Wednesday, September 28, 2011

Should the NDP apologize?

By Jim Harding
No Nukes
September 28, 2011

The northern-based Committee for Future Generations recently wrote all NDP MLAs and candidates asking for support for legislation banning nuclear wastes in Saskatchewan. (This is quite close to NDP policy). They gave compelling information about the steady, worldwide shift towards renewable energy accelerating since Japan’s nuclear melt-downs.

But then the Committee asked for an apology from the NDP for taking us down the nuclear road. This reverberated right to the Office of the Leader of the Opposition, and wasn’t wholeheartedly embraced by everyone working with the Committee. It was too big a leap for many in the inner NDP; there was some support from a few people who left the NDP but would consider returning if there was any sign of sincere policy reevaluation.


My response as an activist-researcher is to assemble relevant historical information. In my last discussion with Tommy Douglas, in the late 1980s at a University of Regina conference at Fort San, Tommy told me, regrettably, that Uranium City’s role in nuclear weapons during the 1950s and 1960s was “mostly a secret”. He told me a few Cabinet Ministers knew of the weapons connection, but that they were sworn to secrecy under the War Measures Act (WMA).

I found the WMA came into play over Canada’s role in supplying uranium to the U.S. Manhattan Project which built the first A-bombs. In 1942 the Canadian government insisted that Eldorado Mines re-open its Port Radium mine in the NWT and send uranium to Port Hope, Ontario for refining before going south. This uranium was used in the bomb dropped on Hiroshima. In 1944 the federal government used the WMA to expropriate Eldorado Mines which became the crown corporation Eldorado Nuclear. Until 1971 it had a monopoly selling uranium for weapons to the U.S. and UK.

The Saskatchewan CCF government’s role was secondary. In 1952 the CCF created the infrastructure of Uranium City to support uranium mining. The CCF also tried but failed to get a seat on the federal nuclear regulatory body, the Atomic Energy Control Board.

Tommy gratefully accepted an invitation to key-note the 1959 Rally for Nuclear Disarmament at the legislature, and he must have known that many of the weapons he supported banning were using uranium from the north. Tommy also campaigned for the Blakeney NDP in 1981 which was promoting uranium joint ventures and was about to lose to Grant Devine. If Tommy were alive perhaps he’d owe us an apology for his secrecy, but nothing more.


What about the Blakeney NDP hitching its wagon to the uranium industry in the 1970s? Lots happened before the NDP announced its uranium joint ventures. Many NDPers thought the policy was created to ensure more provincial resource benefits. But in 1974 the uranium industry, led by Uranerz of Germany, came to Blakeney proposing joint-ventures. In retrospect this isn’t too surprising since the uranium industry everywhere is tied in some way to the state. Arevea, for example, is state-owned.

The province accepted the offer and that year, well before there was any public discussion, Blakeney created the Saskatchewan Mining and Development Corporation (SMDC); the government uranium company. In 1975 Blakeney proposed a 5% royalty on revenues plus a graduated royalty on profits. The industry rejected this outright and Amok (now Areva) suspended its operations at Cluff Lake, where it had discovered high-grade ore in 1968. The NDP government back peddled, agreed to a 3 % royalty and gave in to company demands for more capital investment exemptions.

In 1976 a uranium moratorium was recommended to the NDP convention, but Cabinet, already creating joint ventures, convinced the party to hold an inquiry which rubber stamped what was already underway.

With the price of uranium so erratic, industry wanted public risk financing of infrastructure and mine-site construction, and to protect its profit line. And it got its way; by the end of the Blakeney government the province had invested more into uranium mining than it got in revenues.

In 1988, when the uranium market was bottoming out due to the lack of new nuclear plants, the Free-Trading Devine and Mulroney governments privatized SMDC and Eldorado Nuclear to become Cameco. The same ideology of “trickle down” persisted, but the government and industry returned to traditional roles as regulator and producer. And, as the main nuclear power countries (U.S., France and Japan) targeted Saskatchewan’s higher-grade, more economically-recoverable uranium, Saskatchewan became the world’s major uranium-producing region. Demand, prices and sales shot up.


By 2000 the value of uranium sales was at $419 million, with royalties only at $39 million. By 2005 the value of sales was $644 million with royalties down to $30 million. In 2009, the last year that figures are available, sales doubled to $1,260,400,000 with royalties of only $105 million.

Royalties averaged around 6% of the value of uranium sales during this period, but have been as low as 2% in 2003. These royalties come from two sources: first, a base royalty which is 4% of revenues after resource credits such as capital write-offs are considered; and second, a graduated royalty based on the uranium price. Royalty figures from 2000-2009 suggest the graduated royalty is low, as there was a uranium bull market with exploding prices and profits until Fukushima.

There are other uranium revenues from a resource surcharge on gross revenue and from corporate taxes, but this is aggregated with all natural resources to protect commercial interests. Efforts to research uranium mining are continually plagued by military or commercial secrecy.

The uranium industry turned into the opposite of what Blakeney had been hoping for during the mid-1970s. Though the value of uranium sales continued to rise, tripling since 2000, the provincial royalties remained pretty flat. While the SMDC gave government added policy tools, such as having a say in production schedules based on demand and price, all economic advantages from the joint ventures were nullified by the province’s heavy investments in the industry. These turned out to be a “public gift” to Cameco.

And, while billions of dollars of uranium wealth has gone out of province and country since the 1980s, northern Saskatchewan remains one of the poorest regions in Canada. Some of the same people who deceptively advanced uranium mining as the economic answer to the north are now advocating a nuclear dump as their latest “development strategy”. This time, many see through the ploy.


All political parties played a role in this dead-end. The Thatcher Liberals, the Blakeney, Romano and Calvert NDP, and the Devine and Wall Conservatives all contributed to this toxic economic “strategy”. They should probably all apologize to the Saskatchewan people, particularly northerners, who have ended up with thousands of tonnes of radioactive tailings.

What the Committee for Future Generations was getting at, without laying out the history, is that they think the NDP is more likely than the Sask Party to admit the dead-end and start shifting to a sustainable path. I think the jury is still out, especially as long as Lingenfelter remains leader. Remember that when he worked as an executive in Alberta’s oil patch Lingenfelter supported Saskatchewan building nuclear plants.

Apology, confession and forgiveness are important rituals to help us learn from our experience and find new ways. The CCF has little to apologize for. Since Blakeney however, the NDP has helped take the province on a dead-end path. Someone should probably apologize, especially to the Japanese who face ongoing contamination from Saskatchewan uranium fuel used in Fukushima’s reactors. Maybe half an apology should come from the NDP for their predecessors and half should come from Cameco for what they continue to do.

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