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

Canada's Committment to Developing the Tar Sands

Over the past few weeks politicians and the mass media have been ranting about the development of the Alberta tar sands. Thomas Mulcair, the new leader of the federal New Democratic Party (NDP), and a number of left leaning economists have argued that the massive investment in the development of the oil industry in Canada has been giving Canada a dose of the Dutch Disease. The influx of foreign investment has boosted the value of the Canadian dollar and has resulted in the steady decline of the manufacturing industry all across Canada. This is what happened to The Netherlands in the 1960s when its government stressed the rapid development of their offshore petroleum industry. In 2008 the Organization of Economic Co-operation and Development (OECD) had warned Canada about this development.

There should have been a serious debate on the issue, but the politicians and the mainstream media, including the CBC, shot that down by posing the issue as a conflict between central and western Canada.

 But far more important is the question of whether or not the tar sands should be developed at all. It seems that no one in any position of authority in Canada wishes this issue to be opened up to a general, democratic debate.

Tar Sands in Alberta

The position of the NDP 
Thomas Mulcair has regularly stated that he is not opposed to the development of the tar sands. ‘It would be senseless to stop development.” You will “never hear me speaking against the development of the oilsands,” but “we should do it sustainably.” What does Mulcair (and the federal NDP) mean by sustainable development of the tar sands?

First, the federal NDP has demanded the elimination of the $1.4 billion in annual federal subsidies to the oil industry. Quite a few progressive economists, known to be supporters of the NDP, have also called for the provinces of Alberta and Saskatchewan to raise the provincial royalties on the oil industry. Edmonton’s Parkland Institute, using data provided by the Canadian Association of Petroleum Producers (CAPP), has demonstrated that the province of Alberta collects virtually no royalties from the development of the tar sands. As the dissenting economists point out, Canada has by far the lowest resource royalties in the world, no national energy plan, and no state owned oil corporation. When we are giving oil and gas away, how could the corporations resist?

Second, Mulcair and the NDP argue that it is necessary for the federal government to impose either a carbon tax or a “comprehensive cap and trade plan” to deal with greenhouse gas (GHG) emissions. Then there is the issue of local environmental pollution. The corporations profiting from the extraction of oil from the tar sands should also pay for the damage they are doing to the environment in the boreal forest and the toxic pollution of the Athabasca River basin. The principle here, supported by Canadians in a number of public opinion polls, is that the polluter must pay. Full cost pricing is necessary. The public is not happy with the present system where polluting industries pass on the environmental, social and health costs to the public at large.

Tar Sands and the Athabaska River

Greenhouse Gas Emissions and Climate Change 
By far the most important question is whether the tar sands can be developed without having a major impact on the rising levels of carbon dioxide in the atmosphere. This seems to be the issue that all of our political and business leaders wish to avoid.

The science is quite clear on this matter. The burning of fossil fuels in increasing the level of carbon dioxide in the atmosphere, which is raising the earth’s temperature and causing serious climate change. Even the Calgary Herald, the mouthpiece of the oil industry, recognizes that the scientific evidence is convincing.

Over the last 150 years the level of carbon dioxide in the earth’s atmosphere has risen from 280 parts per million (ppm) to 393 ppm. In 1959, the first year that carbon dioxide was measured at the U.S. Weather Bureau station at Mauna Loa , it stood at 316 ppm. The level is steadily increasing. Scientists warn that we are moving towards the “dangerous anthropogenic interference” level where we would experience radical change to our ecosystem. If the tar sands were fully developed, as projected by the oil industry, this alone could raise the level of carbon in the atmosphere by 120 ppm.

The fact is that the oil extracted from the tar sands is a relatively “dirty.” The GHG released through the extraction and refining process is between 3.2 and 4.5 times greater than that of conventional oil. The level of GHG released will increase as the extraction shifts from open pit mining to the in situ process, which requires the consumption of enormous quantities of energy from natural gas and coal to extract the underground bitumen A study by Environment Canada in 2008 projected that the tar sands would be responsible for 95% of the increase in Canada’s industrial GHG emissions over the next ten years.

