Wednesday, April 16, 2008

Bipartisanship in privatising profits in Saskatchewan

At one time the government of Saskatchewan developed potash, oil, natural gas, and other resources through crown corporations. Now Saskatchewan is booming but the government has long since privatised potash development, oil and other resource areas so that private shareholders wherever they might be profit most from development. As this snippet from an article by John Warnock for the Green Party point out both the Conservatives and NDP took part in this orgy of privatization even though the present NDP always screams that the Saskatchewan Party is pro-privatisation which of course it is-- but the NDP did nothing to reverse the Devine policy and even continued it at times.
With potash prices soaring will the NDP press for taking the industry back into the public sector?

(1) The oil industry. The NDP sold the remaining government shares in Sask Oil; it is now part of Nexen. They did not re-establish the Heritage Fund. The Lloydminister Heavy Oil Upgrader had been created with 75% of the capital coming from Ottawa, Alberta and Saskatchewan and only 25% from Husky Oil. A 1994 agreement gave Saskatchewan 50% of the equity in this operation, a very good deal. However, the NDP government then turned around in 1998 and sold its shares in this $1.6 billion plant for $310 million.

(2) The potash industry. The NDP government completed the privatization of the Potash Corporation of Saskatchewan. It removed the requirements that limited the extent of individual ownership and that non-Canadians could not own more than 45% of the stock. The majority of the stock is now owned by Americans.

(3) The uranium industry. Cameco was created in 1988 by a merger of Saskatchewan Mining and Development Corporation and Eldorado Nuclear. In 1996 and 2002 the NDP government sold the government’s remaining shares in the corporation. Cameco is now majority owned by U.S. investors.

(4) The coal industry. Lignite coal is mined in Saskatchewan to fuel Sask Power’s generators. Originally coal was mined by Sask Power, seemingly a natural development. The Devine government privatized this operation. The NDP government has agreed with this decision. Since 2003 the coal industry has been sending profits to the owners of Sherritt International Corporation.

(5) Natural gas. Historically natural gas was under the control of Sask Power. It acted like a private corporation exploring and developing fields, creating storage facilities, developing pipelines and acquiring future supplies in Alberta. In 1985 the Tories deregulated the market. But the privatization of the industry came in 1998 when the NDP government abolished Sask Energy’s monopoly on selling gas, allowed big corporate users to buy from private suppliers, and then mandated that Sask Energy must allow the private companies the use of the pipeline system created by the Crown corporation.

(6) Forestry. The CCF government of Tommy Douglas created Sask Forest Products which build and operated a plywood plant and saw mill. This Crown corporation was “merged” with MacMillan Bloedel in 1995, completely privatized in 1999.

(7) Investment Saskatchewan. Over the years the Saskatchewan government had acquired major interests in private corporations, the result of subsidies and joint ventures. In 2006 the NDP government transferred these assets to Victoria Park Capital Inc., a private company, to manage and privatize. These assets included the taxpayers’ investment in the Meadow Lake OSB plant, Saskferco, and Big Sky Farms.
Recently I was in the General Hospital. There is no longer any cafeteria or food service there. You can get healthy foods at Robin’s Donuts. My neighbour used to work there as a cook. How many other such privatizations have occurred over the past sixteen years?
The Sask Party may have plans for privatization. They can find out how to do it by examining the record of the NDP government.

John W. Warnock is the author of Natural Resources and Government Revenues: Recent Trends in Saskatchewan, publishing by the Canadian Centre for Policy Alternatives - Saskatchewan in June 2005.


John W. Warnock

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