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
Showing posts with label Privatization in Saskatchewan. Show all posts
Showing posts with label Privatization in Saskatchewan. Show all posts
Wednesday, April 16, 2008
Thursday, December 6, 2007
NDP privatization benefits Sask. Party
Before it was defeated the NDP managed to carry out its own privatization campaign generously leaving funds for the Sask Party. The sask gov. newsite reports that the government half interest in a heavy oil upgrader was sold. 75 million from the sale went into General Revenues and 320 million into a Green Future Funds. Will this be turned into a Rosy Futures Fund under control of Enterprise Saskatchewan!
The NDP deserves some sort of medal for being the stupidest and most hypocritical of governments. It shouts like a stuck pig when the Sask Party even mentions privatization but then it engages in the practice itself even though facing almost certain defeat, leaving the funds to the very party it opposes. The Romanow government also privatised and did nothing to reverse the privatisations of Devine. Maybe Saskatchewan could use a revived CCF.
The NDP deserves some sort of medal for being the stupidest and most hypocritical of governments. It shouts like a stuck pig when the Sask Party even mentions privatization but then it engages in the practice itself even though facing almost certain defeat, leaving the funds to the very party it opposes. The Romanow government also privatised and did nothing to reverse the privatisations of Devine. Maybe Saskatchewan could use a revived CCF.
Saturday, October 27, 2007
Privatization in Saskatchewan
This short entry in the Saskatchewan Encyclopedia gives a brief glimpse at the privatization push under Devine. As the author notes the program ended with the election of Roy Romanow but not reversed. Even in the Romanow Report on health care Romanow does not seem to object to privatisation of ancillary services in health care such as food services although he certainly did criticise the view that privatization was an sort of cure for what ailed medicare unlike the Kirby report and countless pro-privatizing pundits. This comes from this site.
Privatization
With the election of the Progressive Conservative government led by Grant Devine in April 1982, the issue of selling the province’s publicly owned Crown corporations became a priority of the new administration. A senior Cabinet minister, Graham Taylor, was put in charge of this initiative; some highly publicized conferences were held, with internationally known speakers, to promote the concept which had become known as privatization. Beginning in the early 1980s, a number of Crown corporations and major Crown assets were sold to private companies or individuals as private investors. Sask Oil and Gas Corporation, which had been established by the Blakeney NDP government in the 1970s, was privatized in 1986. This sale immediately became a political issue: in its last three years as a Crown corporation, Sask Oil made profits of $31 million, $44 million and $41 million respectively; these earnings resulted in substantial dividends for the provincial treasury. Privatization ended that flow of revenue to the provincial treasury and transferred it to the new private shareholders, 75% of whom were non-residents of Saskatchewan. Within 6 months of being privatized, Sask Oil laid off one-quarter of its workforce, and the company was transferring its exploration focus to Alberta.
In 1988, the provincial government sold off 510 billion cubic feet of natural gas reserves which had been owned by SaskPower; this was the equivalent of fifteen years’ consumption by residential consumers in the province. This natural gas was sold to a private energy corporation for $325 million. Those sceptical of the wisdom of the sale pointed to the fact that at the time, the wholesale market price for that volume of gas entering the province at the Alberta border was $984 million.
In 1987, SED Systems, a high-tech firm in Saskatoon jointly owned by the province, the university, and its employees, was privatized when the provincial government sold the sophisticated research company to Fleet Aerospace of Ontario. The loss of the head office to another province and the fact that seventy workers lost their jobs caused further controversy.
Privatization also involved government departments. In 1983, the Highways Minister terminated 157 workers from his Department, and the following year another 237—telling the former employees and the public, “I’m giving them an opportunity to work in the private sector.” It was announced that in future, private contractors would build the province’s highways. In May 1984, the Highways Department privatized more then 400 pieces of road-building equipment in a giant auction sale on the Exhibition Grounds in Saskatoon. This move drew adverse comments from the opponents of privatization because dumping that quantity of highway machinery on the market all at one time depressed the price and yielded only $6 million during the auction. Much of the road-building and earth-moving equipment was bought up by out-of-province contractors. The replacement value of the equipment was estimated to be $40 million.
In 1982, SaskPower’s coal operations in southeastern Saskatchewan were privatized. A huge dragline was sold to Manalta Coal of Alberta, with the government of Saskatchewan guaranteeing the loan the company took out to buy it. Two years later, the province’s $129 million investment in the Poplar River Coal Mine at Coronach was sold to Manalta for $102 million; furthermore, the provincial government lent Manalta $89 million to make the transaction, and guaranteed the private Alberta company a thirty-year coal supply agreement for the Coronach Power Station.
The privatization initiatives of the 1980s saw a wide range of assets in provincial parks—everything from ski hills to wild animal parks, boat rentals, food concessions, golf courses, and winterized cabins and condominiums—sold, leased or in some way transferred to private operators. Higher fees were charged for services, hours of operation were cut, jobs were lost and lower wages were paid to the workers.
