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Two Plans for Canada: Liberal “Resilient Recovery” All Politics, Ignores Canadian Economic Reality – David Yager


 

Precise Tank Cleaning
Precise Tank Cleaning

 

By David Yager

August 25, 2020

“We’re on a mission from God.”

That famous line by Elwood Blues (played by Dan Aykroyd) from the iconic 1980 movie Blues Brothers summarizes the singularity of purpose of the truly enlightened when they know precisely what civilization must do next.

Take climate change and big government. Those with all the answers – people in possession of moral probity and absolute truth – speak in the first-person plural. We. Us. Our. These are not personal views or opinions. They are gifts to everyone. This is for your own good.

Those who know all speak for the people. And they speak to the people. But they never actually speak with the people.

Or they’d do something else.

That’s how the Liberal government believes it must manage climate change and the COVID-19 recovery.

Except the Liberals speak only to their supporters. They hear no others. Because their primary objective is to continue to govern the country, not improve it.

Let’s review the narrowness of the Liberal view of Canada. There were 27.1 million eligible to vote in the 2019 election. Of the total just under two-thirds voted, 66% or 17.8 million. Of those who cast a ballot, only 33.1% selected Liberal. But in Canada’s “first past the post system” the Liberals formed government because they won the most seats.

But of the 27.1 million Canadians who could vote, only 5.9 million or 21.7% chose Liberal. That means the current government technically speaks for just over one in five Canadian voters.

Committed climate crusaders comprise only part of the Liberal’s 21.7%. Polling last election said this was a significant concern for about 30% of voters. It is remarkable the small percentage of the population that gets to drive the policy bus in the 21st century.

As the oil industry learned the hard way, climate change has been a foundation of the Liberal platform since Justin Trudeau campaigned to replace Stephen Harper as Prime Minister in 2015. Because of COVID-19, there is continuing pressure on governments to provide financial support to accelerate recovery. Ottawa has the most policy tools and Canada’s central bank controls the largest supply of money.

Those blessed with the vision of what the future of mankind should be have identified the current mess as the ideal time to accelerate climate policy goals. Last spring the Liberals put together the Task Force For a Resilient Recovery (RR) comprised of environmentalists, academics, consultants and “sustainable” finance advisors. This includes the infamous Gerald Butts, now operating under the auspices of consultancy Eurasia Group.

A preliminary report was released in July. The authors summarized their work this way:

“Billions more will be invested before this crisis is over, including in restarting economies. Just how much investment will be needed is becoming evident in the initial recovery plans of G7 countries. The goal of our task force is to ensure that those billions in new Canadian expenditure are invested wisely in a strong and resilient recovery – one that delivers good jobs, is positive for the environment, and addresses inequality. Drawing on ideas from across our country and around the world, we have identified five ‘bold moves’ to ensure Canada’s resilient recovery.”

The chosen political spin for this initiative is “resilient recovery”. This means that if Canada could turn the clock back to January and resume life as we knew it only seven months ago, that would not be “resilient”.

We now know even pre-COVID Canada required major repairs. Just pretending the whole thing never happened won’t suffice.

The RR declares, “That means getting Canadians back to work at the same time as supporting the jobs, infrastructure and growth that will keep Canada competitive in the clean economy of the 21st century.” By 2025 the plan is to “…go beyond short-term stimulus to put our economy on a low-carbon, climate-resilient, sustainable and competitive pathway.”

If you happen to work in the oil and gas industry, this has nothing to do with you. With a plan to “Support Canada’s transition to net zero”, you are the problem, not the solution.

Once again, Canada’s largest, most economically valuable and unequivocally essential carbon resource sector is a political target.

RR summarizes “Five Bold Moves” requiring $50 billion. It reads like Canada’s LEAP Manifesto and the America’s Green New Deal. The biggest item is $27.3 billion for energy efficient buildings, primarily retrofits. Another $7 billion will go into zero-emission vehicles. Number three is $11.5 billion for “going big on Canada’s clean energy sectors”. $3.2 billion will go into “the nature that sustains and protects us” while the remaining $1 billion is for “clean competitiveness and jobs.”

21st century Canada is increasingly urban and the Liberals know where their votes are. Based on the 2016 census, 65% of the Canadians lived in communities with a population of 50,000 or more, 23 million of Canada’s 35 million inhabitants. Seventy per cent of those, over 16 million, lived in cities with populations of 100,000 or more in Newfoundland and Labrador, Quebec, Ontario and BC’s lower mainland.

Forty-seven cities in these provinces are the power base of the Liberals.  In the 2019 election these same cities were a political wasteland for the CPC opposition led by Saskatchewan MP Andrew Scheer.

