Oil patch workers to get 8% raise over 3 years

Earlier this month, the Alberta government’s Collective Bargaining Information Services department published an update on contract negotiations in Alberta. The update included contract changes that occurred in October 2023.

One of the changes was a new employment contract between Neegan Development Corporation Ltd. and 217 of their workers.

These workers are employed by Neegan Development in bitumen mine development, operation, maintenance, and reclamation, excpt those in supervisory, office, clerical, and purchasing positions. As well, these workers are members of Local 955 of the International Union of Operating Engineers.

Based out Fort McMurray., Neegan Development specializes in heavy-duty equipment, fuel, and construction.

The new 3-year contract will see these workers receive a 7.75% wage increase over the life of the contract.

6 October 2023	3.25%
1 July 2024	2.50%
1 July 2025	2.00%

Technically, if we account for cumulative increases, it actually ends up being a 7.95% wage increase.

Their previous contract, which was only 2 years long and last December, gave the workers a wage freeze retroactive to 2018 (the contract it replaced had expired in 2017), followed by a 1% increase in 2019, minus 10¢, then raises that matched inflation for the next 3 years (2020, 2021, and 2022).

The wage increases in the previous 3 years occurred in July of each year, so the fact that the first increase in the new contract is effective as of October, means they lost out on 3 months of extra pay.

It’s interesting that the contract has moved away from the increases based on cost of living.

Let’s look at the 2023 raise, for example. If they had continued these raises into this year, it would’ve been based on the change in Alberta’s consumer price index between December 2021 and December 2022.

Alberta’s CPI in December 2021 was 151.7, and a year later, it had jumped to 160.8, a 5.99% increase. Instead of getting a raise of basically 6% in the first year of their contract, they’re getting a 3.25% increase.

In fact, the raises in 2023 and 2024 combined don’t even add up to 6%. Never mind the fact that inflation in the first 10 months of 2023 is already up to 2.74%.

That means these workers will see a drop in real wages, which is wages adjusted for inflation. Inflation between December 2021 and October 2023 was 8.89%. Assuming inflation doesn’t tank in the final two months of the year, these workers will see a cut of 3.15% to their real wages in the first 3 years of this contract.

And that’s not counting inflation in 2024.

Under the previous contract, the end rate—or the maximum wage an employee could make—was $40.43. By the time this contract expires in 2026, the end rate will be $43.64.