This Alberta Federation of Labour (AFL) report, Exporting Profits, shows that Canada’s biggest oil and gas companies enjoyed a massive increase in profits during the boom years of 2021 to 2023 and yet the largest portion of the money went to shareholders, primarily American. Over the same time period, Alberta workers saw their share of the value generated by the oil and gas industry dramatically decline.

The report shows that from 2021 to 2023, the oil and gas industry made $135.2 billion in operating profits. This is a major jump from the previous boom years, 2011 to 2014, during which the industry collected $64.2 billion in operating profits. What is even more striking — and concerning — is that the share of money going to workers has dramatically declined.

During the 2011-2014 oil price boom, the workers’ share of the total value created by oil and gas was 52%, which plummeted to only 24% during the 2021-2023 boom. Furthermore, the report shows that even though our oil and gas industry is recording record profits and hitting record production levels, it’s employing 30,000 fewer people than it did ten years ago — and that doesn’t even include the 900 layoffs announced recently by Imperial Oil.

“The UCP government has put a lot of time and effort into lobbying for oil and gas to become even more profitable, but the wealth has bypassed most of us here in Alberta,” said AFL President Gil McGowan. “Rich American shareholders have never fared better while Alberta workers are left with the crumbs from the table. This is not responsible economic management. It verges on theft. These resources belong to us, not to the United States.”

“Exporting Profits” makes four recommendations:

A new mission-driven industrial policy
Rather than increasing our reliance on industries that have contributed the most to climate change, the public sector must invest in projects that will benefit Albertans and Canadians economically, and environmentally, for decades to come. These could include constructing a national electricity grid, electrifying transportation, using hydrocarbons to produce materials, or developing a sustainable fuels industry.

Conduct a review of Alberta’s royalty framework
The last royalty review, completed in 2016, recommended four guiding principles for Alberta’s royalty framework: 1) optimize returns to Albertans, 2) attract investment and promote job creation, 3) support downstream value-added industries, and 4) encourage environmental responsibility. With the hindsight provided by the COVID-19 pandemic and the oil price boom, it is time to revisit whether Alberta’s royalty framework is accomplishing these guiding principles.

Restore Alberta’s corporate income tax rate to 12%, its level from 2015-2019
Alberta currently has by far the lowest provincial corporate income tax (CIT) rate, at 8%. No other province has a rate lower than 11.5%. Research has consistently shown that lower CIT rates do not stimulate investment. Instead, they simply allow corporate owners to keep more of their profits and reduce public revenue. Increasing Alberta’s CIT rate would bring the industry’s tax level more in line with the rest of Canada’s economy.

Implement a permanent windfall profits tax
The post-pandemic inflation surge demonstrated how our economic system can be exploited by large corporations during crises. Large corporations were able to use the disruptions created by the pandemic to raise prices and increase their profit margins, at everyone else’s expense. Canada should implement a permanent windfall profits tax that could be triggered during future crises to ensure corporations cannot profit from crises like they did during the pandemic.