49% of Canadians Support Nationalizing Oil Industry

NDP must lead movement if it wants to gain support

In the last five years, gas prices in Canada have soared from about 65-cents per litre to over $1.10.  This price hike hits the working class hardest.  While the right wing are trying to blame taxes for the increase, the majority of Canadians see that corporate super-profits are the real culprit.  In a recent poll, 49% of Canadians (and 67% of Quebecers) support nationalizing the oil industry.  As Marxists have contended, support for radical policies is far higher than generally realized.  This issue could mobilize millions given the correct lead.

The North American economy is dependent on oil.  As production moves away from the cities, and high property prices force working families out to the suburbs, millions are forced to commute to work in their cars.  Oil prices also affect the cost of every other product that has to be trucked to the market, as well as fruits and vegetables grown in gas-heated greenhouses.  Nobody, not even the most environmentally-minded, can avoid the impact of oil.

Some liberal-environmentalists think high oil prices are a good thing – this will force individuals to “choose green” and eventually the capitalist market will save the planet.  This completely misses the point; most workers with a mortgage and maxed out credit cards have no choice but to be dependent on oil.  On the other side, high gas prices only make a small dent in the lifestyle of the rich with their gas-guzzling SUVs.  There is also no evidence that high oil prices have reduced consumption – capitalism is not going to save Mother Nature.

The right-wing media and Conservatives have focussed on taxes as the cause of the problem.  Marxists are opposed to regressive taxes on commodities, however most of the taxes on fuel are constant so they cannot explain the increase.  An insightful report by the Canadian Centre for Policy Alternatives showed that the recent US$ 10 increase in a barrel of oil should have only resulted in an 8-cent per litre increase at the pumps, instead of the current 15-cent increase (and 40-cents over Labour Day weekend!)  With such price fluctuations, the corporations that support the Conservative Party would quickly gobble up any tax cuts.  It is akin to the captain of the Titanic blaming the catastrophe on people using too much ice at the bar.

The Federal Liberals oppose gas tax cuts, however apart from a small rebate to the poor and elderly, they say there is nothing they can do.  Their stance is that eventually the laws of supply and demand will even things out and in the long run everything will return to equilibrium.  We can answer with the words of the economist John Maynard Keynes, “In the long run we’re all dead.”  Besides, the prevailing evidence is that capitalism is a system of crisis and not one of equilibrium.

Canada is an oil-rich country.  The industry accounts for over 6% of GDP and at US$ 1.6 billion, Canada is the largest oil exporter to the USA (Venezuela, Mexico and Saudi Arabia all export from $1.3 – $1.5 billion).  In fact, the high oil prices have introduced tensions within Canada’s federation.  While manufacturing is in recession in Ontario and Quebec, oil-rich Alberta has paid off its government debt and is telling the other provinces to keep their hands off its budget surplus.  Oil industry profits have been soaring at over $6.5 billion in 2003, $9.4 billion in 2004, and 2005 profits are likely to break all records.  Oil profits are well in excess of 20% of production, unlike the average of 10-14% for the rest of the economy.  Clearly, people are being gouged.  It is not surprising that Canadians should want to feel the benefit of their own natural resources in their own pocket books.  However, the North American Free Trade Agreement makes any discounting goods to Canadians illegal.

To their credit, the social democratic New Democratic Party has recognized that there is a problem and is putting forward solutions.  However, even though NDP MPs like Yvon Godin proposed the correct (and popular) idea of nationalization, the leadership has settled on the reformist half-measure of price regulation.  Price regulation will not work and is essentially utopian while the oil industry is in private hands.  If price regulation is to have any significant impact on improving the lives of working people then it would significantly cut into the profits of the oil companies.  But when there is a global oil market, and under NAFTA the USA is willing to pay top dollar for Canadian oil, why would Petro Canada, Imperial Oil and Shell bother selling their gas to Canadians at reduced profits?  There would be massive gas shortages.  Alternatively, if the regulation is intended only to stop extreme price gouging, then we would still be paying about 95-cents per litre.  This is still way too high for most working class families and there would still be supply shortages.  The problem comes from trying to calculate what is an “acceptable” level of exploitation.  Marxists answer that the acceptable level is zero.  The contradiction of reformism is what TV psychologist Dr. Phil might tell one of his guests, “if you don’t own the problem, you cain’t change it.” 

If workers pump the crude out of the ground, workers run the refineries, workers transport the product around the world, and workers staff the gas stations, then why should the capitalists make super-profits off our backs?  Venezuela has a similar population size and produces about the same amount of gas as Canada, however Venezuelans can fill their tanks for about $2!  The difference is that the Venezuelan oil industry is nationalized and now there are even moves to increase efficiency through workers’ control.  The reformists may answer that such a radical move as nationalization would not be popular and would make the corporations freak.  We need only remind our jittery social democratic friends of the 49% support for public ownership of oil and that if a serious campaign was organized millions could be mobilized and would vote to counteract the opposition of the corporations.  Support for nationalization of the gas industry is more than double the support for the federal NDP.  Around the world people are fighting for control of their natural resources.  In Bolivia and Ecuador, revolutionary movements have been sparked off over this issue.  Indonesia and Nigeria are on the verge of similar conflicts.  Even in Canada, the truckers in BC and New Brunswick have blockaded ports and highways in protest.  Increasingly, people are linking the results of capitalist control of natural resources to the crisis of the whole capitalist system.  The capitalists could find that oil is explosive in more ways than one.  Nationalization under workers’ control is the only solution.