Canada Continues Resources "Fire Sale".

The South Korea's state owned oil company has purchased Harvest Energy Trust, a Canadian owned integrated oil and gas company. Harvest Oil has interests in the Alberta tar sands, natural gas and a refinery in Newfoundland. Undoubtedly, there are people in the business sector that will be elated, given that Harvest Energy has never been one of the big players in the Canadian energy sector.

Canada is the only major oil producing country that doesn't have a nationally owned oil company. On the other hand, under Harper, we have become a major source of resources for the foreign state oil companies. Our natural resources are being sold off like cheap suits at a bancrupcy sale. It seems everybody is standing in line to pick up Canadian resource companies. In a world of diminishing commodities, where will this leave Canadians? As the oil supplies from the middle east slow to a trickle, and our natural gas is whisked off to the US, we will become an economic colony. Our mines, energy and forests are well along the road to complete foreign ownership. Once control of the resources is gone, what will we have to offer our youth who will be looking for jobs in the future? Tim Horton's or MacDonald's are a poor substitute for INCO, Petro Canada or the auto industry. Natural resources are the basis for a diversified economy. The Conservatives are going to leave us a bleak future indeed. Consider where Africa is on the world economic stage. They have become colonies of the corporations that exploit resources. Canadians will be left with nothing.

Frustration on the Left

The political left in Canada absolutely needs to change the way it does business. During the past thirty years or so it has become disconnected from the people, and ideas that gave it life. It has become club that dreams of past glories and a future that has never happened. The NDP in particular, need to become less of a political party obsessed with finding a way of positioning themselves close enough to the middle of the political spectrum to somehow make themselves palatable to what they believe is the mainstream of the voting public. Continuing along this path will only blur the differences that them different, and preferrable, to the two centre right parties.

The left ought not fear proposing policies meant to improve the lives of the average Canadian. They need to send a clear message to voters, that their ideas will not bankrupt the economy and are more fiscally responsible than the policies of the Conservatives under Harper. After all, it is the Conservatives that have given us a $55 billion deficit, massive unemployment, and the systematic destruction of the manufacturing industry. All the while Harper pontificates about the repatriation of Tim Horton's head office, as a result of his tax policies. That is all well and good, but how many additional jobs has this provided Canadians, especially in the hard hit manufacturing heartland of Ontario.

Policies that enhance the social safety net for the average middle class Canadian aren't reviled by the average voter. Certainly they will be attacked by the right, but if the New Democrats pick those issues that resonate with the people, and build their platform of responsible change it will resonate with Canadians. It was the Conservatives who argued that it was too expensive to improve EI in what has been the worst economic downturn since the Great Depression. It is that same Conservative Party that has overseen the fire sale of Canadian resource companies and manufacturers. What did they do to insure the longterm employment of miners at Falconbridge in Sudbury, (686 laid off in February of this year)? What did they do to insure that there would be no disruption of production at INCO when it was purchased by CVRD from Brazil, (forced into a strike in May)? Where was Tony Clement when US Steel shut down the Stelco plant in Hamilton, and then locked out the workforce at the Nanticoke operations this summer? Where were they when John Deere shut down in Welland and moved to Mexico. Where are they as the CAW tries to negotiate with Ford. Ford, the corporation that has a $1.8 billion shortfall in its pension plan obligations, in spite of praising themselves for declaring a $2.8 billion profit in the second quarter of 2009. The same Ford motor company that is demanding concession from Canadian workers while announcing the closure of plants in Ontario and the signing of agreements to open new plants in China. The list of missed opportunity and failed policies is almost without end.

There is little to differentiate the policies of the Liberals and Conservatives. Canadians need a real change. The New Democrats need to see the current situation as an opportunity. They need to organize at a grass roots level. They need to become a movement that attracts the young voters who do not currently vote. The fact that there has been a continuing decrease in the numbers of voters over the course of the last number of elections really only serves to solidify the positions of the old line parties. There is no better place to start than by educating Canadians that Flaherty's budget deficit will be used a a tool to downsize the social safety net even further. Without a strong left-wing alternative, Canada will become a meaner, less-caring society.

Vale Inco, Not Operating in the Best Interest of Canadians

Vale is continuing its program of expansion regardless of the labour dispute with the USWA - Local 6500 in Sudbury. On the face of it, this is not altogether big news. This is after all a huge multi-national corporation. Earlier today it was announced that they intend to pay $1.4 billion to Thyssen-Krupp in order to increase their ownership in Siderurgica do Atlantico (CSA), a steel plant in Brazil. It is thought that this was the result of pressure from the government of President Luiz Inacio Lula da Silva, (Lula), to increase employment for Brazilians by Vale. While this sort of offshore story is not the sort that I would normally comment on, it did strike me that the progressive government in Brazil is taking steps to provide stable long-term employment for its citizens. Meanwhile, in Canada, where we are supposedly part of the developed world, our federal government, under Harper, is apparently impotent when it comes to maintaining employment and the social safety net that Canadians have struggled for so long to achieve. Clearly, the political right is operating from a bancrupt idea fund.

