Blog, The Economy, The Environment

Nation-building requires balance and compromise – Northern Gateway is no exception.

As published in the Globe and Mail, June 18, 2013.

The federal government’s decision to give Northern Gateway the green light is conditional on the project meeting all 209 environmental and social conditions set out by the joint review panel of National Energy Board and Canadian Environmental Assessment Agency. The proponents must also engage in more consultations with affected aboriginal communities, and there are BC’s 5 conditions to be met.

Many environmentalists are now willing to accept the project, provided those conditions are satisfied. Many aboriginal groups also support the project, based on economic participation in the project and associated benefits to their communities. There remain, however, certain environmental and aboriginal groups who still threaten to do all they can to stop it. There are those who will just keep saying “No”.

These challenges are nothing new. Other major nation-building projects in Canada’s history were plenty controversial in their time. The CPR, the St. Lawrence Seaway, the TransCanada Pipeline, Churchill Falls and the James Bay Project each had its risks, its detractors, and hurdles to overcome. Given what we now know about animal migration crossings and the contribution of cars and trucks to greenhouse gas emissions, some would say “No” to the TransCanada Highway today – but there is no denying its importance.

Every nation-building project done in Canada has required negotiation, balance and compromise, and Northern Gateway is no exception.

You don’t build a nation by saying “No”. You need to ask “How”.

For our oil, access to the West Coast, and thus to global markets, has major economic implications for Canadians across the country. The United States is our only customer for oil, which causes a significant price discount, and they are approaching energy self-sufficiency more quickly than anticipated. We must diversify our customer base, and the opportunities that resource-hungry Asia presents are huge – and not just for Alberta. Manufacturers in Ontario and Quebec supplying the oil sands and pipelines with all manner of equipment and services – and the people they employ—will benefit. So too will scientists and technicians across the country developing more efficient (and environmentally-friendly) extraction processes. And the whole country benefits from social and other programs that are supported with the taxes that oil-related business activity sends to Ottawa.

In the late 1860s and early 1870s, John A. Macdonald saw the prairies as the (potential) breadbasket to the British Empire, with economic benefits for the whole country – but only if the grain could get to the sea. The government sponsored the construction of three transcontinental railways, including the CPR. People were needed, too, so Macdonald encouraged prairie farm settlement with the Dominion Lands Act of 1872. These efforts had their own controversies, and plenty of opponents and hurdles to overcome – but there can be no denying the importance and long-term value of such nation-building. It has ensured prosperity for many, and for generations.

Now, once again, we need access to the sea.

And we have learned a great deal from our mistakes. We have far better labour protection and workplace safety laws now than when the railway was being built. We understand the need for environmental sustainability – indeed, this is a huge opportunity. We can, and should, become the world leader in the technologies for spill prevention, spill containment and remediation, both land and sea. Although it has taken far too long, we now appreciate the importance of economic and social partnership with aboriginal groups. The irony is that the required social licence should now be easier, not harder to achieve, because Northern Gateway, with the conditions met, will be more environmentally sound, more socially responsible and far better for the aboriginal groups involved than any other major nation-building project before it.

Northern Gateway offers an extraordinary, historical, nation-building opportunity to provide economic benefits for the whole country. Done well environmentally, with the engagement and support of the aboriginal groups involved, it can also be something of which we can all be proud.

Martha Hall Findlay, an MP from 2008 to 2011, is an Executive Fellow at the School of Public Policy at the University of Calgary.




Supply Management, The Economy, Viewpoints, What's New

Free trade with Europe’s a start, but we’re still overpaying for food

Read it at the Globe and Mail or below.

The ‘last stumbling block’, the ‘most contentious issue’, the ‘hardest to agree to’ part of the now finally-signed comprehensive trade agreement with Europe (CETA) turns out to have been not cars, not sub-national procurement, not drugs, not beef, not manufactured goods, all of which were important and contentious issues for sure. No, the last holdout was cheese, with Canada finally agreeing to allow a modest 17,000 more tonnes of cheese into Canada.  Cheese lovers hold on to your cheers – that’s barely 3.5% of Canadians’ total cheese consumption.

