The verdict is in – the cancelled Keystone XL pipeline has cost Albertans $1.3 billion! Let’s be grateful we dodged the $6 billion bullet in the form of guaranteed loans which would have materialized if it had not been cancelled.
Jason Kenney’s UCP, and the Government of Alberta in general, love giving money away to oil corporations. Aside from the cancelled pipeline, “The Canadian Energy Centre,” Alberta’s “Energy War Room” – a pro-oil propaganda factory – has a $30 million budget. The Premier also saw fit to give $3.5 million over the past two years to Steve Allan for a “public inquiry” into a supposed conspiracy of environmental organizations against Albertan oil interests. Three preliminary supporting reports are based on “junk climate-denial science, bizarre conspiracy theories and oil-industry propaganda.” The final report is due on July 30 – but the report has already been delayed several times and costs have increased 40 percent since it was launched two years ago.
In 2020, the “war room” was slammed by Alberta’s auditor general for lack of financial oversight, having awarded $1.3 million in sole-sourced contracts without documentation. Meanwhile, the government’s budget required $1.7 billion in adjustments due to accounting errors.
There is also the $200,000 a year “Environmental, Social and Governance Secretariat” position, created by the UCP. The ESG Secretariat is nothing more than a government PR agent for the oil industry.
Of Alberta’s 2020-21 $17 billion deficit, only $5.5 billion was related to COVID – the rest is mostly UCP mismanagement.
But Alberta’s financial bleeding comes in many shapes – like those past mistakes of the former Conservative government still lingering in the form of the Public Private Partnership (P3) turned money pit, the Sturgeon Refinery. The province’s 2011 contract with North West Refining and CNR Redwater has cost $27 million a month in debt-servicing costs, as well as $21 million a month for debt principal repayments since June 2020. $25 billion was also committed for toll payments over 30 years (processing fees paid to energy companies).
A 2020 report from the Alberta Petroleum Marketing Commission (APMC), a crown corporation responsible for policy coordination and royalty collection, declared the refinery to have a negative $2.52 billion net value. The refinery had a $500 million operating loss during its first operational year (June 2020 – June 2021). The APMC reported $2.7 billion in losses last year mostly because of the Sturgeon Refinery.
On July 5, 2021, in order to reduce the debt repayment total, the UCP government acquired a 50 percent equity stake in the project via APMC, taking it off the hands of North West. This will supposedly save $2 billion over the lifetime of the project, but now the government is obligated to supply bitumen to the refinery until 2058. (This is while western Canada is experiencing record shattering deadly heat waves due to oil-fueled climate change.) There’s a delicious and unparalleled level of irony to a “free-market” worshipping conservative government intervening in this manner.
There are also the ongoing crude-by-rail contracts owned by the province, for which the bill has hit $2.3 billion. This is thanks to an attempt by the former NDP government to move up to 120,000 barrels of oil per day out of the province when pipeline approvals stalled.
Of course, when the UCP took over they decided it would be a grand idea to slash the corporate tax rate from 12 percent to 8 percent in under two years. Yet, the finance ministry bemoans that it only collected $3 billion in corporate income tax – just two-thirds of what was budgeted.
Oil companies owe $245 million in unpaid taxes to municipal districts across the province, leading to increased property taxes for rural homeowners.
Oh yes, Alberta has serious problems: handing over wads of cash to the oil industry, slashing its revenue streams, and bleeding money from every pore.
Of course, no bourgeois politician (past or present) will ever personally suffer these afflictions. (They’re too busy taking pandemic trips to Hawaii and dining in the Sky Palace.) It is the working people of the province who suffer this vampire-like drain. On July 6, Finance Minister Travis Toews announced a 3 percent pay cut for nurses (since reversed in another Kenney flip-flop). The very people who have worked around the clock saving lives in the COVID pandemic are now made to pay for the mistakes of the ruling class.
The University of Alberta, University of Calgary, and Red Deer College have all faced drastic cuts to their budgets. 11,000 healthcare jobs have been cut. Edmonton Public Schools teaching positions – over 400 jobs cut. 930 jobs in social services, agriculture and forestry – cut. Municipal disaster relief, cut. Camp L.G. Barnes – cut. Funding for income support – cut. Low-income housing – cut. Provincial parks – cut. Municipal funding – cut. The list goes on.
Lethbridge is experiencing record drug-related deaths since the UCP shut down the ARCHES supervised consumption site last summer. Rural hospital beds are closing because of staff shortages. The UCP seized control of public sector pensions, to invest in Alberta Investment Management Corporation. Now they have their eyes set on withdrawing all Albertans pensions from the CPP to reinvest in billions-losing AIMCo.
The Government of Alberta, in all of its incarnations, will stop at nothing to service oil corporations.
Albertans are left holding the bag every time. The NDP and Alberta Federation of Labour should not wait for the next election in 2023 to get rid of the UCP. Kenney is the most unpopular Premier in Canada. A mass campaign to drive the UCP from office would win huge support.
Socialist Alternative calls for:
- No cuts in public services. Stop privatization, casualization and Public Private Partnerships (P3s). Re-nationalize all public utilities and services that have been privatized.
- Fight climate change. Massive public investment in clean renewable energy, housing and building insulation and retrofitting, and energy saving to quickly move to a clean energy system.
- Take the profit out of energy. Public ownership of the top energy companies to protect jobs and convert them to clean energy. Phase out the Tar Sands and nuclear power.
- Public ownership of natural resources, water and fisheries.
- Democratic planning and management and public ownership to ensure protection of the environment, ecosystems and biodiversity and social justice so the poor and working people do not pay for environmental actions. End subsidies to polluting and environmentally damaging companies.
- Create living-wage union jobs for all the unemployed and underemployed through a massive public works program to develop mass transit, renewable energy and energy savings, healthcare, education, and affordable housing.
- Tax the rich and corporations, not working people.
