Canada faces a difficult challenge. It must find ways to become more competitive in the new trade environment created by the Trans-Pacific Partnership while, at the same time, stepping up on climate change.
The decisions the federal government makes in the coming months – on spending that improves productivity and on climate policy – will have a direct bearing on our ability to adjust to the challenges and opportunities that result from this new trade deal.
For many years, all Canadians have enjoyed the benefits that accrue from our bountiful natural-resources endowment and preferential access to the world's most voracious consumer, the United States. For years, this was enough to ensure economic success.
The Trans-Pacific Partnership rewrites all the rules. Soon, we will have to compete with nine low-cost competitors for the U.S. market. It will also open other Pacific markets for Canadian goods and services. Canada has the food, energy and materials that the world needs and we have ready access to these markets but we have to be willing to compete.
With economies that rely heavily on exports, western provinces are concerned about any action that layers costs onto industries that will face more price competition. The energy sector is most concerned. There is a reason that the dark conservative blue on the electoral map almost perfectly traces western resources.
If we are going to compete, we need better rail crossings, border crossings, highway corridors, ports and intermodal hubs. Our essential skills (literacy, math and communication skills) need to improve. We need better performance on global innovation indexes. We will not be competitive if we do not fix these things.
However, such measures to improve productivity will succeed only if we can rebuild public support for our natural-resources economy. Simply put, we are not getting top dollar for many of our products because of public opposition to building the infrastructure we need to deliver those products to market.
There is public ambivalence even in the West. Last year, the Canada West Foundation polled westerners about the impact of our farming, energy, mining and forestry sectors on western Canada. Only farming was seen to have a significant net positive impact (39 per cent positive, 15 per cent negative). The other sectors were divided deeply – energy (32 per cent positive, 37 per cent negative), mining (18 per cent positive, 25 per cent negative) and forestry (24 per cent positive, 22 per cent negative).
Westerners who saw these industries in a negative light told us that they believe the sectors are bad for the environment and not socially responsible. There is a long way to go if we are going to turn the tide on public support in the natural-resources sector.
We also need to find new ways to align Canadian economic interests with the ambitions of aboriginal, rural and northern communities – communities that want to share in the benefits derived from selling our food, energy and materials to the world.
Our research shows that Canadians understand that the natural-resources sector provides good jobs and economic benefits to the country. Many Canadians, however, do not believe that we have struck the right balance on greenhouse-gas emissions. Many also believe we have not done enough to align Canadian economic interests with the ambitions of aboriginal, rural and northern communities. As a result, power lines and pipelines are not getting built.
As a leader who aspires to govern for all Canadians, Justin Trudeau would do well to recognize both priorities, and know that addressing climate alone raises the risk we won't be able to grab our fair share of TPP markets.
This challenge also presents him with a unique opportunity. By listening to the voices in a strong and confident western Canada, he will have a much better chance of striking the critical balance between helping both the climate and the economy. Smart climate policy will show Canadians (and the world) that we can do both: clean the air and stay competitive on the world stage.
Finding that sweet spot will improve the lives of all Canadians.
Trevor McLeod is the director of the Centre for Natural Resources Policy at the Canada West Foundation in Calgary.