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UCP's "Job Creation Tax Cut" helped eliminate jobs at major oil companies
Report shows Big Oil spent tax savings on furthering automation and increasing executive pay
One of the UCP’s first priorities in government was to reduce Alberta’s corporate tax rate to 8% from 12% over four years with Bill 3, or the Job Creation Tax Cut Act.
Former premier Jason Kenney — how sweet it is to write those words — ultimately used the pandemic as an opportunity to accelerate the tax cut, reducing the rate to 8% two years ahead of schedule under the guise of Alberta’s Recovery Plan.
When it was first announced in pre-pandemic days, Kenney said he was signaling to “job creators they can make their plans now to benefit from lower taxes.” He invoked the prediction of “leading economist” Jack Mintz, who happens to sit on the board of Imperial Oil, that the tax cut would create “at least” 55,000 new jobs.
Major oil companies certainly took Kenney’s advice to benefit from lower taxes. The problem is these plans didn’t involve more jobs for workers.
In fact, according to a new report from the Parkland Institute which received next to no media coverage, it involved less.
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The report “Job Creation or Job Loss?” reveals the major oil companies have all laid off workers since the UCP announced their tax cut — Suncor cut 1,182 jobs, Canadian Natural Resources Limited cut 445, Imperial Oil cut 600, and Cenovus cut 1,223. This adds up to 3,452 jobs lost.
When the tax cut was announced the Big Four oil companies were the Big Five, but in January 2021, Cenovus purchased Husky, resulting in 3,150 layoffs, which are included in the figures above.
Ian Hussey, research manager at the Parkland Institute, told me the major cause is automation, which became a cost-cutting measure in the wake of the 2014 oil price crash but was accelerated further in recent years.
The corporate tax cut enabled these companies to spend more money on advanced computing systems, sensors to collect data on those systems, as well as artificial intelligence and machine learning “to increase productivity and produce more oil while spending less money and employing less people,” Hussey explained.
“Unfortunately, on the other side of the ledger, you're not seeing a lot of job creation because they're not spending money on cleaning their operations up, like investing in renewables,” he added. “We're just not seeing that.”
Beyond accelerating automation, the report found these companies used the funds they saved from lower taxes to increase dividends and share buybacks for executives and shareholders — guys like Mintz.
“It's not surprising that corporate tax cuts don't create jobs,” Hussey said, adding that the UCP’s corporate taxation policy is rooted in the “fantasy of trickle down economics.” Nonetheless, it’s necessary to back these arguments up with hard data.
With the future of the oil and gas industry in question, it’s also crucial to know where the money Albertans are giving to its largest companies is going.
“Right now, it's largely sitting in their [executives’] hands,” Hussey said. “They're just sitting around waiting to see if they can get more money out of the federal government.”
Read the full report here.
Conspiracy theorist Danielle Smith sworn in as Alberta premier
Danielle Smith, who has said there are health benefits to smoking, drinking tonic water prevents COVID and cancer is a choice, among other inanities, was sworn in as Alberta’s 19th premier on Tuesday.
Smith defeated former finance minister Travis Toews on the final ballot of the UCP leadership race last week with 53.77% of the vote.
"Like many Albertans, I've always believed that freedom is foundational,” she said in her remarks at Tuesday’s swearing-in ceremony in Edmonton, where she vowed to protect Alberta’s “exclusive rights” in areas of provincial jurisdiction.
"Albertans have been through so much over these last two-and-a-half years," she said in reference to the pandemic. "Our rights and freedoms have been tested. I will ensure as head of this government that those rights and freedoms are protected."
Smith has promised she would “never again” impose any public health restrictions and has pledged to fire the entire boards of Alberta Health Services and the College of Physicians and Surgeons.
Smith is running in an upcoming Brooks-Medicine Hat byelection, despite residing 289 km away in High River, after Michael Frey stepped down as MLA to make room for the premier in the Legislature.
In her first press conference as premier, Smith announced the byelection will occur Nov. 8.
She also said the unvaccinated are the “most discriminated against group that I've ever witnessed in my lifetime.”
Read the full story on her swearing in here.
In other news …
In her first act as Alberta premier, Smith fired chief medical officer of health Dr. Deena Hinshaw and said she would replace the top doc with a “new team of public health advisors” who share the premier’s view that the pandemic is over.
As of yesterday, Ontario employers with more than 25 workers will have to draft an electronic surveillance policy, which they’ll have a month to disclose to employees. Don’t like being spied on by your bosses? You’ll have to get a new job.
Scandal-plagued Hockey Canada announced the resignation of its entire board and CEO after corporate sponsors and provincial affiliates cut off ties in response to revelations that it used player registration fees to secretly pay off sexual assault survivors.
Documents reveal Ukraine’s blowing up of the Kerch Bridge connecting Russia to Crimea was an idea cooked up by British intelligence.
The A/V Corner
Listen: I went on the Progress Report to talk to Duncan Kinney about Danielle Smith’s strange ascension to Alberta’s premiership, her eccentric views and the legacy of Jason Kenney, who’s already being rehabilitated by the press.
Edited by Stephen Magusiak