It is ironic that the oil industry, whose excesses
have helped distort economies in many parts of the world, including ours, now
has its hand out to the same governments they have “played-off” against each
other for decades.

Still, two groups of local workers – operations and
construction – rely heavily on the industry for their livelihood and,
understandably, want it rescued. This post is a commentary on the plight of the
latter category.

While oil will be in demand for many years yet, the
problems of the industry, including price, are not going away. No matter how you feel
about environmentalists, many of whom naively believe that economies can switch
to other job producing opportunities as fast as turning on a light bulb, the
replacement of dirty oil is both necessary and unstoppable.

But naivety isn’t the exclusive purview of just
one group. The oil industry, prohibited from engaging in monopolistic practices
in free enterprise economies, have for years climbed on the backs of OPEC,
particularly Saudi Arabia, to keep benchmark prices as high as possible. The
added fear is that countries like Iran and Venezuela, who have vast unproductive oil
reserves, will get their act to together.

Those realities, and others to be described,
announce that on the jobs front: “Houston, we have a long-term problem”.

In plaintiff tones, Trades NL spokesperson, Darin
King, says that 85% of trade workers in NL – over 15,000 – are laid-off. Anecdotally,
the parade of those giving up on the Alberta oil patch and returning home has
barely begun.

Those workers are now realizing that after
thirty years NL’s offshore construction industry, except for temporary flourishes
(Hibernia, Terra Nova, Hebron and White Rose), is largely non-existent.

For CAPP, NOIA and Trades NL, the plea for
Government intervention is about a resolution to the immediate crisis. What
they need to acknowledge, at the start, is that they are trapped within a
“sunset” industry diminished by their own short-sightedness.

Forget NOIA; there is no vision there and none is
expected. Trades NL has offered no better insights but the organization has a huge
vested interest in thinking bigger and longer-term quickly, because they
represent many people who have a lot at stake.  

Strangely, it has taken the near total collapse of
the offshore oil industry to get Trades NL to even link the idea of jobs with
the Terra Nova FPSO and Bay du Nord.

Oil Workers Demonstrate (Photo Credit: VOCM)

The Terra Nova FPSO has been sitting idle offshore,
or off Bell Island, since January. The industry knew that the vessel was
heading for Spain eight months ago, or earlier. Why weren’t those jobs
important to Trades NL then?

Why did this “umbrella labour organization” stay
quiet when Premier Ball accepted a few paltry hours of local work in the deal
with Equinor on Bay du Nord? Why did they not tell him to do it over? Even had
they failed, they would have at least demonstrated a capacity for the bigger

Similarly, not a whimper was heard from them when Premier
Ball allowed the retractable gates to be dropped from the Argentia construction
site – killing the prospect of further work, except if another very large
structure is built.

Then, too, a more forward-thinking Trades NL would
have skewered the Government for staging the Muskrat Falls Project
in the hottest economy in Newfoundland history, taking a goodly amount of labour
from elsewhere. Now, Darin King counsels “local preference” as Trades NL looks
for Federal money. That should work well with Canadian taxpayers!

It is one thing to maintain lists of available
workers, as Trades NL does, and place them when the call comes in from industry;
it might even work when markets are efficient, invested and expanding.

What if no one cares that the “bloom might come
off the rose”? What if the Government is unwise and short-sighted? If not
Trades NL, what other organization is going to influence sensible jobs-oriented
public policy in NL? If “not us” is the Union’s answer, then you have learned well from the public sector. Those Unions will soon
regret thinking that good public policy – in this case fiscal policy – does not
apply to them.

The idea of pursuing the Atlantic Accord in the
1980s was to spur a new local construction and offshore services industry –
amidst high unemployment – in which a host of new, and old skills, could be
both learned and employed. No one ever said that the industry should stay local
or that it had no place in an international economy. In fact, the outlook was
far more optimistic then.

What took place was far different than the
promise. The locals rested on their laurels content with the work that the
Atlantic Accord “wrestled” from the offshore oil companies, while they levered almost
nothing except the ability to train and send skilled tradespeople to Alberta,
occasionally Ontario, or elsewhere.

Where did we go wrong? Why can we not even lever
our 70-odd cent dollar to crack into the American, or any other market?

