Canada West Foundation Blog

Top Experts in Environmental Decision-Making Talk to the Canada West Foundation

Thu, 03 May 2012 19:58:00 GMT

A new report released by the Canada West Foundation today summarizes interviews with 23 of the leading minds on how to marry resource development with environmental protection. Keeping Pace: Improving Environmental Decision-Making in Canada is based on input from former senior bureaucrats, former environment ministers, internationally renowned scientists, natural resource industry representatives and ENGO leaders. From former federal Environment Minister Jim Prentice and internationally-recognized scientist David Schindler to original founding member of Greenpeace Patrick Moore and Suncor VP Gordon Lambert, the combined experience with environmental decision-making among interview participants totals well over 400 years.

Considering the diverse background of these Canadian thought leaders there was surprising agreement, especially on three overarching themes:

First, everyone agreed that environmental decision-making in Canada needs improvement—full stop. We are not at the top of our game when it comes to environmental stewardship in the resource sector.

Second, improving environmental decision-making is not about fixing the Canadian Environmental Assessment Act, the National Energy Board, the Alberta Energy Resources Conservation Board, BC Environment or some other government department or regulatory agency. Environmental decision-making has to be viewed in a broader policy context. Some changes are needed to the regulatory framework, but it is a small piece of the pie.

Unfortunately the regulatory framework is taking the brunt of the criticism right now. It shouldn’t. Other components of the decision-making process such as regional plans, monitoring and compliance, strategic plans, clear goals and objectives, political leadership, meaningful consultation/collaboration are much more important. These elements have not kept pace with the public interest.

Third, we have moved from a relatively simple world into a much more complex one. The difference was described as a shift from “environmental challenges 1.0 to 2.0.” The 2.0 label has been famously applied to the World Wide Web to highlight the shift from passive viewing of websites (Web 1.0) to active online interaction and collaboration (Web 2.0). The web has gone from emails, news groups, desktop computers and basic websites to eBay, PayPal, instant messaging, YouTube, Facebook, Twitter, Wikipedia, 500,000+ apps, mobile Internet devices and cloud programming. Environmental challenges have gone from a relatively straightforward set of problems and solutions to situations characterized by a wide range of stakeholders, heated rhetoric, competing scientific claims, incomplete information and responses that require broad social change and/or significant economic costs. Hence, we need to upgrade our environmental decision-making mechanisms.

You can download this timely new report for free from the Canada West Foundation website by clicking here.

More Needed to Fix Environmental Decision-Making in Canada: New Canada West Foundation Report

Tue, 01 May 2012 19:14:00 GMT

By: Robert Roach

The federal government recently announced a “Plan for Responsible Resource Development” that will streamline the federal regulatory review process. While this is a step in the right direction, a report from the Canada West Foundation being published on May 3 argues that the task at hand is much larger. Keeping Pace: Improving Environmental Decision-Making in Canada reveals an environmental decision-making process that, while one of the best in the world, is dogged by a number of significant shortcomings. These weaknesses include insufficient integration of scientific research; a lack of clarity regarding exactly what trade-offs between environmental protection and economic development are acceptable to the government of the day; and the ongoing need to ensure that the various government departments and agencies at the federal and provincial levels are cooperating as much as possible.

You can download this timely new report for free from the Canada West Foundation website on Thursday.

Revealing Regional Voices for a Stronger Canada

Thu, 26 Apr 2012 16:29:00 GMT

As reflected by the results of the 2011 census, the creation of new House of Commons Seats and the ongoing news about the westward titling of the economy, it is clear that the nature of the Federation is shifting. The latest research from the Canada West Foundation looks at the consequences for the region and the country, now that the West is truly “in”.

Taking Stock of the Federation by Dr. Roger Gibbins, President & CEO and Robert Roach, VP, Research, is the synthesis report from a roundtable held on February 9, 2012 in Calgary. This roundtable gathered sixteen participants who provided their insights on the contemporary political landscape, the likely direction of future change, and the potential for strains within the federation across the four western provinces.

“Each region in Canada is vitally important,” notes Dr. Gibbins. “While differences between the regions have evolved, they are still key variables in both Canada’s political environment and the economy. For the federation to work well, we must ensure that all regions— including the West—are heard, understood, and integrated into the whole.”

While participants expressed a general sense of optimism about the region’s future, they also highlighted some significant challenges western Canadians will face in securing a new position within Canada and the global economy. By addressing issues like market access, sustainable environmental management, labour shortages and a fiscally unbalanced federal state, we can ensure that the future remains bright.

Taking Stock of the Federation is part of Foundation’s The West in Canada initiative, which examines public policy innovation in the West, discusses and recommends ways to improve the Canadian federation, and analyzes regional economic, demographic and public opinion trends. Click here for your copy of the report.

Shaping Our Region: Energy in Western Canada

Mon, 23 Apr 2012 17:21:00 GMT

Western Canada profits from its abundance of natural resources, however, in the changing global landscape, we need to take action to ensure our future prosperity. The latest research from the Canada West Foundation outlines the main contours of the contemporary energy world and takes stock of the trends shaping energy in western Canada.

State of the West: Energy – 2012 Western Canadian Energy Trends, by Senior Economist Michael Holden and Policy Analyst Robbie Rolfe, provides an overview of the provincial energy systems in western Canada, including the current state of energy production, consumption, and other associated activities and impacts. That information is framed in the context of the energy-related policy issues and challenges facing the four western provinces.

“Western Canada is characterized by a profound diversity of resources, consumption patterns, and economic and environmental impacts” said Michael Holden. “The energy picture in each province is unique, but their strengths are complementary. Through a more coordinated approach to energy policy, the western provinces can become more than the sum of their parts.”

Given the extent to which it permeates our daily lives, energy has come to dominate the economic, social, and political agenda in the region. State of the West: Energy provides a one-stop information resource on energy in western Canada, informing the debate surrounding energy policy in the West, and providing context to both where we are today and where we may go in the future.

State of the West: Energy – 2012 Western Canadian Energy Trends is part of the Foundation’s Powering Up for the Future initiative, which facilitates constructive debate on sustainable energy policy solutions for Canada and promotes the vital importance of western Canadian energy systems in the national, continental, and global economy. Click here to download a copy of the report.

Water: An Election Issue in Alberta?

Tue, 01 May 2012 18:34:00 GMT

By: Larissa Sommerfeld

Alberta is now in the throes of the third week of the provincial election campaign. Given the critical importance of the province’s water resources to its economy and environment, it is worthwhile checking in to see how water policy is being addressed by the contending parties.

I’ve reviewed the platforms of the main parties and have highlighted their water policies below:

Alberta Party
The Alberta Party’s platform focuses on the five core ideas of healthcare, students, democracy, the economy and communities. It doesn’t specifically place environmental concerns front and centre. However, under the “economy” section, the Party commits to promoting a “positive brand image for our resource industries by insisting on best practices and a strong commitment to environmental stewardship.”

Evergreen Party
The Evergreens—a newer addition to Alberta’s political scene who have replaced the Alberta Greens—simply state in their party platform that “we will encourage conservation and reduction of water usage, and prevent the sale or export of water.”

Liberal Party
The Liberals do not mention water in their party platform at all. Rather, their key environmental policies focus on emissions and the monitoring of the oil and gas industry.

New Democratic Party
The NDP has some very specific water policy goals outlined in their platform including stopping the expansion of water markets and putting human and ecosystem needs first when it comes to water allocation. Regarding industry activity, the NDs support:

Cleaning up tailings ponds, but at a cost to companies rather than taxpayers;
Doubling the monitoring and enforcement activities of the Ministry of Environment and Water to “make sure the industry lives up to its environmental obligations under the law”; and
Appointing an independent scientific panel to examine hydraulic fracturing.

Progressive Conservative Party
The PC Party does not have a comprehensive policy platform available on their website. In this case, we have to look at past policy to see where they might stand on water:

Premier Redford renamed the Ministry of the Environment as the Ministry of Environment and Water last fall. According to Diana McQueen, the current Minister for Environment and Water, this was a “deliberate move to emphasize the priority that our government places on this resource.”
The government has committed to increase funding to about $11 million for environmental monitoring; and
An annual amount of $150 million has been committed to fund the Alberta Oil Sands Technology and Research Authority (AOSTRA) to support research that will help Alberta work toward meeting the Water for Life goals.

Wildrose Party
The Wildrose Party has a fairly robust environmental platform. Some of their commitments include creating a position for an Albertan environmental ombudsman and addressing water quantity issues in the south and water quality issues in the north. The Party is committed to finding ways to improve water storage by building more dams and/or reservoirs and states it will review and reform Alberta’s licensing system to “ensure that existing licenses are fully utilized while respecting the principle of first in time, first in right.” It also is supportive of new conservation technology that allows for the use of things such as grey water recycling and supportive of the movement toward a federal ban on bulk water exports to the US. Regarding industry, the Wildrose has stated it in its platform that it will:

Work toward eliminating tailings ponds;
Support water technology so that industrial use of water decreases; and
Strictly enforce existing regulations on effluent-producing industries.

Reflections on the Federal Budget and What it Means for Water

Thu, 05 Apr 2012 20:46:00 GMT

By: Larissa Sommerfeld, Policy Analyst

Canada’s budget was tabled on March 29 and it includes some interesting changes related to water policy. Here are the highlights:

Department of Fisheries and Oceans (DFO): While we’ll have to wait until the Government’s Budget Omnibus Bill is tabled to find out whether there will be changes to the Fisheries Act, Minister Flaherty announced $10.5 million for the DFO to support “key fisheries science activities”—which is essentially monitoring of key commercial fish stocks. But overall, the DFO faces cuts of about $4 million this year, $13 million for 2013-14 and $79 million after that.
Elimination of the National Roundtable on the Environment and the Economy (NRTEE): The NRTEE is over twenty years old and is a well-respected, arms-length organization with a Parliamentary mandate to “promote sustainable development advice and solutions”. Over its history, the NRTEE has focused on economic and environment issues related to climate, water, energy, biodiversity and governance. In fact, Canada West Foundation’s Shawna Stirrett authored the Round Table’s most recent publication. It’s unfortunate that this reputable organization will be dissolved—particularly when issues related to the interface between the economy and the environment are arguably more important than they’ve ever been.
Environment Canada: Environment Canada will face large cuts for the foreseeable future: $20 million (2012-13), $60 million (2013-14) and $90 million after that.
First Nations: The federal government committed $330.8 million over the next two years to build and renovate water infrastructure on reserves. This money is also meant to support the development of a long-term “strategy to improve water quality in First Nations communities.” This is a step in the right direction; a prosperous nation like Canada shouldn’t have the water problems of developing countries, as many argue is the case on reserves across the country.
Flood mitigation: In response to the devastating floods of 2011, the government has committed $99.2 million over three years to “ assist the provinces and territories with the cost of permanent flood mitigation measures undertaken for the 2011 floods.” Better still, the government wants to move toward a nationally led program: “the Government is also committed to discussing with the provinces and territories the development of a national disaster mitigation program, recognizing that mitigation can lessen the impact of natural disasters on vulnerable communities and reduce the costs associated with these events.” This is a move that should be applauded; proactive measures in flood management are always good news.
Infrastructure: A series of financial commitments were made to both the provinces and the Federation of Canadian Municipalities to improve water infrastructure. While municipalities will likely see this as positive, others may argue that continuing grants isn’t a good policy choice. While Canada does indeed face a major water infrastructure deficit that requires billions to fix, many argue that the prices of water treatment and conveyance should be increased to fund the upgrades rather than relying on government funding.
Lake Winnipeg: Since 2008, the federal government has funded the Lake Winnipeg Basin Initiative. The Initiative has goals that include: reducing blue-green algae blooms, ensuring fewer beach closings, and restoring the ecological integrity of the lake. While no dollar amount was specified in the budget, the Government stated that it’s committed to continue funding activities targeted at restoring the lake.
Mining Regulations: Environment Canada administers the Metal Mining Effluent Regulations, which regulate the deposit of mine tailings and other waste “produced during mining operations into natural fish bearing waters.” According to the DFO, these regulations are “among the most comprehensive and stringent national standards for mining effluents in the world.” These regulations will be expanded to non-metal diamond and coal mines. This is a change that truly makes sense, and probably should’ve been made much earlier.
National Resources Canada (NRCAN): NRCAN is slated to receive $23 million over two years for new satellite data reception facilities as well as the development of a data management system. These systems can be used for a variety of activities ranging from flood mapping to detecting oil spills. This is a step in the right direction: more knowledge and data will lead to well-informed policy.

Overall, there’s a mix of positive and negative developments outlined in the 2012 budget. We’ll just have to wait and see what impacts these changes will have.

Paper Cuts: Federal Budget 2012

Fri, 30 Mar 2012 14:45:00 GMT

By: Michael Holden

“The fiscal restraint that many expected from this budget is more akin to paper cuts than deep wounds.”

The 2012 federal budget was, for all intents and purposes, the first delivered by the Conservative government under majority rule. It was expected to give us our first glimpse at how the Conservatives intend to govern over the next several years. Many assumed that the result would be a fairly dramatic shift toward fiscal conservatism and smaller government. The reality, by contrast, is decidedly middle-of-the-road. The Conservatives have delivered a prudent budget, one that largely fails to live up to the hopes of strong fiscal conservatives, but also largely fails to live up to the fears of their opponents.

To be sure, specific elements of the budget, such as delaying Old Age Security (OAS) and Guaranteed Income Supplement (GIS) benefits until age 67, are bound to attract controversy and spark debate over the coming weeks and months. There are also deep cuts in some areas, among them foreign aid and the CBC. However, the budget also contains several initiatives that are either welcome or overdue (eliminating the penny leaps to mind). But in the final analysis, while the budget itself is a thick document, filled with a wide range of initiatives, this is, on the whole, a cautious and incremental plan. This is true especially considering initial expectations that the budget would pare back government spending in a big way.

In terms of the priorities outlined in the budget – once again called an “Economic Action Plan” – there is a clear emphasis on measures aimed at promoting economic growth and job creation. In particular there are several programs and initiatives that are recognizable as clear priorities for western Canada. These are discussed further below.

Budget Overview

As expected, the budget established an accelerated timeframe for eliminating the deficit and restoring fiscal balance, primarily focusing on the expenditure side of the equation. In last year’s budget, the deficit for the current year was expected to be $32.2 billion, a figure amended in November to $31 billion. Owing to a combination of resurgent revenue growth at the end of the year, spending restraint and lower-than-expected interest payments on the national debt, the deficit for this year is expected to be $24.9 billion. Moreover, the federal government now plans to balance the books in four years (2015-2016), one year ahead of the schedule laid out in last year’s fiscal plan. In fact, barring an unexpected downturn in economic fortunes, the budget will most likely be balanced within three years.

One of the big items that everyone was waiting for in this budget was news on the extent to which the government would be cutting program spending in the years ahead. This is the part of the budget where, depending on their point of view, people will be either the most disappointed or the most relieved.

Although many of the details still have to be ironed out, the federal government announced that its review of department spending will yield ongoing savings of $5.2 billion per year by 2016-2017. This total represents about 6.9% of the spending that was subject to the review process, but only 2% of overall federal spending. In addition, about 19,200 federal government jobs will be cut, about one third of which will be through attrition.

While these cuts represent real reductions for individual departments and agencies, it’s important to keep in mind that, in the aggregate, they are based on spending levels that have grown dramatically in recent years. Since the first Conservative minority government in 2006, federal spending has increased by 38.7%, while the federal public service expanded by 15.3% (adding more than 60,000 jobs in the process). When viewed in that context, the proposed budget cuts do not exactly suggest a broad-scale withdrawal of the federal government from the public arena.

In addition, other components of federal spending, like transfers to the provinces and to persons, will be rising throughout that period. Old age benefits are the obvious exception, but those changes don’t even begin to kick in until 2023. As a result, the overall effect of the government’s spending restraint will not be a decrease in total program expenditures as much as a slightly lower rate of growth over the forecast period.

Specific Programs and Initiatives

For the most part, the federal government’s fiscal plan delivers on the expectations set out in the Canada West Foundation’s pre-budget commentary. Perhaps most notably, it includes a commitment to modernize the regulatory system for major project reviews with the goal of a “one project, one review” approach. This approach is designed to reduce duplication, the administrative burden on businesses and the timelines for approval. While the specifics are still to be determined, this is a welcome development for western Canada, provided that it does not result in an abdication of government responsibility in the area of environmental stewardship.

The budget also contains measures aimed at job creation and addressing labour shortages in western Canada. These include some modest reforms to the Employment Insurance program, an enhanced youth employment strategy, hiring credits for small businesses and improvements to the Temporary Foreign Worker Program. The budget also mentions improvements to Canada’s immigration system, focusing on economic migrants that meet the labour needs of specific provinces and territories. However, there are few details on what that might mean.

Perhaps most significant for the West is new money for First Nations infrastructure, education and measures to improve training and incentives for the on-reserve Aboriginal population to enter the labour force. In its various consultations and roundtable discussions, the Canada West Foundation has heard repeatedly from western Canadian business and policy leaders that more needs to be done to improve living conditions on reserves as well as to improve Aboriginal participation in the workforce. In contrast with the aging population generally, the Aboriginal population is young and growing quickly. As such, they represent a significant, relatively untapped resource of labour in the West. On this issue, the measures contained in the 2012 budget represent a step in the right direction.

As we looked for in our pre-budget commentary, the 2012 budget also targeted spending cuts to specific areas and avoided cross-the-board measures that might have penalized effective or valuable programs. To be sure, there were few details, as usual, offered in the budget as to which exact programs would be affected by the plan, and as noted earlier, some will be unhappy about the areas that were targeted relatively heavily. But in general, the spending cuts reflected a gradual reshaping of government priorities and not a thoughtless chopping exercise.

The budget also emphasized measures related to innovation and research. This focus was signalled widely in advance of the budget, but the approach taken differed from the norm of recent years. Productivity improvements in Canada have been much sought-after, but elusive as previous government initiatives like lower corporate taxation and tax credits failed to deliver on that promise. With this budget, the government has signalled that it is changing tack. In a “Back to the Future” kind of way, there appears to be a return to more direct government involvement and incentives for high-risk venture capital and business innovation. While this type of direct involvement was (and still is) derided as the government getting into the game of “picking winners and losers,” the initiatives proposed in the budget echo many of the suggestions that we heard from business and policy leaders during our most recent series of Honourable James A. Richardson Roundtables this past autumn.

Another recurrent theme was a continued focus on trade and accessing new markets. In a sense, the budget offered nothing new on the subject; it mostly just restated the government’s recent accomplishments and highlighted the various trade- and investment-related initiatives currently underway. Although there was no new money for trade (in fact, foreign diplomacy and aid received disproportionately heavy cuts in funding), this budget signals that international trade remains a high priority for this government.

There were also some policy issues on which, in our view, the budget was disappointing or disappointingly silent. As noted above, in spite of the fact that trade and market access are stated priorities of this government, financial support for foreign affairs and diplomacy was cut. In addition, the budget includes no significant new measures or financial support relating to environmental protection, conservation, curbing greenhouse gas emissions or renewable energy. There was also disappointing silence on the subject of a Canadian energy strategy. Finally, there were no significant new funds for urban or trade-related infrastructure. While the federal government has made significant investments in this area in recent years, there remains a large infrastructure deficit in many parts of the West.

As a concluding note, it seems appropriate to devote a final thought to bidding adieu to the much-maligned penny which will cease to be minted in April, and stop being distributed later this year. Over the years we’ve all complained about the space pennies take up, we’ve gotten into trouble in school for flicking them at classmates, we’ve thrown them in fountains, used them for ill-advised science experiments and we’ve refused to pick them up when they lie alone and half-forgotten on the street. And now they will be no more.

Goodnight sweet penny. No longer will you fool me into thinking I’m rich based on the thickness of my wallet. May flights of angels sing thee to thy rest.

Another Reason Why We Should Care About Water

Fri, 23 Mar 2012 19:10:00 GMT

By: Larissa Sommerfeld

Pipelines, robocalls and economic angst seem to be dominating headlines these days. Yet, there’s an important topic that’s missing from the limelight—water.

Everyone knows that water is essential to our survival and our way of life. What would our national sport be without the ice? But how often do we make the connection between healthy ecosystems and a strong economy?

Not often enough. As economic development in western Canada continues to ramp up, it’s critical that we’re as mindful (if not more) of our water and the broader environment as we are our economic prospects.

Across western Canada, water is integral to a wide range of economic activity including fisheries, shale gas development, irrigated agriculture, oil sands development, and potash and uranium mining.

Yet, there’s a sleeping water policy giant that will be waking up in due course. Climate change, extreme weather, increasing demand for energy, food, commodities, decreasing water quality (often due to effluent discharge and agricultural run-off), depleted sources, mindless water consumption, aging infrastructure, and the drainage of wetlands are all placing immense pressure on our water supplies. If we don’t start mitigating these strains, we’ll have some real trouble on our hands.

If western Canada is going to continue to be a great place to live, we need to constantly be thinking one step ahead. Our economic activity in the natural resource sectors (energy, potash, uranium, agriculture and aquaculture) is projected to grow in the coming decades. This is great news for our economy, but only if we become even better stewards of our water. The time is now for water to take priority on the policy agenda, up alongside energy, health and education policy—before we get to a breaking point.

Water allocation (of which addressing Aboriginal water rights will be key) will be one of the most challenging policy issues in the years ahead and there’s no beating around the bush—it will have to be addressed because water is a necessary component of the western Canadian economy. Canadian author Marq de Villiers once said that “the trouble with water is that they aren’t making any more of it.” We’ve got to protect what we have, not only to keep our ecosystems healthy, but to sustain our economy as well. We have a finite supply of water so it makes sense to find ways to maximize how it’s used so it can meet the increased demand with the same amount of water. This is something we should all care about because our livelihoods depend on it.

Read more about water and economic development in our new report, Stress Points: An Overview of Water and Economic Growth in Canada.

Federal Government Budget: Pre-Budget Analysis

Mon, 26 Mar 2012 17:19:00 GMT

By: Michael Holden, Senior Economist

On March 29^th, the Conservative government will bring forward what effectively amounts to its first budget since it won a majority in the House of Commons last spring. There are several reasons to expect this particular budget to be significant. For one, it will be the first delivered by the Conservatives free from the constraints of a minority Parliament. In addition, the budget is expected to include more specific details on how (and over what time period) the government plans to eliminate the deficit.

Finally, since the current government is early into its mandate, the budget provides an opportunity for it to set its agenda over the next several years and put its stamp on the future direction of the country. Governments in the past have frequently adopted more controversial policies early in their mandates so that voters have as long as possible to forgive and forget before the next election.

In a general sense, the expectations surrounding this budget are pretty clear. The government will take steps toward eliminating the deficit focusing heavily (or exclusively) on the expenditure side of the equation. No new taxes are expected, nor is there expected to be any rollback of previously-announced corporate tax cuts that kicked in this past January. There have also been broad hints about changes to Old Age Security (OAS) eligibility and a renewed focus on international trade and fostering innovation.

What is not known is the nature or the severity of the program spending cuts. We do know that since it was first elected in 2006, the current government has not exactly been “conservative.” Due in large part to its economic stimulus package in 2009, federal program spending has increased by 36.7% since the 2005-2006 fiscal year and the federal civil service has expanded by about 15.3%. Not including federal Crown corporations, there are more federal government employees today than even before the Jean Chretien Liberal government took the reins in the early 1990s.

With that in mind, there are a few things that the Canada West Foundation is anticipating in the budget.

Better-than-Expected Results in 2011-2012

In its last budget, the federal government projected a deficit of $32.3 billion for the 2011-2012 fiscal year. That figure was later amended to $31.0 billion in the government’s annual November fiscal update, as lower-than-expected program spending was more than enough to offset sluggish revenue growth and the addition of a $1.5-billion risk adjustment buffer to guard against the effects of global economic uncertainty on the bottom line.

Barring a major year-end spending spree in March, however, the actual deficit for the current fiscal year will almost certainly be much lower. The deficit was projected to decrease only slightly compared to last year (from $33.4 billion to $31.0 billion) but the government is well ahead of pace. Through the first three quarters of the year (April to December 2011), the federal deficit stands at $17.7 billion, a considerable improvement over the $27.4 billion deficit over the same period last year.

There are two directions the federal government could go with this increased fiscal flexibility. It could accelerate its deficit-elimination schedule and balance its books a year or two earlier than currently planned (in 2016-2017). Alternatively, it could use that flexibility to lessen the severity of anticipated cuts to program spending. Some combination of the two is also possible.

Prudent Economic Forecasts

On a related note, we look for the government to continue making its budget projections based on cautious economic and revenue growth assumptions.

During Jean Chretien’s tenure as Prime Minister, Finance Minister Paul Martin attracted some criticism because his economic- and revenue-growth forecasts were so conservative that the Liberal government regularly posted much better year-end budget balance figures than were initially projected in their budgets. For a few years this was a bit of a novelty as governments historically had tended to over-promise and under-deliver in their deficit-fighting efforts. By the end of the Chretien-Martin era, however, pundits were clamouring for more accurate budget forecasts, because year-end numbers were consistently so much better than budget forecasts.

Returning to this era of under-promising and over-delivering would not be such a bad thing. While worries over sovereign debt crises in Europe and the sluggish US economy have eased somewhat over the past six months, there remains a great deal of global economic uncertainty on the horizon. In this context, small-c conservative growth forecasts would be prudent.

In addition, understated growth forecasts would allow the current government to capture one of the big advantages enjoyed by the Chretien/Martin approach to budgeting. By regularly underestimating revenue growth, the Liberal government of the time was able to avoid the pressure to increase spending that comes when governments announce that their fiscal situation is actually pretty good. The moment a government announces that it has billions of dollars left over after fulfilling its spending commitments, you can guarantee that there will be a clamour of voices with all sorts of ideas about how that money should be spent. This is not to say that many of those ideas are not worth supporting. Rather, it is extraordinarily difficult for a government to announce that it has excess revenues without at the same time creating enormous political pressure to spend those revenues or to decrease taxes accordingly. This can result in decisions being made on the fly rather than being carefully considered as part of a long-term plan.

