By John W. Warnock
October 31, 2021
Act Up in Saskatchewan
an election issue? Well if you watch TV you can’t
avoid it. NDP advertisements insist that Brad Wall and the Saskatchewan
Party have a secret agenda: they will privatize our Crown corporations
if they are elected. This strategy worked for Lorne Calvert and the
NDP in the 2003 election. But will it work again? Brad Wall has spent
several years now trying to convince the electorate that they will
not privatize our state-owned enterprises. But what about the NDP?
What is their record on privatization?
Building our Crown corporations
Most people who live here know that we have had strong public ownership in
the area of public utilities. These Crowns were built by the people of the
province when private capital would not do the job. The private corporations
had no interest in expanding services to people living in rural areas or the
North. Today these Crowns are very successful, efficient corporations which
give us great value. That is why private capital wants to take them over.
In the period between 1971 and 1982 the NDP government under Allan Blakeney
built a series of Crown corporations in the resource extraction area. The goal
was to gain greater control over the development of a major economic sector
and to increase returns to the people of the province. Crown corporations were
built in the areas of oil, potash and uranium. Sask Power already dominated
natural gas and coal development.
When Grant Devine’s Conservative government took office they began the
process of privatization. They sold most of Sask Oil, the Saskatchewan Mining
and Development Corporation, and the Potash Corporation of Saskatchewan. They
split the natural gas division from Sask Power and proposed its privatization.
They sold controlling interest in the Prince Albert Pulp Mill to Weyerhaeuser
Corporation. SaskMinerals was privatized. The Tories also began contracting
out government services. These were not popular moves, and in 1991 the Tories
were soundly defeated by the NDP. While in opposition the NDP promised to “buy
back or expropriate any Crown corporations or government assets sold by the
Tories.” The NDP has been in office for sixteen years. What is their
record on privatization?
(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
(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
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
2156 Retallack St.