By Ray Rivers
January 20, 2015
BURLINGTON, ON
For a long while now I have criticized the federal government’s approach to managing the economy – focusing on energy exports to the exclusion of the rest of the economy.
Given the recent collapse in the global petroleum market and the United States move towards energy self-sufficiency, it is now apparent, even to the Prime Minister, that such a narrow-minded economic policy was short-sighted and dangerous.
So a new Stephen Harper is emerging, one desperately interested in doling out economic subsidies to a forgotten domestic manufacturing sector. Incentives to encourage a more diversified economy, which he now appears to appreciate, are crucial, not only for the economic health of Ontario and Quebec, but for the entire nation as a whole. So much manufacturing capacity has been lost over the past decade that today’s manufacturing sector is simply unable to make up the shortfall in national income lost by the oil exporters.
Massive trucks haul earth that is laden with oil that has to be processed before there is a usable product. Low oil prices make this kind of operation uneconomical.
Harper wasn’t the only one sleeping at the switch, thinking he could slip his way to prosperity on the petroleum gravy train. His nemesis, Russian president Putin, used his vast oil money to build his military instead of diversifying the Russian economy and now is in an even worse pickle than Canada. And then there is Mr. Harper’s former environment minister, now Alberta’s premier, who is facing a budget deficit and considering an Alberta first – a sales tax.
Not long ago, Canada had tried to bully the US into building the Keystone XL pipeline, hoping to reach Asian and European markets easier that way. But US :President Obama resisted our PM and it turns out he knew what he was doing. Nobody is going to buy dirty Alberta oil which costs more to produce than the $50 a barrel price today.
The new Republican controlled congress may still force Obama into that pipeline anyway, though I’m betting on Obama.
Will these pipes every get buried and carry gas or bitumen to Texas or the Gulf of Mexico. The Alberta government certainly hopes they will – the environmentalists hope they get carted off somewhere else.
It’s a legacy thing with the US president. Stopping Keystone, and slowing oil sands development, could be one of the few things Obama would have accomplished to help mitigate global climate change, after doing so little on that file during his eight years in office. On the other hand, Stephen Harper has done absolutely nothing about this issue.
Oh sure greenhouse gas (GHG) emissions in Canada dipped thanks to the 2008-2010 economic recession – but, as Bill Clinton would say, that was the economy stupid. The PM likes to claim Ontario’s renewable energy and coal phase-out reductions as his, though they were made without a lick of federal support.
This PM treats anything to do with the environment as anathema. For example, the Canadian government has recently shocked the rest of the world by objecting to the protection of 76 species being added to the Convention on International Trade in Endangered Species (CITES).
Doesn’t look like oil – but once filly processed it will fuel your car – the question is at what cost to the environment.
The environment should not be an ideological issue. A sustainable global environment is no more right or left than is a healthy growing economy. Yet climate change deniers continue to dominate conservative media and politics, denying what is plainly in their faces; that last year was the warmest on record, that the polar ice caps are melting faster than ever, and that ocean water levels are rising quicker than anyone ever predicted.
It was this PM who shredded the federal Environmental Assessment Act and gutted the time-honoured Fisheries Act in order to expedite more oil-sands development. And having promised to regulate oil-sector GHG emissions, again and again, he has repeatedly refused to do so. In fact, Canada, for the third time in a row, is trying to stop our North American free trade partners (NAFTA) from investigating the environmental effects of the huge tailings ponds created for Alberta’s oil sands.
Canada’s overall contribution to global GHG emissions is relatively modest, given our small population, but those emissions are more than proportionate when compared to many more populated nations. Brian Mulroney, one of Canada’s most environmentally oriented leaders, set this nation on a course to lead the world on the climate change issue back in 1992. Today’s Conservative government has relinquished that leadership and abdicated our responsibility to the planet by pulling out of the Kyoto Protocol and attempting to disrupt other international efforts to cut GHG emissions.
Manufacturing and product processing can become a solid core for the Ontario economy – if the needed investments in technology are made.
It was during Mulroney’s time that Canada embraced the concept of sustainable development, originally defined by the Brundltand Commission in a report to the UN, titled “Our Common Future”. ‘Development that meets our needs without compromising the ability of future generations to meet their own needs’. The rate of development of the oil sands is spectacular and it would be even more so were the Keystone in place and the price of oil higher.
As the PM now realizes, tempering the energy extraction business and promoting a diverse and balanced economic growth and development strategy would have made the nation and his government less vulnerable to the vagaries we are seeing today. It would also have helped in meeting even the modest climate change targets we have set for ourselves.
Ray Rivers writes weekly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking. Rivers was a candidate for provincial office in Burlington where he ran against Cam Jackson in 1995, the year Mike Harris and the Common Sense Revolution swept the province.
Background links:
Canada’s Economy Economy Manufacturing Sector
Economy and Interest Rates Potential Carbon Pricing Hottest Year
NAFTA and Oil Sands Rising Oceans Sustainable Development
[…] Previous Rivers Column on how the PM sees the Canadian economy. Obama’s Take on Equality […]
What pap. Another “good Liberal” propaganda article.
Why don’t you talk about the Ontario Liberals and how they have driven this Province into economic stagnation and debt beyond belief.
You Obama lovers deserve are beyond words. He sure talks “purdy” but he has zero substance.
Geez.
Good points Mr. Rivers.
Good article Mr. Rivers. Giving credit to Mr. Mulroney where credit is due. His environmental initiatives were over shadowed by his rich baritone, and previously unknown to me.
Before PM Harper, there was much talk / effort towards building a Canadian knowledge economy (RH Chretien, and RH Martin) Since Mr. Harper took the reins, the focus has been on building a natural resources based economy. Many of our knowledge workers have see their jobs shipped overseas or taken by TEmporary Foriegn Workers at lower pay rates.
I can see focusing all your energy on one specialty if you are a company, but a country should have a diverse, sustainable economic engine.
The REALITY is: Drilling operations are being suspended and people are being sent home. The unemployment numbers are going to be GHASTLY come January month-end, continuing well into the spring and summer. We’ll see what CUTS Harper, Oliver and Clement are preparing to make. I’ve seen the TD in-depth examination and it certainly DOES NOT LOOK GOOD.
Where is that DIVERSIFIED ECONOMY? We NEED a comprehensive ECONOMIC ACTION PLAN … NOT JUST EMPTY ADVERTISEMENTS.
Why would anyone in their right mind believe that oil prices are going to remain low? At the first opportune moment OPEC will stick it to the west again. It’s not like we haven’t been over this road before. Sheesh.