Simplification of the Tax System

The Canada West Foundation has long argued in favour of a simpler tax system. The recent trend, at the federal level at least, has been for the addition of boutique tax credits aimed at specific segments of the electorate: tax credits allowing tradespeople to write off their expenses on tools; credits for arts and sports programs for children; employment tax credits and so on. Every year it seems that the forms get longer and more complex. We don’t suggest going to the simplified tax scheme proposed here, but an increase in transparency would be welcome.

A caveat to this statement is that we have no position on whether taxes should be higher or lower. Too often people get swept up in ideological debates which focus entirely on the tax side and ignore the expenditure side completely. It is important to remember that taxes are the means by which governments provide services to their citizens. All else being equal, we get what we pay for: lower taxes means fewer or less comprehensive government services and higher taxes mean the opposite. Now there are all sorts of arguments one could make about how efficiently governments use their revenues and about how much easier it is for government to grow than to contract. But in our view, the appropriate level of taxation is the lowest one possible which provides Canadians with the goods and services they want, while also allowing governments the policy flexibility to pursue appropriate social and economic objectives for the long-term prosperity of the country and also ensuring that Canada is an attractive place in which to do business. In other words, we need the taxes to afford what we want and need, not to blindly raise or lower those taxes without a specific, and compelling, reason for doing so.

Government Program Spending

The federal government has already stated that it will not touch transfers to the provinces as part of its move toward balancing the budget. The size (and growth rate) of federal transfers for health and social services has already been determined for the next decade or more. Similarly, the pool of funds for the equalization program is set to increase each year, tied to the growth of the national economy. While we have some concerns about the specifics of these programs and some of the interprovincial equity issues that could result from the distribution of those funds, those concerns are not part of the budget discussion itself.

In terms of direct program spending, however, the federal government has already signalled that it intends to find billions of dollars in “savings” under its “deficit reduction action plan savings target.” What this means, exactly, is anyone’s guess at this point, but the specifics of this plan should be included in the forthcoming budget. What is clear, however, is that after years of rapid spending growth and a hiring spree that has seen the creation of more than 60,000 new federal government positions (including in the military) since 2004, there are cuts on the way.

Given the huge increase in federal government spending in recent years, there is certainly some room for modest fiscal retrenchment. There are, however, a few things we would not like to see. First of all, the budget should not take the easy way out and impose across-the-board cuts on departments. Doing so carries the risk of penalizing effective programs by providing them with fewer resources to accomplish their objectives, while allowing less effective or redundant programs to continue on. A more difficult, but ultimately more valuable, exercise would be to use program spending cuts as an opportunity to revisit past government programs and to refocus efforts on initiatives that are demonstrably effective at enhancing economic and social welfare in Canada. Second, the budget needs to walk a fine line between returning to fiscal balance on the one hand, and not undercutting the still-fragile economic recovery on the other. The Canadian economy grew at a relatively modest 2.0% in 2011. A dramatic cut in federal spending could further weaken the economic outlook for the current year.

A better approach would be for the government to back-end-load its spending cut commitments. This means that the government should set out a deficit-reduction plan that sees relatively modest cuts to program spending this year (and possibly next), allowing the economy time to find its footing. When conditions are more robust, the Canadian economy will be in a better position to absorb the impact of more severe cuts to federal spending.

Environmental Review Process

It has been suggested in the lead up to the budget that the federal government is looking to streamline the environmental assessment process for resource development. While this move is guaranteed to spark outrage in some circles, we are cautiously optimistic. The Canada West Foundation supports the idea of a streamlined review process: one that eases the administrative burden on businesses and reduces the time it takes to get shovels in the ground on approved projects, subject to the condition that the standards to which businesses are held are not compromised as a result.

Many people believe that expediting the review process, or handing the responsibility to the provinces, will result in less due diligence or a patchwork of environmental standards across the country. Some will undoubtedly suggest that a shorter process is, in fact, a backdoor attempt to lower standards, skirt environmental regulations and run roughshod over due diligence.

Without detailed information on the specifics of the federal government proposal, we cannot comment on those anticipated criticisms. We look to the budget to provide some of that information. To be sure, laxer environmental standards are a risk if the spirit of the matter is violated, but we do not accept the view that fixing the review process will necessarily result in lower standards or that it represents an abdication of environmental stewardship on the part of Canadian governments. A longer review process does not make a better review process.

Michael Holden will be in Ottawa on budget day and will prepare a post-budget analysis. Media inquiries can be directed to Rachael Strathern, Communications Team Lead, at communication@cwf.ca or (403) 700-9535.

Do NDP Leadership Candidates Have Water on the Brain?

Thu, 22 Mar 2012 17:30:00 GMT

By: Larissa Sommerfeld

This coming Saturday will mark the completion of a long and drawn out race for the leadership of Canada’s New Democratic Party.

Does water policy fit into the platforms of its leadership candidates?

It doesn’t seem top of mind for Thomas Mulcair or Brian Topp. Both candidates appear to have mentioned water policy only in the context of larger environmental policy, and don’t have any detailed positions posted on their websites. So called “wild card” Nathan Cullen deems himself a “radical” for standing up for the environment, so it’s probably safe to assume that water would be central to his policy agenda. And Peggy Nash and Paul Dewar have been more passionate about the subject and believe that a national water strategy is needed.

The development of a national water strategy isn’t a partisan issue in the policy community. In fact, groups from all sides of the spectrum (from the Canadian Water Resources Association and Pollution Probe to the Canadian Chamber of Commerce) have been calling for the development of a national strategy to ensure Canada is in the best position possible to stand ground against water challenges due to climate change and rising demand stemming from increased economic activity (e.g., the running of LNG terminals on the West Coast would require massive amounts of energy which would come from hydroelectricity). However, a national strategy wasn’t mentioned in the 2011 NDP election platform, nor does it seem to be getting much attention now.

The water debate is more focused on bulk water exports. In January 2012, Paul Dewar stated he would ban bulk water exports, which is in-line with the official NDP position. Dewar has spoken out about Thomas Mulcair, a former Liberal and Minister of Environment in Quebec, stating “I hope that the position he had before with the Liberal government, which was in the past, is in the past, and that his position will be the party position….” The position Dewar is referring to was Mulcair’s desire to open up a debate on bulk-water exports from Quebec to the US. His position was highlighted in a clip posted by the Liberal Party of Canada.

This will certainly be something to watch. The favoured candidates are Mulcair and Topp, both of whom don’t seem to have water on the brain. If either of them are elected, water as an issue might fall out of the NDP periphery and the push for a national water strategy—which most water policy experts agree is something that’s needed—may rest solely with the Liberals (who are very active on the water file) and the Green Party’s Elizabeth May.

The Devilish Details of Market-Based Instruments

Tue, 14 Feb 2012 17:09:00 GMT

By: Shawna Stirrett

Using market-based instruments (MBIs) for environmental protection is a potentially exciting way to manage the tension that sometimes arises between economic and environmental goals. MBIs apply the economic principles of supply and demand to the management of natural resources and they rely on the market to positively influence behaviour.

There are many different kinds of MBIs and some of them, such as deposit refund programs for drinking containers, have a long history in Canada. Other types of MBIs, such as transfer of development credits and resource allocation trading, have had limited uptake in Canada so far.

There is, however, the chance that MBIs will be used more frequently in Alberta in the coming years because of some recent policy changes that have come about with the passing of the Alberta Land Stewardship Act (ALSA) in 2009. This Act explicitly enables the use of market-based instruments for the protection of natural resources in Alberta.

While the theory behind MBIs is solid, the challenge is in the details. It is imperative that market-based solutions are clearly addressing an environmental problem, that they are understandable and accessible to the public, and that they operate within clear regulatory boundaries.

An illustration of how challenging it can be to find the right balance is found in Alberta’s home rebate program for energy efficient new homes. The idea behind this rebate is to incent homebuilders or homebuyers to choose products and designs that will be as energy efficient as possible. This means that if you buy a new home with an EnerGuide rating of 80 or above you will receive a government rebate that ranges from $1,500 - $10,000 on a sliding scale tied to efficiency ratings.

This is a fantastic program in theory because the more that can be done to encourage home owners to reduce their energy consumption the less greenhouse gas will be emitted, the less need there will be for new power generating stations and fewer building materials will end up in the landfills. According to C3 (the organization that administers the rebate program): “Upgrading the energy efficiency of a new home could reduce its greenhouse gas emissions by upwards of one tonne per year.”

The devil, of course, is in the details. The first challenge is that most builders do not know, or do not advertise, the energy rating of the homes they build. If a new buyer wants to find out the rating of their home, they will have to go through a pre-evaluation process. This means sending building site plans with elevations, sections and floor plans; specifications on insulation, doors and windows; mechanical details on the furnace, hot water heater, fireplace and other efficiencies; and information about appliances and lighting systems for assessment.

Not only is this a lot of work, but it will cost homeowners around $300 (if their new house is 1,200 square feet or less, additional footage is charged extra) to have this pre-evaluation done, which will tell them if they might be eligible for the rebate. The fee is non-refundable. There may also be additional charges if the house has solar or geothermal systems attached.

Should they decide to go ahead with getting their house EnerGuide rated, homeowners then have to get a blower door test done—at a cost of $175 for the first hour and $120 for every subsequent hour, and potentially including mileage for the Energy Advisor.

Finally, it is an additional $100 to update the file with the blower door test information, submit the claim to Natural Resources Canada and get the EnerGuide label and report.

A conservative estimate, then, is that a homeowner would need to spend around $600 in order to apply for the rebate that is offered. This is worth it if the house will be rated at the highest level, giving them a rebate of $10,000 or if there is certainty that the house will qualify for a rebate. But what about those who come in at the lowest level eligible for the rebate? They will have spent $600 (not to mention what they will have already spent on high efficiency furnaces, windows, insulation, etc.) in order to get back $1,500. What about those who invest in the pre-evaluation only to find out they are ineligible?

Because of the effort and the amount of money required to get this rebate, this program will have the greatest appeal for those who already care about the efficiency rating of their home and will have designed their home with efficiency measures in mind. In other words, this rebate as currently designed is aimed largely at people who would have made their homes as efficient as possible already and are not motivated by the promise of money back.

The argument could be made, therefore, that the rebate program is not incenting people to buy or build energy efficient homes, merely rewarding those who do.

So what can be done about this? It’s not as though the assessment process can be scaled back. There needs to be certainty that rebate-receiving houses really are as efficient as they say they are otherwise taxpayer money will be thrown away and no environmental benefit will result.

One potential solution is increased system integration around this issue. Would it be possible, for example, to require homebuilders to assess and disclose the EnerGuide rating of their homes, much like auto manufacturers are required to disclose the fuel economy of their vehicles? This would enable consumers to quantify the efficiency levels of new homes and this information, in addition to the rebate program, could lead to preferential selection of homes with higher efficiency ratings. In this way, builders would acquire greater experience and expertise in efficiency measures, one of the main barriers to consumers (the cost and the time of finding out the rating of their new home) would be reduced and substantial improvements could be made in Alberta’s environmental performance.

As this example demonstrates, the idea behind MBIs is good and they have the potential to enable environmental protection in an economically sustainable way. Getting the details of a market-based instrument right, however, is imperative if the tool is going to be effective at solving environmental problems and motivating people to change behaviour.

A detailed look at the role of market-based instruments within the Alberta context is covered in a forthcoming Canada West Foundation report entitled: “The Invisible Hand’s Green Thumb: Market-Based Instruments for Environmental Protection in Alberta.”

Powering the Economy with People

Fri, 10 Feb 2012 18:26:00 GMT

By: Robert Roach, VP, Research

While the recession has affected countries throughout the globe in the past few years, Canada’s economy has done reasonably well. Yet, things are not all that they seem. Like a frog in a pot of warm water, Canadians have not yet realized the danger. A rapidly changing global economy is heating up the water in the pot.

The Boiling Frog Dilemma: Saving Canada from Economic Decline by Todd Hirsch, Senior Economist, ATB Financial and Robert Roach, Vice President of Research, Canada West Foundation, outlines ways that Canadians can get out of the pot before the water boils—and not only survive, but thrive, in the global race for good jobs.

Canadians need to become much more creative and this means a revolution in education and how creativity is harnessed in the workplace. Canadians need to embrace risk and stop lamenting the good old days when more things were made in Canada. They need to see the potential in lodging themselves at the top of the global value chain as the world’s designers, managers, educators, investors and creators. Canadians need to integrate their business practices with environmental stewardship, see the world as their oyster rather than a threat, and be much better neighbours to one another at home.

It is individual Canadians who need to change their own attitudes and habits. Governments can’t do it for them. The Boiling Frog Dilemma envisions new Canadian entrepreneurs who will move Canada from being largely invisible to totally indispensible in the global economy of the 21st century. The new entrepreneur puts into action the argument that nothing generates economic wealth except the power of ideas.

Read Rob and Todd’s op-ed in the Calgary Herald “People, not tax credits, will power the economy.”

To order The Boiling Frog Dilemma: Saving Canada from Economic Decline, visit www.toddhirsch.com

The West Gets It

Wed, 08 Feb 2012 21:36:00 GMT

By: Robert Roach, VP, Research

In an article in today’s Globe and Mail, John Ibbitson argues that "One question will define national politics in our time: Are Western Canadians prepared to sacrifice for the sake of the nation, now that Ontario is less able to help?"

In addition to incorrectly implying that western Canadians chipping in to help the rest of the country is a new phenomenon, the question is the wrong one to ask.

The question Canadians should be focused on is how to ensure that the nation successfully adjusts to the evolving global economy. It is a mistake to start with a negative question that assumes the need for "sacrifice"—whatever that means—or puts pressure on the nation’s fault lines by immediately assuming that regional wealth redistribution is the solution to central Canada’s problems. This is the old way of thinking and this is not the time to bring it back.

The West knows what it is like to have its interests and economic prospects ignored and how damaging this is to the country and its potential. It will not, therefore, make the same mistake that central Canada has made in the past and be blithe to the blight of the other regions.

The West gets it—all regions benefit when all regions are heard and respected. The West will do its part, as it always has.

Ensuring Canada’s prosperity will happen naturally as the western economy continues to provide jobs and returns on investment. It will also happen at the political level through the equalization program, a strong tax base in the West that helps fill the national treasury, and by ongoing efforts by Canadians to ensure strong regional representation within the national government.

Ultimately, however, the economic recovery of Canada's industrial heartland will depend on the efforts of individual Canadians and their ability to harness the changes happening at a global level.

Western Perspectives on a Low-Carbon Economy: A Visual Overview

Thu, 09 Feb 2012 16:41:00 GMT

By: Shawna Stirrett

In November 2011 the Canada West Foundation in partnership with the National Round Table on the Environment and the Economy (NRT) conducted a series of roundtables about developing a low-carbon growth strategy for Canada with particular emphasis on the opportunities and risks facing the West.

You can read all about the main themes, policy recommendations, and overview issues in the report (click here to view) but, just for fun, here is a visual overview of the roundtables:

These word clouds were created from my notes, which were typed up during each of the sessions. Words that appeared more often in the conversation appear larger in the clouds and words that were less common are smaller. In a sense, these clouds give a visual overview of what ideas were most prevalent during the roundtables and which topic generated the most interest.

What is really fun is to see how the conversations—which were all structured around the same questions—varied from province to province.

For example, in Saskatoon, one of the main themes was on how to deal with carbon constraints in an environment of economic growth.

Those in Vancouver were most concerned about how carbon should be constrained, should it be a tax or cap and trade?

Calgary roundtable participants were pretty set on the need for a national framework around energy and emissions.

While in Winnipeg the discussion centered on how challenging it can be to put in place carbon policies when power is so cheap and emissions rates are so low in the province.

Of course these word clouds do not tell the whole story, but they do provide an interesting visual overview of what issues were important to roundtable participants and how the conversation varied across the region.

Click here to download a copy of Cautious Optimism: Western Perspectives on a Low-Carbon Economy.

Was Withdrawing from Kyoto the Right Thing to Do?

Tue, 31 Jan 2012 20:08:00 GMT

By: Shawna Stirrett

Just prior to Environment Minister Peter Kent’s announcement in December 2011 that Canada had decided to withdraw from the Kyoto Protocol, the Canada West Foundation and the National Round Table on the Environment and the Economy (NRT) wrapped up a series of meetings in western Canada on developing a low-carbon growth strategy for the country. One of the key themes that emerged from these meetings was the role of national and international emission reduction targets such as those in the Kyoto Protocol.

Interestingly, there was consensus among the participants that Canada should not be overly focused on emission reduction targets. Participants argued that reduction targets have a tendency to send the wrong signals to producers and consumers. A focus on targets that are not accompanied by a clear strategy for meeting them can have a paralyzing effect rooted in uncertainty and fear.

For example, did every province under Kyoto need to reduce emissions by 17% by 2020, or was the target meant to be a national average? If it was a national average, did that mean that if some provinces did not meet the target, other provinces would have to make up the difference?

Another reason participants took issue with an emphasis on targets was that they can have the unintended consequence of promoting competition rather than cooperation. Targets can create the perception of a zero-sum game in which, as long as a province or country is doing better than another, it wins.

A final reason participants argued that there should be less emphasis on emission reduction targets is that they often overshadow other environmental considerations such as land management, water quality, protection of biodiversity and so on.

Instead of relying exclusively on emission reduction targets, participants argued that Canada should be setting environmentally quantifiable goals that are holistic in nature. These goals would ideally foster interprovincial cooperation, account for all aspects of environmental protection, encourage energy efficiency and facilitate the creation of a nationally coordinated plan for dealing with energy and environmental issues.

While the consensus of participants was that emission reduction targets should not be the main focus of environmental management in Canada and it’s path to a low-carbon future, this does not mean that they were in favour of pulling out of Kyoto. Nonetheless, there was a clear sense of the limitations of Kyoto-like targets for achieving our environmental goals.

For the full summary report of the western Canadian roundtables on a low-carbon growth strategy for the country, see the Canada West Foundation report entitled: “Cautious Optimism: Western Perspectives on a Low-Carbon Economy.”

Having Our Cake and Eating it Too: The Environment, the Economy and Market-based Instruments

Wed, 25 Jan 2012 21:02:00 GMT

By: Robbie Rolfe

I sometimes find myself getting weary of ideologues on environmental issues. One argument I find particularly tiresome is the insistence that there are significant tradeoffs when it comes to the economy and the environment. The conclusion of these extreme viewpoints is that we can be prosperous polluters or penniless hippies. Apparently, there is no middle ground.

These zero-sum views neglect market-based instruments (MBIs for short) that can make us both prosperous and green. The careful deployment of MBIs can address a major difficulty facing governments trying to encourage good environmental practices: people and businesses will not provide enough ecological goods and services because the costs of providing them accrue to individual persons or businesses while the benefits are enjoyed by the wider community. An MBI is a mechanism that shares the costs of environmental protection among its many beneficiaries.

Take a farmer who is nearing retirement and needs cash. If he sells his farm to a developer, he gets the money he needs. If he holds onto the land to ensure that it continues to provide a nearby city’s water system with valuable natural filtration, he takes a direct financial hit. There are significant tradeoffs in that situation: the farmer gives up some of his livelihood to maintain ecological benefits or gives up ecological benefits to enhance his livelihood. An MBI could pay the farmer for the ecological goods and services his land provides. To ensure a fair price, the amount the farmer gets could be set by a market, or at least market-like mechanisms. Taxpayers living in the city who benefit from the natural filtration on the farmer’s land could fund the MBI through their taxes, thereby sharing in the costs associated with the benefits they receive.

The good news is that these kinds of policies are increasingly under consideration in western Canada. The Alberta Land Stewardship Act, for example, urges the use of market-based instruments on a regional or local level to better provide ecological goods and services, particularly when it comes to land use and land management.

Though market-based instruments show great potential, we are only beginning to explore their varied applications. If we can tap that potential, then one day we may be able to have our cake and eat it too.

MBIs are explored in detail in a new Canada West Foundation report entitled The Invisible Hand’s Green Thumb: Market-based Instruments for Environmental Protection in Alberta. To download the report, click here.

Time is the Scarcest Resource

Wed, 18 Jan 2012 18:51:00 GMT

By: Dr. Roslyn Kunin

For many Canadians, there never seems to be enough time in the day. Taking the long view, time stretches to infinity, but, within the scope of our lives, it is much more limited. It has no substitutes and it cannot be re-used or recycled.

Lack of time is the excuse we give for not doing all the things we would like to do or that we have to do. We each have only 24 hours in a day and, like land, they aren’t making any more of it. Unlike land, unfortunately, you can’t buy it.

We can, however, make much more effective use of the time that we do have, both in our personal and our working lives. There are lots of suggestions for making better use of time at the individual level, but it is in our collective working lives that the inefficient use of time is doing us the most harm. Not a lot is being said about this and less is being done, it seems.

Productivity is the measure that is used to determine how effective we are in our working lives. There are many yardsticks of productivity, but the most basic one is output per hour worked.

By this measure, Canadian productivity has been lower than that of the United
States, our biggest trading partner, for at least the last three decades. What’s more, the gap is widening. Although productivity has been rising in Canada, it has been creeping up at a rate of about 1% per year for the last decade. Meanwhile, in the United States, productivity has been charging ahead around double the Canadian rate.

Why is it so important for Canadians to be churning out the greatest amount of goods and services each hour that we work? Because the wages we earn and our standard of living depend upon it. No one can afford to pay anyone more than the value of what it is they produce. If our output is just creeping upward, our incomes and our standard of living can do no better.

And how do we improve our productivity to make better use of the working hours that we put in? We make use of a resource that is widely available and often underused—our brainpower. We have the smarts to develop, adapt and implement the technology and systems that will allow us to become more productive and prosperous.

Now all we need to do is to find the time.

An Early Christmas Present for All: Fiscal federalism issues are back

Thu, 22 Dec 2011 18:11:00 GMT

By: Michael Holden

Just in time for Christmas, the federal government has announced a new funding plan for health care. The present funding agreement, in which federal cash transfers to the provinces and territories grow by 6% per year, is set to expire in 2013-2014. The new ten-year plan will see that 6% annual escalator maintained through to 2016-2017. Thereafter, federal cash transfers for health care will be tied to annual growth in nominal (i.e., not adjusted for inflation) economic output, with a floor provision that guarantees a minimum increase of 3% per year, regardless of how well the economy actually does.

This unilateral announcement caught many people off guard. Federal-provincial transfers have always been a sensitive and nuanced subject and new funding agreements typically come only after extensive, public, and often bitter negotiations between Ottawa and the provinces. Many people were just beginning to get geared up for the next round of talks, which now appear to have been cut off at the pass.

Reaction across the provinces to the new arrangement has been mixed. Alberta is strongly supportive, for reasons that I will discuss below, while BC and Saskatchewan are also largely in favour. In the rest of Canada, however, the backlash has been harsh. It being the Christmas season, “lump of coal” metaphors abound.

This backlash is rooted in the interpretation of a Conservative Party campaign promise during the last election; several provinces had expected the 6% escalator to be maintained over the entirety of the new funding arrangement. Tying federal transfers to economic output will almost certainly result in slower growth in health transfers beginning in 2017-2018.

How much slower is anyone’s guess at this point. However, historical data suggest that nominal economic growth in Canada has actually been quite consistent over the long term, averaging 4.2% over the past 10 years, 4.7% over the past 15 years and 4.5% over the past 20 years. Assuming growth at the low end of that range (4.2%) over the duration of the new plan, total federal health transfers to the provinces can be expected to increase from about $30 billion in 2013-2014 to about $47.7 billion in 2023-2024. Had the 6% escalator remained in place, transfers would have reached $53.7 billion.

As I hinted at above, Alberta is the clear winner under this new funding arrangement. One of the less-publicized changes it will bring is that cash transfers for health care will be distributed across the provinces on an equal-per-capita basis. At present, this is not the case. The history and complexities of federal transfers are too complicated to get into here, but the end result is that wealthy provinces (with strong tax bases) currently receive less cash per person from the federal government for health care than poorer provinces. Since Alberta is by far the wealthiest, it receives far less on a per-capita basis than the other provinces.

When the new funding arrangement comes into effect, there will be a large increase in per-capita cash transfers to Alberta in order for it to reach the same level as the other provinces. This change is bound to be controversial. Alberta is already the richest province in Canada. For it to receive a perceived “windfall” of cash may not sit well with some provinces, especially since the increase in payments to Alberta will, by definition, come at the expense of increases to other provinces (because all funds come out of a fixed pool).

One thing is for certain; after a few quiet years, fiscal federalism and issues about federal-provincial transfers suddenly are back in the public policy spotlight. We will be writing more on these subjects in the months ahead.

2012, Bring it On!

Wed, 21 Dec 2011 21:31:00 GMT

By: Dr. Roger Gibbins

Throughout 2011, Canadians took comfort in the fact that as the world around them seemed to go to hell in a hand basket, life was pretty good here at home. Although the Canadian economy sagged a bit, it held up well by comparison with our major trading partners. Stock markets rebounded, employment did not plummet, and across western Canada there was real economic growth and widespread prosperity.

Unlike the political deadlock and acrimony that has become increasingly characteristic of political life south of the border, Canadian governments enjoyed reasonably strong electoral support and, for better or for worse, we have been freed from the paralysis of minority governments in Ottawa. All in all, 2011 goes down as a pretty good year for Canada admidst a general international environment of uncertainty and unease.

