. Those with the “worst” ratings included Venezuela, Libya, Russia, Iran, Algeria, Bolivia, Iraq, Uzbekistan, Kuwait and Ecuador. These countries have state-owned National Oil Corporations (NOCs) as well as high royalties and taxes.

Countries were given poor marks for keeping old Keynesian “trade barriers.” These included government currency controls and capital controls. One of the central objectives of the various “free trade” agreements was to allow corporations to move capital around and repatriate profits without any government interference.

Political jurisdictions were also judged on their general taxation regimes: did they have progressive income taxes, high corporate taxes, and capital taxes? Here, Manitoba was given very high marks while Venezuela was given the worst ranking. Oil corporations are in love with the Manitoba NDP government.

U.S. billionaires David and Charles Koch gave $500,000 to the Fraser Institute

Are there environmental regulations?
Another key issue surveyed concerned environmental regulations and their enforcement. Were there heavy fines on corporations for causing pollution? Was there a regime of stringent enforcement? Again, Manitoba was ranked high at number 5 and Saskatchewan at number 15. In western Canada our political regimes are very pro-business. Polluters do not pay.

In 2009 Alberta was given an astonishing low rating (92) because the provincial Conservative government was considering a new royalty regime. They quickly backed away from this, and in 2012 the oil executives in turn boosted their overall ranking to 21.

New Brunswick and Quebec received the lowest rankings in Canada because of “threats by anti-development activists.” In both provinces there is strong grass roots opposition to hydraulic fracking to extract natural gas from shale oil rock, fearing that this will pollute ground water sources. New York received the lowest rating of the U.S. states for the same reason.

Saskatchewan ranks high
The Regina Leader-Post noted that Manitoba was “on top” (5th overall) and that Saskatchewan had fallen to 13th place. At one time under Roy Romanow’s NDP government the province had ranked higher in the Fraser Institute survey.

But what should be of interest to the people of Saskatchewan is that the corporate representatives gave Saskatchewan the second highest rating (69%) on the question of whether the province had a fiscal regime that encouraged investment. Of 147 political jurisdictions, only Ireland (77%) was higher, and they have virtually no oil and gas industry. Thanks to the governments of Roy Romanow and Lorne Calvert, we are known for having the lowest royalties and taxes.

In an editorial on June 21, the Leader Post proclaimed that the people of Saskatchewan had learned their lesson. No longer would we have Crown corporations run by local people developing our uranium, oil and potash. This was best done by “private investors,” which of course means large transnational corporations. As they argued, “only ideological zealots of the far left” would threaten public ownership of resources, which would cut off foreign investment.

Crown Corporation privatized by Devine and Romanow governments

A new investment climate
However, those countries which the Fraser Institute identifies as the worst places to invest also seem to have most of the undeveloped oil and gas reserves. Their newly elected governments have been raising royalties and taxes and expanding their control over their natural resources through state-owned oil and gas corporations.

But what happens if the large private transnational oil and gas corporations decide to pull out in protest? As we have seen in Venezuela, Bolivia and Ecuador, other oil corporations quickly rush to take their place. Many of these are also state-owned corporations. Most Canadians seem to be aware of the fact that the Chinese National Oil Companies, which remain state-owned, are investing everywhere they can. Even in the Alberta tar sands. Today, there are many alternatives to Exxon-Mobil and their like.

On top of this, those nasty governments in Venezuela, Bolivia and Ecuador are using their additional revenues from the oil and gas industry to support programs aimed at reducing  poverty. What could be worse!

Currently, the industry and their supporters have directed their political and economic anger at the government of Argentina. This democratic government, with strong popular support, re-nationalized their largest oil company, YPF, once a state-owned corporation that had been privatized by a previous government. That was a very bad precedent. It might even give Canadians some ideas.

Who Owns Alberta's Tar Sands?

In theory, the tar sands, as a Canadian natural resource, are owned by the people of Alberta. Their government has the right under the Constitution to give it away. That is what they are doing, of course. Information on shareholders reveals that 71% of all the profits resulting from the tar sands operations goes to foreigners.

Nikki Skuce of Forest Ethics Advocacy has used Bloomberg Professional and data from Oilsands Review to calculate the extent of foreign ownership and control of the major corporations involved in the extraction and processing of the bitumen which is processed into usable oil products. The results are below:

Foreign Owned Oilsands Corporations: percent foreign ownership

Statoil, 99.8%
Mocal Energy (JX Holdings), 99.3%
Murphy Oil, 99.2%
Royal Dutch Shell, 98.5%
Devon Energy, 98.4%
ConocoPhillips, 97.8%
Petrobank Energy Resources, 94.8%
Husky Energy, 90.9%
MEG energy, 89.1%
Imperial Oil, 88.9%

Canadian Oilsands Corporations : percent foreign ownership

Nexen, 69.9%
Canadian Natural Resources Limited, 58.8%
Suncor energy, 56.8%
Canadian Oil Sands, 56.8%
Cenovus, 54.7%

SOURCE:  Nikki Skuce. Forest Ethics Advocacy