Alberta oil workers rally against royalty hikes

Labour leader suspicious of PR firm hired to promote rally

Last Updated: Wednesday, October 17, 2007 | 12:07 PM MT

CBC News

Fearing for their livelihoods, hundreds of oil workers gathered outside the Alberta legislature Wednesday to protest higher royalties, on the same day a research group called on the province to hike the rates charged to energy companies by 90 per cent.

A protester carries a sign referring to the much-hated national energy program that rocked Alberta's economy in the 1970s.
(CBC)

The workers are worried about huge job losses and an economic slowdown if the province follows through on recommendations by a government-appointed panel to charge oil and gas companies another $2 billion a year for the right to extract resources.

Premier Ed Stelmach is reviewing the panel's report, which concluded Albertans had been shortchanged for years. An official response is expected by next week.

On Wednesday, the Parkland Institute released its own report saying royalties should be boosted by 90 per cent, rather than the "timid" 20 per cent recommended by the panel. The group also called for government ownership of energy companies.

Research director Diana Gibson said Albertans should get the same kind of return on the province's resources as a high-paying energy executive would get for his shareholders.

Energy companies have launched an offensive against any royalty increases, warning they would be forced to trim jobs and drastically cut back on investments in Alberta.

Energy workers arrive for a rally at the Alberta legislature protesting any changes to royalty rates.
(CBC)

Dave Hamsing, who runs a drilling company south of Calgary, said companies are already scaling back operations, waiting to see how the government responds to the royalty review.

Hamsing has only two rigs booked this winter, after six were cancelled. He fears another bust in Alberta is a possibility.

"The ones who suffer from the fallout will be us, the service companies, entrepreneurs, employees, families. The rest of Alberta is going to suffer if they implement the royalty report in its state," said Derrick Jacobson, owner of a small oil service company in Red Deer.

"It's not threats anymore, I mean some companies have shifted operations to Saskatchewan already."

'This is clearly a rally that's been organized by employers.'—Gil McGowan, Alberta Federation of Labour

Jacobson called Wednesday's protest in Edmonton a "grassroots oil workers rally," but the involvement of a high-priced public relations firm is raising questions.

"This is clearly a rally that's been organized by employers, not rank-and-file oilfield workers," said Gil McGowan, president of the Alberta Federation of Labour.

He believes some smaller companies and their employees are being swayed by "big oil scare tactics."

"In places like Suncor and Petro-Can and Husky, those members are telling us very clearly that they support the recommendations being put forward and in fact many of them are saying that they should go further."

McGowan has organized his own rally, scheduled for Thursday night in Fort McMurray, to counter the one at the legislature.