Foreign shareholders are making more money than ever from Alberta’s oil and gas sector while Albertans themselves lose out on profits, according to a new report from the Alberta Federation of Labour (AFL).
The report, released on October 21, compared Alberta’s four largest oil companies’ net earnings during the 2011-2014 oil boom with today’s numbers. The numbers show that oil companies are making more money than ever following the post-pandemic oil boom, but that only a fraction of these profits have stayed in Alberta.
“Our report shows that the vast majority of the benefits from the oil sands’ final harvest are being reaped not by Alberta workers or Alberta citizens — the real owners of the resource — but by foreign investors, mostly wealthy Americans,” said AFL President Gil McGowan in a press release.
Americans getting rich while Albertans suffer
Foreigners own three quarters of the assets of Alberta’s four largest oil companies. Between 2021 and 2023, they took home 76 per cent of oil production profits, leaving only one quarter of the profits for Albertan workers.
In comparison, workers took home 90 per cent of the construction industry’s earnings during the same period. On average across non-oil and gas sectors, workers received 74 per cent of total earnings – the opposite of the oil and gas industry.
The recent report marks a troubling trend. During the previous oil boom of 2011-2014, workers took 52 per cent of total earnings – double what they claim today.
Fewer workers, more profits
The oil industry’s unique structure has made it more profitable for owners and shareholders than for workers.
Even ten years ago, oil companies were still building most of the infrastructure needed to extract oil from the ground. Today, most oil companies aren’t expanding their facilities much and are focussed on production.
Extracting gas has always required less labour than building gas facilities. Today, thanks to automations, much of the extraction of oil and gas that used to be done by humans can now be done by machines. This means fewer jobs, and fewer profits going to Albertans.
“These massive profits were possible in large part because the industry has increased production without increasing employment or wages,” the report said. Since 2011, oil production has increased 72 per cent. Employment has not kept pace however, increasing just 22 per cent during the same time period.
Oil worker wages, too, decreased. In 2014, companies were spending an average of $111,900 on wages per employee. Today, wages have actually decreased to just over $106,000 per year.
“These resources belong to us”
The report outlines several recommendations to ensure that Albertans rather than foreign entities benefit from the province’s oil wealth.
First, it recommends that the province refine its industrial policy to ensure that it invests in projects that will financially benefit Albertans. It suggests investing in public transportation, a national energy grid, and building retrofits as possible options.
It also asks the province to review its royalty framework to ensure it optimizes returns to Albertans, and recommends increasing corporate income taxes to 12 per cent.
Bringing Alberta’s oil money back to the province is essential, said 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,” he said.
