Union warns of more Canadian petchem closures

06 September 2006 18:11  [Source: ICIS news]

TORONTO (ICIS news)--Ontario could suffer more job losses and plant closures in the petrochemicals and chemicals industry if Canada does not change its policies on energy exports, a top Canadian union official warned on Wednesday.


“The Dow Chemical closures in Sarnia [Ontario] might be just the tip-off, but not the end,” Bob Huget, Ottawa-based vice-president of the Canadian Communications, Energy and Paperworkers union told ICIS news.


Dow announced last week it will close all its chemicals plants at Ontario’s Sarnia petrochemicals hub by end 2008 due to lack of feedstock.


Huget called on Canada’s federal and provincial governments to reverse policies under which raw natural gas and oil are exported to the US and elsewhere without first taking out valuable components such as ethane to create value-added jobs in Canada.


If policies are not reversed, Ontario could see more job losses and plant closures in the chemicals sector, Huget said. “We are afraid Alberta’s oil boom and its benefits could completely by-pass Ontario,” he said, adding that the CEP union is pressing governments on the issue.


Dow’s planned closures in the Sarnia region and southwestern Ontario will go far beyond the 340 employee and 40 contractor job losses that were announced by the company, Huget said. “This is huge in terms of lost pay-roll alone ... it will take some Can$20m ($18m/€14m)/year out of the local economy."


Huget said that the closures could eventually affect more than 1,000 jobs in the area. “We estimate that for every job lost there [are] an additional three jobs [that] will be impacted; maybe not necessarily lost, but negatively impacted.”


Huget said while Dow’s presence at the Sarnia hub has declined over the years - from more than 2,000 direct employees at the peak to 340 - the decision by Dow to close all of its plants there was still a surprise. CEP will seek talks with Dow and others to review possibilities of how the company's considerable infrastructure and plants at Sarnia can be used to create or maintain some jobs, he added.


The Canadian Chemicals Producer Association (CCPA) said that it was alarmed that at the peak of the business cycle there was little new investment on the horizon for Ontario's chemical industry. CCPA added that key to growth in the chemicals and petrochemicals industry is access to energy and feedstock resources, and pointed to the planned Alaska and Mackenzie Delta natural gas pipeline projects as well as liquefied natural gas as future feedstock options.

By: Stefan Baumgarten
+1 713 525 2653

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