Meanwhile, in Sudbury, Vale Inco is going to court to try and get an injunction to prevent striking Steelworkers from disrupting the flow of ore to its beneficiation operations at the Clarabelle Mill and Copper Cliff smelter. The Union contends that this is "Scab" ore,(Hot Cargo) and as such is not permitted under the previously negotiated picket line protocol,(read the full article here). While this may seem like a serious setback, its worth noting that the price of nickel, as documented on infomine.com, over the past six months has seen a steady increase. The strikers have time on their side.

FYI - The Issues at Play in Local 6500's Strike.

"African unions tell Vale to stay out", Northern Life, Sudbury,ON

"Steel to city businesses: ‘You’re either on our side, or Vale’s", Sudbury Star

"Vale-Inco strike heats up", The Real News Network, (video) - Excellent background information to this labour dispute.

"Canadian miners strike global giant", The Real News Network, (video) - a must see for background of the issues.

Steelworkers in Sudbury Continue to Man the Picket Lines

The summer is over and the strike by the USWA - Local 6500 against Vale Inco drags on in Sudbury. (The company's other operations in Port Colborne, Thompson Manitoba, and Voisey's Bay are also affected). This wasn't perhaps the best time to go on strike, but, their collective agreement has expired, and when the economy is slumping, as it has been for a year now, employers will attempt to claw back any gains, made by labour, in the name of cost control, economic distress or whatever excuse happened to spring into the fevered minds fomenting a company negotiating strategy in the board room. In the instance of Vale Inco, they had the “benefit” of a federal cabinet minister, Tony Clement, attempting to sway public opinion by suggesting, that had CVRD not purchased INCO when it did, Sudbury would be a ghost town and the mines would be soon closed as uneconomic. I have to wonder what that statement has to say about the business acumen of Roger Agnelli and his cronies in Brazil. After all, they paid $17 billion dollars for INCO. Thats a good sized chunk of change in anybody's book. Clement further went on to state that, ”There was going to be no buyer, there were going to be no jobs, there weren’t going to be any capital investments, there was going to be no employer. That was the Valley of Death that Sudbury faced.” Clearly he had failed to remember the bidding war that went on between Teck Cominco, CVRD, and Phelps-Dodge for the so called, “Valley of Death”. In the end, Tony Clement, Industry Minister in the Federal Government headed by Stephen Harper, had to admit that he had made, “a pretty bone-headed remark”. That stands as one of the few times I have stood on total agreement with anyone in our current federal government.

In today's Northern Life, there is an article, (Steelworkers blockade contractors' trucks at picket lines),
that is highlighting some of the tactics that are currently being used by the Union in its struggle to achieve a fair and equitable contract with their employer. The company is attempting to resume production at some of its operations, partially in order to keep some of it customers in spite of having earlier declaring “force majeure” on it contracted deliveries of nickel. Given that these are tactics that were used by Falconbridge in 2000-2001 during that dispute with Mine Mill/CAW, there is clearly another motive in play here. This is a naked attempt by management to break the will of the Union's Rank and File and deliver a substandard collective agreement. Many of those in positions of influence in the Vale Inco management team locally are former Falconbridge management types eight years ago. This is clearly going to be a protracted dispute. Unfortunately, there is a good deal of anti-union sentiment being expressed by some in the comments sections of the local media online. The peanut gallery making these statements don't matter. What matters in this dispute is the resolve of those on the picket line. In any strike, no matter how long, or how bitter the feelings become, there will come a time when the “worm turns”. There will be a time when the company is no longer dictating the terms and conditions, and it becomes the Union's strike. The issue right now is can they last, “One Day Longer”...

Vale Inco Attempting to Break Union

I have been following the progress of the strike by the USWA – Local 6500 in Sudbury with a good deal of dismay. This workers at this local have been forced into an untenable situation first, by the sale of the Company to CVRD from Brazil, and secondly, by the collapse of the world nickel market in late 2008. It is unfortunate that their collective agreement expired when it did. The prices on the nickel and copper markets at a levels lower than they have been for some years and the Vale Inco was planning an extended maintenance shutdown over the course of the summer.

It is generally conceded by anyone who has experience in organized labour that in times of economic recession, employers will plead poverty and economic hardship in order to extract concessions from labour. The massive profits leading up to the economic downturn are conveniently forgotten, The following information was found on the Union's Strike Site, (http://www.fairdealnow.ca/):

Vale has $22 Billion US (cash assets as of 31 March 2009).
Vale had $13.2 Billion US PROFIT last year (2008 after-tax profit).
Vale has made twice as much profit in 2 years, as Inco made in past 10 years.
Vale Inco collected $4.1 Billion US profit from Ontario two years (2006-2008).
Inco collected $2.2 Billion US in Ontario profits in 10 years (1996-2006).
Vale has collected big profits every year, even during economic recessions.