The anti-carbon, nature protection theme is a big vote-getter among urban voters.  To read the news you would easily be convinced that the primary purpose of Canadian resource industries is to pillage nature and destroy the environment.

In fact, Canada is one of the least populated countries on earth as measured by citizens per square kilometer. There is an enormous amount of natural, undisturbed land. With 4.1 persons per square kilometer, the only countries with a lower average population density are Greenland (0.1), Mongolia (2.0), Namibia (3.0), Australia (3.2), Iceland (3.5), Suriname (3.7), Libya (3.8), Guyana (4.0) and Botswana (4.0)

OECD member countries with much higher population densities that aren’t pitching nature protection as foundational to their COVID-19 recovery strategy include Sweden (25), United States (38), Mexico (65), Spain, (94), France (122), Denmark (138), Italy (205), German (237) and Israel (410).

When the target is urban voters, RR bucks for building retrofits will go where the structures are – the major population centres. Because of limited range, bigger cities are the only practical market for electric vehicles. Urban Canada has no idea where its energy comes from, so backing more investment in renewable energy is always popular.

The program has a significant “social justice” element. While you probably thought Canadians are polite, civil, tolerant and friendly, you are wrong. On a global basis you can sure do a lot worse. But to the Liberals, Canada remains excessively unpleasant and oppressive for too many. Therefore, COVID recovery funds are earmarked appropriately.

The only global reference is a comparison with what other countries are spending on the big green, government directed recovery. These countries have little in common with Canada besides OECD membership and appearances at global climate change conferences. It reads, “Canada will need to invest ~$50 billion to be competitive with its G7 peers”. For Canada this is $1,350 per person. The UK is at $280, Germany $714, France $988, and the EU at $1,840.

The whopper is the US averaging $8,288 per person. But that is from the non-existent, US$2 trillion Democratic campaign platform that may or may not exist after November’s US election.

Complying with international agreements is important. As is reducing global emissions. We should continue to participate. But with the economy in shambles because of the COVID mess, should this still be our number one priority?

Absolutely, according to the Liberals. There has been considerable chaos in Ottawa in past weeks thanks to the WE scandal. On August 17 and 18 the Finance Minister was replaced and parliament was shut down until September 23. By then the Trudeau administration will apparently have its act together.

Appearing with Prime Minister Trudeau at a press conference, incoming Finance Minister Chrystia Freeland responded to a question stating the importance of following the path of the RR; “…decarbonization as part of our economic plan going forward? Of course, it has to be part of it. I think all Canadians understand that the restart of our economy needs to be green. It also needs to be equitable. It needs to be inclusive. And we need to focus very much on jobs and growth.”

Trudeau added, “This is our chance to build a more resilient Canada, a Canada that is healthier and safer, greener and more competitive, a Canada that is more welcoming and more fair. This is our moment to change our future for the better. We can’t afford to miss it because this window of opportunity won’t be open for long.”

Peculiar choice of words. Only climate salvationists would classify a global pandemic as an opportunity. Lucky us. Or perhaps if the Liberals don’t act now soon Canadians won’t be so economically desperate they can be bought off with their own money. Maybe Trudeau is worried he won’t be around to deliver his grand plans after the next election.

The statement by Freeland that “all Canadians understand that the restart of our economy needs to be green” illustrates the intellectual insularity of the climate concerned, and the lack of acknowledgement of the of the 78.3% of voters who didn’t vote or chose another party.

When decarbonization is “part of our economic plan going forward”, the fundamental message is clear. Whatever got Canada this far, however important the oil and gas industry is to the economy and millions of Canadians, it is not resilient. A sunset industry. Why bother.

Therefore, the Liberal government is going to print and borrow billions more and steer us in a new direction.

Fortunately, working Canadians not seeking public office have put forth their own plan for the future called Task Force For Real Jobs, Real Recovery (TFRR). Quarterbacked by the Resource Works Society in Vancouver, TFRR’s report was released in mid-August (www.realrecovery.ca).

It is endorsed by 36 business organizations representing every major resource and manufacturing sector in the country. Besides all the major E&P and OFS organizations (CAPP, CEPA, PSAC, CAODC), it includes Canadian Manufacturers and Exporters, Indigenous Resource Network, First Nations LNG Alliance, Business Council of Alberta, Canada’s Ironworkers, Quebec Provincial Building Trades Association, and the Forest Products Association of Canada.

