The Alberta-B.C. pipeline saga took another turn yesterday with the announcement that the federal government is ready to “nationalize” the Trans Mountain pipeline project to the tune of $4.5 billion. On top of that, Alberta Premier Rachel Notley committed her government to put another $2 billion into an “indemnity pool” that will insure Kinder Morgan against unexpected costs resulting from the B.C. government’s opposition. This is one of the few times that a “nationalization” has been welcomed so warmly by the capitalists, with Kinder Morgan CEO Steve Kean cheerfully declaring it as “a great day”. The company’s share price, which had been sliding because of the delay of the project, moved upward after Finance Minister Bill Morneau made the announcement of Ottawa’s plan to buy the pipeline.
Let us make no mistake as to what kind of nationalization we are witnessing here. This is a corporate-bailout type of nationalization, very similar to how both the federal and Ontario governments bought the shares of General Motors and Chrysler in 2009 during the financial crisis. Both governments injected $13.7 billion into the two auto giants, and in the end they only managed to recoup $10.2 billion, thus costing Canadian workers $3.5 billion. We should expect to see a similar loss incurred by this bailout, a loss that will be shouldered by the working class through future austerity.
The $4.5-billion purchase is just the first down payment on an ongoing series of expenditures. That initial payment merely covers the cost of buying a 65-year-old pipeline that had a spill just last week. Now that the federal government has responsibility for building the new pipeline and covering risk assurances, the final cost is estimated to be between $15-20 billion!
The government has made it clear what this nationalization would entail. Morneau explained in his announcement that it would be a short-term purchase, wherein at the appropriate time the government will return ownership of the pipeline to the private sector. This “appropriate time” would be when the project is no longer incurring heavy losses and instead producing a handsome profit; right now Kinder Morgan is losing about $75 million per month on this project due to the delay. The Liberals’ plan is truly a case of socialism for the rich, where the federal government nationalizes the company’s losses.
Workers, on the other hand, have to be content with capitalism. When it comes to upgrading First Nations water systems in order to completely eliminate boil-water advisories, which would only cost $3.2 billion; to eliminating post-secondary tuition fees, which would cost about $10.2 billion; to funding pharmacare, universal child care, and various programs that would make the working class’ life easier; the money is never to be found. The workers are told that there is no free lunch, and to instead pull themselves up by their bootstraps. Yet corporations are handed all-you-can-eat breakfast, lunch and dinner, with the accompanying desserts.
A very loud and persistent noise has been made that the construction of this pipeline is in the national interest. To the workers this national interest is framed as good-paying jobs, with the oft-repeated mantra that Canada is losing $15 billion per year without this pipeline. Particularly for the many oil workers in Alberta who were laid off when the oil crisis hit in 2015, they pin their hopes for the return of their good-paying oil jobs onto this pipeline. However, they will quickly find this hope to be illusory. All the high paying oil jobs will not be returning, even with the completion of this pipeline. The crisis has forced employers to “trim the fat”. Todd Hirsch, chief economist with ATB Financial, had this to say about the high-paying jobs that used to abound in Alberta’s oil patch: “[It’s a] widely accepted truism now that companies over hired—and overpaid—in 2013 and 2014. Then, when the price crash came, many of those jobs had to go. The reality, and it’s kind of a harsh reality, is a lot of them were unnecessary.” In other words, employers are finding ways to get workers to work harder and longer with less pay, and with the recent climate of crisis in which people were getting laid off left and right, most workers are ready to do just that.
The crisis has also forced oil companies to move toward automation in order to cut labour costs. Mark Salkeld, president and CEO of the Petroleum Services Association of Canada, said a hydraulic fracturing crew that used to require 30 workers—one on each pump—can now be handled by just two people and some remote controls. Therefore, while oilsands output is projected to grow, employment will be for the most part stagnant. (see figure below)
Carol Howes of PetroMLI, an industry group that studies the labour market, added this: “The reality is, it is a different industry going forward than it has been in the past. … [It is] highly unlikely that Canada’s oil and gas industry will rehire all of the workers downsized since late 2014. … [T]he jobs will be different.” The jobs will indeed be different. They will be harder, longer, lower-paying, and few and far between. The construction of the Trans Mountain pipeline will not solve the job crisis in Alberta or B.C.
The main beneficiaries of this pipeline project will be the men and women in suits sitting on top of Calgary skyscrapers. They will pocket most of the proceeds from this expansion of oil production and shipping, while workers receive only chump change, are forced to shoulder the $4.5-billion bailout cost which is expected to balloon well beyond that number, and risk facing environmental catastrophe in the event of oil spills. Furthermore, this saga has divided the working class, forced to choose between the environment and economic prosperity, between respecting the rights of Indigenous communities and creating jobs.
It has also split Indigenous communities, with nearly half of Alberta First Nations along the pipeline route signing benefit agreements or letters of support, and about one-third in B.C. In fact, many Indigenous communities have few other options. Yale First Nation’s chief Ken Hansen said his people had no choice as they needed to seize on Trans Mountain’s cash deal to lift them out of despair. “When we signed this deal, I felt a lot of shame,” Hansen told APTN. Cheam First Nation Chief Ernie Cray says killing the project will deprive impoverished Indigenous communities of much-needed support.
But the working class do not have to choose between the environment and economic development. There is another choice: a socialist program of nationalization of the whole energy industry. Not nationalization under capitalist control as we see today that nationalizes the losses and privatizes the profit, but nationalization under workers’ control. No compensation is necessary as the price of nationalization has been paid dozens of times through decades of low royalty rates. With democratic planning of the socialized energy industry, we can ensure that all the benefits from the oil and gas sectors do not flow into the pockets of the few, but to the whole working people that will ensure: 1) creation of good union jobs; 2) protection of the environment by setting aside the necessary rainy-day fund to deal with any environmental impacts; 3) investment to significantly reduce environmental risk; 4) infrastructure building for all Indigenous communities to end the on-reserve water crisis and chronic poverty; 5) speedy transition to cleaner energy while protecting employment; and 6) free education, pharmacare, public housing, and universal child care for all Canadian workers.
When posed with the question of nationalization of the oil and gas industry in Alberta, the reformist leaders of the Alberta NDP always said that there is no appetite amongst Alberta workers for such program. However, when pressured by the oil barons to ensure the completion of the pipeline, Rachel Notley and her NDP caucus don’t hesitate at all to play the nationalization card. The bosses always welcome nationalization when it is in the interest of their bottom lines, while furiously opposing it when it is in the interest of workers. Yet what is clear from this episode is that workers have been shown not to oppose nationalization when it is framed as being done in their interest, to create good jobs for them. Therefore, it is never a question of workers categorically rejecting nationalization, or having a natural aversion to socialism. It is a question of the NDP leadership who bend easily to pressures from big corporations, and who do not have the audacity to oppose the oil dictatorship with a socialist program of nationalization.
No to the Kinder Morgan bailout!
Nationalize the oil industry under democratic workers’ control!