In the Sudbury Star, the Company has recently announced their intention of resuming production at some of their mines using company staff, unionized office, clerical and technical employees and contractors. This is the first time in the history of the Sudbury Operations that this has been attempted. It was the modus operandi of the management of Falconbridge during the Mine Mill- CAW strike in 2000-01. That brutal affair dragged on for nearly seven months. Production was maintained at Craig Mine, then the company's flagship operation. This mine was chosen because it was a blasthole, or bulk mining operation that required a smaller workforce to produce the tonnage the company wanted. After the strike was over it was apparent that the tonnage produced was such that the effective reserves, of the mine, had been significantly depleted, and the mine life greatly shortened. This effectively knocked the economic structure of the company out of balance. The greater portion of the company's fixed cost structure fell on the lower grade, higher cost operations relying on cut and fill mining methods, such as Strathcona, Fraser, and Thayer Lindsay. When the nickel and copper prices collapsed on the world markets, as a result of the economic downturn late last year, the end result was that the entire economic structure of the Xstrata Sudbury Operations, (formerly Falconbridge), collapsed. They were all closed down in February 2009, with the exception of one new operation, Nickel Rim South, which is currently being rushed into full production.

It is interesting to note that many members of the management team in the years leading up to the collapse of Falconbridge in the Sudbury Basin are now on the management team at Vale Inco. It seems that this group is determined to use the same tactics against Local 6500, that were used against Mine Mill, even if it results in the destruction of the company.

It is clear that this will be a prolonged strike and that labour must act to support the struggle for a fair contract of their Brothers and Sisters at Vale Inco.

Negotiations Appear Headed for the "Ditch"

There is a looming crisis in area of labour relations in this country. One only has to read the comments after any article remotely related to business, labour, or strikes to see any number of comments opposed to any form a labour activism. Most are ill-informed, some downright venomous. The point is, that they are the result of an active campaign by business, and the conservative elements of government that have gradually begun to take hold. When times were good, workers were told that they didn't need unions because the corporations would look after them. Individual actions versus collective activism were promoted. Now that the bubble has burst, we are told that unions are greedy, and society can't afford them. On the government side, labour legislation has gradually been watered down and programs meant to protect workers such as workman's compensation, and unemployment insurance have been gutted. Good luck trying to deal with an unfair employer, or a unsympathetic bureaucracy if you are a worker in need.
A good example of the tactics being used by business to destroy the effectiveness of unions can be seen in the actions of Vale Inco in their current negotiations with the USWA at the Sudbury and Port Colborne operations. The Company is demanding concessions in the areas of wages, and contract language as well as a major restructuring of the current pension plan. In the Sudbury Star article referenced below, it is reported that the company wants to reduce the nickel bonus paid to the workforce. In the Globe and Mail, the Company sites this as one of the reasons that the Sudbury Operations are not viable. Nickel Bonus is a misnomer. This is not a bonus based on the price of nickel, but a bonus based on the profits achieved by the company. As such it cannot have any impact on the viability of the Sudbury operations. No profit, no bonus. This is an area that is often commented on by the ill-informed union bashers as an example of union greed.

The issue of frequency of being able to change jobs is a clear attempt by the Company to gut the seniority provisions of the collective agreement. This seems on the surface a simple request by the company that would allow them to “streamline” the administration of their workplace. However, anyone who has any background in labour relations would see this as a bright red warning light that is clearly the thin edge of the wedge designed to destroy the seniority provisions of every aspect of the collective agreement. In conjunction with the proposed two tier pension plan, the effect would also be to pit the older and younger workers against each other.

The changes to the pension plan would allow the company to cap the current defined benefit pension plan and place any workers hired after 2010 into a defined contribution plan. The article by Jim Stanford explains the magnitude of this concession demanded by the company from its workforce.

On the other hand, in the face of these types of assaults on the unions by both management and companies, organized labour has been for all intents and purposes been asleep at the wheel. These are not the isolated skirmishes by individual employers or industry groups of years past. These are much more organized and widespread and with the support of the political right, more effective. They have been aided and abetted by a Canadian media that has over the past quarter century become more conservative and concentrated in the hands of a few. The Labour Movement must begin to react to these assaults quickly or face becoming an increasingly irrelevant force for social change. A key strategy that needs to be adopted by unions is the realization the unions are more than an organization that was formed to look after the economic needs of a group of workers in a workplace but part of a broader social movement. In other words, unions need to reach out to each other and organize their responses to the assaults made against the working classes. They also need to engage their own memberships. Once organized, a union cannot afford to become complacent and ignore their own members. An old tennet of the Mine Mill and Smelter Workers Union from the 1940's was the one of the chief duties of the union leadership was to organize themselves. Many in the modern labour movement have been overwhelmed or have lost sight of this aspect of the job.

http://www.theglobeandmail.com/globe-investor/vale-ceo-calls-sudbury-unit-not-sustainable/article1209841/

http://www.thesudburystar.com/ArticleDisplay.aspx?e=1646633

Update: Vale Inco has posted their latest contract proposals online: http://www.northernlife.ca/News/LocalNews/2009/vale080709.asp?NLStory=vale080709