Thursday, February 8, 2018

One-Upmanship



Both the Premier of Alberta, Rachel Notley and of Premier John Horgan from B.C.  are engaged in a rather silly game of one-upmanship solely to look good for their constituents. Whether or not their antics will have any effect upon if or when the pipeline gets built is anyone guess. At a quick glance it is hard to see how either creating provincial policies that limit the transit of bitumen or the importation of BC wine into Alberta will have much effect at all. 

From Notley's perspective, I would guess that she has little choice but to do everything she can to ensure that a pipeline gets built to somewhere. Getting oil out of the ground is Alberta's major industry. With the exception of agriculture, Alberta has no other significant industries. Without oil/gas production Alberta has no capacity to produce sufficient funds to support its schools and hospitals. While there is no doubt that having a provincial income tax would be  helpful - such taxes only generate income if people have money to buy stuff. Alberta has struggled for the past few years trying to develop other types of industries but it has been challenging. For well over half a century Alberta's entire infrastructure has been based on oil. Thousands of people have been convinced to move to that province because Canadians needed access to oil - we needed it to travel and to heat our houses.  

In fact almost everyone has benefited from that oil production: from the pipe welders who have made more money there than they could have anywhere else, to the families in the Maritimes who were supported as their men folk worked the oil fields, to all Canadians whose services were at least partially funded from oil money raised by both the federal and provincial government through taxes and through balance of trade payments. It is worth noting that Canadians did not suffer the effects of the last major recession at least initially because our economy was strong - bolstered by our oil sales. It is understandable that Notley and other Albertans are frustrated that no one seems to want to have their oil be transported across the country. Central Canada has clearly rejected the concept of both pipelines and rail transport and now it appears as if BC has drawn a clear line in the sand - saying no to oil flowing to the coast. It is the height of NIMBY that it appears the only solution that might alleviate the stress is if our neighbours to the south allow their pipeline to be built and therefore accept all of the risks.

On the other hand, Premier Horgan has an equally difficult problem. Letting three times as much oil get to the coastal ports will not generate a significant amount of tax revenue. There is almost no benefit to BC. As well there are thousands of BC residents prepared to protest both the construction of additional pipeline capacity through sensitive/vulnerable terrain and the risk that an increase in the number of tankers parading up and down the coastline will bring to the shore of the Pacific Ocean.  To make things more complicated there are some Indigenous communities who are supporting the construction and some that are not. Hogan has little choice but to at least look as if he is prepared to block any new construction. If he does not, the three member Green Party who hold the balance of power, have threatened to withdraw their support - and thereby causing an election. I am quite sure that Hogan is desperately praying that someone else will take responsibility for the decision - ideally the federal government or the courts. That way he can blame someone else.

Similarly Notley from Alberta, who I suspect is the "greenest" of the bunch of them, would like someone else to make the decision so that during the next election she can have a highly visible enemy to tilt at - which maybe her only strategy to win the next election.

This is a Canadian problem - we need to recognize that the cost of not doing anything or doing something are equally as high. If Canadians are prepared to accept that a province should be relegated to "have not" status, then we should be prepared to pay for it which would in part mean invest billions of dollars into Alberta to create other industries. If Canadians accept that the inherent risk of transporting oil products (not if but when) are worthwhile because the benefits are significant, then we need to be prepared to invest to billions of dollars into building the best oil spill prevention systems in the world.

No matter what the decision is - someone will be hurt. Our only real question is who.


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