New direction in energy policy needed: CAW

Manufacturing is falling victim to the madness in global energy markets and CAW president Ken Lewenza wants the Harper government to do something about it.

March 1, 2011   by PLANT STAFF

TORONTO: Manufacturing is falling victim to the madness in global energy markets and Ken Lewenza, president of the Canadian Auto Workers (CAW) union, wants the Harper government to do something about it.

This past weekend’s surge in gasoline prices to $1.20 per litre across Canada is further proof that fundamental change in energy policy is needed, said Lewenza in a press release.

The upheaval in Libya, Africa’s biggest crude producer, is creating uncertainty in the markets and driving up oil prices (April crude on the New York Mercantile Exchange was up $1.94 at US$98.91 a barrel).

But Lewenza wonders why Canadians are paying dramatically higher oil and gasoline prices as a result of geopolitical events on the other side of the world.

“Most of the gasoline we buy is refined from our own oil. It’s no more expensive to produce than it was last year. Yet thanks to globalization, speculation, and greed, Canadians are being gouged again. There is nothing inevitable about this thievery; it reflects a deliberate policy choice by our governments,” he said.

Warning of renewed economic recession if oil and gasoline prices are allowed to soar freely, he wants Ottawa to begin discussions about adopting a new Canadian energy policy that would involve overseeing a more gradual and steady development of Canadian resources; controlling exports and foreign ownership; and ensuring Canadians pay a fair, sustainable price.

But he also wants the Harper government to reverse corporate tax cuts that he says will disproportionately benefit the oil industry.

The tax rate dropped from 21% to 16.5% on Jan. 1, and will decline further to 15% next year.

“It is outrageous that the oil companies should be rewarded twice: once for gouging Canadians at the gas pump, and then again with a fat tax gift from Ottawa,” Lewenza said. “The more they extract from Canadian consumers, the bigger will be their tax savings under Harper’s plan.”

He said the petroleum industry booked before-tax profits of $50 billion in 2008 (considering both upstream and downstream operations), and could earn that much again this year given escalating oil prices. The CAW calculates the industry is poised to capture as much as one-quarter of the total savings delivered by the Harper government’s latest corporate tax cut.

“Canada’s manufacturing industry is another casualty of the madness of our energy markets,” Lewenza added. “Sky-high energy prices, and a sky-high currency, are destroying the real foundations of our economy. It’s not inevitable, and it’s not tolerable.”

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