Canada’s biggest oil sands companies have benefitted to the tune of $4.3 billion since Alberta handed large corporations a ‘job creation’ tax cut three years ago, but those jobs never materialized, a new study has found.
Instead, a total of 3,452 jobs with oil sands majors were lost to automation and consolidation since 2019, concludes the report from the University of Alberta’s Parkland Institute. “Meanwhile, those same companies added millions of dollars to the compensation of their CEOs and rewarded their shareholders with generous dividends,” the institute says.
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Alberta Premier Jason Kenney’s United Conservative Party (UCP) government said 55,000 new jobs would be created, offsetting a projected $2.4-billion loss in revenue, from its plan to cut the corporate tax rate from 12% in 2019 to 8% by 2022. But three years later, and with the 8% tax cut delivered two years ahead of schedule via Alberta’s Recovery Plan, Parkland says that the boon to the corporate sector enriched the coffers of the oil sands “Big Four,” even as provincial revenues tanked by twice the projected amount. And 3,452 oil sands workers have been given pink slips.
“The oil sands majors have been cutting jobs on the front lines, but CEOs and shareholders have remained very well compensated,” said report author Ian Hussey, research manager at Parkland. Digging into the details, he found the CEOs of the so-called “Big Four”—Suncor Energy, Canadian Natural Resource Ltd.,, Cenovus Energy, and Imperial Oil, which account for some 86% of Canada’s oil sands production—have been enjoying an average annual pay raise of $2.35 million since the UCP corporate tax rate changed. The policy shift that left the “Big Four” alone $4.3 billion richer.
With that same amount, the government of Alberta would have had enough funds to add more than 10,000 new employees to its payroll in critical areas like health care and education, Hussey said.
The study found that shareholders have also been considerably enriched, with dividends in some cases totalling “more than twice the amount oil companies paid the province in royalties.”
In 2021, when Big Four CEOs were averaging $12.8 million annual paycheques, and the price of oil was skyrocketing, 2,988 oil workers lost their jobs, a finding that “should concern the UCP government and all Albertans,” Hussey said.
A sustained decrease in capital spending is partly responsible for the job losses, as is the fact that the oil industry has “entered the mature phase of its business life cycle,” he added.
Spending was also reduced as the Big Four navigated weak oil prices from 2015 to 2020, and now the “recent price unpredictability linked to the pandemic and to the Russian invasion of Ukraine.”
And now, despite the UCP’s tax giveaway, “no new oil sands mining megaprojects are being developed or proposed.”
Automation is also driving job losses in the oilfields themselves. Beginning in the wake of the 2014 oil price crash, the process the industry likes to call “de-manning” has intensified since the pandemic, with digitalization in field and back office operations looming large in this “troubling trend.”
The climate emergency is also lighting a fire under oil operators determined to squeeze every dollar out of their dying industry. “Leading oil sands companies are speeding up automation to lower production costs by cutting jobs because they will soon be competing in a shrinking market, as the peak of global oil demand is likely to occur in the next five years,” Hussey said.
Citing a forecast from Ernst & Young and Petroleum Labour Market Information, he adds that automation may result in 46,108 job losses in the Canadian upstream oil and gas sector by 2040.
Amongst several recommendations, Hussey urges a return to a 12% tax rate for large corporations (the standard across British Columbia, Saskatchewan, and Manitoba) and a federal windfall profit tax “to help pay for household support programs.”
Prime Minister Justin Trudeau has to bring back the National Energy Program to stop Big Oil from looting the taxpayer.
I can guarantee you if the NEP was still in effect there would be no climate change policy in this country
Right you are. Because if *Pierre* Trudeau’s National Energy Program were still in effect, it would be the 1980s, and nobody would know about climate change yet except Exxon, the American Petroleum Institute, and the fossil utilities!
When Cenovus took over Husky they laid off over 2500 people . You should add those to the list
Cenovus was also one of the companies that helped bring the term “de-manning” into the vocabulary.
As someone who works with words every day, I cannot tell you how many different ways I object to this language.