Canada needs a frank discussion about Ken Hughes’ Globe and Mail op-ed

Ken Hughes, former Alberta Minister of Energy, has implored Canadians to be “honest with each other” in a recent Globe and Mail opinion piece, when raising the question “How does Canada work?”

Mr Hughes’ premise is that the recent cancelations of oil and gas pipelines and other projects reveals a national dysfunction that is powered by a myth that “we are so wealthy as a nation that we can afford to ignore our natural strengths”. 

This is the first time that any of us have been exposed to this myth, at least that I am aware of. 

But the former Alberta MLA and MP subtly inserts other myths, those we have heard many times before, into his lament. 

Take for example the myth that Canada is a staples economy, here to export raw resources to the world as if the sun still didn’t set on the British Empire.  “We can’t build a country without building something.” Hughes says, that something being pipelines. Which implies that the natural resources sector is essential to the project of colonization and settling, a revealing statement unto itself. In fact it’s one used time and time again by industry and politicians to justify pipelines owned by foreign corporations being in Canada’s National Interest

As a parliamentary study demonstrates the tar sands produce about 1.5% of Canada’s GDP. Yet getting that toxic sludge to tidewater, no matter how many farms, beaches, rivers or lakes are risked along the way, is the highest act of nation building for carbon celebrants like Hughes.

But yes, to his point, if we are to build something are we building the Canada of 1867, or a new one that forges a better path forward with indigenous peoples? A Canada that moves ahead, one that truly reconciles, cannot revert to old mentalities, old logics, and the old types of unsustainable energy infrastructure they promote. Will that something we build help us move forward and create a form of prosperity that does not come at the expense of the climate or indigenous peoples, or will it be something that holds us back in the colonial worldview of the 1800s?

There is such a thing as an opportunity cost, it’s a classic economics principle explored by 19 year old university students in Econ 100. Yet so many distinguished leaders like Hughes seem determined to ignore it when promoting resource extraction. When the largest market in the world is considering a ban on gas powered vehicles to improve public health outcomes,  and economists are predicting that electric vehicles will make the global oil and gas sector obsolete in the next decadewhen solar power is the fastest growing source of energy in the world, why sink our investments into what appears an increasingly arcane and obsolete form of energy infrastructure?

If we are to build something together as a country, let it be something sustainable.  

Hughes emphasizes the important role that entrepreneurship plays in filling tax coffers, that “Success leads to taxes paid to local, provincial and federal governments.” Yet on his watch as a Member of Parliament and a Member of Alberta’s Provincial Government, the Province’s deficit grew while profit making entrepreneurial oil companies paid the lowest royalties imaginable. Instead of a sovereign wealth fund like Norway’s, Albertans are now saddled with a collective debt of $45 billion dollars and growing. If the private sector extracting oil is so great for the economy, why is this the case? It’s the myth that the oil industry is an endless bounty of giving, when in fact we Canadians pay it billions of dollars in subsidies every year. 

And lastly there’s Petronas. Was Petronas canceled due to national dysfunction predicated on us being wealthy enough already? No. That’s another myth. As the CEO of the energy firm clearly and unambiguously stated the recent decision by Petronas to cancel its proposed LNG project in British Columbia came down to economics. Just as the end of gas powered vehicles will come down to economics. 

And what is the value of the lost investment of these energy projects Hughes, in his outrage, asks us to consider? Not nearly as much as the value of reducing carbon emissions. The greatest risk to economic stability, as determined by the World Economic Forum, is an increased risk of disaster and waves of refugees caused by climate change. Already the insurance industry is being turned upside down by the certainty of climate impacts on trillions of dollars of assets. Many of them soon to be stranded. 

The world that Canada is a part of needs less carbon in the atmosphere, not more, the world Canada is a part of needs less geopolitical instability, not more.

So yes, let’s be honest. If we are to be honest we necessarily need to be using facts and not myths. Petronas was canceled due to economics; the greatest threat to Canada’s economy doesn’t come from dysfunction standing in the way of pipelines, it comes from a changing climate driven by human consumption of fossil fuels; sensible public policy isn’t supporting sunk costs in industries that are being eclipsed by sustainable alternatives; and Canada’s national identity does not have to rest on infrastructure projects in the interest of a single sector worth less than 5% of GDP.  

At some point this century Canada will have to move beyond the staples economy identity that resource extraction celebrants promote as our national identity, it can either be proactive about that or scramble when all the resources are depleted and government debts insurmountable from corporate subsidies to failing sunset industries. 

The denouement….

If we are to put aside the dire implications of burning the reserves of tar and oil and gas beneath our feet and imagine that this is purely about prosperity and job creation and tax revenues, here’s where we might cede some ground and meet Mr. Hughes halfway. If Alberta’s energy sector is about nation building (I will suspend my disbelief for the benefit of this thought exercise) then what is fair? I don’t believe it’s fair that Alberta’s prosperity come at the risk of other provinces and the communities, industries, farmland, and watersheds within them. Nor do I think it’s fair that we cripple future generations with the impacts of our climate emissions. Conversely, I can respect and empathize how Albertan’s feel other provinces and cities are boxing them in and limiting their most important sector. This too must feel unfair. If either side feels unfair in an outcome how can that be effective nation building? If the tar in Alberta must be extracted would it be more fair to upgrade it and make it into value added products in Alberta and other provinces? Solar panels and wind turbines, and for the short-term, gas for Canadian vehicles until such time as they are rendered completely obsolete. Is this, I ask Hughes and my Albertan friends, family and colleagues “fair”?  

As Hughes says in closing his opinion piece “The world really does need more Canada. Canada just needs to focus and get its act together.”  I couldn’t agree more, but not to build pipelines predicated on outdated national myths, to build a 21st century economy that won’t leave Canada behind in a 19th century mindset. One that respects fair outcomes for all regions, not risk for some and rewards for others, one that is fair for First Nations and for future generations.

If we do that I think Canada will be working fine.