Premier Jason Kenney needs to get Alberta taxpayers out of the $70-billion debt hole so he needs to cut government labour costs that have ballooned by more than $3 billion during the downturn.
Union bosses will oppose cuts, but their own advocacy against revenue-generating pipelines and in support of wasteful corporate welfare spending has made the need for cuts even greater.
The Alberta Federation of Labour has consistently fought pipeline development, including the Trans Mountain project which is expected to generate $19.4 billion for the Alberta government during its construction and the first 20 years of operations. That’s a lot of money that could be used to build more schools or pay nurses.
The maximum compensation for a registered nurse in Alberta is $112,974 every year, according to Alberta government data. That means Trans Mountain would generate enough revenue to fund an additional 8,500 top registered nurses for the next 20 years. That’s one-third of the RNs employed by Alberta Health Services.
Instead of staunchly supporting the project and the billions of dollars in extra government revenue that could be used for services, the AFL recommended the National Energy Board cancel the pipeline project.
“[The Trans Mountain expansion project] is not in the public interest of Canadians and [the AFL] asks that the Board recommend against the Project,” reads AFL’s submission to the NEB.
The AFL has a long history of opposing pipelines. Northern Gateway, Energy East, Keystone and the Alberta Clipper pipeline projects have all been opposed by the AFL. The AFL has gone so far as to “applaud” the Obama administration for delaying Keystone XL.
The lack of pipelines and resulting lower oil prices has already cost the provincial treasury billions of dollars. And if key pipelines aren’t built, the lower oil prices and lost investment will cost the Alberta government another $5 billion by 2023, according to its recent budget.
While the pipeline deficit and lower oil prices mean job losses for many Albertans and leaves less money to pay for health care, education and other important services, some people actually prefer low prices. The AFL opposed the Northern Gateway pipeline because higher oil prices would mean refineries that employ AFL affiliates might be less profitable.
“The Northern Gateway Pipeline is not in the public interest because, by reducing the price differential between bitumen and conventional oil, it would remove the major competitive advantage enjoyed by Canadian refiners: which is access to relatively cheap feedstock,” reads AFL’s submission to the Joint Review Panel.
Along with attacking pipelines, the AFL has eroded the public purse by pushing for wasteful spending on corporate welfare.
The AFL acted as cheerleader for a report that tried to shine a positive light on government subsidies for the Sturgeon Refinery.
But this is the same project that was deemed “a multi-billion dollar boondoggle,” by former Alberta finance minister Ted Morton. This government-supported refinery has put taxpayers on the hook for about $25 billion in toll payments, “making it almost impossible … to break even.”
Worse yet, AFL head Gilbert McGowan co-chaired the committee that recommended the government dole out corporate welfare under the guise of energy diversification. The Alberta government has committed $1.6 billion in tax dollars for petrochemical firms. To put that into perspective, that’s about three times as much as the government’s proposed labour cuts.
With a $70-billion debt tab and ballooning labour costs, it’s mathematically necessary for the Alberta government to address its compensation. Whether through attrition, salary cuts or job losses, some government employees will need to take a cut. And some of those cuts will be deeper because union bosses oppose pipelines and support corporate welfare that’s costing Albertans billions.
Franco Terrazzano is the Alberta Director for the Canadian Taxpayers Federation.