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Amidst a fog of policy confusion, we run the risk of losing sight of a key reality: Our resources are large, but other countries are well-endowed, too (Moe Doiron/The Globe and Mail)
Amidst a fog of policy confusion, we run the risk of losing sight of a key reality: Our resources are large, but other countries are well-endowed, too (Moe Doiron/The Globe and Mail)

BRIAN EMMETT

How to sustainably turn Canada's resources into wealth Add to ...

The way policy-makers and Canadians think about natural resources (fossil fuels, minerals and forest resources) is fundamentally important to the Canadian economy. How we perceive and evaluate our natural resource endowment shapes policy frameworks, which, in turn, can have profound effects on the way we live and the way we earn our living.

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Prime Minister Stephen Harper touched on this during the Summit of the Americas in Cartagena last month, saying: “Resource development has vast power to change the way a nation lives. … It is also something which is tremendously responsive to actions of government.”

Unfortunately, current policy frameworks in Canada are based on entrenched views about natural resources and provide little room for critical thinking about how to turn resources into wealth in a sustainable way. In many respects, Canadian natural resource policy has been hurt by an excessively narrow conception of our resource endowment and its value – what might be called resource determinism – leading to policies that are often poorly conceived and divisive.

Almost without fail, when talking about resources and the economy, Canadian politicians and business people emphasize the size of the gifts that nature has bestowed on us (we have 10 per cent of the world’s forests, for example). Our endowments are large, so Canada must be wealthy – as if natural resources were gifts one can simply take to the bank and exchange for cash.

As a consequence, natural resource policy in Canada has tended to focus on narrow aspects of the resource itself, not on the broader sets of conditions necessary to turn resources into sustainable value. Both levels of government maintain large departments devoting significant resources to determining how big our resource base is, what qualities it has and how its health can be improved. Resource policies focus on how quickly resources should be extracted or harvested, under what conditions, and who should get the economic benefits. This is what resource owners do.

But, in Canada, both levels of government do not share ownership of natural resources – it resides clearly with the provinces. The result is that natural resource policy becomes a protracted form of federal-provincial dispute, leading to overlap, duplication, wastefulness, divisiveness and missed opportunities for sustainable development.

In the midst of this fog of policy confusion, Canada runs the risk of losing sight of a key reality: Our resources are large, but other countries are well-endowed, too, and many of our resources are either in remote areas or difficult and costly to extract. In the next decade or two, our resources are unlikely to change in a significant way. Russia will continue to have more forest; Brazil and others will continue to have forests that grow faster; Saudi Arabia will have more readily accessible oil; and other countries will have higher quality mineral deposits. These are facts of nature we can do nothing about.

Canada’s Economic Action Plan hints at just this: “While the potential for our resources is great, we cannot take it for granted. We are not the only country in the world with rich mineral and energy resources. Others have made it clear that they are willing to act to do what is required to supply markets around the world. We must compete every day with those countries not just for markets but also for vital investment dollars.”

But Canada possesses powerful advantages in addition to its resource base. Many of these lie in areas that have tended to be overlooked or underemphasized in traditional natural resource policy – in its people, talent, technology and governance. Canada’s economic and political stability make it a good place for the capital-intensive investments needed by modern resource industries. We have well-managed firms, working with highly trained and skilled people using high technology, operating in a framework of governance that (more or less) works and meeting the needs of consumers who demand high levels of performance (environmental, social and economic). These are the areas where we can continue to improve and in which we should be increasingly looking to invest in order to succeed in a high-tech, knowledge-based world economy that is committed to developing resources sustainably.

From this point of view, three recent government moves are quite positive: first, the signal by the Prime Minister that good policy is fundamental to the creation of sustainable wealth from our natural resource endowment; second, the view that this must be accomplished in a world in which other countries, too, have abundant resources, as well as talent and technology; and third, the steps announced in the Responsible Resource Development plan to back away from federal-provincial disputes, focus on areas of respective jurisdiction and promote intergovernmental co-operation.

These are sensible steps that open the way to the development of a genuinely creative resource policy framework for the future, based on a broader understanding of the advantages Canada possesses in a knowledge-based global economy.

The next step? Developing an all-of-government policy framework that will allow Canada to bring the elements that create value from natural resources together in a sensible whole – from technology and innovation, to macroeconomic policy, to the supply of labour and skills development – and underpinning it all, environmental and sustainable development.

Brian Emmett is a principal at the Ottawa-based consulting firm Sussex Circle. He served as Canada’s first commissioner of the environment and sustainable development, and was an assistant deputy minister (policy) at Environment Canada, a vice-president (policy) at the Canadian International Development Agency and an assistant deputy minister (Canadian Forest Service) at Natural Resources Canada.

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