Strike threat looms over booming oilsands
http://www.businessedge.ca/article.cfm/newsID/15812.cfm
By The Canadian Press - For Business Edge
Published: 07/13/2007
The looming threat of Alberta's first trades strike in 25 years could slow construction in the booming oilsands, ultimately harming the province's reputation as a reliable investment climate, observers say.
"Oil and gas companies look at investments all around the world and they weigh the factors," Todd Hirsch, chief economist at ATB Financial, said as 25,000 skilled workers, including pipefitters and electricians, began a strike vote last week.
"If Alberta is starting to be seen as a place where there is a continual threat of strikes, that will weigh into their decision," he said. "They're not going to pull up stakes (in) the province, but it will weigh into their decision on how attractive is the Alberta investment climate."
Alberta's labour board recently ordered that vote results be sealed until after the ironworkers union held its vote July 13.
The looming labour unrest among trades is the first in Alberta since 1982 when the government of Peter Lougheed created legislation grouping 10 building trades unions that negotiate with employer associations for contracts that apply across the province.
Under the province's labour law, none of the unions may take a strike vote unless 60 per cent of unions with unsettled contracts opt for a strike vote.
About 40 per cent of those voting are working on construction at the oilsands near Fort McMurray in northern Alberta, where the cost of living has skyrocketed in recent years.
The energy industry has been struggling for months to cope with soaring development costs in the area, fuelled in part by a shortage of skilled tradespeople and regular labourers. But while manpower has been increasingly expensive, it has always been steady.
A strike could halt or slow down work on several multibillion-dollar projects with unionized labour, including Long Lake, the joint venture between Opti Canada (TSX: OPC) and Nexen Inc. (TSX: NXY) that will use steam-assisted gravity drainage to mine bitumen, slated for completion within a year.
Electricians spokesman Barry Salmon says his members want a contract that recognizes the economic pressures of the booming province and believe a strike mandate will kickstart negotiations.
"We wouldn't want to see any of these projects adversely affected, but we don't feel the responsibility lies with us - not when we've had a six-per-cent increase over the last four years," said Salmon, business manager for the 6,000-member electricians union.
The unions say Alberta's labour code prevents effective bargaining and was written to prevent trades from ever getting to the stage of a strike vote and a potential labour disruption.
Foreign workers make up between 2,500 and 5,000 workers in the Fort McMurray area, but that has never been a sticking point in the contract negotiations.
Meanwhile, about half of unionized workers at Suncor Energy Inc. near Fort McMurray have voted in favour of a new three-year contract.
Members of the Communications Energy and Paperworkers Union (CEP) Local 707 approved an agreement including a wage increase of seven per cent in the first year and six per cent in each of the following two years, as well as a $4,000 lump sum payment.
The union represents more than 2,100 of the 4,000 employees who work at Suncor's oilsands operation north of Fort McMurray.
