CALGARY - A controversial labour strategy used by Canadian Natural Resource Ltd. to build its oilsands mega-project could be put to the test later this month if 30,000-plus unionized construction workers in Alberta decide to go on strike.

The Calgary-based company said yesterday the first phase of its $7-billion Horizon project, at which the workforce has peaked at 7,000, is 75% complete and virtually on budget and schedule as it approaches a startup date some time in next year's third quarter.

Questions remain, however, about whether Horizon is really insulated from a looming job action that appears to be gaining momentum among seven unionized building trades in Alberta.

The provincial government granted the project a rarely used status in 2004 under its labour code called Division 8, which Canadian Natural president Steve Laut said yesterday makes it illegal for employees at the site to strike, just as it would be illegal for Canadian Natural to lock workers out.

The status also let Canadian Natural negotiate a blanket agreement with a single union -- the Christian Labour Association of Canada, which Alberta unions see as pro-business -- that binds workers on the site, including those from other Alberta-based unions, for the duration of construction.

Six unions last year challenged the decision to grant that special status but there has been no final ruling, creating a state of limbo that could put some unionized workers at Horizon in a quandary, should a strike be called.

They won't know if it is legal or illegal to walk off the job, even as fellow union members not working at Horizon take job action across the province.

Such a scenario would quickly lead to picket lines forming at the gates of Horizon, so those workers won't have to make a choice, said Gil McGowan, president of the Alberta Federation of Labour.

"If Canadian Natural wants to tell investors it's protected from a strike, then the company is dreaming in technicolour," Mr. McGowan said. "The question around Division 8 hasn't been answered by the labour relations board and if that state remains and a strike occurs, there's a good chance you'll see picket lines at the Horizon gates."

Mr. Laut would not say exactly how many workers at the Horizon site fall within one of the unions threatening job action, but labour leaders estimate the total could run as high as 1,000.

Mr. Laut said the number is much smaller.

Support for a strike among construction trades that are critical to all oilsands projects -- and to major construction projects across the province -- is snowballing, said Barry Salmon, spokesman for a group of five building construction trades that last month overwhelmingly voted in favour of walking off the job.

The group, which includes about 6,000 electricians and another 19,000 boilermakers, millwrights, plumbers and refrigeration mechanics, has been without a contract since May.

Alberta's 7,000 unionized labourers and 6,500 carpenters have also now received permission to hold a strike vote, which will occur on Aug. 15, Mr. Salmon said.

Workers are looking for wage hikes and for protection from the rising cost of living in Alberta, hoping for a two-year contract rather than a four-year deal. Electricians last Friday turned down a contract for a wage hike of 24% between 2007 and 2011.

Talks with the associations that negotiate on behalf of independent contractors were to occur this week but were pushed back, angering several of the unions, Mr. Salmon said. "The earliest a 72-hour strike notice could be served would be Aug. 20, because we're waiting for the boilermakers to re-do their vote because of an internal technical issue with the way the first vote [on July 4] took place," he said.

Canadian Natural reported lower profits in the second quarter but lifted its production outlook for the remainder of the year.

Net income in the quarter fell to $841-million, from $1.04-billion last year, when earnings were inflated by a $438-million gain on tax changes.

National Post, Page FP1, Fri Aug 3 2007
Byline: Jon Harding