“More Agreement than Not” — Canada’s Premiers in 2012

by John Brian Shannon

It was heartening to see Canada‘s Premiers working together today on the challenges facing Canada, it’s provinces and citizens. A provincially-led era of common-sense has appeared across the political spectrum in this country. How reassuringly Canadian.

Saskatchewan Premier Brad Wall felt comfortable enough to make the statement that between the provinces, there is “more agreement, than not.” New Brunswick Premier Robert Ghiz standing beside him indicated his full agreement.

Why can’t politics always be like this?

And I was pleased to see a high level of cooperation between the provinces on the topic of health-care. The Premiers want to lower costs for patients, enhance health-care  and harmonize their somewhat disparate systems. As I said, heartening.

Downplaying Northern Gateway pipeline tensions

British Columbia Premier Christy Clark quite rightly states that BC will be taking all of the risk where the Northern Gateway pipeline is concerned, while so-far receiving little benefit under the present proposal.

In fact, the number of Canadians who will actually benefit from this pipeline over its proposed 30-year lifetime are surprisingly few.

It must be said that during the one-year pipeline construction period, a few thousand temporary jobs would be created. But no more than a handful of oil executives will benefit, but benefit they will — handsomely. And it’s not rocket science to do the math on oil and pipeline company stock market shares, as American citizens own far more of these stocks than any other national group. Less than 15% of the total stock in this market segment are owned by Canadians.

From the British Columbia standpoint, does it really matter to BC citizens if some Ontario or Texas oil executive can afford to buy yet another Bentley at Christmas?

Especially when the risk of damage to wildlife, citizens and to the economics of the region could be catastrophic. Tourism, fishing, forestry, farming and real estate values can dramatically change for the worse in the case of only one major spill. Taken together, these sectors represent billions of dollars per year for the people of BC.

It might interest you to know that under the Canadian Constitution, resources are owned by individual provinces on behalf of the citizens of those provinces. As the owners of these resources, citizens nowadays have precious little say in how they are accessed, developed or sold — and to which entity they are sold. Let alone have any say on the per-tonne selling price of those resources for decades of time.

Premier Christy Clark of British Columbia, acting with parallel support from the leader of BC’s official opposition party, the Honourable Adrian Dix, has questioned the present situation and both politicians have called for an examination of risk/net benefit for British Columbia’s citizens in this matter.

The next logical step is to hire the most reputable, global, petroleum-wise accounting firms available, to have them determine the cost to repair damage to the environment and to cover employment and profit losses resulting from the worst-case oil spill at sea — or wherever the pipeline route crosses the interior of this scenic province.

Whatever the full cost happens to be for a full clean-up and remediation along with the full compensation costs for affected individuals and businesses, that should be the minimum price of admission in order to receive the necessary permissions and permits to build and operate an oil pipeline route  through BC — or through any province for that matter.

A worst-case scenario security-deposit is what all British Columbian‘s should require of companies wishing to cross BC territory with oil pipelines or oil shipping terminals located in the province.

If the appropriate deposit is paid in full and in advance, at that point, even I will put up with an oil pipeline and trans-shipment terminal in BC. Especially if the highest standards and practices are put into place to ensure lower risk for British Columbia.

When a pipeline gets taken out of service (and removed) after years of successful operation (without a single spill) the security deposit — principal only — should be returned to the company.

You’d think that insurance companies would be all over this.

If these proposals were passed into law, it might encourage oil execs to direct their teams to build world-class pipelines which never leak and require the use of double-hulled supertankers as part of their corporate policy. Double-hulled tankers are the law in the EU (since 1996) and the U.S.A. (since 1990) and both have in place, severe penalties for non-compliance. In the GCC nations and Japan it is long-standing convention (but not law) that double-hulled tankers are required anywhere close to the coastline.

Canada, with the most scenic coastline on the planet located here in the province of British Columbia, has no such law nor convention. Pathetic.

IF the price formula outlined above seems too high for pipeline or shipping companies, that’s too bad. We don’t need it. We’re not getting anything from it except risking the wealth and beauty of our province, so take it somewhere else. No really, please. Take it somewhere else.