The only way to reduce the amount of GHG released in the extraction process would be through a major system of carbon capture and storage (CCS). But this “solution” appears to be a pipe dream. Only a couple of projects are in operation, both of which use carbon dioxide to extract more oil and gas. The two test projects begun in Alberta, heavily subsidized by the federal and provincial governments, have been recently abandoned. The private corporations involved withdrew, arguing that they were too costly.

Tar Sands Tailings Ponds

The choice for Canadians 
So what does this mean? James Hansen, who is the director of NASA’s Goddard Institute for Space Studies, and one of the pioneers in research on global warming, recently set forth what we can expect. (NYTimes, May 9, 2012). If the tar sands is developed the way the industry and Canadian governments project, carbon dioxide levels in the atmosphere will rise to over 500 ppm. This level would be “higher than in the Pliocene era, more than 2.5 million years ago, when sea level was at least 50 feet higher than it is now.” There would be the disintegration of the polar ice sheets. Sea levels would rise significantly. “Global temperatures would become intolerable.” Hansen concludes that “civilization would be at risk.”

But even over the short term – the next 20 years – Hansen argues that we would see dramatic changes in climate in North America, including “semi-permanent drought” on the plains, extreme events with heavy flooding, the loss of irrigated farmland in California, and dramatic increases in the price of food. He argues that there must be a comprehensive plan right now to significantly reduce GHG emissions. The last thing we need is to expand the fossil fuel industry.

So Canadians face a clear choice. The likely scenario is that it will be business as usual for the foreseeable future. In 2015 it is possible that the NDP could be elected the government of Canada. Mulcair and the NDP could introduce some kind of plan for a “sustainable” development of the tar sands. We can be sure that the governments of Alberta and Saskatchewan will strongly object. But the development of the tar sands would continue.

However, given the past history of NDP governments in Canada, and social democratic governments in other countries, there is no reason to believe that a serious plan would be adopted to reduce Canada’s GHG emissions. The Romanow-Calvert governments in Saskatchewan (1991-2007) were strongly opposed to the Kyoto Protocol and stood with Alberta governments on these issues. We can’t put our eggs in the NDP basket.

Stephen Harper and the NDP

Act Up in Saskatchewan
May 3, 2012

It is a year this week since the last federal election. Active members and supporters of the New Democratic Party (NDP) celebrate this event, for their party passed the Liberals to finally become Her Majesty’s Official Opposition in the House of Commons. However, others, like myself, remember that day for the fact that Stephen Harper and his Canadian Alliance/Reform Party colleagues were able to squeeze out a majority of the seats in the House of Commons. For us, it was a day of mourning.

For those who live on the prairies, it was worrisome, as we knew the Reformers better than people in the rest of Canada. For years we heard them attacking gay rights, denouncing feminists, opposing abortion and any form of gun control, opposing state-supported child care, denouncing economic support for Aboriginal communities, supporting two-tier medicare, denouncing environmentalists and insisting that climate change was bad science by communists. A great many were Christian fundamentalists, demanding public support for their own separate school systems where they wouldn’t have to teach evolution. They were strong supporters of free market capitalism and opposed collective democratic institutions like the Canadian Wheat Board. They wanted Canada to go into Iraq with the Americans.

Stephen Harper’s relationship with Jack Layton’s NDP
Jack Layton came from a well-known Quebec political family. His grandfather had been a cabinet member in Maurice Duplessis’ Union Nationale government. His father had been an active member of the Quebec Liberal Party and then served as a Member of Parliament and a cabinet member in Brian Mulroney’s Conservative government. 

After a move to Toronto, Layton became a prominent activist in municipal politics. He was elected leader of the NDP in 2003 and won a seat in the House of Commons in the 2004 federal election. His goal was to have the NDP replace the Liberals as the major party of the progressive centre-left. Under his leadership the party became more professional and made a considerable move to the political right. His long term goal was the same as that of Stephen Harper: Canada would move to a two party system similar to that in the other Anglo-American countries.

Bringing down the Liberals
Paul Martin’s minority Liberal government, elected in 2004, was deeply hurt by the Sponsorship scandal. Layton and Harper saw their chance. A non-confidence motion was introduced by Stephen Harper and seconded by Jack Layton. The Liberals were defeated, and an election was held in January 2006. In the campaign Layton and the NDP concentrated their political attack almost exclusively on the Liberals. This strategy gave Canadians their first Stephen Harper government, although it was a minority government.

