ELECTION 2019: GETTING IT RIGHT FOR WORKING ALBERTANS - GIL MCGOWAN PRESIDENT ALBERTA FEDERATION OF LABOUR
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Election 2019: Getting it right
for working Albertans
Gil McGowan
President
Alberta Federation of Labour
2
Something unprecedented is happening to the global oil and gas economy…
US Oil Production
since 2010
values are shown in thousands of barrels produced per day
1
1
1
1
1
4
Price of Oil
2010-2019
The current price of WTI crude oil as of January 15, 2019 is $52.11 per barrel
5
6
Global Oil Investment
7
US Oil Investment
8
AB vs SK in investment
Oil and Gas Employment (Alberta and Texas)
450000
400000
350000
300000
250000
200000
150000
100000
2014 2016 2018
AB TexasTwo final factors • Alberta-specific • Global
Alberta Crude Production continues to
Increase under NDP
Pipeline Capacity and Crude Oil Available for
Export from the WCSB
13WCS price collapses…and recovers
14EIA World Oil Demand Production Scenarios
140
120.5
120
105.5 106.3
102.4
100 94.8 93.9
World Oil Demand (mb/d)
77.3
80
69.9
60
40
20
0
2000 2017 2025 2040
Year
Current Policies New Policies Sustainable DevelopmentWhy do we have to pay attention to the “sustainability scenario”? Because the world is finally waking up to climate change … even if we aren’t.
Diagnosis
US fracking has changed the fundamentals of global oil markets
Global supply-demand balance has been transformed (the world is
awash in oil; scarcity has been replaced by surplus)
Prices will be lower, not just for longer, but probably forever
As a result, investment will remain sluggish (especially for expensive
megaprojects, like the oil sands)
It gets worse: companies are responding by cutting costs… and jobs
They’ve learned how to produce more with fewer people
Finally: the world is moving away from fossil fuels (demand will dry
up)Diagnosis (con’t)
None of this is the result of AB or federal
government policy
It’s all about global trends – which we can’t
control (but must adapt to)Prescription? What is the proper course of treatment for what ails our economy?
Support Alberta’s oil & gas industry
Build new pipeline to access markets other than the US
Incentivize and support “greening” of the industry
Goal: ensure Alberta is last heavy oil producer standing
in an increasingly carbon constrained world
Goal: Use the wealth generated to help build a bridge
to a greener economy
21Diversify the economy
Diversify within oil & gas
Diversify beyond oil & gas
Be ready for change… by leading change
22Invest in infrastructure
Therecord from around the world is clear:
places that invest in infrastructure thrive
Infrastructure is win-win: for workers and
for business
Build resilience by building infrastructure
23Invest in people (by investing in
public services)
High-quality services aren’t just good for individuals,
they’re good for the economy
Education and training
Health Care
New services that make life more affordable (Pharmacare,
Child Care, Dental Care, Long-Term Care, Tuition)
Revenue reform to support quality services
24Protect Workers’ Rights
Workers’ rights are an economic issue
60 per cent of the economy is driven by consumer spending
If wages and benefits are suppressed, the economy suffers
So, if governments are concerned about the economy, they
need to enhance, not erode workers’ rights – and worker
bargaining power
Minimum wage, employment standards, health & safety,
union rights
Public policy benefits
A fairer economy is a more resilient economy
25How do the parties compare on the diagnosis?
Do they get it?
Rachel Notley Jason Kenney
Tacitly acknowledges the energy Denies that anything has changed
transformation in global O&G markets
Understands we’re being buffeted Blames everything on Rachel and
by global forces Justin (and environmentalists)
Accepts climate change science Denies climate change science
Implementing a plan for Has no plan for diversification; says
diversification tax breaks and budget cuts will
bring back good old days
27How do the parties compare on the prescription?
Support Alberta’s Oil & Gas Industry
Rachel Notley Jason Kenney
Got a pipeline approved to west Never got a pipeline approved to
coast west coast
Wins people over with diplomacy Says he’ll go to war with enemies
and resolve of the industry
Supports efforts to “green” the No plan for greening industry;
industry as a competitive strategy criticize oil sands for supporting
CLP
Has talked about using existing
industry as bridge to greener Hasn’t talked about using industry
future as bridge to greener future
29Diversify the economy
Rachel Notely Jason Kenney
Has a plan to diversify within the No plan to diversify within O&G
O&G industry (pivoting towards the
downstream) Voted against NDP diversification
legislation
Refining, Upgrading, Petrochemicals
(leveraged $8.5B of private Says he might cancel NDP
investment this year alone) diversification contracts
Has a plan for diversifying beyond No plan for diversification beyond
O&G O&G
Alberta is now a leader in renewable Would cut budgets that support this
energy work
True heir of Lougheed Hands-off approach (like Klein)
30Invest in infrastructure
Rachel Notley Jason Kenney
Ramped up spending on Will freeze or cut spending on
infrastructure during recession to infrastructure
help both businesses and workers
Would go back to old conservative
Built or renovated more than 250 approach of saying the cupboard is
schools bare (no new schools)
Like Lougheed; legacy of schools, Like Klein: legacy of overcrowded
roads and hospitals hospitals; neighbourhoods without
schools; crumbling infrastructure
31Invest in people
(by investing in public services)
Rachel Notley Jason Kenney
Refused to engage in austerity Promises austerity
during recession
Sometimes says he’ll freeze
Increased spending on services to spending (no adjustments for
match inflation and population inflation or population growth)
growth
Other times says he’ll cut spending
Established $25 a day child care by 25 percent
pilot
Would stop funding child care pilot
Open to pharmacare
Opposed to pharmacare
Won’t discuss revenue reform
Opposed to revenue reform
3233
Protect Workers’ Rights
Rachel Notley Jason Kenney
$15 minimum wage Will freeze minimum wage
Brought Employment Standards and Will rollback all NDP legislation,
Labour Code into the Canadian including changes to Employment
mainstream Standards Code, Labour Code, OH&S
Act and WCB Act
Dramatically strengthened OH&S
Code and WCB Act Calls these protections “costly red
tape”
Protected pensions
UCP wants to rescind public-sector
Gave workers a seat at the table DB pensions
Acknowledges important role of UCP support RTW and other attacks
unions on union rights (even right to strike)
34Conclusions
What Alberta needs is a government with a plan to manage, change, and
diversify the economy
Rachel Notley acknowledges that change is coming and that we have to
prepare for it
Jason Kenney denies change is coming and will leave us unprepared and
vulnerable
Kenney’s plan to cut spending on services and infrastructure will weaken us,
just when we need to be strong
Kenney’s lack of a plan for diversification will leave us exposed
Kenney’s policy tool box will hurt, not help; Notley’s will build resilience
On the economy, Kenney and the UCP are the LAST thing we need, right now
35THANK YOU! www.nextalberta.org
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