In 1986, the Prince Albert Pulp Company and related assets were privatized. The giant forestry corporation Weyerhaeuser of Tacoma, Washington bought the mill for no money down and thirty years to pay at a preferred interest rate, with no payments required in years when the company’s profits were less than 12%. Also under the agreement, the province was obliged to build many miles of forest roads each year for Weyerhaeuser.
SaskMinerals was a small but quite successful Crown corporation that produced sodium sulfate at Chaplin and Fox Valley, and peat moss at Carrot River. In its forty years of operation, it had made a profit every year but one. The sale of SaskMinerals to two out-of-province companies again prompted a reaction by those opposing privatization. They pointed out that the sale realized $15.9 million—less than the earnings of SaskMinerals for three years when it was publicly owned.
Some privatization caused less public debate, such as the sale of the Sask Computer Utility; but most of the deals drew widespread media and public attention as well as stiff opposition from privatization opponents. With the defeat of the Conservative administration in 1991, the privatization program was discontinued, but not reversed, by the incoming Romanow NDP government.
Privatization
With the election of the Progressive Conservative government led by Grant Devine in April 1982, the issue of selling the province’s publicly owned Crown corporations became a priority of the new administration. A senior Cabinet minister, Graham Taylor, was put in charge of this initiative; some highly publicized conferences were held, with internationally known speakers, to promote the concept which had become known as privatization. Beginning in the early 1980s, a number of Crown corporations and major Crown assets were sold to private companies or individuals as private investors. Sask Oil and Gas Corporation, which had been established by the Blakeney NDP government in the 1970s, was privatized in 1986. This sale immediately became a political issue: in its last three years as a Crown corporation, Sask Oil made profits of $31 million, $44 million and $41 million respectively; these earnings resulted in substantial dividends for the provincial treasury. Privatization ended that flow of revenue to the provincial treasury and transferred it to the new private shareholders, 75% of whom were non-residents of Saskatchewan. Within 6 months of being privatized, Sask Oil laid off one-quarter of its workforce, and the company was transferring its exploration focus to Alberta.
In 1988, the provincial government sold off 510 billion cubic feet of natural gas reserves which had been owned by SaskPower; this was the equivalent of fifteen years’ consumption by residential consumers in the province. This natural gas was sold to a private energy corporation for $325 million. Those sceptical of the wisdom of the sale pointed to the fact that at the time, the wholesale market price for that volume of gas entering the province at the Alberta border was $984 million.
In 1987, SED Systems, a high-tech firm in Saskatoon jointly owned by the province, the university, and its employees, was privatized when the provincial government sold the sophisticated research company to Fleet Aerospace of Ontario. The loss of the head office to another province and the fact that seventy workers lost their jobs caused further controversy.
Privatization also involved government departments. In 1983, the Highways Minister terminated 157 workers from his Department, and the following year another 237—telling the former employees and the public, “I’m giving them an opportunity to work in the private sector.” It was announced that in future, private contractors would build the province’s highways. In May 1984, the Highways Department privatized more then 400 pieces of road-building equipment in a giant auction sale on the Exhibition Grounds in Saskatoon. This move drew adverse comments from the opponents of privatization because dumping that quantity of highway machinery on the market all at one time depressed the price and yielded only $6 million during the auction. Much of the road-building and earth-moving equipment was bought up by out-of-province contractors. The replacement value of the equipment was estimated to be $40 million.
In 1982, SaskPower’s coal operations in southeastern Saskatchewan were privatized. A huge dragline was sold to Manalta Coal of Alberta, with the government of Saskatchewan guaranteeing the loan the company took out to buy it. Two years later, the province’s $129 million investment in the Poplar River Coal Mine at Coronach was sold to Manalta for $102 million; furthermore, the provincial government lent Manalta $89 million to make the transaction, and guaranteed the private Alberta company a thirty-year coal supply agreement for the Coronach Power Station.
The privatization initiatives of the 1980s saw a wide range of assets in provincial parks—everything from ski hills to wild animal parks, boat rentals, food concessions, golf courses, and winterized cabins and condominiums—sold, leased or in some way transferred to private operators. Higher fees were charged for services, hours of operation were cut, jobs were lost and lower wages were paid to the workers.
In 1986, the Prince Albert Pulp Company and related assets were privatized. The giant forestry corporation Weyerhaeuser of Tacoma, Washington bought the mill for no money down and thirty years to pay at a preferred interest rate, with no payments required in years when the company’s profits were less than 12%. Also under the agreement, the province was obliged to build many miles of forest roads each year for Weyerhaeuser.
SaskMinerals was a small but quite successful Crown corporation that produced sodium sulfate at Chaplin and Fox Valley, and peat moss at Carrot River. In its forty years of operation, it had made a profit every year but one. The sale of SaskMinerals to two out-of-province companies again prompted a reaction by those opposing privatization. They pointed out that the sale realized $15.9 million—less than the earnings of SaskMinerals for three years when it was publicly owned.
Some privatization caused less public debate, such as the sale of the Sask Computer Utility; but most of the deals drew widespread media and public attention as well as stiff opposition from privatization opponents. With the defeat of the Conservative administration in 1991, the privatization program was discontinued, but not reversed, by the incoming Romanow NDP government.
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