Exports only fuel boom and bust cycles
Re: Discussions around the federal government paying for the Kinder Morgan pipeline.
I fail to comprehend the rationale behind racing to enhance the export of raw materials faster and in larger volumes while the resource industries in Canada are so sensitive to the fluctuations of world prices that are completely out of our control. Here on Vancouver Island and in B.C. we have been trying to slow down the export of raw logs for decades and have been forced to watch the closing of value added mills and facilities which were a huge sector of employment in the forest industry. We enjoyed many years of huge numbers of high paying jobs in the forest industry that have dwindled to a fraction of the mills that were once operating, while the log export “pipelines” are thriving, supplying thousands and thousands of jobs in mills in the U.S. and abroad.
At one time, there were five oil refineries, (mills?), operating and employing thousands of people on the B.C. Lower Mainland, turning the raw resources into value added products. Now there is only one I believe. Unfortunately, we have allowed the large, raw resource producing corporations to position their business models to handle the raw resources as little as possible, selling the raw materials so other jurisdictions and countries can add value to it while employing thousands of workers, and sell it back to us, (and globally), just like our timber.
The oil and gas industry has always been boom and bust. The federal government has always offered up tax relief, incentives, and other subsidies to some of the most profitable corporations on the planet when the global markets “bust”. So again, we have allowed the large corporations to become dependent on those subsidies. All they have to do is propose large projects with great fanfare and promises of prosperity for all, then after a year or two, decide it is no longer economically feasible. Then the governments, (provincial and federal), step in and keep giving away taxpayer dollars in subsidies and incentives until they have no choice but to go ahead with the project as it costs them so little, or worse yet, the government take it over 100 per cent funded by us taxpayers. The “federal”, Kinder Morgan pipeline is little more than a multi billion dollar government subsidy to provide the raw resource producers a faster export venue, so they can sell more product that they are now crying they are selling at a loss. That seems like they will be able to accrue larger losses much faster, as the market fluctuates. Seems like a similar situation as the electric coal trains to Prince Rupert, paid for by the taxpayers and then abandoned after several years of operation when the bottom fell out of the coal market, (again: surprise, surprise), and the subsidies or the value of the subsidies were surpassed by the real costs.
Our grandchildren and greatgrandchildren will need our natural resources. The exploiting of those resources has the potential to supply good, long term jobs in value added industries.
If the Liberals invested $4 billion into valued added programs for the oil and gas between Fort MacMurray and the B.C. coast instead of encouraging the boom and bust of raw exports, there would be the formation of long term, good paying jobs and research and development on Canadian soil. A much better “plan” than the short sighted approach of getting as much of it out and sold as fast as possible for short term “booms” of subsidized pipeline construction, and then employment “busts” when all we can do is watch the oil flow, (or logs float), with the money flowing back up the pipelines and not stopping in any of the affected communities along the way.
We’ve allowed the large resource based corporations to convince the governments that we need to keep planning for short term gains and keep pretending the “busts” will never come. What we need is the corporations to restructure for long term moderate profits in less unstable value added markets and provide local, long term employment opportunities.
Check out “Unpacking Canada’s Fossil Fuel Subsidies” on the International Institute for Sustainable Development website. https://www.iisd.org/faq/unpacking-canadas-fossil-fuel-subsidies