Two years later opinion polls indicated increased support for Harper and his government. He convinced the Governor General to prorogue the Parliament and call an election for October 2008.  But the Conservatives again failed to win a majority of the seats. In December, in a poorly planned and feeble attempt, the three opposition parties asked the Governor General to allow them to form a coalition government. Harper went on the attack and demonstrated that he is a cunning and skilful political leader. He also had the Governor General in his back pocket.

In what was a coup by the party’s right wing, the Liberal Caucus dumped Stephane Dion and replaced him with Michael Ignatieff. No leadership convention was held. Ignatieff had spent most of his productive adult years in Great Britain and the United States and was unknown to Canadians. The majority of Canadians were opposed to the policies and politics of Stephen Harper’s minority government. But how were they to translate that into an alternative government?

With the Liberals greatly weakened, Harper was keen on a holding a new election, one which promised to give him a majority government. Again, he was aided by Jack Layton and the NDP caucus. In March 2011 Layton and the NDP insisted on voting non-confidence in Harper’s budget and brought down the government. They had a clear option, to denounce the budget but to abstain from casting their votes. But Layton saw an opportunity to move ahead of the Liberals in the House of Commons, and he chose to put the interests of his party first. Harper was elated. On May 2, 2011 with only 38% of the votes, the new Conservatives narrowly won the majority of seats in the House of Commons. Only 59% of Canadians bothered to vote. We are now all paying for that decision.

Do we need to buy the F-35? Does anyone speak for the Canadian public?

By now we all know that there has been a big cock up in Ottawa since the Department of National Defence decided to purchase the F-35 Lightning II fighter-bomber from the United States. The Auditor General has issued a scathing report. The Liberal and NDP opposition in the House of Commons has had a field day attacking the Harper government. But absent from all the political hype is any discussion of the central issue: where is the need for this aircraft within Canada’s broad military policy? On this question we can see that the position of all three of our major political parties is at variance with that of the general public.

Public opinion and Canadian defence policy
There is no question that the events of 9/11 had a dramatic impact on Canadians and their views on national security and defence. But an even greater impact has been the history of Canada’s participation in the U.S.-led and directed war in Afghanistan.

Canada’s mass media has consistently been a strong supporter of Canada’s role as the loyal ally of the United States in foreign policy and its military activities. Thus it is even more surprising to discover that over the past ten years Canadian public opinion polls on foreign and defence policy have found that a majority of Canadians are not comfortable with Canada’s role as an aggressive NATO military power and would much prefer to see our country to be committed once again to United Nations peacekeeping. They would rather Canada act through the UN to provide relief for famine than to drop bombs on less developed countries.

In spite of a major government and media campaign for support of the war in Afghanistan, the majority of Canadians have often disagreed. For example, the Focus Canada polls by Environics have consistently reported low support for the Afghan war, once as low as 24%.

Angus Reid polls have reported similar results over recent years: 55% to 59% opposed to the Afghan war; in 2009 82% wanted to end Canada’s combat role with only 12% in support. In July 2009 they reported that only 38% believed that the Canadian government was right to send our troops to Afghanistan in the first place. Ipsos Reid reported in September 2011 that 75% of Canadians did not believe that the war in Afghanistan was worth the cost. An Angus Reid poll from March 2011 found that 63% of Canadians opposed the military operation of Canadians in Afghanistan with only 32% in support.

A number of polls have reported that around 70% of Canadians prefer a peacekeeping role to a military role in “peacemaking.” The Ekos Research poll in 2005 found Canadians preferring peace keeping over “peace making” by a ratio of 2 to 1.

Canadians prefer UN peacekeeping

What do Canadians want as a defence policy?
In October 2010 Nanos Research asked Canadians what their priorities were for the federal government’s budget. Of the five issues listed, health care ranked first followed by education, jobs and the economy, the environment and taxes. Spending on the military ranked last.

When asked what should be the priority for Canada’s armed forces, the results were as follows:
(1) UN peacekeeping.
(2) Security operations with the U.S.
(3) European NATO commitments.
(4) Overseas combat missions.
A key question asked: “Would you support Canada having another mission like Afghanistan?” The results: 54% strongly opposed, 11% somewhat opposed, 12% strongly supported and 9% somewhat supported. The rest were unsure. None of our three major political parties reflect this majority position.