We can’t jeopardize British Columbia’s pristine coastline, wilderness, rivers, creeks, lakes, farmland and ranchlands. Nor can we risk BC’s entire multi-billion dollar tourism, fishery and forestry industries and the hundreds of thousands of jobs they provide, because comparatively small numbers of people in Alberta, Ontario and the U.S. want a shiny new car next year.

John Brian Shannon writes about green energy, sustainable development and economics from British Columbia, Canada. His articles appear in the Arabian Gazette, EcoPoint Asia, EnergyBoom, the Huffington Post, the United Nations Development Programme – and other quality publications.

John believes it is important to assist all levels of government and the business community to find sustainable ways forward for industry and consumers.


Check out his personal blog at: http://johnbrianshannon.com
Check out his economics blog at:
https://jbsnews.wordpress.com
Follow John on Twitter: https://www.twitter.com/#!/JBSCanada

Canada – Resource Boom or Manufacturing Boom? Why Not Both!

by John Brian Shannon

I’m a big fan of Saskatchewan Premier Brad Wall. You can’t argue with success and the province has excelled with Brad Wall as premier. Well done on all counts, Premier Wall.

NDP leader Thomas Mulcair has a point, however. By devaluing the dollar, a huge part of Canada’s economy (almost 50%) could ALSO start to perform at a high level instead of continuing to sputter along at half-speed.

Not just the resource-based provinces romping along as they have been doing — but manufacturing provinces could return to full performance.

For manufacturing, a lower dollar will drive the demand of exports higher, Canadian production will ramp up, employment will increase. And we all know where – Ontario which is Canada’s largest ‘value added‘ economic zone.

Some people use the term manufacturing, but I call it what it really is, value-added. We take our provincially-owned raw resources and add value to those resources by manufacturing something from them or processing them, instead of merely selling our finite resources out of the country and getting nothing more from them.

Manufacturing has stalled in Canada, due in part to Canada’s strong dollar – our exports have become uncompetitive over the years as the dollar has risen. A direct correlation exists between those two stats.

If you want the biggest economic engine in Canada to suddenly begin to receive larger volumes of orders from other countries including the U.S. our biggest trading partner, causing those goods to become cheaper is the way to go.

Devaluing the Canadian dollar has NO EFFECT on Canadian consumers at all, unless you are purchasing goods and services from outside Canada. And if you are buying goods from other countries – shame on you – buy Canadian!

If devaluation inconveniences you because you purchase goods from other nations, a booming economy (Cdn resources PLUS Cdn manufacturing) firing on all cylinders should more than make up for it!

Some may wonder about losing our strong resource sector exports, which are already performing very well due to high demand for them in the rest of the world.

The price of raw resources will not drop when demand is so high.

It’s only different in the case of Canadian coal exporters who are facing dropping demand, which equals lower prices ($192.86 in July 2008, now at $99.75 in May 2012) devaluation could help, however, as a lower price will increase demand.

Those coal quotes are the 60 month (thermal coal) contract price from indexmundi.com — but are representative of world thermal coal price trends: http://www.indexmundi.com/commodities/?commodity=coal-australian&months=60

It is better to sell lots of coal at $85.00 per metric tonne, than hardly any at all at $100.00 per metric tonne.

Tourism to Canada would also receive a major boost as our prices would become more affordable due to devaluation of our dollar.

So, what’s the downside of getting Canada’s manufacturing sector and related (which together represent up to 50% of Canada’s economy) again firing on all cylinders — by devaluing the dollar by up to 20%?

As long as demand remains high for gas and oil there should be little downside for Canada’s resource-based provincial economies, as that high demand dictates prices will stay the same, or continue to increase.

I can understand Premier Wall’s concerns for Saskatchewan’s resource and agriculture based economy – but at this point in time, world demand remains high for all resources – and for coal too – but only at the right price.

Follow John Brian Shannon on Twitter: https://twitter.com/#!/JBSCanada

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