Nonetheless, it is difficult to look forward to 2012 with anything close to unbridled optimism. Economic and political conditions in the United States, still our major market for virtually anything we produce, are unlikely to improve as Americans lurch toward the November elections. Economic conditions in Europe remain grave. Closer to home, western Canadians face huge challenges in moving resource assets to new international markets while at the same time, American markets are soft and/or overflowing with conventional Canadian products such as natural gas.

So often western Canadians believe that we have the resources the world needs, and assume the world will beat a path to our doors. Quite understandably, resource wealth breeds complacency. Increasingly, however, we realize that we will have to do much of the beating, that our competitors are many and often better positioned geographically, and that the barriers to international market access are challenging in the extreme. Being resource rich in the absence of markets is not a recipe for sustainable prosperity.

In 2012, Canadians from across the country will also have to come to grips with growing regional imbalances within the national economy, and how these play out through the frameworks of fiscal federalism and in a period of growing financial constraints for all governments—federal, provincial and municipal. On balance, western Canadians are doing very well, but how do we reconcile regional prosperity here with more disadvantaged regions of the country? How do we ensure that regional economic strength is encouraged as a national asset, and not seen as a target?

None of this means that Canadians should be fearful when looking ahead to 2012. At the same time, we will face some truly intimidating policy and political challenges as we try to re-jig the Canadian federal system and national economy to meet unstable and rapidly changing global conditions. The upcoming year will not be a time for the faint of heart, or a time for complacency. But then, to quote the last words of Australian bushwhacker Ned Kelly as he stood on the scaffold, such is life. Or, in the more current vernacular, bring it on!

On behalf of the Foundation, I would like to wish you all the best for the holidays. Thank you for your engagement over the past year. As 2012 approaches, we look forward to continuing our work as the only think tank dedicated to being the objective, nonpartisan voice for issues of vital concern to western Canadians.

Who is in Charge? Asking Questions About the European Debt Crisis

Wed, 14 Dec 2011 23:14:00 GMT

By: Roslyn Kunin

Any reporter knows that if you can get the answers to six questions, you have a story. The questions are Who? What? Where? When? Why? And How?

The biggest economic story that is likely to affect all parts of Canada as we move out of 2011 and into 2012 is not within Canada. Nor is it in Asia, the source of much of global economic growth. It is not in Africa which we should be starting to watch as that continent begins to exhibit growth patterns similar to those in China and India of a few decades ago.

The story concerns the very precarious financial situation in Europe and the on-going, increasingly desperate attempts to ameliorate things or at least generate enough stability to avoid conditions becoming any worse.

So far, we have answered the “what” and the “where” questions. The “when” is now. The “why” is generating growing concern among both political and business leaders and informed citizens. Failure to put Europe back on a secure financial footing could spell the end of the euro as a widespread and growing common currency. It could threaten the European common market and the resulting free trade and mobility. The simple uncertainty of the situation could generate economic retraction in Europe, which could then spread to the rest of the world.

This has led the political leaders in Europe to earnestly seek out “how” to avoid these dire consequences. Greece and Italy have positioned unelected technocrats as heads of their governments, hoping they will be able to find and implement the tough answers needed.

An almost continuous series of summit meetings has been held, featuring Nicolas Sarkozy of France and Angela Merkel of Germany, each meeting seeming to lead only to the next summit meeting. The latest meeting did result in some more specific proposals, including a tax on financial transactions.

Already Britain and others in Europe are stepping back from this potential solution. Nevertheless, the situation is serious enough that this proposal just might work. Merkel has already stated progress could be made even if not all countries choose to participate.

However, there is still one very important unanswered question. The current proposal, and indeed any solution, will involve imposing fiscal and monetary requirements on individual countries. Rules will be set and penalties specified for breaking those rules. The big remaining question is “who” will apply and enforce these rules and penalties?

Europe and the euro zone have always had rules. They were often broken. If previously established deficit limits had been adhered to, Europe would not be in its current mess. So putting in place more rules that will intrude even more deeply into national sovereignty and expecting them to work requires a leap of faith. Unless, and until, there is an agreed upon body with both power and widespread consensual support, an effective solution to the European problem will remain elusive.

What We Do with Our Water Affects Our Northern Neighbours

Wed, 14 Dec 2011 23:15:00 GMT

By: Larissa Sommerfeld

In Canada, we often think within our respective provincial/territorial bubbles, but it’s important to create public policy on a regional basis.

Take the case of the Northwest Territories (NWT) and its recently developed water stewardship strategy, Northern Voices, Northern Waters. Published in 2010, this strategy is lauded due to the fact that the NWT government engaged and collaborated with citizens, introduced an eco-system approach to governance and defined water as a human right.

One of the main obstacles to success of the strategy, however, is what neighbouring jurisdictions, such as British Columbia and Alberta, do or don’t do in terms of water policy.

The NWT is almost entirely enclosed with the Mackenzie River Basin—a massive watershed that contains 20% of Canada’s landmass and also includes parts of Yukon, British Columbia, Alberta and Saskatchewan. While borders separate governance, they do not separate the flow of water. What happens downstream will affect water quality or quantity upstream. And upstream in this case goes all the way north to the Beaufort Sea.

The real test for the NWT will come in implementing the strategy. And that’s where things get tricky.

For instance, take the obvious example of Alberta’s oil sands. Long criticized for affecting both water quality (pollution and altered water temperature) and quantity (altered in-stream flow needs), those in the NWT assert that Alberta needs to continue to work toward sustainable development to ensure that those who rely on a clean and stable water supply upstream aren’t unduly affected.

This isn’t to say that the NWT isn’t dealing with similar issues within its own borders. The point, however, is that activity outside of those borders requires intergovernmental discussion and coordination because governments have different goals, different solutions and different opinions.

Last week, the Canada West Foundation and the Forum for Leadership on Water (FLOW) co-hosted two events held in Edmonton and Calgary which were part of water expert Bob Sandford‘s 15 city cross-country speaking tour titled “Northern Voices, Southern Choices” on this very topic.

One of the key themes that emerged from both discussions was the need for a Canadian water strategy—a strategy that would get provincial and territorial governments on the same page so that strategies like “Northern Voices” would have a greater chance of being successfully implemented.

What do you think? Does Canada need a national water strategy? Should we be thinking about other provinces or territories when developing our water policies, or should we just focus on our own jurisdiction? Can southern choices truly silence northern voices?

These aren’t easy questions to answer. But, in the end, we’re all downstream from someone.

For more on Bob Sandford’s presentation and thought-pieces on this issue, check out FLOW’s website at www.flowcanada.org.

Time to Abandon Dairy Marketing Boards

Thu, 15 Dec 2011 14:47:00 GMT

By: Roslyn Kunin

It sounded really good when US President Barack Obama spoke in Hawaii after meeting with Canada’s Prime Minister Stephen Harper: his talk centered on an expanded trans-Pacific trade agreement which would significantly increase trade and, in turn, create jobs and generate economic growth.

Canadians should be delighted at this chance to expand trade. We are twice as dependent on international trade as the US. But the greatest part of that trade is with the US. In western Canada, we have survived the recent economic uncertainties better than much of the rest of the continent, in part because our trade with the Asia Pacific region has been growing. For the first time ever, BC wood exports to Asia have exceeded those to the US.

So it would appear to be a no-brainer that Canada should be jumping at the chance to sell more to the fast growing markets in Asia and not have our foreign trade sector held hostage to the weak and wavering conditions in the US. But, according to Finance Minister, Jim Flaherty, we have to pay attention to details before we move ahead.

What are those details? They are the Canadian monopolies on things like eggs and dairy products that we call “marketing boards”. These boards were put in place to appease the relatively small number of producers of these products by guaranteeing them protected markets for milk and other basic foods. All other Canadians pay for this program dearly in the form of notably higher prices for these groceries. How much higher? Enough to make it worthwhile for those who live close to the US border to pick up their eggs, milk and other dairy products on the south side of the Canada-US border. In fact, Canadians in US border towns are called “cheeseheads” after one of their common purchases.

Not only do the marketing boards increase the cost of living for Canadians, they are also a serious trade barrier. They have been and remain a major deterrent to expanding Canada’s trade opportunities in Asia and elsewhere. So it should be a big win-win to get rid of them. At a time of rising food costs, we would all see the amount on our grocery bills drop while our markets for goods and services abroad would expand and jobs would increase.

Even the protected producers could benefit in the long-run. Once they have lost their monopoly, they are smart enough to figure out not only how to be sufficiently productive to survive in the Canadian market, but also how to compete in markets abroad. We saw this happen in New Zealand when their previously protected food producers were exposed to the winds of competition. The quantity and quality of the output went up, the prices went down and markets and profits expanded. Canadian producers will do, at least, as well.

Where are the customers?

Wed, 14 Dec 2011 23:17:00 GMT

By: Dr. Roslyn Kunin

Over the years, I have spoken with many people who were planning on starting their own business. They told me about the great product or service they would offer. They described how they would set up the business. They all told me how much money they hoped to be making once the business got rolling.

What they never mentioned, until they were prompted, were customers. That basic business need, someone willing and able to pay for the good or service provided was, if not totally missing from the mental image of the new business, certainly not in the foreground.

We should not be too hard on these aspiring entrepreneurs for not thinking about who was going to buy their output. For a very long time, governments, policymakers, planners and others interested in economic development did the same thing. Some still do so.

Take western Canada as an example. When we think about advancing our economy, we think about inputs. These include our resources and how we can access and develop them. They include infrastructure; transportation, communication, etc. They definitely include human capital—a workforce with both hard and soft skills and, ideally, some relevant experience.

We think about what we might produce. In the past, the focus has been around the question of how the West can move up the food chain beyond its traditional, resource-based industries and into manufacturing and the newer technologies.

What we have not been thinking about is customers. Who is going to want whatever it is we are or might be producing? For too long, we have had an “if you build it, they will come” attitude. But that only happens in the movies.

Relative to much of the rest of the world, western Canada is blessed with various essential resources, an educated labour force, decent infrastructure and political stability. But we are seriously limited by our lack of customers. We have been, and still are, far too dependent on one customer—the United States.

If you have only one customer, the US is a good one to have. It is close, big, speaks English and has similar laws and customs. But it exposes you to the risk of having all your eggs in one basket. We learned this to our sorrow in the last downturn.

To advance western Canada, we need more customers, and those potential customers are sitting across the Pacific and beginning to creep into our awareness. They want, need and can afford the resources and high level services that we can provide.

So let us adjust our focus to look west as well as south. Let us develop the pipelines and other infrastructure needed to serve new markets. Let us develop and add to our customer base. That is how businesses and economies grow.

The Okanagan Basin: Land of Fruit, Wine...and Water Challenges

Wed, 14 Dec 2011 23:18:00 GMT

By: Larissa Sommerfeld, Policy Analyst

The Okanagan Valley. For many, these two words can conjure up an image of green orchards filled with fruit, endless vineyards and an idyllic landscape.

When driving through or flying over the Okanagan, the scale of the four major lakes that sit in the middle of the valley are breathtaking. It’s almost unexpected that there would be so much water inland, and in such a dry part of Canada.

But although everything seems to be going well on the surface, there is a growing wave of concern among decision-makers in the Valley.

Increasing population and development are putting new pressures on the Okanagan’s water resources. More people are demanding water, but the supply is fixed—a supply facing its own challenges due to climate change, invasive species such as milfoil (aquatic weeds) and mysis shrimp and increasing amounts of contamination from pesticides and livestock.

Many people in the Valley’s twelve municipalities, three regional districts and four First Nations bands rely on tourism and agriculture for their bread and butter. Ensuring that the water needs of these sectors are met is essential to maintaining a vibrant Okanagan economy. But can all the demands be met? Should some individuals or sectors make sacrifices? And who should make these prickly decisions?

Given these pressures, many are questioning the way water is currently allocated, priced and monitored. For example, there are no permits or regulations protecting groundwater in the province of British Columbia. This is likely to change in the coming year: next fall, the provincial government is expected to put forth new legislation that will amend the province’s one hundred year old Water Act.

One thing is certain: water management in the Okanagan Valley needs to change in order to satisfy the demand of a complicated array of stakeholders and to sustain the local economy. How this will come about is yet to be seen. It’ll be interesting to follow along and see what changes in the next year—BC might set an example for the rest of Canada, or they might not. Only time will tell.

Leading the World With Energy

Thu, 13 Oct 2011 17:58:00 GMT

A new publication released by the Canada West Foundation illustrates Canada’s current energy reality and highlights opportunities for a bright energy future.

Catching a Rising Tide: A Western Energy Vision for Canada by Sheila O’Brien and Shawna Ritchie, draws from one-on-one conversations with 50 leading western Canadian experts in energy and the environment who share their vision for energy. Energy has been an important centerpiece in public policy discussions for the last half-century, conversations which are now part of a global debate.

“Western Canada has expertise in the production of various energy resources, but we have also had to address the need for sustainable and responsible development and the reality of unequal resource distribution—making our energy reality a microcosm of global energy production,” notes authors O’Brien and Ritchie. “This gives western Canada’s vision for energy particular importance in national discussions about where energy should and could go in the future.”

Canada has the opportunity to become a supplier of choice for energy products, services and expertise, supported by environmental and social records that define our values as a nation and give us a stronger voice internationally. However, achieving this vision will be a challenge for all Canadians regardless of where they live. As the Foundation’s President and CEO, Dr. Roger Gibbins explains, Catching a Rising Tide, “provides a model for western Canadian thought leadership on the big national policy issues of the day, setting out creative options rather than narrow prescriptions.”

To purchase a copy of Catching a Rising Tide: A Western Energy Vision for Canada, click here.

Premier Redford, Water Steward?

Wed, 12 Oct 2011 15:08:00 GMT

By: Larissa Sommerfeld, Policy Analyst

Today Alberta’s new cabinet will be sworn in.

Some regard the selection of her Cabinet to be Premier Alison Redford’s first test. How many fresh faces will have new jobs? Who will be shuffled? Will any of the old guard remain?

Those involved in water policy will watch the Environmental portfolio closely. Will veteran Minister Rob Renner stay or go?

Perhaps more importantly, what does the election of Redford mean for Alberta’s water?

On her campaign blog, Redford wrote, “while I believe that water needs to be conserved, this does not necessarily imply that it should be treated as a commodity with a market-driven price. Such a move has far-reaching and complex implications, none of which, especially in areas like licensing and export obligations, have been adequately explored.”

She went on to write that any changes to water policy would be arrived at through public consultations. However, she did refer to the fact that she would move “ahead with a new water management framework for the province.”

While her statements were ambiguous, it is clear that Redford will wade into the water debate cautiously. She is aware that the status quo cannot continue, and is committed to ensuring the stability of Alberta’s water supply. So, while we know the ends, we do not yet know the means to get there.

One fundamental question will be whether Redford will follow any of the recommendations put forth by the Premier’s Council for Economic Strategy in the 2011 report Shaping Alberta’s Future. When it comes to water policy, the report recommended that the province create an Alberta Water Authority. The Authority, an independent organization, would be tasked with gathering and maintaining a robust water database for the province, developing a long-term water infrastructure plan, and perhaps most importantly, “oversee[ing] an Alberta water allocation exchange.”

This Authority would “encourage the growth of activity that delivers the highest possible benefit to the province for the water used.” In other words, the Premier’s Council recommended that an active water market in Alberta be developed—one where those industries that could generate the highest benefit to Alberta are awarded the right to use an allocated amount of water. (What is meant by benefit is still to be determined.)

Although a pseudo water market currently exists in the southern half of the province, the idea of a market is extremely controversial. Stakeholders have expressed concern that a firmly entrenched market would favour those who can pay large sums for a license—for instance, an irrigator likely could not compete with a large oil company.

While there has been much discussion about further developing water markets in Alberta, the Stelmach government did not wade too far into the debate. Now that we have a new government, perhaps we’ll see some movement in this area.

Will Redford follow the advice of the Premier’s Council? Or will she start from scratch—engage in public consultations and carefully assess the implications of a water market before initiating new policy? Or will she wait until the next general election? Water just might be one of those issues that isn’t touched until a clear government mandate—which isn’t entirely certain right now—is given to the Redford Progressive Conservatives.

Only time will tell. But today’s pick for Environment Minister might give us a few hints.

Is your renewable cup half empty or half full?

Wed, 14 Dec 2011 23:18:00 GMT

By: Shawna Ritchie

Developing a national vision for energy can seem like a daunting task. After all, there are so many different ideas, opinions, perspectives and factors that come into play. Should Canada continue to develop the oil sands? Should we be trying to sell more oil and gas to Asian countries or to the United States? Or, should we not be selling it at all? Is reducing our emissions profile the most important issue going forward? Or is protecting Canadian jobs?

These were the kinds of questions that Sheila O’Brien (my co-author) and I were exploring during the first few months of 2011 when we set out to interview 50 of the leading experts in western Canada on energy and the environment. We had an incredibly diverse and thoughtful group of interviewees and heard many different visions for Canada’s energy future.

Throughout the course of these interviews, an interesting trend started to emerge. It became clear that a person’s perspective on the potential for renewable energy has a dramatic impact on their vision for the future. It wouldn’t be too much of a stretch to say that what someone believes about the potential of renewable energy shapes their vision for energy in Canada. And, broadly, there are three different groups of people when it comes to the potential of renewable energy: the optimists, the hybrids and the skeptics.

Those who have unbridled optimism for the future of renewable energy have a vision for Canada that we would fuel our energy and economic needs almost entirely with renewable energies.

They would accomplish this vision by stopping the production of conventional energy and therefore eliminating the need to build new pipelines or LNG terminals. They see a future where governments, individuals and companies would all turn their time, creativity and—importantly—money towards fostering and developing renewable energy solutions. This collective commitment toward renewable energies would enable us to overcome the current technical challenges around renewables like the lack of an efficient storage system and the high materials cost.

These optimists point out that Canada has one of the most expansive renewable energy portfolios in the world with good wind corridors, sunny skies, innumerable rivers, extensive bio feedstock and much, much more. They argue that if we diverted money away from conventional energy subsidies, technologies and investments and into renewables the future would be unrecognizably changed and that would become the bedrock of our economic success.

By contrast, those who believe renewables have potential, but maybe not enough to take the place of conventional energy sources, advocate for a cautious approach. These are the hybrids. Loosely, their vision is that we should continue to develop and sell fossil fuels, but we should strive to sell them around the world while we simultaneously wean ourselves off those carbon-intensive goods by using more renewable energy here at home.

Their vision for the future is one where Canada remains one of the leading suppliers of conventional energy to the world and then uses the wealth generated from that economic export to transform our domestic energy system. The underlying hope of this vision is that in the process of transforming our own system we will develop the skills and expertise in renewable energy technology that with time will become one of our main exports to the world.

At the furthest end of the spectrum are the renewable skeptics who believe that renewable energies have limited use and application in Canada. These skeptics note that if we are going to continue to consume energy in the same way as today, then the only solution is to expand our conventional energy system by building pipelines, developing the oil sands, coordinating government regulations and establishing global energy trade networks and not significantly investing in renewables energies.

For most skeptics, renewable energy may be appropriate for some smaller, remote communities that do not have easy access to the energy grid—such as those on islands—but it is not a viable option for the vast majority of Canadians. They argue that even if we do increase the development of wind and solar energies, for example, they will always have to be backstopped with a conventional energy like natural gas because of the intermittent nature of the sun and wind and our insatiable demand for energy.

This central role of renewables in the energy vision is interesting for two reasons. First, because where a person falls on this renewable energy spectrum can’t be determined by their occupation or their industry. There are environmentalists who are renewable skeptics and oil and gas executives who are renewable optimists. Second, because this trend indicates a possible first step in creating a national vision for energy. If we as a country can come to a fact-based and informed understanding of what the potential for renewable energy is in Canada, it could make the path forward much more visible for us as a country.

Where people stand on the potential for renewables is pivotal in their vision for our energy future. This issue has the ability to cut through many of the other debates and questions that surround our energy future and can restructure the conversation.

So, where do you fall on the spectrum? Are you an optimist, a hybrid or a skeptic? Why?

A vision for Canada’s energy future, based on one-on-one conversations with some of western Canada’s leading energy and environmental experts, is explored in a forthcoming Canada West Foundation publication entitled “Catching a Rising Tide: A Western Energy Vision for Canada,” which will be released on October 12, 2011.

The Divide in Western Canadian Labour Markets

Thu, 06 Oct 2011 17:16:00 GMT

By: Michael Holden

The 2008-2009 recession and the still-fragile economic recovery in western Canada have amplified the urban-rural divide in regional labour markets. That large cities have been responsible for the majority of job creation in the West is hardly a recent development—the region’s nine Census Metropolitan Areas (CMAs) [1]have accounted for nearly 80% of all job growth in western Canada since 1997. However, the gap in employment growth between those nine cities and less populous areas has widened in recent years.

Not only did the West’s largest cities, on average, emerge from the recession relatively unscathed, but they have since posted much stronger job gains as well. From its pre-recession peak (November 2008) to the lowest point of the economic downturn (August 2009), western Canada lost just over 110,000 jobs. Even though our nine CMAs were home to about two thirds of all employment in the region, they accounted for just one third of those losses. Conversely, when the region began to add new jobs, it was mostly in the large cities. Since August 2009, there have been 119,000 positions created in western Canadian CMAs compared to 42,100 elsewhere in the region. In fact, smaller urban centres and rural areas have, on the whole, yet to recover their pre-recession employment levels. Meanwhile, the CMAs collectively did so in August 2010 and have been expanding ever since.

Of course, this is not to suggest that all the region’s big cities have been engines of job creation. Two cities—Vancouver and Edmonton—have been the primary drivers of employment growth, creating more jobs post-recession than all other CMAs combined. Regina and Kelowna have also posted impressive job gains, although their smaller population base means their affect on regional job creation is somewhat muted. At the other end of the spectrum, Calgary, Victoria and Abbotsford-Mission have all seen strong employment growth within the past 12 months, but there are still fewer people working in those cities today than before the recession began. In Saskatoon, there have been only modest job gains in recent months and employment remains well below pre-recession levels.

Even though most new jobs in western Canada are being created in big cities, this does not mean that employment prospects elsewhere in the region are necessarily bleak. In Manitoba, for example, employment growth outside of Winnipeg has been a lot stronger than in the province’s largest city since even before the recession began. Similarly, job creation outside of Alberta’s major urban centres has kept pace with the 4.3% average employment growth rate in Edmonton and Calgary over the past two years.

Moreover, as much as employment in western Canada’s CMAs has been rising, this increase has been counterbalanced by strong population growth; through the combined forces of urbanization, immigration and interprovincial migration, people continue to flock to our cities. Employment gains in our major centres since August 2009 has been just sufficient to absorb the growth in the urban working-age population in western Canada. Meanwhile, while job creation has, broadly speaking, been slower elsewhere in the region, so too has population growth.

These concurrent trends have created a favourable balance in western Canadian labour markets. While there remain pockets of weakness in some areas, the general situation is one where excess labour capacity in the region is moving to our major cities to absorb the growing demand for workers. As a result, the unemployment rate in urban and rural areas in western Canada has been virtually identical for several years.

1. In order of population size, western Canada’s nine Census Metropolitan Areas are: Vancouver, Calgary, Edmonton, Winnipeg, Victoria, Saskatoon, Regina, Kelowna and Abbotsford-Mission.

Water Pricing: Seizing a Public Policy Dilemma by the Horns

Fri, 30 Sep 2011 15:11:00 GMT

The goal of the Water Pricing: Seizing a Public Policy Dilemma by the Horns project is to explore the current state of water pricing in Canada and take a closer look at water pricing in the Canadian context. Although Canada is not facing a national water crisis, some parts of the country are beginning to experience water challenges. Strains on water supply can impact both regional economies and the Canadian economy as a whole. Examining this issue is critical to ensuring that Canada’s water policy is proactive rather than reactive.

The results of the project are summarized in a series of backgrounders and two reports:

Our Water and NAFTA: Implications for the Use of Market-Based Instruments for Water Resources Management - examines whether “market-based instruments” currently being explored as possible solutions for water allocation are impacted by the North American Free Trade Agreement.

Charging for Water Use in Canada: A Workbook of the Central Principles, Key Questions and Initial Steps - complies results from 42 water policy experts that were sent a discussion paper outlining the rationale for and complexities of water pricing. The resulting report describes where there was general consensus amongst the expert panel and provides a workbook that outlines the questions policymakers must answer in order to build a comprehensive water charging system.

The Canadian Water Policy Backgrounders are short documents providing basic information on Canada’s water resources. The series seeks to inform the debate over water pricing and set the stage for a consideration of pricing as a water resources management tool tailored to Canada’s unique waterscape. Titles in the series include:

Join Our Team!

Fri, 30 Sep 2011 15:04:00 GMT

We're currently seeking a Director of Fund Development.

About The Canada West Foundation
For forty years the Canada West Foundation has been the only independent and non-partisan think tank focused on public policy issues of vital concern to western Canada. Reporting to the Vice President of Operations and working closely with the President& CEO, the Director of Fund Development is responsible for developing and implementing the Foundation’s comprehensive fund development program, with a particular focus on major gifts and fund development opportunities.

Key accountabilities will include:

Lead the development, design, implementation, reporting and evaluation of fund development strategies and activities for both annual and long-range plans. This includes annual gifts, planned gifts, grants, major and leadership gifts, sponsorships and partnerships to increase operating fund and endowment funds.
Manage and steward relationships with funders, members and subscribers.
Identify, cultivate, inform and involve potential donors. Solicit, recognize and steward donors.
Coordinate and administer the fund development budget.
Supervise, mentor and evaluate the Foundation’s Fund Development Coordinator.
Develop and edit communications materials related to fundraising activities including website content, advertising, brochures, case for support, solicitation letters, thank you letters and funders’ newsletters.
Represent the organization at external meetings and events.
Organize and prepare meeting materials for the Development Committee of the Board.

Candidate Profile:
The successful candidate will have a post-secondary education in business, marketing, communications or a related field, ideally a minimum of five to seven years of fundraising experience, and appreciation of public policy and a strong interest in western Canada.