It opens, “… Canada’s natural resource sector can play a critical role in ensuring a competitive, prosperous economy while accelerating innovation and environmental competitiveness…Canada’s natural resource enterprises can make an enormous contribution to the rebuilding challenge ahead. In the first quarter of 2019, natural resource industries contributed $236 billion to GDP, representing 11.3 per cent of the Canadian economy…the right conditions for natural resources and manufacturing could mean up to 2.6 million new jobs and as much as a 17 per cent jump in real GDP, yielding nearly $200 billion in potential increases in labor earnings – at time when Canada’s economic future is uncertain due to the impacts of COVID-19.”

This is the polar opposite of the Liberal plan, so different it is hard to believe they originated in the same country. Instead of tens of billions to retrofit buildings, subsidize electric vehicles and replace hydrocarbon energy, TFRR wants to focus on mobilizing proven resource prosperity, building meaningful (read not-government subsidized) employment, and accelerating innovation and environmental competitiveness.

The report has 19 policy proposals. The top six are a powerful and direct rebuttal to the Liberal plan.

  • Leverage Canada’s world-class resource industries
  • Improve public and investor confidence in regulation and decision-making
  • Attract capital investment to boost COVID-19 recovery
  • Enhance critical infrastructure
  • Ensure access to resource lands for development
  • Maximize Indigenous economic participation

This is from the folks who know a few things about how the Canadian economy actually works, how wealth is created, who hires the most people and why, and how long-term success requires collecting more money than you spend.

This too will require federal financial support. But instead of central planning, TFRR wants tax incentives combined with stable and predictable regulations to restore investor confidence and attract financial support from private capital markets, both domestic and international.

The message of Real Jobs, Real Recovery is clear. If the resource industries are not ignored or persecuted, they can provide private sector recovery capital that won’t be added to the public debt. This ensures the inevitable future tax increases won’t be as onerous as they would be otherwise.

Back to the Liberals. One of RR’s stated goals was government money to support “Indigenous Protected and Conserved Areas” and “growing investment in Indigenous guardians”. This is cynical – even colonial – for the aspirations of many First Nations. It also exposes the true beliefs of the career environmentalists populating senior positions in the federal government.

When Indigenous activists and their supporters block pipelines, the RR roadmap makes it clear they have had the de-facto support of the Trudeau government. This is congruent with the history of Gerald Butts and the large number of committed greens at the top of most government ministries.

When rail blockades opposing the LNG Canada gas pipeline were in place early this year, we now understand that Ottawa was, with its silence, endorsing illegal pipeline protests. This reminded the world yet again that Canada was no longer a safe and reliable destination for investment.

As a result, one of the first major investors to bail was Warren Buffet’s Berkshire Hathaway which withdrew $4 billion from Energy Saguenay, Quebec’s $9 billion ambitious, hydro-powered, LNG export project. About the same time Teck formally gave up on its Frontier oil sands development, walking on billions in sunk investments.

The TFRR plan identifies the essential restoration of investor confidence in Canada head on.

As for climate change, the belief that Canada alone can move the needle on the chemical composition of the global atmosphere is breathtaking in its utter hubris. Canada accounts for 1.6% of total GHG emissions and is home to only 0.047% of the planet’s population. Like every country that signed the Paris GHG reduction commitments in 2015, we’re not going to meet our 2030 target. Canada could shut down its economy entirely and depopulate its land mass and the world’s 2030 GHG reduction target will still not be achieved.

Trudeau said this is “our moment to change the future”.  All indications are that when the House of Commons reconvenes September 23, the Liberals will put forward the most expensive and publicly funded change in the direction of Canada in history.

This will be a “confidence” motion meaning that if the government loses the vote it will trigger an election. Knowing that its minority government’s days are numbered, the Liberal strategy is clearly to focus on urban Canada, ignore rural and resource producing regions, and compete for votes with the NDP, Green and Bloc Quebecois.

Because in the 21st century, the Liberal Party under Trudeau Jr. has gone so far left that it has abandoned the centre-right votes that historically have moved back and forth between Liberals and Conservatives.

The Liberal grand plan for the future of Canada has everything to with remaining in power and little to do with building on our economic history and core strengths for a sustainable, private sector driven recovery.

The election of new CPC leader Erin O’Toole, a sitting MP who is bilingual and from Ontario, will spark a broad and thoughtful national debate on Canada’s future. O’Toole will put forward a sensible and alternative plan to the Liberal’s debt-fueled, government-managed leftist paradise.

Then we’ll find out what Canadians really want our country to be.

David Yager is an oil service executive, energy policy analyst and author of From Miracle to Menace – Alberta, A Carbon Story. More at www.miracletomenace.ca

 

 



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