2016-01-29

Canada Is Pipelines, Pipelines Is Canada

"Hockey is Canada, Canada is hockey." Canadiana folk motto. 

The fight to prevent oil pipeline projects in Canada overlooks one major reality about the economy in this country. As pointed out in other posts, the main focus has always been the extraction and export or natural resources and little else. It's a problematic approach that has been a feature of many debates for decades. Indeed,  littered throughout our history are warnings from economists, politicians, diplomats and general observant Canadians whether they be academics, journalists or amateurs that if we don't diversify our economy we will be condemned to our mercantilist mentality.

When seen from abroad, the image of Canada is that of a frontier town and our neo-mercantlism doesn't help to improve on this.

We made our bed and don't seem to want to lie in it. We just want to be accepted because 'we're Canada'.

Economist and politician Eric Kierans pointed out in the 1980s, "...Canada's interests are being poorly served by maintaining the pretense that we are a leading industrial power. We are not. We will never develop the set if strong domestic policies needed to give us control over the directions of our economy until we accept that fact. Neither Japan nor Europe nor the United States has any intention of helping Canada to become an industrial power. These three industrial giants are each fully capable of supplying a whole range of manufactured products, cars, television, steel, radios, capital equipment, tools and so on, to world markets. Canada's manufacturing potential is neither needed nor will it be welcomed in a world that is moving, despite all protestations, toward increasing protectionism. As these three powers divide the world into industrial spheres of influence, Canada's role will be the supplier of raw materials and energy resources."

And that's that. Blunt but still accurate. Natural resources nationalists here who rail that the Americans - with the usual, pedantic anti-American blathering rants - will come after our water still haven't realized we don't have much choice in the matter. Never have. We chose this path. Such is the impossibility having been born out of the bosom of one great power (Great Britain) and attempting to carve a nation while living next to the greatest power in all of history the United States. It's like we never had a chance.

When it comes to pipelines, whenever activists manage to convince politicians to kill them, they in effect hurt the essence of our economy. It's not like we can fall back on other industries to pick up the slack until a more politically expedient time to build them. We don't have an economy remotely closed to the gargantuan American economy. They can afford to play games given the stature and wealth they possess.

It's an unfortunate thing to have happen (to be fair we did try at different intervals in the past but competing with the United States and its immense economies of scale and general talent for business was always an obstacle sometimes too difficult to overcome) to this nation that despite accesss to the greatest nation in human history we haven't really done much with the comparative advantages at our disposal. We prefer to engage in reactionary anti-Americanism rather than use it to our benefit. We take American capital, buy American machines but still act as though we're doing them a favor.

Kierans notes, "Canada's tariff policy of 1879 was a national policy, although it turned out to be counterproductive. Infant industry protectionism can be made to work if it is accompanied by strong industry creation, as the policies of both the United States and Germany have shown. But Canada failed to create the industries that the tariff was designed to protect, and so the foreign investment and the branch plants took over."

And the rest is history. It's also worth noting Otto von Bismarck's quip, "free trade is the policy of the strong'.

It's a mindset I've always felt we need to change but stubbornly refuse to.

A similar thing happened to our culture. We're a country still in the process of 'searching' for itself. It's a unique phenomena we don't see in the United States. This is so largely because we never really were able to establish values that bind us as a nation-state. Sure, we had some political symbols but nothing that distinguished us. Perhaps this is why we appropriated and incorporated in our value bank things like 'universal health care'. It always struck me as a bit of stretch to do so given we didn't exactly invent the concept and nor is it something all Canadians necessarily agree with. Other symbols that have come to characterize Canada like "multiculturalism" are also fleeting and strike me as superficial. The United States is the most diverse nation in human history having absorbed and assimilated more people than any country without such policies. Quite frankly, if given the choice I would choose the latter. It's more real.

Canada is a member of the G8 by virtue of its partnership with the United States. On our own, however,  I don't think we can claim to truly be a refined and mature economy like our G8 partners.

This is why, practically, realistically and pragmatically it's paramount we don't hinder and hamper our chances at prosperity which runs through our pipelines.


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