The candidate will have a track record for achieving fundraising goals, with the proven ability to work effectively with volunteers, as well as independently. He or she will have excellent organization, time management and planning skill; strong interpersonal skills; excellent written and oral communication abilities, and will be a strong team player with exceptional leadership, and a drive to achieve results. Experience with Raiser’s Edge is also an asset.

Applications should be submitted via email to “Human Resources” Canada West Foundation at: porteous@cwf.ca no later than 5pm Mountain Daylight Time on October 12, 2011. Only applicants who are selected for an interview will be contacted further. All applicants are thanked for their interest in the Canada West Foundation.

Asia poised to pass the US and become BC's #1 export destination

Tue, 06 Sep 2011 21:21:00 GMT

By: Michael Holden

As the Canada West Foundation highlighted in a study released earlier this year, western Canadian exporters are gradually shifting their focus away from the United States and are increasingly selling their goods in Asian markets.

Early data for 2011 show this trend continuing. Through the first six months of the year, western Canadian exports to Asia were up 23.3% compared to the same period last year, well above the growth rate for exports to the US (11.2%) or other non-US destinations (18.3%). In total, 18.2% of western Canadian exports from January to June 2011 went to Asian markets.

Leading the charge is BC. Through the first half of 2011, BC’s total exports were 14.0% higher compared to the first half of 2010. Exports to Asia, however, have risen at more than twice that rate, owing in part to strong growth in sales to China, Taiwan and South Korea.

This increase has not only helped to cement BC’s status as Canada’s largest exporting province to Asia, but, if the pattern established through the first six months hold true for the remainder of the year, BC will be the first province to reach a significant new milestone: it will export more to Asia than to the United States. From January to June 2011, BC shipped 43.2% of its merchandise exports to Asia, compared to 42.0% of sales going to the United States.

As we’re looking at just half a year’s worth of data, this feat is mostly symbolic at this point, but if the underlying trend continues, it could represent an important structural shift in how we think about the BC economy. What happens in Asia could be more important to the province’s economic outlook than what happens in the United States.

The other three western provinces are in no danger of crossing that threshold in the foreseeable future, but Asian markets continue to grow in importance for exporters on the prairies as well. Manitoba and Saskatchewan have seen increases of 39.0% and 25.4% in exports to Asia, respectively, through the first half of 2011. Both provinces now sell more than 20% of their total exports to that part of the world.

On the surface, Alberta appears to be something of an exception to this general trend. Not only are Alberta’s exports to Asia growing more slowly than any other province (7.6% through the first half of 2011), but the share of total exports going to Asia (7.5%) remains low as well. Only New Brunswick and Ontario send a smaller share of their exports to Asia.

The weakness in growth through 2011 to date is partly due to reduced sales of primary plastics and canola – two of Alberta’s largest exports to Asia. It remains to be seen if that reduction is a temporary dip or evidence of a longer-term trend.

But in terms of overall market share, Asia is far more important to Alberta than the figures suggest. Oil and gas make up more than half of Alberta’s total exports, but based on the infrastructure in place, Alberta oil and gas companies wishing to sell their products abroad have no real choice in where they can go: all roads – or, in this case, pipes – lead to the US.

Removing oil and gas from the equation gives us a chance to see where Alberta exporters sell their products when they have a choice of customer. When you do so, Alberta’s export mix begins to look a lot more like the other Prairie Provinces. In the first half of 2011, 15.7% of Alberta’s non-oil-and-gas exports went to Asia – not as much as in Saskatchewan or Manitoba, but still much higher than in any province outside western Canada.

On Thursday, September 8, 2011, The Canada West Foundation and the Asia-Pacific Foundation are co-hosting the Canada-Asia Cooperation Conference and Dinner, which will look at the growing web of energy-related trade, investment, strategic and environmental linkages between Canada and Asia. For more details, click here.

New Employment Opportunity at the Canada West Foundation

Thu, 25 Aug 2011 17:47:00 GMT

Policy Analyst
Canada West Foundation Head Office, Calgary AB

About the Role
For forty years the Canada West Foundation has been the only independent and non-partisan think tank focused on public policy issues of vital concern to western Canada. As a member of the Foundation’s research team you will lead the development and delivery of a range of public policy research projects. Research topic areas will include issues relating to the intersection between economic, energy, and environmental issues, and a range of other policy areas of critical importance to western Canada and to all Canadians.

Remuneration will be negotiated commensurate upon skills and experience of the successful candidate.
This is a full time position located in Calgary, Alberta. Some travel including across western Canada is required.

Key accountabilities will include:

Showing creativity and innovation on critical economic, energy and environmental policy issues and trends.
Working both collaboratively and independently as a member of the research team to formulate evidence based, practical and thoughtful public policy recommendations based on research results.
Provide mentorship to interns within the team to ensure delivery on high quality project deliverables.
Communication of research results to drive impact for a variety of audiences including the media, the research community, the business sector, policy-makers and the public both orally and in writing, through authoring major research reports, presentations, blogs, and op-ed articles to a high standard.

Selection Criteria:

Strong research analysis and critical thinking skills. Relevant tertiary qualifications and work experience in policy research, public policy, economics, social sciences and/or related fields are required.
A detailed understanding of the key public policy challenges facing western Canada in the Canadian and North American context.
The ability to manage complex research projects and achieve contract outcomes on time and on budget.
Strong communication, negotiation, networking and stakeholder management skills.
Ability to lead projects, work in teams and supervise others.

Applicants should provide:

Cover letter addressing how you meet the selection criteria (no more than 2 pages in length).
Resume including education and employment history.
Two references, including phone and email contact details, who we may contact regarding your application.
A writing sample (eg; a report, briefing note or article you have written).

Applications should be submitted via email to Human Resources at: porteous@cwf.ca no later than 5pm Mountain Standard Time on September 6, 2011. Applicants may be asked to provide academic transcripts as part of the selection process. Only applicants who are selected for an interview will be contacted further. All applicants are thanked for their interest in the Canada West Foundation.

Asia and Western Canada's Future

Tue, 30 Aug 2011 20:43:00 GMT

Global demand for Canadian energy resources, including coal, shale gas, oil sands and uranium, is on the rise, especially amongst Asia’s largest and fastest growing economies. On September 8, 2011, Canada West Foundation will be collaborating with the Asia-Pacific Foundation to host the Canada-Asia Energy Cooperation Conference, which will be held alongside the 7th Annual Canada-China Energy and Environmental Forum.

The Conference will examine the growing web of energy-related trade, investment, strategic and environmental linkages between Canada and Asia, featuring Canadian and Asian experts and practitioners from a variety of sectors. Opening Remarks will be made by Alberta Environment Minister, the Honourable Rob Renner, with Alberta Energy Minister, the Honourable Ron Liepert, providing the Luncheon Keynote.

That evening, the Canada West Foundation will share our strategic vision for the future of western Canada, and Asia’s place within that vision at our Community Board Dinner. The Keynote presentation by Victor Gao, China Co-Chairman of Daiwa Capital Markets, will explore the growing and complex relationship between Canada and Asia.

Don’t miss out on these exciting events! For more information on the Canada-Asia Cooperation Conference and Community Dinner, please click here.

Western Experts make a Splash with Water Priorities

Thu, 11 Aug 2011 17:19:00 GMT

With increasing food and energy prices, a growing world population and the potential effects of climate change, water—and how it is managed—is more important than ever. A new publication by the Canada West Foundation delves into the views of water policy experts across the West to determine key highlights and priorities for our water future.

Wave of the Future: Water Policy in Western Canada by Dr. Roger Gibbins and Larissa Sommerfeld highlights viewpoints from over 50 individuals across the West with a background in water management, governance or the study of water, brought together by the Canada West Foundation for the Honourable James A. Richardson Discovery Roundtables. As a result of these discussions, it was obvious that water experts have similar priorities.

“Canada needs to take a long-term approach to planning water policy,” advises Dr. Gibbins. “In addition to ensuring that policy developments progress in a timely matter, we also need to appropriately value this natural capital while increasing public awareness about water issues.”

Our water has the potential to be a challenging issue for western Canada in the coming years, yet the participants at the spring 2011 James A. Richardson Discovery Roundtables shared a general sense of optimism. Although there are challenges that lie ahead with this resource and how we can best manage it, decision-makers should recognize that addressing any one of the priorities highlighted will be a step in the right direction.

The Honourable James A. Richardson Discovery Roundtables were launched in 2006 to seek out new thinking to strengthen the voice of western Canadians and gain a sense of policy challenges to come. The annual roundtables are designed to engage a small group of individuals with a background in, and a passion for, the topic under discussion. In the spring of 2011, the Roundtables featured water and were held in Victoria, Lethbridge, Saskatoon and Winnipeg.

Click here to download a copy of Wave of the Future: Water Policy in Western Canada.

Preventing Canada’s water from disappearing down the drain

Thu, 28 Jul 2011 15:03:00 GMT

Two new publications released by the Canada West Foundation examine the current and future state of Canada’s water supply and the impact that market-based instruments in water resources management have on policy innovation.

Charging for Water Use in Canada: A Workbook of the Central Principles, Key Questions, and Initial Steps provides a workbook that outlines the questions policymakers must answer in order to build a comprehensive water system from interviews of 42 water policy experts in Australia, Canada and the United States.

Our Water and NAFTA: Implications for the Use of Market-Based Instruments for Water Resources Management determines whether using market-based instruments as a solution for water allocation will impact Canada’s participation in the North American Free Trade Agreement.

“Canadians are some of the heaviest users of water in the world and we also pay some of the lowest prices for that water. Yet, the nation’s current supply of clean and safe freshwater is not guaranteed given the prospect of climate change and our critical water and wastewater infrastructure in many areas of the country is in a clear state of disrepair,” noted Vander Ploeg. “More rational and appropriate pricing strategies for water are one way to resolve some of these concerns.”

Canada’s water supports diverse and significant ecosystems, is essential to almost all aspects of the economy and has great social and cultural significance. With that said, global trends including climate change, population growth and urbanization are creating apprehension about the future of one of our greatest resources. By creating a comprehensive framework for water management, we will be able to successfully manage coming stresses and strains on Canada’s water supply.

Download Charging for Water Use in Canada: A Workbook of the Central Principles, Key Questions, and Initial Steps or Our Water and NAFTA: Implications for the Use of Market-Based Instruments for Water Resources Management.

Sounds like a Canadian energy strategy to me

Tue, 19 Jul 2011 22:26:00 GMT

By: Dr. Roger Gibbins

When the federal, provincial and territorial energy ministers met over the last two days in Kananaskis, Alberta, they faced a surprisingly vocal and concerted call by industry associations, environmental groups, think tanks, editorial commentators and even some of their own members for a Canadian energy strategy.

But, when the ink finally dried on the official communiqué, there was no mention of a Canadian energy strategy, only much softer language around a “collaborative approach” to energy.

As one voice in the chorus calling for the creation of a Canadian energy strategy, I was initially disappointed that the energy ministers had pulled up short. However, the documents released by the ministers outlined a shared vision for greater pan-Canadian collaboration, a guiding set of principles, a comprehensive list of key objectives, and action plans.

In short, most of the components of a Canadian energy strategy are there, albeit clothed in the language of “collaboration.” The ministers have set the stage for an expanded national conversation on energy policy, which is precisely what the advocates of a Canadian energy strategy had hoped to achieve.

To adopt the old cliché, if it walks like a duck...it is probably a duck, or in this case, a Canadian energy strategy. The ministers have delivered, and should be forgiven the awkward language that the realities of Canadian federalism impose on any policy debate. The fact is there is a consensus that a collaborative, pan-Canadian approach to energy should be achieved and although the words may be more subdued, it still sounds like a Canadian energy strategy to me. Good progress has been made.

Read the 2011 Energy Communiqué.
Visit the 2011 Energy and Mines Ministers' Conference page.

Dr. Roger Gibbins is President & CEO of the Canada West Foundation and attended the Energy Ministers’ Meeting in Kananaskis.

Evolving the Future of Energy with Natural Gas

Mon, 18 Jul 2011 17:54:00 GMT

The latest research released by the Canada West Foundation delves into the world of natural gas, explaining its economic benefits for Canada over the past 50 years, and its value as a foundational fuel for our energy systems going forward. Sound policy decisions will ensure that natural gas continues to be a cost effective and stable energy alternative as we move toward a carbon reduced future.

Seismic Shifts: The Changing World of Natural Gas by Michael Cleland, Nexen Executive-in-Residence, examines the future of natural gas from the perspective of both consumers and producers. Natural Gas accounts for about one-quarter of Canadian energy end use as well as a growing share of fuel for power generation. Seismic Shifts concludes that natural gas is not a “bridging” fuel, but rather a stable foundational fuel that will remain a part of the energy mix in the future.

“Although the energy landscape in Canada is shifting with new technologies and resources, the future of natural gas is extremely positive for consumers. Lower costs underpin the competiveness of the Canadian economy, and in addition to being affordable, natural gas is abundant and reliable and can significantly reduce the environmental impact of the energy system,” author Michael Cleland explains. “While the producer’s perspective is less optimistic, Canada needs to look at both internal policies and Asian export opportunities to remain in the game.”

The Seismic Shifts paper outlines several policy directions that need to be discussed when outlining future policies that deal with this resource.

“Natural gas is abundant, has relatively low emissions and may be the only part of the energy system not facing increasing commodity costs in the coming decade,” said Cleland. “It is a natural foundation fuel in an increasingly carbon constrained world.”

Since the policy foundations for natural gas were laid in the mid-1980s, supply sources, markets, environmental imperatives and technologies have changed. Up to this point, Canada has benefited from a successful natural gas industry, and with some refining and additions to existing policies, has the ability to succeed in the future.

This report is part of the Canada West Foundation’s Powering Up for the Future Project, which focuses on public policy challenges at the interface of the economy, the environment and energy.

To download Seismic Shifts: The Changing World of Natural Gas, click here.

Calgary business supports Canadian energy framework

Thu, 30 Jun 2011 15:55:00 GMT

On June 29th, 2011, the Calgary Chamber of Commerce and Canada West Foundation released the research report Changing the Climate: A Policy Framework for Canada’s New Energy Environment. The report is the product of a series of high-profile events by the same name, focused on energy, the environment and the way forward for Canada.

Changing the Climate emphasized three main priorities for a robust Canadian energy strategy:

Strengthening Canada’s energy relationship with the United States and with Asia Pacific markets;
Driving continuous improvement on environmental performance across the energy system without adversely impacting the economy; and
Building cooperation across the Canadian federation on energy issues.

“A Canadian energy strategy must respect the constitutional division of powers and responsibilities for energy development between the federal government and the provinces and territories,” said Dr. Roger Gibbins, President & CEO of the Canada West Foundation. “Canada’s regions have unique energy circumstances; however, there is potential for shared action.”

Critical action areas that a Canadian energy framework needs to address include intergovernmental collaboration; regulatory enhancement; environmental performance; national carbon management; energy efficiency; energy market diversification; energy sector innovation; and workforce issues in the energy sector.

The greater series brought together thought leaders from business, government and the broader community in the United States and Canada to discuss and analyze energy and environmental policy issues critical to Canada’s future.

Changing the Climate was released in anticipation of the 2011 Energy and Mines Ministers’ Conference, hosted by Alberta from July 16 – 19, 2011, where the topic of a Canadian energy strategy will be discussed.

To download Changing the Climate: A Policy Framework for Canada’s New Energy Environment, click here.

Premiers putting muscle into water policy

Wed, 29 Jun 2011 17:46:00 GMT

By Larissa Sommerfeld, Policy Analyst

Canada’s premiers are getting serious about water policy. On June 14th, the Council of the Federation announced the creation of the Water Stewardship Council (WSC). The Council comprises senior government officials, one from each province and territory—in most cases, the Deputy Minister of Environment. Not just another council, the WSC plans to put some muscle into Canadian water policy by acting as an information and advice-giving resource for Canadian premiers.

The creation of the WSC is good news for a variety of reasons:

First, the WSC marks a continuation of the momentum that was gathered with the creation of the 2010 Council of the Federation Water Charter. The Water Charter is a brief document that recognizes some of the challenges in Canadian water policy (e.g., watersheds do not follow political boundaries) and commits the provinces and territories to working together to successfully manage water in their individual jurisdictions. The WSC is an action-oriented body that will take last year’s work one-step further by implementing the Water Charter commitments.

Second, the WSC will strive to address some of the challenges that have dogged Canadian water policy in the past. There is an emphasis on ensuring that water quality in rural and remote areas is improved upon. Often the discussion of water in Canada is focused on quantity—floods in Manitoba, or scarcity in southern Alberta. There’s a lesser focus on quality, despite the fact that it is a serious problem in rural areas, as well as on First Nations reserves. Perhaps most important is the goal to develop a water sharing initiative, which is meant to “improve the dissemination of and access to water data, and better integrate data and information across provinces/territories and sectors.” Improving the way data is collected and analyzed is immensely important to successful water policies.

Third, by implementing the WSC, Canada’s premiers indicate they are serious about translating academic research into policy. In addition to the WSC, the Water Partner Advisory Committee (WPAC) has also been created. The Advisory Committee will guide and direct the WSC, and is likely to be key to the success of the WSC. The Advisory Committee is made up of 11 highly respected individuals from the water policy community, each of who bring vastly different, yet rich experience and knowledge to the table. The involvement of these experts with the WPAC will should ensure a strong linkage between the academic and the policymaking communities.

Several of the members of both the WSC and the Advisory Committee participated in Canada West Foundation’s spring 2011 series of the Richardson Roundtables, held on the topic of water policy in western Canada. These individuals are competent, visionary and action-oriented. It will be fascinating to watch the development of the Water Stewardship Council in the months to come, and see whether or not further initiatives or actions will be announced in the wake of the annual Council of the Federation meeting held next month in Vancouver.

The creation of both the Water Council and the Water Advisory Committee are positive signs. The action-oriented council is an indication that the Canadian government sees water policy as an important issue; yet it should be noted that significant challenges do exist and Canadians will likely want to see evidence that these councils are producing positive outcomes that address key water policy issues. However, the emphasis on inter-governmental collaboration, improved data collection and monitoring, linkage with the academic community, and focus on persistent problems such as water quality in rural areas seem to indicate that our Premiers are ready to put some muscle into Canadian water policy.

The West gets another NHL team

Thu, 02 Jun 2011 21:03:00 GMT

By Tom Carson, Director of the Manitoba Office

While there remains one more hurdle—selling 13,000 season tickets within three weeks—Winnipeg appears destined to bolster western Canada's presence in the NHL by adding another team. Yes, western Canada, with almost 31% of the nation’s population will have four (or nearly 60%) of Canada's seven NHL teams.

In 1996 when Winnipeg lost its NHL franchise, several economic factors drove the end of the city's presence in the league. These issues have since been minimized throughout the years, which should secure Winnipeg’s position in the league going forward:

The Winnipeg Arena was considered to be the finest facility in western North America when it was built in 1955, when Winnipeg was Canada's third-largest city. The Arena was renovated in 1979 and expanded to accommodate 15,565 people. Owned by an agency of the City of Winnipeg, it did not provide the revenue potential that owners needed nor the modern amenities and entertainment potential expected in today's facilities. In contrast, the city's new arena (2004) is a full season multiplex owned by True North Sports and Entertainment Limited, the owners of the new hockey club. For hockey, it can accommodate 15,015 people, which is not large by NHL standards (the smallest of 30 NHL arenas ranging from 16,234 to 21,273 seats). However, size is not everything: five NHL clubs had lower than 15,000 average attendance in 2009/10, many of them were substantially lower.

The 1996 ownership of the Winnipeg Jets did not have the means to backstop the growing financial risks that came from the rising salaries and operating costs associated with NHL expansion into the US. By comparison, True North Sports and Entertainment has spent the past decade learning the market, done its due diligence and the ownership team of David Thompson and Mark Chipman has the means and knowledge to support a team in the current Western economy, provided that the fan base is as strong as Manitobans believe.

The Canadian dollar was very weak in 1996. NHL hockey salaries were paid in US dollars and in Canada, every player's salary dollar cost the club at least $1.36. Prior to the negotiations that ended the 2004/05 lockout the NHL had no luxury tax, revenue sharing, salary cap or salary floor.

Manitoba's population was 1,134,000 in 1996, and the capital region of Winnipeg was 684,100. Today, after posting its highest growth rate in 40 years, the estimated population is projected to stand at 1,250,900 with the CMA at 764,200. Although it has the smallest NHL population by at least 250,000, the region is a deeply knowledgeable and committed hockey population.

All in all, a stronger Canadian dollar, a well-designed new facility, a province more confident in its economic future, a growing population, a greater local sense of pride and a rabid fan base are all pieces of the package that make this potential NHL franchise far different from the one Manitobans lost in 1996.

Western Canadian Opinions on Energy and the Environment

Mon, 16 May 2011 22:19:00 GMT

Three new publications from the Canada West Foundation highlight the variety of views western Canadians have about environmental, energy and water issues. The results from a survey commissioned by the foundation are compiled in three separate reports under the Attitudes to Energy and the Environment Initiative.

Reading the Meter: Western Canadian Opinions on Energy Issues outlines the variety of views western Canadians have about energy issues including the economic importance of the energy sector, support for green energy, and the future of the oil sands.

Green Expectations: Western Canadian Opinions on Environmental Issues highlights a fundamental tension in the public mindset: Canadians need and want energy but worry that energy production and consumption are damaging the environment.

Water Worries: Western Canadian Opinions Toward Paying More for Water shows that western Canadians are worried about the long-term supply of fresh water and that they are willing to pay more for water if doing so results in more conservation.

“As westerners, we know that the energy sector helps butter our economic bread by providing jobs, stimulating investment and generating government revenue,” notes the survey’s principle investigator Robert Roach. “At the same time, there is a strong degree of apprehension about one of the country’s (indeed the world’s) largest natural resource assets—the Alberta oil sands. While outright opposition to the oil sands is quite low in the West, large numbers of westerners would like to see better environmental results, even if this means slowing the pace of development,” adds Roach.

The results examined in these three publications are drawn from a survey conducted by Environics Research Group Limited. The survey was conducted by telephone in late 2010 with 1,202 western Canadians (300 per province) 18 years and older. The results are accurate +/-2.8 percentage points 19 times out of 20.

Attitudes to Energy and the Environment is part of the Canada West Foundation’s Powering Up for the Future Project, which focuses on public policy challenges at the interface of the economy, the environment and energy.

To download the Attitudes to Energy and Environment publications, click here.

Revitalizing our Cities with Pennies

Wed, 11 May 2011 16:05:00 GMT

The latest research conducted by the Canada West Foundation shows that a small locally-levied sales tax, dedicated to municipal infrastructure and implemented only if voters agree in a referendum, would help western Canadian cities close the gap between their huge infrastructure needs and the funding dollars available.

The Penny Tax: A Timely Tax Innovation to Boost our Civic Investments by Casey Vander Ploeg, Senior Policy Analyst, measures the projected infrastructure needs facing western Canadian seven biggest cities over the next ten years at over $40 billion.

“Our work shows that a small voter-approved penny tax, combined with regular and comprehensive reporting by governments, could be the most visible, transparent and accountable tax in Canada,” author Casey Vander Ploeg explains. “It has so many benefits to recommend it. One that is very important is how the tax would ensure that all individuals coming into a city and use the infrastructure also help pay for it.”

The penny tax would be a tax unlike any other in Canada because of the unique features built into the tax. Such features include a capped rate so the tax cannot be raised, voter-approval for implementing the tax, and dedicating all revenue to specific municipal infrastructure projects that would also be subject to voter-approval.

“The features I like the most in our proposal is the automatic sunset and the refund of excess revenue back to taxpayers,” said Vander Ploeg. The penny tax could only be used across two municipal election cycles, after which the tax would lapse. For the tax to be used any longer than six years, voters would have to vote the tax back in along with a new set of infrastructure projects. A sales tax can also produce revenues that exceed expectations. This tax revenue could be returned to local taxpayers.

While there are challenges that require further exploration before a penny tax could be implemented, it is clear that this innovative tax option would do much to maintain, renew, and rehabilitate existing infrastructure, as well as invest in new infrastructure. Across the globe, local governments are implementing such innovation tax solutions.

This report is part of the Canada West Foundation’s Smart Financing Project, which focuses on innovative solutions to Canadian public financing challenges.

To download The Penny Tax: A Timely Tax Innovation to Boost our Civic Investments, click here.

The day after: western Canadian reflections on the 41st federal election

Tue, 03 May 2011 20:57:00 GMT

by: Robert Roach, Senior Researcher and the Director of The West in Canada Project

Majorities are not evil
Majority governments are the norm in Canada, so it is a bit odd to hear a large number of commentators acting like a Tory majority is some sort of evil aberration out of Tolkien’s Land of Mordor. It is true that the Harper government will be able to pursue its agenda without the restrictions of a minority Parliament, but this is exactly the same as it was for Trudeau, Mulroney, and Chretien. We are back to business as usual and not—as some seem to think—out on a crazy limb that will break and send the country into freefall.

In addition, majority governments like to win more than one majority. Hence, while they can pursue their vision for the country without constant fear of a non-confidence vote, they tend to keep one eye on the next election cycle. In other words, radical policies that will alienate large chunks of voters remain unappealing regardless of majority status.

Regional fault lines remain
From a regional perspective, the outcome of the election is very interesting. You barely need two hands to count the Conservative seats in Quebec whereas the NDP have become the de facto representatives of Quebec in the House. This is a new dynamic. In some ways, Quebec has become like Alberta in that it has chosen to side with the opposition rather than the government. Not that long ago, it was Alberta MPs who had only a small presence on the government side of the House.

