Keep jobs in Canada: Build refineries for oilsands
Political codswallop and flak-flavoured red herrings now litter the debate over pipelines to carry bitumen from Alberta's oilsands to markets in the United States and Asia.
Can we please have some mature discussion?
That would involve calm and intelligent cost-benefit analysis based on science and reason rather than emotive sloganeering and clownish "talking points."
Yes, that assessment must include climate change and whether exporting carbon emissions to another jurisdiction represents moral hazard on the part of the exporter.
Yes, we do need objective environ-mental risk analysis without vested interest.
In the meantime, the International Labour Organization says developed economies like Canada have a global responsibility to stimulate job growth rather than simply slashing jobs to balance budgets. The ILO argues that this is a moral imperative because constraining economic growth in the developed world causes disproportionate suffering in the developing world.
So this pipeline debate is also a discussion of exactly what Canada's jobs strategy should be.
For example, how many jobs would the Northern Gateway pipeline really create, how long would they last and where would they be located?
If the Keystone XL and Northern Gateway pipelines were to go ahead and begin flowing close to a million barrels of raw bitumen a day from Alberta to refineries in the southern U.S. and China, wouldn't this mean that Canada was foregoing an opportunity to add value to 365 million barrels a year by not upgrading it here before exporting it?
I'm no energy economist. I have no idea how many jobs would be created by increasing Canada's refining capacity to upgrade another 365 million barrels of bitumen a year.
However, common sense suggests that enhancing refining infrastructure would generate a heck of a lot more residual and long-term economic benefit for Canadians than sending a primary product to distant markets to be upgraded by somebody else.
Canada is already importing about half of its petroleum needs.
Wouldn't it make sense to reduce imports while upgrading our domes-tic capacity to add value to a primary resource and then export any refined surplus at a higher price? Commentary in Alberta claims that adding upgrader capacity there is a non-starter because the regional economy is already overheated. But this argument surely serves the narrowest of self-interests.
Alberta's northeast may be running hot as an economy but other regions of Canada could benefit from the long-term jobs and economic stimulus of enhancing or building new refinery capacity there.
For example, the economies of Ontario and Quebec languish as a result of the economic downturn. Long-established pipeline rights-of-way already link those regions to Alberta. Why not put upgrade refineries there?
Canada's federal government has a long-standing policy of supporting value-added manufacturing for raw materials before export. Here is Canada's minerals policy, from government websites: "Work with industry to realize more benefits in terms of employment and revenues from mineral and metal resources through value-added manufacturing."
"Production of value-added mineral and metal products is an important source of jobs for Canadians, especially as the primary production of mineral and metal commodities becomes increasingly globalized."
"The goal is not only to increase the GDP associated directly with mineral and metal processing but also to increase the employment and other benefits that accrue from processing and manufacturing with minerals and metals and from the many supplier industries such as engineering, design, environmental technologies, equipment supply and others."
Business thinks a value-added strategy is crucial to Canada's long-term economic growth, too. The Canadian Manufacturing Coalition advocates a "made-in-Canada manufacturing strategy that takes full advantage of the growth prospects in our resource-based industries by encouraging the development of value-adding supply chains, products and services."
Other countries also see the importance of value-added strategies for job growth and economic stability. Fore-most among them is China. The coalition observes that China "is quite clear in identifying value-added upgrading in its manufacturing chain as a strategic imperative."
So it won't just be raw bitumen flowing down the Northern Gateway and Keystone XL pipelines, it will also be jobs and Canada's long-term opportunities for adding value. This is precisely the opposite of Ottawa's vigorously stated policy, although it fits nicely with strategies in China and the U.S.
We need a robust discussion about this.
CORRECTION: A column last week said B.C.'s political parties needed to stake out a position on the Northern Gateway project.
My in-basket soon bristled with testy emails and media releases from the NDP informing me that party leader Adrian Dix and other members of his caucus have indeed taken a firm position: "New Democrats have long opposed the Enbridge tar-sands pipeline because it provides few long-term benefits while posing serious risks to the B.C. environment and economy." I stand chastised and corrected. The NDP is nay on Northern Gateway.
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