Right now the quota is only 20,000 tonnes (as is, only about 4% of the Canadian market), and the additional 17,000 are all being offered to the EU.  But the total amount of cheese allowed in under quota (without tariffs) will still be only a tiny fraction of the cheese available to Canadians – we have to buy the rest through the supply-managed, artificially high-priced Canadian dairy cartel. (Any imports over the quota face tariffs of about 250%, effectively keeping them out.)

To put a total quota of 37,000 tonnes of cheese into perspective: In 2009 there were 35,500 tonnes of skim milk powder sitting in storage, unused. That’s equivalent to more than 34 million litres, or more than one litre per Canadian. Thanks to supply management’s economic distortions, there is a chronic surplus of skim milk powder in Canada each year, which the Dairy Commission buys (with money earned through high milk prices), simply to protect the system.

The dairy lobby has wasted no time responding to the EU trade deal announcement – they claim that “dairy farmers will not support the Harper government agreeing to a deal with the EU that gives away the Canadian cheese market that Canadian dairy farmers and cheese makers have worked so hard to develop over the years.” “Gives away”? The Europeans are simply being allowed to bring in a tiny fraction more of the cheese that Canadians want to consume, at market prices.

The irony is that there are some wonderful cheeses that are now being made in Canada by innovative, entrepreneurial dairy farmers and small processors – indeed, Glengarry Cheesemaking’s Lankaaster cheese just took top prize at the annual Global Cheese Awards. But their ability to turn good cheese into economic success is severely hindered by the artificially high prices they pay for milk, and by our system preventing them access to other markets. I’m sure that many of our small cheese manufacturers – those the dairy lobby is so quick to “defend” — would do very well exporting, but at market prices and to the much larger markets that we might have access to, if it weren’t for our own protectionist policies. This was a tough enough hurdle for the EU trade deal — the Trans Pacific Partnership negotiations, offering tempting access to huge Asian markets, will likely be off-limits if we don’t fully dismantle supply management.

This concession on cheese was part of the effort to get the EU to allow more Canadian beef into their market. The Europeans clearly have their own protectionist forces at work, and, in a world where our supply management system forces Canada to make major trade-offs, this is one of the rare examples where supply management is held up as a tit for a tat. But even putting aside freer trade and greater access to markets for Canadian food, goods and services — Canadians should be up in arms over the high prices we continue to pay for dairy, poultry and eggs here at home: Over $200 MORE for the average family each year. And of course the people who suffer the most from these high prices include single parent families, too often living in poverty, with children who most need basic, healthy food.

How Thomas Mulcair and the NDP can continue to support a regressive system that hurts so many Canadians most in need is astounding.

Canadians are upset about their cell phone charges – they should also be insisting that their politicians take action to achieve market prices for basics such as milk, cheese and chicken. The Harper government is happy to be seen as pro-consumer for the one, but continues to show utter hypocrisy on the other.

Message to the Harper government and all politicians: too many of you are afraid of the dairy lobby.  Indeed, it used to be very powerful, but dairy farms are now far outnumbered – in every single federal riding – by the 94% of Canadian farms that are NOT supply managed. The vast majority of those other farmers want to see supply management go — including the beef, pork, grain, oilseed and pulse producers who could then gain access to other major world markets. In the 1970s, when supply management was brought in, there were about 145,000 dairy farms across the country. But that number has dropped a staggering 91% to barely more than 12,500 — nationwide.  They now represent far fewer votes than do all of the people, including the majority of Canadian farmers, who would benefit from dismantling the system. There are no more excuses. There have been proposals to dismantle the system in a positive, successful way for the farmers, and successful examples. It can be done, win-win.

For a full description of the supply management system, the challenges it causes, and, most importantly, positive recommendations for an exit strategy that is win-win – including for dairy farmers – see this report from the School of Public Policy,

The negatives now far outweigh the positives — Canadians need to start insisting that their politicians to get something done.  17,000 tonnes is a small drop in what should be a big bucket.