On the bright side, a Harper majority likely means that the federal government will do as much as it can to advance Senate reform (full reform still requires the provinces to get on board). This is good for the country, good for Quebec and good for the West. A properly designed Senate has the potential to ensure that regional representation does not depend on which party forms the government in the House. Maybe, just maybe, Canada will finally start to fix this broken part of our political system. Maybe.

The Rise of the NDP
Given the nature of the Canadian system, the Official Opposition in a majority Parliament is largely irrelevant in terms of policy. They have an important job to do trying to keep the government’s feet over the coals, but they can’t block government legislation. In this sense, it matters little which party forms the opposition. However, the rise of the NDP is important for several reasons: 1) it is the first time in Canadian history that the Liberal party finds itself in the third party position and it remains to be seen if it can recover; 2) the fuzzy mandate that Layton has from Quebec voters will be a factor but it is impossible to say how this will play out; and 3) the ideological differences between the Tories and the NDPs are relatively clear and will present Canadians with a black and white set of alternatives to watch over the next four years.

The West is Still In
This election shows that a party with a leader from the West and a strong base of support in the region can, by also appealing to Ontario voters, form a majority government. Regardless of your political stripes, the Harper government is not a bad thing from a regional perspective. A government with a strong western base will have a natural connection to the region’s needs and unique circumstances. Because they are governing a nation rather than a region, these needs will not always take precedence, but they should be at least understood and given a fair hearing. This does not mean that governments without a strong western base can’t do this, but in reality, it is much more likely when they do.

Just what is an election budget?

Mon, 18 Apr 2011 15:20:00 GMT

By: Tom Carson, Director of the Manitoba Office

Manitobans head to the polls on Tuesday, October 4, 2011, and with only 169 days to go it is not surprising that the budget tabled on April 12 seemed designed both to benefit the largest number of interests and to create the least possible controversy.

On the revenue side, no increases are planned for major corporate or personal income taxes and expenditure increases will be sprinkled across many sectors, reaching a very broad public. These increases include the freezing of administrative costs for the regional health authorities and tying tuition increases to the consumer price index (CPI).

However, there was also some disappointment, especially for those who viewed the budget through a lens where the economy and our future spending ability is of preeminent importance. While the minister stated that overall expenditures were expected to rise by 2.3%, year over year, spending on core programs actually rose by 4.89%.

Going into the preparations for this budget, consultations generated a few hot points:

The Business Council of Manitoba had what seemed to be an unprecedented recommendation; in recognition of the serious impact that Manitoba's infrastructure deficit has on the economy, the leaders of Manitoba's business community actually recommended a 1% increase in the provincial sales tax to be applied for a ten-year period and used only for infrastructure expenditures. This was seen as an opportunity for municipalities to deal with their infrastructure problems with a revenue source that actually grows with the economy.
The government responded with a commitment to spend the equivalent of one point of the provincial sales tax on municipal infrastructure and public transit. This looks like a bigger commitment than it is. Rather than being incremental to current infrastructure spending, this commitment blends current grants for infrastructure and public transit. While blending both grants identifies a secure and growing source, for the City of Winnipeg it would represent an estimated 9% increase from funds they already receive. Winnipeg will benefit by having this increase funded from a growth stream, whereas previously approximately 50 to 60% was funded in this manner. Over time the value of that growth will become more obvious, however, it is not a substantial investment and will not contribute significantly to correcting the infrastructure deficit.
Comparatively, Manitoba's universities have been both underfunded and, due to a decade-long tuition freeze which ended in 2009, prevented from using tuition increases as a means to help balance their books. The government has committed to increased grants of 5% over the next three years and has reinstituted a tuition freeze, although this time tying it to growth in the CPI. Although this commitment is not enough to bring them on par with the support received in most other provinces in Canada, it does at least begin to reflect the importance of universities to our provincial economies.
For those hoping that the budget would reflect a major commitment to cut spending, the tone of the budget speech demonstrates that it was clearly not something the government wished to lead with. The publicly stated commitments to restraint are quite narrow—they are striving to negotiate a 0% increase for the general civil service, freeze discretionary salary and operating expenditures, maintain last year's reduction in ministerial salaries and carry on a freeze on salaries for members of the legislative assembly along with their staff. They will be attempting to freeze salaries for senior management in the regional health authorities and generally seeking ways to foster innovative, cost-effective services. (Government will likely also expect all public-sector employers to seek the same wage freeze—presenting an interesting dilemma for university administrators).

The question yet to be answered for Manitobans is whether the right policy choices are being made through the current budget. Were there alternatives which could have resulted in balancing the budget more quickly? If these choices were not made in this budget, will it be incumbent on the government formed after October's general election to initiate them?

It might be tempting to say that no government going into an election would choose to add 1% to the sales tax or to introduce themes of restraint and program redesign. However, Saskatchewan is also heading into an election in November of this year, and unlike Manitoba and most other provinces, has already posted a surplus. Both provinces saw greater revenues last year and both spent more than they had budgeted in 2010/11. Saskatchewan's revenues and expenditures have grown significantly more than Manitoba's, but their treatment of the budget challenge in 2011/12 is quite different despite the upcoming elections. While Saskatchewan plans to be spending 5.48% more than their printed estimates of last year, they will be spending 2.45% less than their actual previous year expenditures. And the untouchable—spending in the Department of Health will actually be reduced compared to the previous year.

Now, that would have raised eyebrows amongst those looking for more attention to the bottom line in Manitoba!

2010/2011 Jim Hume Student Essay Contest

Thu, 14 Apr 2011 21:24:00 GMT

Students:
Since exams will be wrapping up soon and summer is just around the corner, put one of your most prominent skills to good use and write us an essay! This time, however, you’ll have a chance to receive more than good marks—there is $10,000 in prize money to be won:

First prize: $5,000
Second prize: $ 3,000
Third prize: $2,000

This year's essay question is: What is the most important thing western Canadians need to do to ensure that the West remains a great place to live in the 21st century?

The best essay will have a clear position that displays strong arguments, solid evidence and research.
Once complete, mail your essay to roach@cwf.ca with “Jim Hume Essay Contest” in the subject line. To read the rules for this contest or to view past winning essays, click here.

We look forward to hearing your vision for western Canada. Good luck!

The Jim Hume Student Engagement Program encourages young people to become engaged and contribute to debate on public policy issues of importance to the future of western Canada and all Canadians.

There is common ground on a Canadian energy strategy

Fri, 08 Apr 2011 21:18:00 GMT

Latest research conducted by Canada West Foundation has identified broad agreement that a well designed Canadian energy strategy would contribute to a secure and prosperous future for Canada.

Finding Common Ground: The Next Step in Developing a Canadian Energy Strategy by authors William Kimber, Vice President, Research and Dr. Roger Gibbins, President & CEO, was released today as part of the Canada West Foundation’s Powering Up Project.

Between 2009 and now, a wide range of stakeholder groups including: the energy industry, environmental organizations, leaders of Canada’s top enterprises and policy experts in academia and think tanks have released papers and statements calling for reform of Canada’s energy policy framework.

The Common Ground paper is the first to provide a synthesis of these various initiatives and points of view, and identifies eight interconnected themes from this impressive body of work. These common themes are:

embrace Canada’s energy diversity as a strength;
ensure robust environmental stewardship;
set a price for carbon;
transform the demand side of the energy system;
strengthen Canada’s position in the world;
promote energy security in the North American context;
drive innovation and technological development; and
understand that strategy is a dialogue.

“The research shows that there is much that diverse stakeholders across Canada can agree on.” Co-author Will Kimber commented. “The common view is that we need an energy strategy for Canada, and we need it now.”

While impressive progress has already been made, there is much more work to be done. The report therefore proposes three next steps to ensure that momentum for policy reform is not lost.

To download Finding Common Ground: The Next Step in Developing a Canadian Energy Strategy, click here.

Environmental sustainability diversifies western Canadian economy

Fri, 08 Apr 2011 21:18:00 GMT

Canada West Foundation has released a new report on the green economy and its potential to diversify the Western Canadian economy. The Green Grail: Economic Diversification and the Green Economy in Western Canada, by Robert Roach, Senior Economist, focuses on the connection between the green economy and its potential to contribute to the diversification of the western Canadian economy.

Eight representatives from western Canadian companies active in the green economy were interviewed to address challenges and prospects. These include:

The hurdle of commercialization and the lack of venture capital at this critical point in the business development process;
A domestic market that tends to shy away from home grown options in favour of what can be imported from Europe, the US or Asian and the tendency among Canadians to see early adoption as too risky;
The preference for large and capital-intensive energy (especially electricity) projects over facilitating small-scale additions to the grid; and
Politically inconsistent environmental mandates in jurisdictions where green companies are operating.

While the emerging green economy in western Canada faces a variety of challenges, growing cultural consciousness and the desire for government to create a positive framework around which green businesses can develop and flourish are promising.

To download the full report, The Green Grail: Economic Diversification and the Green Economy in Western Canada, click here.

New data on the West's trade with Asia-Pacific

Tue, 22 Mar 2011 20:52:00 GMT

By: Michael Holden, Senior Economist

On February 22nd, the Canada West Foundation released a new research paper examining western Canada’s trade relationship with Asia-Pacific. Through the Gateway: Unlocking Western Canada’s Potential for Economic Diversification by Expanding Trade with Asia-Pacific looks at the importance of Asia-Pacific markets to western Canadian exporters, their impact on economic diversification in the West and some of the policy options for further expanding trade with that region.

One of the challenges in writing on current economic developments and trends is that the timing of major data releases does not always cooperate with research deadlines. Not long after Through the Gateway was launched, new trade data was released for the 2010 calendar year. With a new year’s worth of numbers in hand (along with some minor revisions to previous years’ figures), I thought it might be useful to revisit some of the key trends we highlighted in that paper to see if and how those trends are holding up.

As it turns out, data for 2010 continue to drive home the growing importance of Asia-Pacific market for western Canada. One of the most important trends we noted in Through the Gateway was the growth in western Canadian exports to Asia-Pacific—especially since the early 2000s. From 2001 to 2008, the value of goods shipped to Asia-Pacific markets rose from $14.0 billion to $26.7 billion, before falling to $22.6 billion in 2009 because of the impact of the global financial and economic crisis.

While exports to Asia-Pacific in 2010 did not recover their 2008 peak, they did rebound strongly, reaching $25.9 billion—the second highest value on record. Leading the charge was B.C., where exports were 28.9% higher than in 2009. B.C. now exports almost as much to Asia-Pacific ($12.2 billion) as it does to the United States ($13.7 billion).

Through the Gateway also observed that growth in western Canadian exports to Asia-Pacific was being driven by shipments to the region’s developing markets. In 2009, the total value of exports to wealthy countries like Japan and South Korea was about the same as the value of exports to China and other developing economies, but long-term growth in the latter group vastly exceeded growth in the former; from 1990 to 2009, exports to industrialized countries in Asia-Pacific had grown by about 25%, while those to developing economies had risen by 428%.

Although 2010 was a good year for western Canadian exports to Japan and South Korea, there was no competing with the continued boom in sales to China and other developing markets. Western Canadian exports to developing economies in Asia-Pacific rose by 18.1% compared to 2009 (reaching $13.5 billion), while exports to industrialized economies in the region increased by 11.1% (to $12.3 billion).

A final point worth mentioning is the need to consider trade flows with the United States when assessing the importance of Asia-Pacific markets. We noted in Through the Gateway that, while the share of exports going to Asia-Pacific rose from 12.5% in 2001 to 17.5% in 2009, it was hard to say how much of that increase was because of strong growth in trade with Asia-Pacific and how much was because of weak market conditions in the U.S. Factors such as a high Canadian dollar; new regulatory and security measures; the economic downturn in 2008-2009; and the resulting drop in commodity prices have all weighed on shipments of goods to the U.S. in recent years.

With the economy stabilizing in the U.S. and commodity prices recovering, western Canadian exports to the U.S. rebounded in 2010. From a six-year low of $92.1 billion in 2009, north-south sales increased to $102.4 billion in 2010. While this figure remains well below its historic high ($141.9 billion in 2008), it’s interesting to note that the recovery in exports to the U.S. did not come at the expense of growth in trade with Asia-Pacific. While the share of western Canada’s total exports to the U.S. rose from 71.5% in 2009 to 72.1% in 2010, the share going to Asia-Pacific markets rose by even more¬—from 17.5% to 18.2%.

Global Opportunities across the Pacific

Fri, 18 Mar 2011 20:53:00 GMT

By: Dr. Roslyn Kunin, Director of BC Office

In the 19th century, young men in North America who wanted to seek their fortunes were advised to go west. In the 21st century, those who are already in western Canada are advised to keep looking west, where Canada’s best opportunities to participate in the global economy lie across the Pacific Ocean. However, opportunities only become reality for the prepared. To benefit from growth in the trans-Pacific trade that is so important to Canada’s present and future wellbeing, western Canada must have the infrastructure and capacity in place to receive, move and dispatch goods in growing volumes. Otherwise, our growth may be limited not by lack of supply or demand, but by the lack of capacity at its ports and elsewhere to handle the flow, as illustrated in Brazil.

Fortunately, federal and provincial leaders in Canada have taken steps to remove this potential limitation. The Asia Pacific Gateway and Corridor Initiative (APGCI), now at the midpoint of its lifecycle, is a connected series of major projects to improve both port and inland goods moving capacity in western Canada.

First, we should note that the benefits will not be limited to Canada’s Pacific ports. This is because the APGCI deals not only with gateways (ports and related facilities) but also with hubs (inland distribution centres such as Edmonton and Regina). The results of this increased trade volume will be spread not only throughout western Canada but to the rest of Canada and the United States.

There are several advantages in western Canada that will be created or enhanced by the APGCI. One is the very short transit time from BC across the Pacific, especially from the port of Prince Rupert. The tonnage through Prince Rupert has been soaring given very strong markets for products like coal, and the port facilities have been enhanced to meet this demand. In 2008, volume through Prince Rupert increased 20%.

Another advantage is the very efficient and competitive rail system that goes from Canada’s west coast ports across the country and into the United States, which is emphasized by the fact that Canadian rail transport systems are much more cost effective than those in the United States. A third, often called the hidden advantage, is that many people of Asian origin currently reside in BC and are increasingly spreading across the western provinces.

Not surprisingly, there are also challenges that come with developments of this magnitude. Much of the development is primarily focused on container movements, which is ideal for all the manufactured goods that are imported, since they travel in containers. However, it may be a limiting factor for what are western Canada’s biggest exports—commodities. Demand for minerals, food, energy and wood is strong and rising rapidly, particularly in Asia. In particular, China’s demand is not only increasing sharply, but China has become a dominant player in world markets for copper and other commodities. Other developing Asian economies are expected to follow. To take advantage of these long-term markets, our inland and port facilities need be able to handle not only bulk commodities like coal and grain, but also fluid energy sources like oil and, ultimately, liquefied natural gas.

APGCI developments, like any others, must deal wisely with the continuing realities that affect all major investment projects. First, agreements must be reached with affected First Nations on whose territories the developments occur. By negotiating in good faith, arrangements can be made that are win/win for all the parties involved. As always, attention must be paid to the environmental impact of any developments. Steps can be taken to minimize environmental impacts and to compensate for any unavoidable effects.

Finally, given that taxpayer dollars are contributing to the APGCI, Canadians must be assured that they are getting value for money. Cost benefit analysis is the best tool and should be comprehensive; looking at all costs including the environmental impact. Potential competition must be considered such as the newly widened Panama Canal.

We need to take into account all the benefits, many of which are long term. In comparing present costs against future benefits, we should not be discounting future benefits too heavily. Otherwise, we will find that we have lost long term benefits to defer short term costs.

Photo Courtesy: Prince Rupert Port Authority

Public finances are more like baseball than you’d think

Mon, 28 Feb 2011 15:06:00 GMT

By: Jacques Marcil, Senior Economist

This is the season of budgets and baseball spring training. While there is no true link between the two, one could not help think of Alberta Finance minister Lloyd Snelgrove as a relief pitcher.

Snelgrove was brought in last month as an emergency caretaker minister of Finance in replacement of Ted Morton, who resigned to join the PC leadership race. (One of the worst-kept secrets in Alberta is that Morton essentially resigned because his views on government cost-cutting were too drastic for outgoing Premier Ed Stelmach’s taste.)

There were no real surprises in the February 24 Alberta budget. Usually, the absence of surprises is considered to be a positive sign. Is this the case here? Yes and no.

On the expense side, the 2010 approach is somewhat repeated: sustained financing for health, education and other “social” ministries, with modest cuts to the other ministries to offset this. This results in program spending increases of 0.5%, 1.3% and 3.1% over this year and the two following years.

On the revenue side, nothing much is done except some service fee increases. However, Snelgrove expects Alberta revenues to grow solidly on their own, reflecting very positive forecasts for economic growth and for natural resource royalties. The latter are expected to jump by 23% and 16% in 2012-13 and 2013-14 respectively. (This is not impossible, but who knows?)

As a result, the province’s deficit gets erased by 2013-14, one year later than originally planned. This delay is not bad in itself given the severity of the recession in Alberta. The problem is that the balancing act is accomplished by drawing down most of the Sustainability Fund—a meager $1.7B is left in it by that date, one-tenth of what was in the Fund in 2009-10.

So the Alberta government has little margin of maneuver and lots of hope hanging on energy price forecasts. Past experience has taught Albertans that those prices are full of surprises, positive and negative. We might have reached the point where Alberta taxpayers have had enough of this uncertainty.

You can’t have your cake and eat it too—Albertans have long enjoyed low taxes, but if they want to enjoy the same level of services as other parts of the country they will have to start considering other sources of revenue for their provincial government.

Energy royalties are nice but they are irregular and unpredictable. The province pays for most of the steadily-growing cost of its services using rollercoaster energy money. If Alberta needs to reform its tax system, it should do so. Taxes are not an ideological issue, they are a practical one. Decisions on tax policy should be fact-based, period.

To return to my baseball analogy (a very agreeable thought when the windchill factor is -36ºC outside), walks are “bad things” but even the best pitcher sometimes has to issue an intentional walk depending on the game situation. No one likes taxes, but sometimes we need them.

Given the unpredictability of Alberta politics (a misnomer until a few years ago), maybe now is not the time to start complex discussions on what size of government Albertans want, or about what taxes are needed for its proper functioning.

Thinking again about it, maybe it is the right time.

Maximizing economic potential through Asia-Pacific trade

Mon, 28 Feb 2011 15:07:00 GMT

A new paper released through the Canada West Foundation’s Going for Gold project examines western Canada’s current trade relationship with Asia-Pacific and explains how these markets offer tremendous opportunities for economic growth and prosperity in the West, now, and in the years to come.

Through the Gateway: Unlocking Western Canada’s Potential for Economic Diversification by Expanding Trade with Asia-Pacific by author Michael Holden, Senior Economist provides the background and the numbers that show the importance of this region to western Canada’s economic prosperity. With Asia-Pacific being home to over half the world’s population and exports from the four western provinces to the region accounting for two-thirds of Canada’s total exports (totalling 9.6 Billion in 2009,) Asia-Pacific is second most important, only to the U.S.

“The research shows the importance of Asia-Pacific, not only to western Canada’s economic prosperity, but for Canada.” Canada West Foundation’s President and CEO, Dr. Roger Gibbins explains. “Considerable opportunities exist for western Canada if we take advantage of them and successfully reduce the barriers to trade and investment.”

The report describes two ways in which trade with Asia-Pacific countries promote economic diversification in western Canada 1) export market diversification and 2) export product diversification.

This publication was released at the Through the Gateway event, which was sponsored by the Vancouver Board of Trade on February 22, 2011.

All in attendance received a summary copy of the report. To download the summary report, click here.

To download the full report of Through the Gateway: Unlocking Western Canada’s Potential for Economic Diversification by Expanding Trade with Asia-Pacific, click here.

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Managing the transition to low carbon energy

Thu, 17 Feb 2011 20:03:00 GMT

On Monday, January 17th 2011 in Calgary, Corporate Knights Magazine teamed with the Energy Policy Institute of Canada (EPIC) to invite key thought leaders to discuss the significant challenges facing the economy, energy, and the environment. They focused on the following question: Most Canadians expect that we all will eventually transition from carbon-based to low carbon energy. Given that the transition will take years, how can we best manage it?

While initiating change is one of the focuses of a Canadian energy strategy, decision makers must be cautious to ensure that proposed changes are attainable and sustainable. Dr. Roger Gibbins, President and CEO of the Canada West Foundation, is in favour of improving methods for handling our resources. “The prescription going forward is very simple, alarmingly simple. That is we have to continue doing what we do best only do it better, and much better, going forward." (Paul Wells, Daily Oil Bulletin January 17, 2011.)

In addition to building attainable goals, measuring environmental consequences should be considered when discussing an energy strategy. Preston Manning feels that, “The first principle should be proper measurement of the environmental impacts of all our major energy sources, not just oilsands within the petroleum sector. There's an old saying: 'If it matters, measure it.' I don't think we measure the environmental impact right across the board to the degree that we need to." (Wells) By measuring environmental impact in all aspects of energy, not only the oilsands, we will be able to obtain a more comprehensive look at our energy environment.

Marlo Raynolds, senior advisor to the Pembina Institute expressed the importance of reviewing our consumption, "I do think it has to focus and hit the greenhouse gas emission head on ... I don't see why we would move into strategy discussions around energy without really addressing the need for deep reductions." (Wells) While a greater understanding of more efficient processes and better tools to measure their impact will help us become more efficient, we must also focus on how we can reduce our reliance on carbon-based energy to ensure long-term success.

Regardless of the main driver behind a Canadian energy strategy, Dr. Gibbins supports the notion that a Canadian energy policy must focus on Canada’s strengths, one of which is Canada’s ability to make improvements on existing technology, "We will be the solar power panel installers," he said. "We won't design them. We won't build them." (Dan Healing, Calgary Herald January 18th 2011.)

"Our role going forward is not to figure out how to transition away from hydrocarbons—the world will be working on that. What we have to do is figure out how to get better—much better—at the green production of hydrocarbons." Gibbins said. (Wells)

The suggestions from the roundtables in Toronto, Montreal, Calgary and Vancouver will be taken into consideration as EPIC creates a proposal to the federal and provincial governments for a Canadian energy strategy.

The Canada West Foundation has multiple initiatives focused on driving constructive discussion about energy policy and Canada’s energy future under the Powering Up for the Future Project. In November 2010, the Canada West Foundation published Western Leadership for a Canadian Energy Strategy, which outlined the need for reform of current Canadian energy policy, along with the principles upon which western leadership for a Canadian energy strategy should rest.

A new project, Let’s Talk Energy, is built around a series of short articles authored by Nexen Executive-in-Residence, Michael Cleland. The purpose is to get people talking about whether Canada needs an energy strategy, and if so, why and what ideas should inform such a strategy. The discussion and debate on this website may also serve to be relevant to Canada’s energy ministers when they meet in Kananaskis, Alberta in July 2011. For more details see letstalkenergy.ca.

Articles referenced:
“Debate on National Energy Strategy Wide-Ranging” Paul Wells, Daily Oil Bulletin (January 17, 2011)
“Don’t count on officials for coherent energy policy: experts” Dan Healing, Calgary Herald (January 18, 2011)

The new Canadian entrepreneur

Mon, 28 Feb 2011 15:07:00 GMT

By: Robert Roach, Senior Researcher and Director of The West in Canada Project

Be it myth or reality, there is a perception that our neighbours to the South are naturally more entrepreneurial than we are. The history of the United States is rich in entrepreneurial spirit, but for whatever reason—geography that requires a more communal approach, a different history of immigration, a slightly more conservative culture—Canadians haven’t been quite as naturally willing to roll up their sleeves and start their own businesses.

Of course, Canada has had its share of personal business success too. Family empires such as the Eatons, the Bronfmans, and the Thompsons quell the notion that Canadians can’t be business savvy.

Brett Wilson is a Canadian businessman, philanthropist, and a “dragon” on CBC television’s The Dragon’s Den. Having built an energy empire from scratch, he knows a thing or two about entrepreneurialism and how essential it is for an economy like Canada’s. Additionally, he has established the Wilson Centre for Entrepreneurial Excellence at the University of Saskatchewan. Education around entrepreneurialism is critical, and young people seem particularly well-suited for entrepreneurialism, perhaps because of their naturally youthful optimism or the energy they devote to pursuits which interest them.

Entrepreneurialism matters because economic power centres are shifting. Manufacturing is in upheaval. Resources are under cost and environmental pressure. Everything is changing, and the countries that will succeed are not the ones that cling to 20th century ideas of business empire building, but the ones that can adapt more quickly to the world around them.

A heady combination of creative skills, comfort operating in foreign markets and with international partners, risk-taking, a strong desire to be at the top of the economic value chain, environmental thinking, civic duty and social gregariousness will culminate in the New Canadian Entrepreneur. The result will be not only a measurably better economy, but a happier, more engaged and more productive workforce.

The New Entrepreneur may be on the cutting edge of scientific research, perhaps starting Canada’s next Research In Motion. She will find innovative new cures for diseases and put Canada on the map for health technologies. He will creatively find solutions to political and social issues around poverty and homelessness. They will be superstars in their fields.

Surely not everyone will be as wealthy and famous as Jim Balsillie. Not many of us will make medical breakthroughs like Sir Frederick Banting and Dr. Charles Best, the Canadian discoverers of insulin. Most of us don’t even aspire to that anyway. The good news is that the New Entrepreneur will also be what most of us hope to be: fairly-paid employees who feel that their ideas and actions are actually valued and making a difference.

Admittedly, some jobs are simply more creative and engaging in nature. It may be easy (and expected) to be creative if you work for a software company with a foosball table. Working in a meat slaughtering plant or a road paving crew may not be as naturally creative.

Still, in even the most seemingly mundane or routine jobs, there is scope for creativity and entrepreneurialism. In any occupation or activity, one can ask “Is there a way to do this better? Is there a method that reduces time or waste? Are there ways I can minimize my environmental footprint and save money at the same time?”

