EDMONTON - The provincial government's decision to cut infrastructure spending and impose a public-sector hiring freeze is hard to justify in light of the rosy financial figures released today, says Alberta Federation of Labour president Les Steel.
According to the government's own documents, the provincial economy is expected to grow by 4.9 percent in 2001 - more than double the national average. At the same time, private and public sector investment is expected to increase by 14.2 percent.
"The Premier and the Finance Minister want Albertans to believe that we can no longer afford to hire desperately needed staff in areas like health and education. And they want us to believe we can no longer afford to invest in infrastructure," says Steel. "But the government's own budget forecast paints a different picture. There doesn't seem to be any good reason to embark on another austerity program."
Steel points out that the price of oil is exactly what the government predicted it would be at this time - and the price of natural gas is only marginally lower.
"It's true that the international economy has taken a turn for the worse and that places like Ontario and the U.S. are edging toward a recession," said Steel. "But here in Alberta, the sky is not falling."
Steel says the labour movement is particularly concerned about the public-sector hiring freeze, deferred construction projects and the decision to reduce transportation grants to municipalities - which have already been cut in half over the past seven or eight years.
"The hiring freeze means that we won't be able to deal with the staffing shortage that is currently undermining service in areas like health care and children's services," says Steel. "And the decision to defer infrastructure projects and further reduce grants to municipality's means that our province's infrastructure will continue to deteriorate. These projects were already long overdue. This is just going to make a bad situation worse."
Steel says the government's new fiscal plan proves - once again - that the Klein Tories have an unhealthy and inflexible focus on debt elimination at all costs.
"They want Albertans to believe that cuts to people and services are the only option," he says. "But there are other options for dealing with the dip in natural gas revenues. What about 'deferring' debt elimination for a few years? And what about 'deferring' tax cuts for corporations and the wealthy until resource prices rebound? The government has to realize that cuts are not the solution to every problem."
For more information call: Les Steel, AFL President @ (780) 499-4135
Deep cuts to health care, education and other services would have not been necessary if Klein had been a better steward of Alberta's petroleum resources
EDMONTON - Premier Ralph Klein owes Albertans an explanation about why his government has failed to collect appropriate levels of royalties from the province's booming oil and gas sector, says the president of Alberta's largest labour organization.
Audrey Cormack, president of the Alberta Federation of Labour, says the province could be collecting billions of dollars more each year in royalties, taxes and other fees - money that could be used to improve health care, education and other cash-strapped public services.
"Premier Klein likes to portray himself as a smooth operator and a tough bargainer," says Cormack. "But it looks like he's been a real push-over when it comes to negotiating royalty rates with big oil and gas companies. His government has been giving away our collectively-owned petroleum resources at bargain basement prices."
Cormack's comments were made in response to a study released yesterday by the Parkland Institute, a public policy think-tank at the University of Alberta. The study shows that the Klein government collects royalties at a much lower rate than other resource-rich jurisdictions and at a lower rate than previous Alberta governments.
"What this study shows is that deep budget cuts weren't the only option open to the government in the mid 90s," says Cormack. "It's clear now that the government's so-called debt problem could also have been solved with a more aggressive approach to the collection of resource revenues. If Albertans had known they were getting such a small return from their resources - especially when compared to the returns enjoyed by citizens living in other resource-rich jurisdictions - they probably would have been even more opposed to deep cuts to important public services like health care and education."
Cormack rejects the government's argument that low royalty rates are necessary to encourage new investment, especially in the oilsands. She points out that the government's royalty holidays are available to all tar sands projects, not just the new ones. She also dismisses the argument that lower royalties are justified by the higher costs of oilsands production. The Parkland study shows that - thanks to new technologies - the production costs are now lower in the oilsands than in conventional oil. The study also show that places like Norway and Alaska - where most of the oil is offshore - also faced higher production costs. Despite these higher costs, these jurisdictions still manage to collect significantly higher royalties than Alberta.
"It sounds like Klein and his ministers have been duped by the energy industry - they've bought the sales pitch hook line and sinker," says Cormack. "The truth is that the same companies that are involved in major oilsands projects here in Alberta - companies like Shell and Exxon - are also investing billions in Alaska and Norway. The governments in those jurisdictions have been much more aggressive in getting a bigger share of the pie for the public - but this has not driven away investment."
Cormack says the bottom line is that the Klein government has failed in its role as steward of Alberta's natural resources.
"The government is letting Albertans down," she says. "The Premier says Albertans will get their 'pound of flesh' when the new oilsands projects have been finished and paid for - maybe fifteen years from now. But it the meantime billions and billions of barrels of oil will be pumped out of the ground with very little return for the public. And once that oil is gone, it's gone for good. That means money that could have been used for health care, education and other services is also gone for good."
For more information call:
Audrey M. Cormack, President @ 499-6530(cell)/483-3021(wk)/428-9367(hm)