In June 2011 Ipsos Reid conducted a public opinion poll for the Department of National Defence to see what role the Canadian public would like them to play. The results were as follows:
(1) At the top of the list was disaster relief in Canadian communities.
(2) Ranked second was search and rescue.
(3) Third was patrolling Canadian air space, land and maritime areas.
(4) Next came enforcing Canada’s sovereignty in the Arctic.
(5) “Fighting the war on terrorism” came last.
A poll by Ipsos six months earlier showed that Canadians expressed strong support for the Canadian rank and file forces, but only four percent said that the military and defence should be at the top of the public’s agenda.

Roy Romanow: Payback Time for Warnock!

March 14, 2012

Since the middle of 1991 I have certainly been the most vigorous and persistent critic of the decision of the Saskatchewan NDP under Premier Roy Romano to strongly move the party to the right – or the liberal position – and abandon the left and democratic tradition of the previous NDP governments of Tommy Douglas, Woodrow Lloyd and Allan Blakeney. I have written many newspaper articles, magazine articles, presented papers, contributed chapters in books, and jointly published a book with two of my friends which is an overall critique. In fact, at times I thought that I was the only one in the province who thought this was a bad move. No one active within the NDP put forth any public criticism. No federal NDP leader ever came to Saskatchewan and in any way criticized the neoliberal policies being implemented by Romanow and his successor, Lorne Calvert. Now it seems that Roy has finally been able in some way to pay me back.

Saskatchewan model of medicare reform
In 1991 the new NDP government found that the spending programs of Grant Devine’s Conservative government (1982-91) had left the province with a large debt and annual budget deficits. The Saskatchewan Federation of Labour and the Saskatchewan Coalition for Social Justice argued that the NDP should follow the example of the CCF government of T.C. Douglas. They had paid down a similar debt over 20 years so that they could retain the ability to implement their progressive party platform. Instead, the Romanow government put its first priority on balancing the budget and paying down the debt.

One of the goals of the Romanow government was to reduce the cost of medicare. They chose the liberal road. They closed 52 of 132 hospitals, transforming them into “health centres.” They created 30 health districts, appointed the majority of their boards, and gave them budgets which were set by the provincial government. The districts were forced to shut facilities and contract out services in order to meet the budget cuts set by the provincial government.

With so many rural hospitals closed, people with emergency health problems were forced to travel by ambulance over significant distances to the remaining hospitals. There was the issue of ambulance service. Originally, the Douglas government had paid for ambulance service. Later there were flat user fees charged. The Romnanow government introduced fees by distances covered. It was not unusual for rural residents to have to pay over $700 to take someone to a hospital by ambulance.

The Romanow government called this “the Wellness Model.” It is no surprise that the NDP lost all of its rural ridings. There is a democratic alternative to the liberal model, based on inequality. In 1998 it was advanced by a new political party, the New Green Alliance, which later formally presented it to the Romanow Commission on Health Care.

Regina's Plains Health Centre - Closed!

Changes in Regina
The “Wellness Model” was also instituted in Regina. A private consultant recommended that one hospital be closed, and of course the NDP agreed. They closed the Plains Health Centre, the newest of the three hospitals, built by Allan Blakeney’s NDP government on the southern edge of the city to better serve rural and eastern Saskatchewan. The older two hospitals were to receive some rather expensive upgrading. The key for the Romanow government was that the number of hospital beds in Regina would be reduced from 1200 to 630. They would also move to contract out services. Robins Donuts replaced the on site food services provided by hospital employees.

The Plains hospital was highly regarded. All rooms were private, with large windows looking out at the prairies. Rural communities had contributed to its construction, and they were outraged. The two older hospitals had little room for additional parking space. The Plains was also a teaching centre linked to the University of Saskatchewan schools of medicine and nursing.

Fiacco Steps Down: Will There Be Any Change for Regina?

Act Up in Saskatchewan
March 5, 2012

On Valentine’s Day Mayor Pat Fiacco held a press conference to announce that he was stepping down and would not run in the fall municipal election. A week later he announced that he would be supporting city Councillor Michael Fougere to replace him. Fougere, who has represented Ward 4 for fifteen years, is the president of the Saskatchewan Construction Association.