The New Entrepreneur will naturally ask these questions, regardless of the type of work he or she is doing. It goes far beyond our 20th century notions of “entrepreneur” as strictly an inventor or a self-employed business person. The New Entrepreneur will see every action he takes—be it as a medical researcher or a janitor—as part of something larger. She will use her natural creativity and willingness to embrace failure to push her world and her economy a little further.

Sounds utopian? Perhaps a bit. But for the most part, we are not talking about revolutionizing the world. We are suggesting that the Canadian economy and personal job satisfaction can be improved simply by asking a simple question: “How can I do this job differently?” That question will come naturally to the New Entrepreneur.

See previous blogs in this series for a discussion of each of these factors.

This article is based on a forthcoming book entitled “Rewriting the Code: Changing Canada’s Economic DNA” by Todd Hirsch and Robert Roach. Robert Roach is the Senior Researcher at the Canada West Foundation and Todd Hirsch is the Senior Economist at ATB Financial.

Social trust, strong communities and collaboration

Mon, 28 Feb 2011 15:08:00 GMT

By: Robert Roach, Senior Researcher and Director of The West in Canada Project

If Canada’s economy is to get to the top of the international economic food chain, Canadians will have to get better at working together in three key ways.

The first thing that we need to do improve our democratic literacy and civic participation. We are not at the point where we are throwing rocks and fire bombs at each other as is currently happening in Egypt, but our democracy could use some preventive maintenance.

Democracy, however, can be a slow method of decision-making as compromises are made to placate competing factions. This makes some people long for the single-mindedness and efficiency of dictatorships. But, in addition to being horrible regimes to live under, dictatorships cannot sustain economic prosperity across a broad population. They are good at enriching a few at the top, but repression eventually undermines economic performance. It is for this reason that the Chinese government has been slowly loosening its grip on the Chinese people. Time will tell how far down this path the Chinese government is willing to go.

Canada is fortunate to have well-established democratic traditions that allow free markets to operate, give people the right to congregate and express themselves, facilitate stable government and in a host of other ways, provide fertile ground for economic growth. Yet over time, our democracy has atrophied. Red flags include low voter turnout, distrust of politicians and divisive rather than productive public debate.

If government is seen as suspect, if the political system is stagnant and if public debate is replaced by cynicism and polarized camps, this puts up huge barriers to economic growth and our ability to compete in the global economy. These barriers include a weakened capacity to engage in collective projects such as public infrastructure, ineffective public policy and social cleavages that inhibit cooperation and mutual understanding. Hence, it is critically important that we foster democratic participation and civic duty, that we encourage informed public debate and that we try to see matters from multiple perspectives.

The second piece of the puzzle is social engagement. If Canadians retreat behind the walls of home entertainment rooms or only interact with like-minded people, we will not nurture the social bonds with a diverse set of people upon which we can build economic partnerships and entrepreneurial ventures. We need to be volunteering, talking with our neighbours, learning about each other and supporting each other. The alternative is a weak society that will break under the strain of international economic competition.

The third component of a new and improved team approach to the economy is collaboration. Those who study creativity and innovation are quick to point out that they are distinctly social phenomena. The image of the lonely inventor toiling alone in a workshop is incorrect. We need groups of people interacting with each other, exchanging ideas, advice and capital (be it social or financial). If we are participating in the civic sphere and if we engage in lots of gregarious activities, collaboration will follow and so will the fruits of team work: new economic enterprises that create wealth and jobs.

What’s more, if we can do these things at home, we can do them abroad.

On the other hand, if we see businesses as corrupt, politicians as fools, public servants as inept and our neighbours as strangers, we will not succeed as an economy or as a society.

This article is based on a forthcoming book entitled “Rewriting the Code: Changing Canada’s Economic DNA” by Todd Hirsch and Robert Roach. Robert Roach is the Senior Researcher at the Canada West Foundation and Todd Hirsch is the Senior Economist at ATB Financial.

Schwarzenegger sees fossil fuels as twilight industry

Wed, 26 Jan 2011 17:32:00 GMT

By Robert Roach, Senior Researcher

In his speech in Calgary January 25, 2011, former Governor of California Arnold Schwarzenegger argued that America must wean itself off fossil fuels to break its dependence on foreign oil, to eliminate the harmful health effects of fossil fuel pollution, to take advantage of the potential efficiencies of renewable energy sources, and to address climate change. Note that climate change is just one reason and, at present, not even the most important one.

What this signals is that the rationale for a sea change in energy use in the US is not tied exclusively to the global warming horse. As a province full to the brim with fossil fuel resources, this is not the best news for Alberta. However, the Governator also suggested that the transition will take time. Americans are not all going to be driving electric cars by next year. As many analysts have observed, fossil fuels are likely to be part of the energy mix for some time to come. We have some breathing room to adjust.

Nonetheless, the message to take away from Mr. Schwarzenegger’s comments is the value of rethinking through how to make the necessary changes before it is too late. If the US, China and other big users of fossil fuel move faster than expected toward renewable energy sources, Alberta may be caught with its pants down in terms of its key industry.

America is a democracy and will be slower to act as it debates the issues, but China is a dictatorship that could make huge investments in infrastructure designed to wean itself off fossil fuel in a time frame that would make our heads spin. If this happens, the global energy game could change overnight. We need a plan B, a plan C, and a much bigger Alberta Heritage Fund to help us through the transition that is coming sooner or later.

One potential boon for Alberta is America’s desire to reduce its dependency on oil from the Middle East. When the Twin Towers fell, something changed in the American mentality. This change is summed up by the following question posed by Mr. Schwarzenegger: “Why are we sending trillions of dollars [for oil] to people that want to blow us up?” This anger has not yet had a major influence on actual imports of oil from the Middle East, but it is a slow burning fuse that could ignite major changes in US policy. In anticipation of this, Alberta has worked hard to position itself as a friendly and effectively “non-foreign” fossil fuel supplier. It is in our best interest to keep hammering home this point.

This will buy us time, but eventually, if Schwarzenegger is even only half right, a much smaller number of future generations of Albertan’s will be working in the oil patch because demand for oil will be much lower than it is today. Prudence dictates that we do not just put our collective head in the sand and enjoy the next boom (if and when it comes). We need to plan for the coming changes and get much more aggressive about diversifying our economy.

This does not have to mean less oil and gas activity in the province. It does not have to be a zero-sum game in which we walk away from what has been, and still is, a bread and butter industry for Alberta. There is no need to say hasta la vista, baby to our energy sector.

What we need to do is continue the slow, but critically important, process of economic diversification. There will be failures. There will be missteps. But if we work hard (a key message of Mr. Schwarzenegger’s speech) and forget the limitations and naysayers, we can make Alberta not only an energy capital, but a high-tech, an education, a knowledge sector, a green tech, a you-name-it capital, too.

We have a lot to lose if we dismiss Mr. Schwarzenegger’s green pronouncements as unrealistic. The world will change (as it always does) dramatically in the next decade or two. The question is, will we be ready or will we be wondering what to do with all those pump jacks and giant trucks?

Arnold inspires Calgary, gets behind an American energy strategy

Mon, 28 Feb 2011 15:09:00 GMT

By Will Kimber, Vice President Research

Governor Arnold Schwarzenegger is a global icon; a mammoth of sports, entertainment, and public life. After achieving the title of Mr. Universe at age 20, he went on to become a legend of Hollywood and then Governor of California, marrying a Kennedy in the process.

Schwarzenegger’s story is inspirational and embodies the American dream. He was an Austrian immigrant with few resources, except those that really mattered: a vision, a fire in the belly, and a huge charisma. So what did the Governator mean when he famously described California Legislators as “Girlyman?” It’s not someone who has failed at a worthwhile endeavor, but someone who has failed to try—failed to take a risk.

Schwarzenegger set out four principles that have underpinned his success: have a vision and trust it; break the rules; don’t be afraid to fail; and work hard—there are no shortcuts. Growing up in Austria, the stereotype was that Arnold was expected to marry a girl called Heidi and live a Sound of Music lifestyle in the hills. Instead, he adorned his bedroom walls with pictures of half naked, muscle bound and oiled up men and he harbored burning ambitions to take America by storm. Arnold came up against obstacles, but instead of letting them defeat him, he used them to his advantage. Casting agents first said his monstrous body and machine like accent didn’t work—they said “you can be a Nazi officer or a bouncer but not a leading man,” yet he proved them wrong.

On energy policy, Schwarzenegger was somehow less inspiring. He got most of the big rocks on energy policy reform in place. He noted the need to shift the debate on energy from a singular focus on carbon emission reduction and instead urgently develop an American energy strategy. He identified what needed to be focused on: energy supply and security; the US’s overreliance on foreign oil; the need to address pollution more generally; and the importance of green jobs and technological innovation as the primary objectives of such an energy strategy. That said, Schwarzenegger’s legacy is a California that is a world leader in renewable energy innovation, technology development and deployment—the so-called new energy economy.

However, in contrast to the rapturous applause for most other parts of his performance, the Calgary audience at his first public speaking engagement on January 25 was far more subdued in its reaction to Schwarzenegger’s comment that “we showed in California that you can create green jobs in the midst of a major economic downturn.” This likely suggests a suspicion in regards to heavy government intervention in the energy economy.

Although his term as the governor of California has come to a close, Schwarzenegger is well positioned as a leading US political leader to assist the Obama administration as an “energy Czar,” and use his political experience as a focal point for development of an American energy strategy. This could provide the political jolt needed to push forward stagnated US action on an American Energy Strategy, which is critically important for Canada-US relations, North American energy security, and the interests of western Canada in particular. For Canada, having Schwarzenegger’s muscle and charisma turned to American national policy reform on energy has to be a good thing.

Fiscal planning and resource royalties

Mon, 28 Feb 2011 15:11:00 GMT

by Michael Holden, Senior Economist

Resource royalties are a valuable source of revenue for provincial governments in western Canada. In fact, they have been rising steadily in importance since the early 1990s and are nearly as important to provincial government revenues today as they were at the tail end of the 1979 energy crisis . While royalties are a boon to governments’ bottom lines, they present considerable challenges when it comes to long-term planning and fiscal management.

I began examining trends in royalty income as part of my preliminary work on the Canada West Foundation’s "Powering Up" Project. My colleagues and I have been working on creating a detailed and comprehensive snapshot of the existing energy system in the four western provinces, including the impact of resource extraction on government revenues.

In 1981, resource royalties accounted for 23.8% of all provincial government revenues in western Canada. There was a considerable range from province to province: in Alberta, royalties were as high as 43.2% of revenues, while the corresponding figures for Saskatchewan (21.0%), BC (5.6%) and Manitoba (1.4%) were much lower.

After tumbling in the 1980s and early 1990s, a surge in oil and other commodity prices in the mid to late 2000s have meant that royalties are once again a major source of income in the region, particularly in the three western most provinces. For western Canada as a whole, royalties made up 20.6% of government revenues in 2008 (the most recent year for which Statistics Canada data are available). Alberta still leads the pack at 33% of provincial revenues, but Saskatchewan and BC have seen the importance of resource royalties grow considerably since the early 1980s. In Saskatchewan, royalties grew to 24.1% of provincial revenues in 2008, while BC saw the share of income from royalties double to 11.2%.

Is this increasing reliance on royalty revenues a good thing for the western provinces? It really depends on your perspective. On one hand, royalties provide governments with more available funds to spend on goods and services—like health care, education, and infrastructure—or to put towards deficit elimination or debt reduction. This, in turn, eases the burden on provincial taxpayers; the more government revenues that come from resource rents, the less taxpayers have to pay out of our own pockets. By reducing the fiscal burden on taxpayers, royalties also contribute to creating a more competitive tax environment which could help attract businesses, investments and skilled workers to western Canada.

However, overreliance on resource royalties comes with its own set of problems. For one, royalties and royalty rates are closely linked to commodity prices which are notoriously volatile and completely beyond our control. While all government revenue sources are prone to fluctuations, royalty income is far more erratic than most. Responsible fiscal planning is an extraordinary challenge when a major source of revenue can fluctuate so dramatically, and unexpectedly, from one year to the next. How do governments make stable, predicable and long-term spending commitments in such an environment? How do they resist the pressure to increase spending when royalty income rises? And how do they maintain that spending level in the face of a negative price shock?

Additionally, the resources in question are non-renewable. To be sure, some of our resource deposits—like the oil sands—are vast, and some like shale gas are only beginning to be developed, but even these won’t last forever. Moreover, environmental concerns and development of alternative energy sources could change future market conditions in unforeseeable ways.

Should we be concerned about the long-term sustainability of our royalty revenues? Should some of this resource wealth be saved for future generations? Are Albertans missing out on the opportunity to add to the Alberta Heritage Savings Trust Fund and convert part of their present wealth into a form that could provide interest revenue in perpetuity? Should Saskatchewan re-introduce its Heritage Fund? Should BC consider starting up such a fund? These questions are further explored in the Canada West Foundation’s "Investing Wisely" Project.

These questions all require careful study and debate in the community, but two things are immediately clear. First, as resource royalties grow in importance for provincial governments in western Canada, steps need to be taken to minimize the impact of resource price volatility on government revenues. Secondly, better public policy is needed to ensure that both current and future generations benefit from present-day extraction of non-renewable resources.

Michael Holden is Senior Economist and is currently working on creating a detailed and comprehensive snapshot of the existing energy system in the West as part of the Powering Up Project.

Building momentum in water policy

Mon, 28 Feb 2011 15:12:00 GMT

by Larissa Sommerfeld, Policy Analyst

Water matters. It matters to people. It matters to businesses. And most importantly, it matters to the environment. Water is at the centre of all our activities. Without it, we couldn’t grow food to consume and export, or produce energy to power our homes, charge our iphones and run our cars.

But are we fully aware of the value of water, and are our actions matching our words? Not always. Here are five important things we’ve learned about Canadians’ attitudes toward water over the past year:

Water is precious: The majority of Canadians think that water is our nation’s most precious resource, even more so than oil and gas. And people are worried: over 80 percent of Canadians are concerned about “the declining state of the availability of Canada’s fresh water”.
Water should be a right: Almost all Canadians (96 percent) think that access to clean water should be a guaranteed right.
Water should be a priority: BC Perspectives on Fresh Water, a recent poll commissioned by the Vancouver Foundation and WWF-Canada found that almost all British Columbians (94 percent) think that ensuring the “protection of nature, wildlife and species like salmon [should] always [be] a top priority”.
Water is going down the drain: Despite recognizing the importance of water, many Canadians admit to water-wasting activities, like leaving the tap running when brushing teeth or watering down their driveways.
We’re not water aware: Three in ten Canadians don’t know what they pay for water each month and the one in three Canadians aren’t aware of local government water conservation initiatives. In British Columbia, 84 percent of citizens are unaware that the provincial government has been pursuing major reforms to its Water Act.

It seems that there’s a missing link between our attitudes and actions, and herein lies the rub. We’re aware of water’s importance and believe that it should be a right and priority. Yet, we continue to over-consume water and are in the dark about the water management activities of our governments.

We’re in for a wake-up call. As our water resources become more stressed, increasing water prices to incite conservation will continue to be generally opposed. Results of a McAllister poll showed that people feel that the cost of providing potable water should be covered by the general tax coffers, rather than through citizen’s pocket books. But in a time of fiscal restraint, governments may not be able to continue subsidizing water services in the same fashion.

This is particularly relevant given that most Canadians feel that clean water should be a guaranteed right. I couldn’t agree more—no one should be denied this critical resource. However, defining a right can get into tricky terrain; just because clean water is considered a right doesn’t mean that access to that water is guaranteed—one of the major points that has been raised in the wake of the United Nation’s adoption of water as a human right in July. If we truly want to ensure that all Canadians have a stable supply of potable water, we need to change how we value that water. In many cases, that involves raising the price of water. The caveat is that prices must be implemented in tandem with social policies that ensure that Canada’s most vulnerable are can access a minimum water supply at a price they can afford. A framework for water pricing must also factor in economic competitiveness, equity amongst water using sectors, rising demand for water, and the uncertain impact of climate change.

Continuing to nod our collective societal head on the importance of water won’t get us anywhere unless citizens start taking action. Water management is a two way street. Yes, the Canadian public needs government leadership—and communication and awareness efforts need to be ramped up—but ultimately change starts with the individual.

The Canada West Foundation recently addressed some of these issues in the publication From H20: Turning Alberta’s Water Headache into Opportunity. The Foundation is currently spearheading the development of a Canadian water pricing framework that draws upon the insight of individuals from across the country involved in water policy. Keep your eye out for new publications on water pricing in January 2011.

Bottom line: Forging a link between words and actions starts with increasing water awareness and literacy. Governments can provide the leadership, tools and incentives for people to change their behavior to match their beliefs. We must work together to build a Canadian water ethic that demonstrates to the world that we’re serious about protection and conservation. It is, after all, our most important resource, and that’s one thing the majority of Canadians agree on.

Happy Holidays from Canada West Foundation

Thu, 13 Jan 2011 22:08:00 GMT

by Dr. Roger Gibbins, President and CEO

Although Santa and his Elves are still hard at work, the public policy world is starting to nod off. Parliament has adjourned (but not prorogued!) and policy wonks everywhere are catching their breath, maybe even a nap, after a busy fall.

It is an opportunity, therefore, to wish everyone all the best for the holiday season, and for the new year that will soon be upon us!

Certainly the past year was a busy one for the Canada West Foundation as we launched new work on energy policy and released a strategic vision for western Canada, and thus for Canada. We also increased our staff capacity both to do more and to ensure that the work we produce has the greatest possible impact. We are not only "all reved up" but, with the strategic vision in hand, we definitely have somewhere to go.

This increased capacity will be tested in 2011 as we celebrate the Foundation's 40th Anniversary. This celebration will be marked by an aggressive energy research program, an expanded water policy agenda, and a return to the challenges of economic diversification in light of a resource boom and the growing impact of the Asia-Pacific economies. As Canada's gateway on the Asia-Pacific region, western Canada will be fully exposed to a tremendous range of opportunities and challenges.

In closing, let me thank you for your engagement with the Canada West Foundation over the past year. Your interest and support are greatly appreciated. All the best for the holidays, and for the year to come.

A closer look at diabetes in western Canada

Mon, 28 Feb 2011 15:13:00 GMT

by Shawna Ritchie, Policy Analyst

In a recent article in the Calgary Herald, the Canadian Diabetes Association (CDA) warned that the cases, and the costs, of diabetes will balloon in Alberta if the government doesn’t take aggressive action.

Michael Cloutier, president and CEO of the CDA, cautions that the burden of diabetes is rising sharply in Alberta. He attributes this to “a growing population and because many immigrants are from Asian or South Asian background and others born with a higher predisposition to the disease.”

Diabetes is a growing problem in Canada and I commend them for speaking out. I was struck, however, by a surprising omission. Nowhere did they mention or discuss the prevalence of diabetes in the Canadian Aboriginal population (unless that is what is meant by, “others born with a higher predisposition?”), which seems like a very large oversight. Here’s why:

Diabetes has become so prevalent in Canadian Aboriginal communities, particularly in First Nations communities, that the National Aboriginal Diabetes Association says it has “reached epidemic levels.”
The rates of diabetes diagnosis are three to five times higher in Aboriginal populations than in the general population.
In a study published in the Canadian Medical Association Journal in 2010, Dr. Roland Dyck of the University of Saskatchewan revealed that by the age of 60 almost half of First Nations women and more than 40 per cent of First Nations men have diabetes!
The rates of Aboriginal diabetes are expected to continue to increase as Aboriginal peoples typically develop the disease at much younger ages, and as children and teenagers—who make up almost half the Aboriginal population—become adults.

This is a particularly acute issue for western Canada, which is home to the majority Canada’s Aboriginals, both in absolute terms and in terms of population percentages.

For example, in 2009 Manitoba released the results of a 20-year study on diabetes in the province, with an emphasis on diabetes in the First Nations population. Based on what they learned, they forecast that the number of First Nations diabetes cases will increase three-fold in the next 20 years resulting in a prevalence rate of 27% in the province—more than one in four of the population.

Because diabetes is a disease with many side effects, this same study estimates that over the next 20 years, as rates of diabetes increase, there will be “a 10-fold increase in the rate of cardiovascular disease; a 5-fold increase in strokes; 10 times as many dialysis starts; 10 times the rate of lower extremity amputations; and 5 times the rate of blindness” in the province.

Rising diabetes rates will have tremendous impacts on the economy and health care requirements of Manitoba. This is also ominous for Saskatchewan and Alberta, which have similar proportions of Aboriginal peoples.

The reality is, you can’t talk about diabetes in western Canada and ignore diabetes in the Aboriginal population. Not only because the rates are so high and the complications so severe. But also because effective solutions for diabetes in Aboriginal communities must take into account their unique cultural and geographical situation.

In many developed countries, Aboriginal peoples fall behind the rest of the population in a host of health, education and prosperity indicators. Diabetes rates amongst Aboriginal peoples in Canada are a symptom of these broader and deeply entrenched set of issues. As such, diabetes must be tackled as part of an integrated public policy strategy for Aboriginal Canadians.

It isn’t enough to launch an education campaign about the importance of following the Canada Food Guide, when many of those foods are not part of traditional Aboriginal diets and when many Aboriginal communities are in isolated areas that don’t have access to fresh fruits and vegetables for most of the year. The first step to solving a complex problem is admitting that there is a problem to solve, and that’s why we need to tell the whole story of diabetes in western Canada.

Western Canada in Great Shape: Highlights from the new State of the West report

Mon, 20 Dec 2010 17:01:00 GMT

by Robert Roach, Senior Researcher and
Director of The West in Canada Project

Like Canadians in general, western Canadians tend to be uncomfortable when it comes to tooting their own horn. It is worthwhile, therefore, to take a moment and celebrate some of the incredible strengths possessed by the West as outlined in the latest edition of the Canada West Foundation’s “State of the West” report.

Western Canada is often described as a small economy. The way we talk, you would think the region’s economic output was on par with Estonia or some other tiny place (no offence to our Estonian friends, of course). In fact, if western Canada is placed on the list of the world’s largest national economies, it would be eighteenth (Canada is eleventh).

Western Canada’s economy is much smaller than, for example, the US or German economies, but it is hardly a bit player on the world stage. At well over half a trillion US dollars in 2008, western Canada’s economic output is nothing to snuff at.

Western Canada is also a major player when it comes to international trade. The West exported just over $180 billion US dollars worth of goods in 2008. This would place it twenty-sixth on the list of the world’s leading export countries (Canada is once again just out of the top ten in eleventh spot). We may not be the Sidney Crosbie of international trade, but we are still playing in the big league.

When it comes to the natural resources the global economy is hungry for, western Canada is home to some of the largest reserves and industries in the world. Alberta’s oil sands place it second only to Saudi Arabia’s oil reserves and Saskatchewan is one of the world’s largest suppliers of uranium and has the world’s largest reserve of potash (a key ingredient in the fertilizer that helps feed the world).

The region’s stock of human capital is also very impressive with over 1 in 5 western Canadians holding a university degree. When university and college education is combined, the western provinces have higher education levels than places like Germany, France, the UK, and Australia. BC’s education level is second only to Ontario’s and is higher than in both the US and Japan.

Western Canada is a magnet for international and domestic migrants. BC’s net international migration rate is more than double the average for the European Union. Between 1971 and 2008, 671,543 more people moved to the West from another part of Canada than left. Vancouver and Calgary appear on the Mercer ranking of the cities with the best quality of life and the urban West is growing at a nice pace.

Western Canada is a cosmopolitan, dynamic, growing, economically powerful and highly educated place. It is ideally situated as Canada’s gateway to the growing economies of Asia, it is blessed with abundant natural resources and it is a major driver of the Canadian economy and, increasingly, of the Canadian identity.

None of this is meant to gloss over the many challenges faced by the region. If the West is to take full advantage of its current assets, it has a lot of work to do. The global economy is getting more competitive, not less. Social challenges such as the high unemployment and low education levels that dog the West’s Aboriginal population and the constant need to innovate and step up our economic game remain critical concerns.

Nonetheless, it is worth stepping back from both the day-to-day and long-term challenges and celebrate our strengths. Too much modesty can result in missed opportunities. Western Canadians need to see that their region has the skills to compete in the big league and recognize the importance of honing those skills so they can continue to do so.

Download State of the West 2010.

Robert Roach is Senior Researcher and the Director of the Canada West Foundation’s The West in Canada Project. Canada West Foundation is the only think tank dedicated to being the objective, nonpartisan voice for issues of vital concern to Western Canadians.

Energy Efficiency in Alberta? Yes, We Can!

Tue, 23 Nov 2010 23:45:00 GMT

by Larissa Sommerfeld, Policy Analyst

President Obama’s classic phrase, “yes, we can!” may soon fade into the background of political rhetoric in the US, especially after this month’s unsurprising election results. Yet here in Alberta, those involved in the energy sector have an optimistic, forward-looking picture of what the future looks like for the province. And when it comes to making Alberta more energy efficient, “yes, we can!” succinctly sums up the attitude of key stakeholders.

On November 5, the Alberta Energy Efficiency Alliance’s energy conference pulled together a range of stakeholders to connect and collaborate. In attendance were representatives from industry, municipalities, NGOs, and the Alberta government.

In a time when news headlines are generally pessimistic on issues of energy, the environment and the economy, it’s refreshing to find a room full of people who aren’t willing to accept a business as usual approach. Rather, they’re looking to innovate and collaborate to mobilize public awareness of energy efficiency issues, and to influence legislation.

Improving energy efficiency is an obvious first step to a greener province and a stronger economy. It is also the fastest and cheapest way to reduce GHG emissions. The clincher is that solutions need to be affordable before they will be adopted en masse. But, once this happens, we’ll be on the road to changing consumer behaviour, which is critical to long-term success.