The truth is that not just government, Trades
NL and the 16 trades unions whom they represent, need to take – not all – but some
of the responsibility for this problem. They need to ask themselves: are we able
to do things differently?

Last week’s rally heard no Plan. It had but a single
demand: Government, throw money at our industry.

This is not good enough. What construction tradespeople
are facing is a 30-year old Bull Arm befitting a third-world country rather than
one with most every first-world advantage. The problem is not just non-existent
facilities – professional offices, modern heavy lift cranes, etc. or the
absence of retractable gates allowing easy entry/exit of vessels and other
platforms. It is that the sheer mention of competitiveness, especially “productivity”,
attracts only guffaw and derision.

Why is it so difficult for Union and Management to come to grips with that issue? Perhaps, with both parties backed into a corner, there is still time to get it resolved. The urgency is compelling.

The Marystown Shipyard has given up trying to
compete internationally. It is now servicing the local aquaculture industry. The
jury is still out on whether Kiewit Offshore Services is able to bring any
continuous international business to the Cow Head offshore facility.

Norway, on the other hand, with 4 million people,
build most of their offshore installations AND are able to compete for work all
over the world, in the oil industry.

Enough time has passed for Bull Arm to have become
a modern, competitive yard, ready to compete with any in North America, Europe,
or Scandinavia. As it stands, WE send work to THEM; hence the Terra Nova FPSO awaits
its crossing.

Demonstrations have their purpose and get
attention, but when “too good to be true” isn’t any longer, sanity must prevail.
Disciplined investments are the ones managed by a disciplined management team
and a productive workforce – the latter possessing leadership that does not
turn a blind-eye to the partisan priorities of political Parties, is engaged in
public policy issues able to fix our economic short-comings, and is
not preoccupied only with the Collective Agreement. Sound public policy – not short-termism
of any kind, is what will give certainty to peoples’ lives – the ability to pay
their mortgages and the constancy of the next job.

If Trades NL fails to become a part of a new era
for Bull Arm – and Argentia – one that will have positive long-term implications,
“temporary” is all that local tradespeople will ever have; for those who
remember the decades of the 50s through to the 90s, it will be deja vous all
over again!

Federal Natural Resources Minister Shamus O’Reagan
is too much of a novice to be this candid; too nubile even to bang the Federal
Cabinet over the head in the tradition of either Don Jamieson or John Crosbie.
But another Federal Minister might tell him to tell us: Newfoundland, get your
act together.

As much as people don’t want to hear the grim
facts, further inaction by the Provincial Government, the oil industry, and
Trades NL – combined – will have us all watching as the free-market – not the
Federal Government – sorts out the winners and the losers. 

Des Sullivan
Des Sullivan
St. John's, Newfoundland and Labrador, Canada Uncle Gnarley is hosted by Des Sullivan, of St. John's. He is a businessman engaged over three decades in real estate management and development companies and in retail. He is currently a Director of Dorset Investments Limited and Donovan Holdings Limited. During his early career he served as Executive Assistant to Premier's Frank D. Moores (1975-1979) and Brian Peckford (1979-1985). He also served as a Part-Time Board Member on the Canada-Newfoundland Labrador Offshore Petroleum Board (C-NLOPB). Uncle Gnarley appears on the masthead representing serious and unambiguous positions on NL politics and public policy. Uncle Gnarley is a fiscal conservative possessing distinctly liberal values and a non-partisan persusasion. Those values and opinions underlie this writer's views on NL's politics, economy and society. Uncle Gnarley publishes Monday mornings and more often when events warrant.


If a Big Mac costs McDonalds $10 to produce and it is sold for $1.50, McDonalds will go out of business. They would not declare a profit!


Bill left public life shortly after the signing of the Atlantic Accord and became a member of the Court of Appeal until his retirement in 2003. During his time on the court he was involved in a number of successful appeals which overturned wrongful convictions, for which he was recognized by Innocence Canada. Bill had a special place in his heart for the underdog.

Churchill Falls Explainer (Coles Notes version)

If CFLCo is required to maximize its profit, then CFLCo should sell its electricity to the highest bidder(s) on the most advantageous terms available.