Both Fiacco and Fougere stated that their primary commitment for the future of Regina was the building of a new domed stadium. This is the central focus of Fiacco’s dream for the development of the old CPR yards on Dewdney Ave. The existing stadium, known to the people  as Taylor Field, is located in the North Central inner city area. Mayor Fiacco has proclaimed that the existing stadium would be torn down and the land would be redeveloped with “affordable and market-rate housing.” This latter part of his plan would begin in 2020.

Taylor Field to be Upgraded 2012

The new domed stadium
The new stadium, with a retractable roof, would have seats for 33,000 fans. In the winter the dome would be closed and it would host major events like rock shows. While no serious studies have been completed, two years ago the estimated cost of the stadium was set at $431 million. The Mayor said then that 75% of the cost would come from the private sector. To break even on operating costs, it was estimated that the stadium would have to host around 31 major events each year to be able to turn a profit of $1 million.

Brad Wall’s provincial government announced support for the stadium. However, it has yet to commit any funds. An appeal was made to Stephen Harper for federal money. It was hoped that PPP Canada would come up with 25% of the cost or at least $100 million. However, the Harper government pointed out that PPP Canada does not provide funding for professional sports facilities. Mayor Fiacco has yet to reveal who from the private sector might invest in the project. It is not clear how much will come from Regina taxpayers.

Even among those who support the domed stadium there were early criticisms. The original estimate did not include the cost of acquiring the land from the CPR. The draft released to the public called for the site to have a hotel and another casino; many asked why this was necessary.  It was quickly pointed out that the original plan does not include any parking facilities! Many supporters want any new stadium to be built out of the city, similar to the hockey stadium in Saskatoon, the Credit Union Centre.

Brad Humphreys, a University of Alberta economist who specializes in researching sports facilities, has warned the people of Regina that many stadiums end up losing money. The Skydome in Toronto was a disaster; originally costing over $800 million, it was sold to Rogers Communications a few years ago for $25 million. His research has indicated that there is no evidence to show that building sports stadiums results in any local net increase in income or jobs. It is widely recognized that professional sports are in competition with other businesses in the entertainment industry for peoples’ discretionary spending. They are not productive enterprises.

Social Democracy and the Greek Disaster

February 13, 2012

On Sunday night, February 12, the Greek Parliament passed the new austerity measures demanded by the Troika of the International Monetary Fund, the European Commission and the European Central Bank. It is widely agreed that the draconian program will drive the Greek economy even deeper into recession. Very few believe that Greece will avoid defaulting on their debt.

The new “restraint” package includes a 22% reduction in the minimum wage, cuts to pensions and the national pharmaceutical drug program, wage cuts, the elimination of 150,000 government jobs, and the privatization of more government businesses and programs. Companies will now be able to unilaterally reduce wages and break contracts with trade unions.

Public opinion polls show an overwhelming majority of Greeks are opposed to the economic measures being imposed on them. The present government is an alliance between the social democratic party,  PASOK, and the conservative New Democracy, presided over by Lucas Papademos, an unelected prime minister and former banker. The latest poll shows 79% opposed to the bailout package, which is designed to try to protect the international banks and their investments in Greek government bonds.

The two major trade union confederations have been holding general strikes across Greece for over a year now. They are formally linked to PASOK, Greece’s version of Canada’s New Democratic Party (NDP). In the 2009 election for the Greek parliament PASOK received 44% of the vote and formed a minority government. In the most recent public opinion poll, their support among potential voters has fallen to 9%. New Democracy is holding at 31%, just slightly less than they received in 2009.

Greeks support general strike

The Greek crisis has shifted public opinion away from the neoliberal social democrats and towards the parties of the left. Support for he Communist Party (PKK), which has played an important role in the general strikes, stands at 13%. The Coalition of the Radical Left, a left green party, is at 12%. The Democratic Left, a socialist party created in 2010, stands at 18%.

When voters were asked who would be the best leader for Greece at this time, the results show the general shift to the left:

Fotis Kouvelis of the Democratic Left – 56%
Alexis Tsipras of the Coalition of the Radical left – 41%
Antonis Samaras of New Democracy - 31%.