Momentum is gathering across the country: there is increased support for a Canadian Energy Strategy, and progress is being made on improving building codes to ensure that buildings are built to higher efficiency standards.

Change is happening in Alberta as well. The province was recently given a grade of B+ in energy efficiency by the Canadian Energy Efficiency Alliance (a vast improvement from previous years) but has fallen behind other provinces such as BC and Ontario in terms of energy initiatives and outcomes. Alberta households are the largest energy consumers in Canada: in 2007, each household consumed 130 GJ, compared to the national average of 106 GJ. On the whole, Alberta consumes the most energy per capita than any other province. A large chunk of this can be attributed to Alberta’s heavy industrial activity. Yet, despite bumps along the road, there are more things going right in Alberta than going wrong, and policymakers are brimming with good intentions. Now, those intentions need to be turned into action.

Take Medicine Hat, for example. The city has a strong energy conservation program that includes the promotion and use of renewable energy sources such as solar power. The city also has an Energy Conservation Charge in place that charges customers a higher premium for energy usage that exceeds the allotted maximum amount per billing cycle.

One key step towards improved energy efficiency is an effective carbon price. Yet, there was a sense of resignation by some conference participants over the recent US elections. Many talked about the urgent need for an effective carbon price either through a cap and trade system, or through a market, but reluctantly agreed that it doesn’t make sense for Canada to go forward until the US pushes out their energy strategy. It’s unlikely that the US will be making significant change in this area anytime soon. Regardless of the doubts of some, Canada isn’t waiting on the development of a national energy strategy—the possibility of which was recently embraced by Alberta Energy Minister Ron Liepert.

Bottom line: More individuals, businesses and organizations are realizing that improving energy efficiency can lead to a several good things: reduced environmental impact, increased economic gains, and valuable reputational benefits. Energy efficiency has become one of the cornerstones of debates surrounding a Canadian Energy Strategy. And for Alberta? The province has a long way to go but the potential for both a healthy environment and burgeoning economy is significant. Better energy efficiency in Alberta? Yes, we can!

Why Embracing Failure is Good for the Economy

Mon, 15 Nov 2010 20:56:00 GMT

by Robert Roach, Senior Researcher

Most of us are familiar with a little blue and yellow can of spray in our garages or under the kitchen sink called WD-40. That is the trademarked name of a lubricating spray developed in 1953 by a Californian named Norm Larsen. It was originally designed to repel water and prevent corrosion, and later was found to have a variety of practical household uses. WD-40 stands for “Water Displacement – 40th Attempt.”

Fortieth attempt? You almost hear Mrs. Larsen yelling down into the workshop: “Norm, sweetie, forget it! You’ve tried over 30 formulas … it’s not gonna work!”

As investors and taxpayers, we are more likely to identify with Norm’s wife than Norm. If success is not ensured, we get antsy. We want our mutual funds to go up and never down. We want ventures supported by government dollars to be a sure thing. This is not, however, how you succeed and make money in the long-term in a highly competitive and ever changing global economy.

The aversion to failure in our society has gone too far. We’ve become so intolerant of mistakes and errors that we go to enormous lengths to either hide them or pass them off as success in disguise. This cult of nothing-less-than-success undermines the kind of risk-taking needed to develop new processes, new products, new markets and new jobs.

Fortunately, Canadian economic history has its share of “mavericks”—individuals who went against the herd mentality, took risks, and accomplished great things. They also failed a lot along the way. The now-famous Leduc No. 1 oil well, drilled in Alberta in 1947, followed a string of dry holes. Had the original prospectors given up in fear of finding yet another dry hole, they never would have struck it rich in Leduc, Canada’s oil industry may not have gotten off the ground, and the country’s prosperity would be much less than it is today.

There is a long list of clichés that apply here: “you miss 100% of the shots you don’t take,” “if you want big rewards, you need to take big risks,” “damn the torpedoes, full speed ahead,” “if at first you don’t succeed, try, try again,” and so on.

Unfortunately, ridiculously skittish stock markets that go up and down if someone sneezes unexpectedly and a culture that favours economic comfort over financial adventure have pushed Canada’s mavericks to the sidelines. “Stick with what ya know” is the mantra of the Canadian economy. As a result, both public and private investment in bold new ventures is in very short supply.

Many readers will wrongly conclude that we are suggesting that we should wallow in failure, follow every wild goose that comes along from growing oranges in Saskatchewan to building hotels in space, and use tax dollars to prop up incompetence. But this is exactly the opposite of what is being proposed.

Canadians need a higher tolerance for failure because this is an unpleasant, yet necessary, means by which we succeed. This may be a hard principle to accept in a culture where you have to appear like you never fail or, at least, be good at blaming someone else when things go wrong. But tolerating failure doesn’t end with the failed attempt. The failure needs to be accompanied by learning: why didn’t that attempt work? What did I learn that I can apply to my next attempt?

Ultimately, Canada’s economic progress will rely on risk-taking. An entrepreneur has an idea, a scientist has a hunch, a designer has a vision. To act on any of these notions, someone needs to stick his neck out and take the chance, failure or not. But if the consequence of failure seem overly dire, it will crush the incentive for the risk-taker to try anything less than a sure bet. And the economy will suffer.

As Brazilian architect Ruy Ohtake said, “Every project should be a little bit impossible. That is how we progress.” But those little bits of impossibility along the way will result in some failed attempts.

Failure should not be devastating. Taking a chance on a hunch should not be punished with a zero-tolerance approach to failure. We can’t sit and wallow in failure, but we can come to embrace failure for what it is—a necessary stepping stone to success.

Canadian Universities and Foreign Students – Getting Our Act Together

Mon, 08 Nov 2010 23:14:00 GMT

by Robert Vineberg, Research Fellow

On November 4, the Association of Universities and Colleges of Canada (AUCC) announced that a delegation of fifteen university presidents will undertake a seven day tour of India to promote Canada as a destination of choice for Indians who wish to pursue post-secondary education abroad. This is good news for a number of reasons. First, until now Canadian universities are, for the most part, unknown in India. According to the AUCC, only 3,000 Indian students chose to study in Canada in 2008. By comparison, in 2007, over 63,000 Indians chose to study in Australia.

Why the huge difference? Certain factors are beyond our control. Australia is closer to India and its climate is milder. But the major reason is that Canada has never gotten its act together to effectively promote Canadian universities as a desirable destination for Indians. To their disadvantage, too many Canadian universities have regarded their competition for foreign students to be other Canadian universities, leaving Canadian universities to promote themselves, individually, without the critical mass that comes through collective promotion. In reality, the competition for all Canadian universities is other countries, such as Australia. The Australian universities and the Australian government learned several years ago to promote the country of Australia as a desirable place to study, not a specific university, and the results have been fantastic for Australia. It also recruits many of its best immigrants from the ranks of its foreign students.

This is why the delegation of fifteen universities working together to promote education in Canada is good news. We need to beat the Australians at their own game by promoting the value of a Canadian degree from any Canadian university. The Canadian government recently caught up to the Australians by changing immigration regulations to allow foreign graduates in Canada to apply for immigration from inside Canada, as foreign graduates can do in Australia. Now is the time for Canadian universities to catch up to the Australians as well. By promoting a degree from Canada rather than a degree from Alberta or McGill or Manitoba, we will attract more of the best foreign students. Some may want to stay in Canada and many will return to careers in their home countries but, either way, Canada and the foreign students stand to benefit.

Let us hope that this delegation of university presidents to India will be the start of a new, coordinated, approach to promoting a Canadian post-secondary education to the world.

Senate Reform? Seriously?

Tue, 02 Nov 2010 16:39:00 GMT

by Robert Roach
Director of the West in Canada Project

A new Canada West Foundation report shows that regional discontent with the federal government continues to be a key feature of Canadian politics. It also shows that discontent exists in every part of the country, not just its traditional home base in the West.

Many lament this and pray for a day when everyone comes to their senses and toes the line put down by the government in Ottawa. This, of course, only works if you agree with the line Ottawa puts down.

For many years, Ontario residents saw a rough congruence with what Ottawa wanted and what they wanted. Ontario was Canada and Canada was Ontario (plus Quebec, but that’s a different story). This makes sense for Ontario was, and is, the province with the most voters, Canada’s largest city, the biggest economy and the ear of the federal government. Federal governments ignore Ontario at their peril.

Meanwhile, the West was seen by the centre as a series of provincial outposts that should report to head office and definitely not the other way around. When we got cranky, we were either ignored or, on occasion, punished. As a result, discontent with the federal government was a natural element of western Canadian political culture.

The recent Canada West Foundation study shows that western discontent has not gone away, but the election of a Prime Minister from the West has seen it go from a rolling boil to a nice calm simmer. A lot of this is perception rather than the result of a consistent pro-western program on the part of the federal Tories, but perception counts in politics.

Indeed, the perception that a gap has formed between Ottawa’s interests and Ontario’s interests has caused discontent to rise in Ontario in recent years. Because provincial premiers have cast themselves as the defenders of the provincial faith, Ontario’s Premier Dalton McGuinty has picked up on the perceived gap and used it to his advantage. After all, someone has to take the blame for Ontario’s newly minted “have-not” status.

While the swing in the regional discontent pendulum is interesting to note and helps explain the current woof and warp of federal-provincial relations in Canada, it points to a more important stone in the Canadian shoe. Namely, given that Canada is a land of diverse regions (and the better for it), shouldn’t there be a more effective means of addressing regional discontent than waiting for the Prime Minister to be from your region or for your Premier to huff and puff to the media about how unfair everything is?

Maybe, just maybe, we need a mechanism within the federal government that is a permanent and powerful means of expressing the full range of regional interests.

So what is that mechanism? Wait for it … the Senate! Please don’t stop reading and let me explain.

The lack of success at reforming the Canadian Senate has left the topic with the political equivalent of horrendous body odor. Everyone just wants to get away from it and hopes that it doesn’t show up again. This is extremely unfortunate because the much-maligned Senate can be given an overhaul and, once this is accomplished, it can make sure that regional interests are better represented within the national government.

This does not mean that regional discontent and regional winners and losers will go away. In a big country like Canada, you cannot please every region all of the time. Senate reform is not a panacea for all that ails Canadian democracy. But, surely, we can do a lot better than the goofy system and broken Senate that we rely on now?

So the next time the topic of Senate reform comes by, consider plugging your nose and calling for change. Canada’s regional diversity deserves it.

Thoughts from the CEO – Saskatchewan Tax Plan

Tue, 09 Nov 2010 16:36:00 GMT

by Roger Gibbins

Today the Canada West Foundation released a comprehensive study of tax reform options for Saskatchewan. A Tax Framework for Saskatchewan’s Continuing Prosperity was commissioned by the Saskatchewan Chamber of Commerce, the Institute of Chartered Accountants of Saskatchewan, Association of Saskatchewan REALTORS®, Certified General Accountants of Saskatchewan and the Certified Management Accountants of Saskatchewan. It can be found at here and at www.sasktaxplan.ca

This report comes in the wake of sustained, even dramatic growth in the Saskatchewan economy, conditions often associated with the opportunity for tax cuts. However, given the inherent volatility of a commodities-driven provincial economy, the report focuses more on what is taxed, how it is taxed and by whom (provincial or municipal governments) than it does on tax rates. Getting the tax system and its incentives right will contribute more to Saskatchewan’s competitive position than will tax rates themselves.

The report was prepared at a time when the newly harmonized sales tax was facing a populist revolt in BC, when the government of Manitoba dismissed the possibility of a Manitoba HST, and when Alberta had no provincial sales to harmonize. Given this competitive environment, the report explores a variety of alternative ways to meet many of the HST goals without directly endorsing harmonization.

At the present time, it should be stressed, Saskatchewan’s tax system is not wildly out of line with its provincial competitors in western Canada. Nonetheless, the report provides a number of options for further improving Saskatchewan’s competitive position.

On a different front, the Foundation continues to staff up for Powering Up for the Future, a major multi-year project on the western Canadian energy system. Mike Holden, our new senior energy economist, has been recruited from the Library of Parliament; and three Executives-in-Residence and a Research Associate have been recruited to help craft and animate the project’s policy research agenda. Mike Cleland comes to the Foundation from the Canadian Gas Association, Sheila O’Brien and Barry Worbets from extensive careers in the oil and gas industry, and Jeff Reading from the City of Calgary.

An impressive team is in place, and work is already well under way on the potential impact of unconventional gas on the political landscape in North America, the challenges of reaching Asia-Pacific markets, the opportunities and challenges posed by the emergence of the new energy economy, and the role that western Canadians can and should play in shaping a Canadian energy strategy.

The Foundation is also preparing a comprehensive atlas of the western Canadian energy system—State of the West: Energy will be released in the spring of 2011—and within a few weeks will go into the field with a national survey of public attitudes towards energy and environmental policy issues.

There is no doubt that 2010 will go out with a bang, not a whimper!

Rolling out the Red Carpet in the Oil Sands

Tue, 05 Oct 2010 15:35:00 GMT

By Anna Columbos

James Cameron’s visit to the oil sands this week caused quite a splash of publicity and media frenzy. He came at a perfect time, given the results of a recent poll conducted by Ipsos Reid for the CBC, which indicated that 30% of Canadians have not heard of the oil sands, including an unbelievable 14% of Albertans. Based on these data, even if all the high-profile visit accomplished was to get more people talking about and raising awareness of the oil sands, then I am all for these visits.

What the same poll also found was that Canadians are evenly split over the debate to develop the oil sands because of environmental and economic risks. This makes sense as Canadians have good reason to be divided. A decrease in provincial government revenue from the oil sands not only impacts every Albertan (because it helps pay for things like health care and education) but a reduction in oil sands development would affect people all across Canada. Alberta currently contributes over $20 billion a year in transfer payments to other provinces. Oil sands development supports jobs, profits and investments in all parts of the country.

At the same time there is a growing environmental imperative and if oil sands producers are not able, or willing, to clean up their environmental act there will be increasing domestic and international pressure to use alternative energy resources. It is imperative that the oil sands industry takes appropriate steps to address problem areas. As Cameron described it, the oil sands are a “curse” or “gift” depending on how they are managed.

If visits like the Cameron trip (apparently he arrived with an Oprah Winfrey camera crew in tow!) can engage more in people in conversation regarding the oil sands, then the public will be able to influence the public policy process in a positive way. In the Calgary Herald, Syncrude Chairman Marcel Coutu recently acknowledged that for a long time the oil sands industry has not communicated well with Canadians but there has been a stronger initiative to engage the public. Understanding the importance of reputation and public perceptions will help contribute to better management of the oil sands.

If the purpose of Cameron’s visit was to engage public discussion, promote global awareness and encourage oil sands producers to take environmental responsibility, then mission accomplished. One day after Cameron’s visit, federal Environment Minister Jim Prentice announced the appointment of a six-person advisory panel to look into the water-testing regime in the Athabasca River, an issue Cameron mentioned as a major concern. Was this a coincidence in timing or a strategic media plan by Prentice who knew he would get the most press following Cameron’s visit? It’s hard to say, but if celebrity-status brings more public attention to this important policy issue, I say, roll out the red carpet. But, let’s just make sure we are ready for the party that follows.

The Cost of the Gun Registry

Mon, 27 Sep 2010 20:09:00 GMT

by Roslyn Kunin

The bill to dismantle the gun registry has been defeated in Parliament and, according to Prime Minister Harper, this controversial and divisive issue has now been raised to become fodder for the next federal election campaign.

Among all the heated discussions that have been aired there has been one too frequently overlooked concern—one that should be of great importance to every Canadian taxpayer: is the gun registry the best use of our tax dollars?

Everyone who watches these things knows that the federal government is in a tight fiscal situation. Government expenditures are exceeding income and debt is accumulating. As is true for ourselves and our families, this situation cannot continue over the long run. And the only solutions are to raise taxes, cut government expenditures or both.

With the economy still fairly fragile and unemployment still relatively high, raising taxes is not a very viable option at this time. This means that the government is going to have to cut its spending. So, where shall it cut? It could squeeze the provinces, but that would impact both healthcare and education. Canadians already have an on-going rant about wait times, lack of doctors and drug costs in healthcare. We are also concerned about our children and ourselves if we face a career change, being able to get the education and training we need to be productive workers, providing for our families and keeping our economy moving.

If we look at most other components of government spending, similar objections can be raised as to reducing what the government provides. We are even altruistic with most Canadians supporting the prime minister in encouraging more foreign aid spending to help the really poor in the less developed world.

So where can expenditures be cut to have the least negative impact on Canadian society and on Canada’s role in the world? One of the only other areas where the current budgets are big enough so that their elimination or major reduction would be large enough to make a difference is the billion dollars spent annually on the CBC.

So the question that needs to be asked is not just should we have a gun registry or not. It is a much bigger issue. Given that the government is spending beyond its means, given that we as Canadians do not want—and at this time probably cannot afford—to pay more taxes; sooner or later the government services that we receive are going to have to be significantly reduced. Which cutbacks would make us least unhappy: healthcare, education, foreign aid, some other services, the CBC or the gun registry? Looking at this list, what would you cut?

Nuclear Power: Is the West In?

Wed, 22 Sep 2010 16:54:00 GMT

by Larissa Sommerfeld

It seems like energy can be created from almost anything these days. In addition to the somewhat standard and predictable renewable sources such as wind and solar power, scientists are now figuring out how to make energy from mountain pine beetle wood and algae (cool!).

Energy sources are diversifying in a big and exciting way. But what’s happened to the nuclear power debate? The majority of the European Union member states, as well as South Korea, Japan, and the US all rely on nuclear power for electricity. In 2008, 14 percent of total global electric energy was produced by 439 nuclear reactors scattered amongst 30 countries. Despite nuclear energy’s importance, some argue that reliance on nuclear power will decline in the coming decade. Where does Western Canada fit into this discussion?

As it currently stands, the nuclear sector is an important contributor to the Canadian economy. Activities related to nuclear energy include the construction and export of reactors, electricity production, and uranium mining and export. According to the Canadian Nuclear Association, the industry generates 15 percent of the nation’s electricity using CANDU reactors (home-grown technology), 71,000 jobs, and $1.5 billion in federal and provincial revenues from taxes.

That sounds pretty good. But the nuclear landscape, and opinions on whether it’s a viable clean energy source, range across Canada.

Eastern Canada is chockablock with nuclear power compared to the West; Ontario serves as the nuclear hub (over half of the province’s electrical needs are met by nuclear power), but Quebec and New Brunswick also rely on nuclear power for meeting some energy needs.

The West stands in stark contrast. Although Saskatchewan has a massive amount of uranium, it has no nuclear reactor. And the government of British Columbia is outright against nuclear power—the BC Energy Plan blatantly lists “no nuclear power” as a policy strategy. Making nuclear power a reality is perhaps closest for Alberta—Bruce Power Corporation has launched a public relations campaign to garner the support of Albertans for the potential construction of reactors in the northern half of the province.

Apart from BC, government leadership on nuclear energy is slow going in the West. The Alberta government hasn’t shut the door on nuclear power, but so far hasn’t trumpeted the cause either. Saskatchewan’s Energy and Resources Minister Bill Boyd said recently that small-scale reactors could potentially work in the province, but such technology is a decade away. And the government of Manitoba appears to have no firm policies in place advocating for going nuclear. However, nuclear power is being talked about in policy circles, and the former Director General of the International Atomic Energy Association, Mohammed El-Baradei, will be speaking at an event on October 12.

The nuclear debate is complex. Yes, nuclear energy is cleaner than conventional fossil fuels (for example, Canada emits 90 million fewer tonnes of greenhouse gas emissions each year due to reliance on nuclear rather than coal for electricity production). Nuclear energy is also more reliable than renewables, and power plants can function as baseload plants (inexpensive to run, and a guaranteed minimal level of output). However, building nuclear plants can be expensive and figuring out what to do with nuclear waste can be problematic. Waste is being temporarily stored at nuclear facilities, but in the next few decades, it is anticipated that a central underground repository for the nation’s nuclear waste will be built—with a location still to be determined. The Canadian Nuclear Waste Management Organization is tasked with finding a willing community, but is most likely gearing up for a series of “not in my backyard” protests from citizens.

And, is nuclear energy truly clean? Does it fit in with the current shift to more renewable and “green” energy sources? Can public support be mobilized for nuclear power in the West?

Bottom line: There’s no question that nuclear power is a political hot potato. But governments shouldn’t shy away from including nuclear power on the agenda of the clean energy debate. Demands for electricity are growing, and we have to find ways to meet that demand. Maybe there’s potential for nuclear power to be part of the new energy buffet, ultimately contributing to a cleaner, greener, and more prosperous future.

Report from the Vice President, Research

Wed, 29 Sep 2010 18:02:00 GMT

by William Kimber

In the decade to come and beyond, the policy choices at the interface of energy, the environment and the economy are of critical importance to the sustainable well-being of western Canadians, and for that matter all Canadians.

Across the four western provinces, the diversity of energy production and distribution systems, along with differing energy consumption and trade circumstances, provides a microcosm of the broader Canadian energy challenge. British Columbia and Manitoba’s large hydro resources, Alberta’s endowment of unconventional oil, and Saskatchewan’s uranium deposits are examples of the different lenses that each provincial government needs to apply to energy, environment and economic policy.

As commodity based, trade exposed and relatively emissions intensive economies, the four western provinces also face similar challenges. Western Canada’s resource endowments are substantial—but the ability to bring commodities like unconventional crude and shale or tight gas to market may be increasingly constrained by environmental and social acceptance in our primary export markets in the United States.

The challenge presented by growing populations requires a vision for western Canadian industries, cities and infrastructure that involves greater efficiency of energy use and expansion of power supply in an environmentally and socially acceptable manner. In the second half of 2010, the Canada West Foundation is launching “Powering up for the Future” which aims to assist decision makers in government, industry and the broader community to navigate the choices we face in driving Canada’s interests forward.

For example, what are the regional opportunities in the “new energy economy,” what are the risks with a business-as-usual approach to our current resource and energy consumption directions, and how committed is Canada to becoming a clean energy superpower?

Keep an eye out for the following key research outputs in the coming months from the first phase of “Powering Up”:

a strategic overview of western Canada’s energy situation and policies including production, consumption, trade, and economic drivers for the provincial economies;
a range of opinion survey work to identify and analyze attitudes towards energy, the environment and the economy in the West and across Canada; and
a series of “extra-ordinary conversations” with energy leaders from across the West.

Some of the Foundations’ research highlights for the fall include:

A study of Saskatchewan’s taxation system in partnership with the Saskatchewan Chamber of Commerce and a range of other funders (release date is October 14).
The recent release of “Blackened Reputation”—an analysis of media coverage of Canada’s oil sands with some surprising results, which go to the nature of reputational risk in our export markets.
October and November roundtables for the New Energy Economy project that will bring together thought leaders from industry, government and the community to discuss and quantify opportunities across each of the four western provinces.
The upcoming release of “State of the West 2010,” a key reference analyzing economic and social trends across the four western provinces.
The upcoming release of a range of reports under the “Going For Gold” project (in partnership with Western Economic Diversification) including a report on western Canada’s Asia-Pacific trade, with a specific focus on India and China in the Asia-Pacific context, and a report on the green economy in western Canada.
The book release of “Extraordinary Conversations” which summarizes the key themes from a series of interviews with 50 western Canadian thought leaders on what it will take to make western Canada a great place to live in the 21st century.
A range of work on the key water policy issues facing Canada, including a framework for water pricing in Canada and further work with the Alberta Water Resources Institute.
Collaborative policy work with the Calgary Chamber of Commerce on the event series, “Changing the Climate.”

With such a range and scale of research activities underway, this is a busy time! However, in addition the Foundation is also committed to our regular economic monitoring work and our engagement with the media and other stakeholders on key policy issues as they emerge.

The Foundation’s Board is star studded and includes a range of highly accomplished leaders from industry, government and the community. Our Executives-in-Residence—Mike Cleland, Sheila O’Brien and Barry Worbets—bring a wealth of knowledge, expertise and energy. Our new and existing core research team members bring many decades of combined research and policy analysis experience, and our new Research Fellows and interns further round out the team.

Next year the Foundation will celebrate its 40th year anniversary as the only think tank dedicated to pan-western Canadian policy issues. The Foundation is well positioned to build on its track-record as a leading source of strategic insight through conducting and communicating non-partisan economic and public policy research of importance to the future of the four western provinces and all Canadians.

Thank you, then, to the Foundation’s many supporters, funders and members for your continuing support in driving the Foundation’s high impact research. As we move towards 2011 and beyond with this full and exciting research agenda, I look forward to continuing to work with all of you to drive outcomes for the benefit of Canada.

Apples and Oranges: Finding Common Ground between the Economy and the Environment

Tue, 14 Sep 2010 22:35:00 GMT

by Shawna Ritchie

There is a common English idiom about comparing apples and oranges. The point, of course, is that you can’t compare two different things and, if you must compare, then you need to find some way to make them similar.

This process of making similar is precisely what economists do when they conduct what are called nonmarket valuations. That is, when they find a way to attribute monetary value to things that are not marketable, like the environment.

Let’s look at an example: suppose you have a cabin on a lake. It is a beautiful lake that is quite popular with boaters and swimmers. It is also excellent for fishing and the water is clean enough to drink. There is, however, a proposed commercial development in the area that would change the lake by bringing in industrial infrastructure and services. Although this development will provide an influx of economic activity, it also threatens to damage the lake’s original character along with its water quality and ecosystem.

While it is quite easy to determine the value of the commercial development, how do you determine the value of a healthy lake?

This is the problem that environmental economists strive to solve with nonmarket valuations. They have various techniques, each with strengths and weaknesses, which attribute value to the environment so that it can be compared with economic development. Below are a few of the different techniques and how they would assign value to the lake in the example above:

Contingent Valuation: Using a survey, all the lake residents would be asked how much they would be willing to pay to maintain a healthy lake, or, conversely, how much they would need to be given to compensate for the loss of the lake. The answers of everyone would be considered the value of the lake.
Damage cost avoided, Replacement cost, and Substitute cost method: Since the lake currently provides drinking water for residents, using this technique, the value of the lake would be assigned based on how much it would cost to replace or substitute that service. Therefore, the value of the lake would be the cost of providing water and water infrastructure to all residents.
Travel Cost: This technique would calculate the costs incurred by people who recreate at the lake by determining how much they spend on fuel, lodging, travel time, entry fees, etc. The cumulative amount of recreational expenses represents the worth of the lake.
Hedonic Pricing: This technique would examine property values in the area looking at the difference in sales prices between similar cabins on the lake compared to those off the lake. The difference in sales prices is used as a proxy for the value of the lake because that is how much value the lake added to the property.

The advantage of all these techniques is that it is possible to have a conversation in which apples are being compared to apples. If we know that the commercial development will inject $3 million into the local economy, but, based on one or more of these valuation techniques, we can assign a value of $5 million to a healthy lake it makes the decision to deny the commercial development an easy one.

The risk, of course, is that these techniques may not adequately capture the value of an intact ecosystem. It seems unlikely, for example, that the value of a lake, an entire ecosystem, can be adequately captured through property price differences. What if the properties not on the lake have other redeeming features, such as easy access to excellent walking paths? That nuance would be missed using only the Hedonic Pricing technique and the lake deemed less valuable as a result.

Although it couldn’t be argued that any one of these techniques does a perfect job of attributing value, they are all better than nothing. If no value can be ascribed to the environment the conversation languishes forever in the realm of apples and oranges and, historically, that puts the environment on the losing end. It is better to have the environment undervalued than not valued at all and for that reason nonmarket valuations are an important tool – by finding common ground between the economy and the environment, these techniques make possible a comparison between the two.

Composting: Worth the expense?

Fri, 10 Sep 2010 17:09:00 GMT

by Larissa Sommerfeld

Local government, despite receiving the lowest portion of the overall tax pie, provides many of the services that affect our daily quality of life, such as water services and waste management. Actions on the local level represent the building blocks of change, and it’s always interesting to learn what different communities are doing for the environment and economy—two major areas the Canada West Foundation focuses on.

I was in Saanich, BC last week. While coming up the basement stairs of my friend’s home, I encountered her five year-old son.

The curious type, he wanted to know where I was going.

“I’m just heading upstairs to throw out my banana peel,” I told him.

He looked at me with wide eyes and with a hint of exasperation said, “You mean, you’re going to compost your banana peel.”

I was surprised and impressed by how environmentally mindful this little guy was.

My interest peaked, I learned from my host that in Saanich, garbage is collected only once every two weeks and that each household—whether it is a household of two or ten—can only have two bins collected at a time. To put out a maximum of two additional bins, a small fee is charged.

Garden waste, and anything that is recyclable, can’t be mixed in with regular garbage. If it is, you might be fined up to $100.00.

And as of 2012, it’ll be prohibited to put kitchen waste in your garbage anywhere in the Capital Regional District (CRD). Instead, kitchen waste will be collected and turned into compost. Kitchen waste can include meat, bones, dairy products, coffee grounds, and used paper towels—all stuff you wouldn’t want to put in your compost unless you wanted a raccoon and rodent feeding frenzy in your backyard.

Saanich’s dump is filling up—and if it keeps filling up at the current rate, the CRD will have to buy more land for a new landfill. In Metro Vancouver, the amount of waste generated per year is increasing—partly due to population growth. Right now, 3 million tonnes of waste is generated annually. In twenty years time, it’s projected to hit 4.5 million tonnes. The kitchen waste-to-compost program is a way to avoid creating new landfills. Banning organic waste from dumps free up a lot of space—in Saanich, it makes up almost one third of all waste in the landfill.

On top of freeing up space in landfills, compost programs remove a major producer of greenhouse gas. The decomposition of organic waste produces methane, which is 21 times more potent that carbon dioxide in terms of global warming. According to the Pembina Institute, “composting is the best solution for avoiding the generation of landfill gas.”

But change doesn’t come cheap. In the CRD, the cost of collecting recycling is currently about $2.7 million each year. With the introduction of compost collection, the price tag is expected to rise to $5.9-$8.6 million per year. That’s a pretty big increase. Are these costs justifiable in a time when municipalities are tightening their belts? And is it politically viable? Inevitably, either taxes or waste disposal fees will rise.

Are there are other questions to consider. What are the long-term implications (economic, social, and environmental) of adopting short-term solutions to these waste management challenges? What incentives or stimulus programs could be implemented to create change? Should the costs of landfilling be increased to the point that other options are more appealing?

And is this kind of program user friendly? Some argue that knowing what is recyclable can be confusing, and even despite best efforts, a recyclable product usually still ends up in the trash by accident, resulting in a warning or fine.

Although government initiatives may face resistance due to their large price tags, they are often necessary. Large-scale programs such as composting provide individual citizens with the tools needed (infrastructure, regulations) to make positive change. Governments should be taking the lead on these kinds of initiatives, and 34 municipalities across Canada (including Edmonton, Vancouver, and Toronto), have already taken the leap.

The bottom line: It makes sense to invest in composting. Increasing populations and dumps that are filling to capacity mean that either new landfills need to be created or the amount of waste needs to be reduced. Composting organic waste frees up space in our landfills, reduces landfill green house gas emissions, provides compost for community gardens and parks, creates local green jobs, and develops a new level of environmental consciousness in our kids and us.

Evolve the Economy or Face Extinction

Wed, 08 Sep 2010 21:57:00 GMT

by Robert Roach

There are many ways to ruin a cocktail party. One tried and true way is to bring up the environment: “Are you aware that the pork in that pig-in-a-blanket you are eating creates toxic run-off that contaminates our rivers?” “No, but it sure is tasty!”
This is why we did not start this series of articles on changing Canada’s economic DNA with a piece on the importance of thinking and acting green. However, while it may be a buzz kill, addressing the environmental piece of the economic competitiveness puzzle is critically important.

This is especially true because we are nowhere near where we need to be when it comes to environmental efficiency (see what we mean—what a buzz kill). We have an economy that is really good at exploiting the environment and we are trying to stick this square peg into a round environmental hole. There has been progress: recycling has become commonplace, dumping industrial waste directly into rivers has been banned, and we have greatly reduced the use of ozone-depleting hairspray. Despite these and other minor adaptations, our basic economic DNA is black and red (as in black and red ink) rather than green.

The point here to not to be ashamed of what we have accomplished as a civilization. The modern economy and its roots in transforming the land and harvesting the earth’s resources have taken us out of the stone age. For most of us, at least, this is a good thing.

Nonetheless, we don’t want to become an economic dinosaur staring into a future where we are just a bunch of bones in a museum. We have to move beyond tinkering at the margins of how our economy operates and embrace a completely different approach to how we weld our economy with the short-, medium- and long-term health of the planet.

The first thing we have to admit is that this will not be easy and it will not come without short-term costs. It will pay off, but like anything worth having, it requires sacrifice. There will be winners and losers, and the losers are not going to be happy. If we plan for this rather than think that the transition to a green future will be painless, our chances of success will be much greater.

The second thing we need to understand is that one-off reactions to the crisis of the day—be it greenhouse gases, oil spills, birds getting chewed up in wind turbines, or the disappearing rainforest (remember when we cared about that?)—will not get the job done. It is like training a duck not to quack—you might have some success, but it would be better to change the duck’s genetic code so it has no need to quack.

As an economy, we need to change the basic equation of exploiting land, labour and capital to a much more complex algorithm that incorporates the value of ecological goods and services, establishes the primacy of creativity and innovation, and erases the notion that “protecting” the environment is either a cost or a moral obligation. Sustainable practices must be as natural as breathing. If they are only the result of laws, guilt or religious fervour, they will always be on shaky ground and open to fierce opposition

We need business practices, investment strategies, production systems, accounting methods, entrepreneurial norms and market signals that integrate both the efficiencies that can be gained from green economics and its respect for the natural processes that sustain life.

A change of this magnitude is a massive undertaking, and for this reason alone it cannot be centrally controlled. It has to happen at the level of the individual firm, investor, entrepreneur, worker, parent and teacher.

Two things make this transformation increasingly likely: first, there are many potential advantages to a greener economy including lower production costs and higher profits; new jobs in the green services sector; a decrease in onerous government regulation and the related compliance costs; and less money spent on reacting to environmental challenges (thus leaving more money in the hands of consumers).

Second, we know more today that we used to. Some will say that we have only rediscovered what some ancient cultures already knew, but either way, the next generation of Canadian entrepreneurs, investors, managers and workers are much more savvy about the need for, and value of, greater balance between harvesting the earth’s bounty and ensuring that it continues to be bountiful.

Canada can take the lead. Or, we can become the dinosaur as Germany, the US, and yes, even China, push us out of the way.

Moving Up—Way Up—the Value Chain

Wed, 01 Sep 2010 15:47:00 GMT

by Robert Roach

This post is based on a forthcoming book entitled “Re-Writing the Code: Changing Canada’s Economic DNA” by Todd Hirsch and Robert Roach.

In the bad old days when people were sent to poorhouses for falling on hard times, there was a job called “picking oakum.” Prisoners were forced to untwist old bits of hemp rope by hand until their fingers bled. The resulting product was then used for other purposes such as stuffing mattresses. As such, picking oakum was a value-added industry: a raw material was processed and, in turn, value was added and “jobs” were created.

It is easy to imagine a local oakum producer stressing how much better it is to untwist the hemp locally as opposed to exporting it in its raw form.

Picking oakum is an extreme example, but it highlights the need for economic strategies that go beyond simply promoting more value-added activity. A new meat packing plant, bitumen upgrader or auto parts factory are not going to maintain Canada’s economic prosperity in the global economy of 2010 let alone 2025 or 2050. We have to aim higher—much higher—than the modern equivalents of picking oakum.

This does not mean that we should not make more pasta, furniture and or other value-added manufactured products here in Canada when and where it makes economic sense to do so. What it means is that we need to fully understand that “making things” (especially things that our competitors can make cheaper) will not keep Canada prosperous.

For example, we have lots of oil and natural gas that we could turn into plastic patio chairs. But the reality is that, even after shipping the chairs across the sea to North America, the Chinese can still make plastic patio chairs cheaper than we can (assuming we don’t try to compete by dramatically lowering wages or loosening environmental standards—something we definitely do not want to do). As a result, when some guy in Florida needs a patio chair, he buys the one made in China. And at $10 each, you have to sell a lot of patio chairs to fuel your economy.

So where does this leave us? Believe it or not, it leaves us in a very enviable spot. The Chinese officials who know that their country’s long-term economic future will be bleak if it involves making stuff that ends up in dollar stores would love to have the advantages that we have in Canada right now: a modern service-based economy with a high level of education, a relatively low level of poverty and infrastructure galore. We have everything we need to aim for the top of the global value chain.

The good jobs of tomorrow and the industries where we have a chance to develop a comparative advantage are largely at the upper end of the value chain. You don’t want an army of workers assembling iPads. What you want is workers who design iPads and other marketable innovations. You want businesses that not only figure out how to extract oil and gas here in Canada, but that sell their expertise to drilling companies around the world.

We might make lots of pasta out of our wheat or we might ship it elsewhere for processing, but what we really want is to corner the market for designing the strains of wheat and other staples that will help feed the world’s growing population.

We have the ingredients—wealth, education, previous successes, entrepreneurs, great cities and so on—to play at the upper end of the value chain, we just need to make this our focus. Exporting natural resources and “making stuff” will remain key components of our economy, but if we don’t aggressively go after the profits and jobs to be found in medical research, education services, financial services, biotech, IT, entertainment and so on, we will find our standard of living falling as our competitors get better and better at both the bottom and top ends of the value chain.

The Canadian economy needs to be driven by ideas, innovation and the practical knowledge that takes ideas and innovation and turns it into good jobs and economic growth.

One caution: the bursting of the dot.com bubble showed us that economic activity at the top of the value chain still has to have real substance. If it is just a bunch of young people playing pool in the lunch room and getting paid in soon-to-be-worthless stock options, it won’t work. We need good ideas that are turned into real innovation and real value. We have the ingredients to do this, now is the time to stir the pot and make it happen.

Robert Roach is Senior Researcher and Director of the West In Canada Project, Canada West Foundation and Todd Hirsch, is Senior Economist, ATB Financial.

In Memoriam: David E. Mitchell

Fri, 27 Aug 2010 21:56:00 GMT

In Memoriam: David E. Mitchell (1926-2010)

The Canada West Foundation was very saddened last week by the loss of long time supporter, friend and member David E. Mitchell. Mr. Mitchell was a patron of the Foundation, expressing keen interest in the research we were doing and always encouraging the Foundation with thoughtful words of support.

The Canada West Foundation was very proud to have Mr. Mitchell, a man of integrity, intelligence and wisdom among its Members and he will be missed.

Mr. James Gray, Honorary Chair of the Canada West Foundation, a close friend of Mr. Mitchell shares his memories of this remarkable man.

I first met Dave Mitchell in the late 1950s. He was running the engineering and production department at Great Plains Development Company and I was a summer student in the exploration department. Within a year the company’s then CEO, Nick Nichols, drowned in a swimming accident in Hawaii and Dave was prematurely thrust into the responsibility of CEO in his early thirties.

From that point, Dave never looked back. His technical knowledge together with his strategic vision were of the highest calibre. What set Dave apart, however, from other industry leaders was his outstanding ability to connect and communicate with virtually everyone he met. He valued family, friends, community and country and in all aspects he “walked the talk.”

Once Dave identified young leaders he loaded them with responsibility and offered advice and support—he believed in strong teams. Dave also believed strongly in community and country and served both with resources and personal commitment.

Finally, Dave believed deeply in both family and friends. He was immensely proud of his family and was always loyal to his friends. Dave had every right to be proud of his accomplishments but he never, ever brought praise onto himself. At every opportunity he insisted that others be congratulated, that others be given the credit. Dave is one of the very few who truly left this place substantially better than he found it.

I have always considered myself among the blessed to have known Dave Mitchell for over 50 years. We have lost a dear friend and a great citizen.

(David E. Mitchell was a Member of the Canada West Foundation from 2003-2010)

Canadian Identity in Nature

Tue, 24 Aug 2010 19:39:00 GMT

“The People and the deer fused in my mind, an entity. I found I could not think of one without the other, and so by accident I stumbled on the secret of the Ihalmiut.”

I was reminded of this quote from Farley Mowat’s book, People of the Deer, when reading about the debate currently taking place over the impact of seismic testing on the marine wildlife in Lancaster Sound and, by extension, the northern communities that rely on that wildlife.

The connectedness of people with their natural environment, including the wildlife, is important and something you can’t put a price on. This was the message of Nunavut judge Sue Cooper and one of the reasons why she blocked a seismic study of Lancaster Sound. She states, “The loss extends not just to the loss of a food source, but to loss of a culture. No amount of money can compensate for such loss.”

Lancaster Sound is a body of water north of Baffin Island in Nunavut that is rich with marine wildlife. It is the home of narwhal, walrus, beluga whales, seals and polar bears and is an important migratory route. The abundance of life is so substantial there it has been dubbed the “Arctic Serengeti.” It is also an area that has yet to be explored in terms of its mineral and resource wealth.

That is the aim of Natural Resources Canada, which is interested in conducting a geo-mapping program in order to “increase our knowledge of the geology of the North.” This seismic involves firing an air gun underwater to gather data. This process, they say, presents very little risk to wildlife. The Inuit, however, disagree and argue that previous seismic testing resulted in death and hearing damage to wildlife, and caused whales to alter their migratory route.

Many important questions remain unanswered in this case, including: What is the scientific evidence of the impact of seismic on wildlife? Was the consultation process with the potentially impacted communities sufficient? And, what is the intended use of the geological knowledge obtained through this seismic testing?

What is interesting to me isn’t whether blocking the seismic was a good or bad decision. What’s interesting is that there was an acknowledgement of the larger philosophical concept that place matters—that individuals, communities and cultures’ sense of self is informed by their natural environment and you can’t impact that environment without impacting the people within it.

It is easy to forget sometimes that the value of the natural environment can’t be readily quantified in economic terms—although various solutions from Bentham’s utilitarianism to Bhutan’s Gross National Happiness indicator have been attempted. The valuation difficulties are not easily overcome, as the case of Lancaster Sound illustrates. It is possible to conduct seismic testing to learn about the type, quality and quantity of mineral deposits on the bed of the Arctic Sea and assign a numeric value to it; but, is it possible to assign a price to the value of a preserved natural environment to the culture and identity of the Inuit?

Having a connection with nature is important for all people, not just aboriginals or northerners. A love of nature is one of the few things that unites all Canadians. For example, 98% of Canadians state that they view nature in all its variety as essential to human survival, 90% consider time spent in nature as children as very important and 82% say nature has very important spiritual qualities for them personally (Environics International, 1999).

This connection, or bond, with the natural world is especially significant for western Canadians whose psyche and character are informed by the expansive lakes of Manitoba, the broad prairies of Saskatchewan, the jagged teeth of Alberta’s mountains and the rhythmic ocean on British Columbia’s shores.

This means that whenever we disrupt the natural environment we need to be asking: what is the impact of a disrupted, polluted or otherwise unhealthy natural environment on our sense of self and community? Or, to put it another way, if you woke up tomorrow and the salmon stock had collapsed, the lakes were too polluted to swim or boat in and grizzly bears were extinct, how would that impact your understanding of what it means to be western Canadian?

As we search for the correct balancing point between economic development and environmental conservation as a region and a nation, we need to keep in mind that the natural world matters to our sense of self. Although both the economy and the environment are important there are some variables, such as identity, that you can’t readily put a price on. As Mowat notes, identity and nature are fused, they are an entity.

Namaste India

Wed, 25 Aug 2010 15:18:00 GMT

Or, ‘Hello India’ as ‘Namaste’ is the traditional Hindi greeting.

Why an Indian greeting for India?

This past Sunday, Indian flags were flying across Canada to celebrate India’s 63rd year as a sovereign nation. This past June, during the G20 Summit, Prime Minister Stephen Harper hosted a formal dinner for Indian Prime Minister Manmohan Singh. After roughly forty years of cool (some might even say cold) relations between India and Canada, events such as these symbolize a marked warming, and celebration of Canada’s relationship with India. India currently ranks 10th amongst Canada’s trading partners but, it is relationship which is proving increasingly important to Canada for a variety of strategic, and trade reasons including: its potential as an expanding market for Canadian goods, and an opportunity for Canada to expand its knowledge economy.

Acknowledging India’s potential as a new market for Canadian goods is nothing new. India is home to a population of 1.25 billion (second only in total population to China) of which an increasing number are middle class. India’s growth has been no less than astounding; with a GDP growth rate that has averaged over 10% the last few years. Both of these facts have contributed to increases in commodity trade by 23%, 116% and 306% in Manitoba, Alberta and Saskatchewan respectively over the past decade.

But, where the potential really lies in doing business with India is not in our lentil and wheat production. India offers a great opportunity for Canada to increase its trade of knowledge and expertise. This is especially apparent in the areas of resources and energy production and infrastructure.

At current rates of economic growth India is demanding that its own energy sources increase production by more that more than 4.3% a year. However, it is faced with a growing carbon footprint and a depleting water source. Canada can help with a focused and bottom-up approach to share expertise and technology in areas including hydro-electric power and nuclear energy, areas which Canada is a long-time global leader in research and development, as well as biomass and clean coal technologies, where Canada is working towards becoming a global leader. The added bonus being that if India chooses to, while it is developing these energy capabilities, it has the opportunity to develop energy infrastructure that is cleaner than the energy systems in many western countries, something which is an environmental benefit for all.

In regards to infrastructure, one of the biggest challenges facing India and its ability continue on its current trajectory of tremendous growth is its domestic infrastructure, or more accurately, its lack thereof. But, every problem has a silver lining and in this case, it’s one that offers western Canada opportunities. After all, who is the world is better at building pipelines than western Canadian companies?

At a recent conference put on by Calgary Economic Development (CED) in conjunction with the Indo-Canadian Chamber of Commerce (ICCC) entitled “Doing Business in India”, I had the chance to hear of one such story of trade expertise. Enbridge Technology Incorporated’s Bill Trefanenko told how Enbridge was recently contracted out by an Indian firm to help it develop a gas pipeline to take natural gas from India’s south east coast clear across the country to where they refine petrochemicals on the west coast.

These are just two examples of where western Canadian-Indian knowledge trade has potential.

But, if we are going to be able to take advantage of these opportunities we need to ensure that we build the cultural bridges necessary, we need to better understand India’s business culture. Over 925,000 Canadians identify themselves as Indo-Canadian. We have the connections, we need to use them! Calgary Economic Development and the Indo-Canadian Chamber of Commerce’s conference was a good start towards this.

Other recommendations for how we can understand and improve business relationships with India include enhancing our focus on building bi-lateral linkages. This could include trade delegations, perhaps similar to the New West Partnership mission that went to Shanghai this past spring. Research and educational institutions also have a large role to play in tapping the Indian market for educational services, and building institutional linkages.

So, we have some work to do if we are going to take full advantage of the opportunities India presents when it comes to western Canadian trade. But, we would be amiss, when we looked west to only look as far as China’s shores. Who knows how far western Canadian trade with India can go, and we’re not going to know unless we take the opportunities that are in front of us here and now.

Posted by: Candice Powley

Canada’s Economy Needs Clever Thinkers

Tue, 17 Aug 2010 19:46:00 GMT

This post is based on a forthcoming book entitled “Re-Writing the Code: Changing Canada’s Economic DNA” by Todd Hirsch and Robert Roach.

In much of the thinking on economic competitiveness, there tends to be an emphasis on science, math and applied technical skills. Without question, these are essential if Canada’s economy has any chance of success in the coming years.

But a test tube can solve no problems. A hammer can build nothing. And even the most powerful computer can’t create a thing. What each of them needs is a human brain to operate them to solve, build and create. Obviously, knowing how to use a test tube, a hammer, and a computer is essential, but what’s really needed is clever ideas that apply the technology to solving 21st century problems. We don’t need a fountain of youth; we need a fountain of smart!

A few years ago, Daniel Pink authored a book entitled “A Whole New Mind.” He argued that linear-thinking and “left-brain” occupations such as medicine, engineering and computer science contributed significantly to our economic wealth in the 20th century. But increasingly, because of competition from Asia and the advances in computing ability, what North America’s workers really need in the 21st century are more “right-brain” attributes—skills such as imagination, creativity, intuition and relational abilities—to complement our linear thinking.

The problem now is that so much has been written on the importance of “the creative culture” that some of us are growing frustrated with not knowing exactly what “creative” means. Does it mean that our cities need to be artsier? Will trendy cafes and poetry readings bring prosperity? Do we really need to turn our old warehouses into avant-garde theatres or face economic extinction?

Not at all. Art and culture have extremely important roles to play in the economy, but the notion of creative students and creative workers goes far beyond Bach, Shakespeare and Monet.

Creativity is an essential element in every occupation. In its broadest definition, creativity is the application of a clever idea to solve a problem, seeing something in a new way or making something unique. Even something as simple as putting a telephone book under your computer monitor to raise it a few inches is a creative (albeit very basic) solution to a common problem.

People say all the time, “Oh, I’m not creative.” But in fact, everyone is creative, or at least has the potential to be. And most of us have no idea of the creative capacity we possess. There is not a single sector of the economy that would not benefit from clever solutions to problems, new ways of seeing things and unique products.

What can we do, then, to foster a clever society?

When it comes to our children, the answer is almost comically simple: stop pounding the creativity out of them. Much of our education system over the past century had sadly evolved into a system that practically punishes creativity. Thankfully, huge strides are being made by some of Canada’s most thoughtful education practitioners in trying to correct that.

One example of how to foster children’s creative abilities is found at the Calgary Arts Academy. This K-9 charter school is not an art school; rather, it’s an arts immersion school that delivers the standard provincially approved curriculum through the arts. Teachers work alongside artists to design the program. Kids learn math through music and dance, for example, or social studies through drama. Don’t just make the kids read about and memorize types of cloud formations—get them to write a play and act like clouds. By doing so, they engage their whole brain in learning the defining characteristics of different cloud types.

Being clever must also extend to the workplace, and here we need an effort from both employers and employees. All sorts of courses and seminars are offered to stimulate the whole mind and train ourselves to think critically. At the very least, an emphasis on correcting basic literacy deficiencies would go a long way in making the workplace safer and more productive.

Certainly there are many who will quickly dismiss these activities as a waste of time and money. But activating all parts of the human brain is no silly diversion, and it could do amazing things to help Canadians work more productively, get more enjoyment out of their jobs, and find clever solutions to the problems they encounter in the workplace.

All of us are clever in ways we can’t even imagine, and exercising that cleverness is an economic imperative. Clever kids aren’t the ones who simply memorize information; clever kids are the ones who learn how to learn. Clever workers find simple solutions to the complex problems they encounter in their daily jobs. And the future of Canada’s economic prosperity needs them both.

Robert Roach is Senior Researcher and Director of the West In Canada Project, Canada West Foundation and Todd Hirsch, is Senior Economist, ATB Financial.

Posted by: Rob Roach

Looking Forwards and Back: Canada’s Environment and Aboriginal People

Tue, 17 Aug 2010 18:58:00 GMT

This last month celebrations were held for the 125^th anniversary of two significant and unrelated events to western Canada: the creation of Banff National Park and the Métis Northwest Rebellion led by Louis Riel.

If you aren’t familiar, here’s a little bit of the history:

Banff National Park was created in 1885, the first national park in Canada and the third such park in the world. The park was created to protect the Banff hot springs, which had been discovered by two railway workers in 1883 and were the focus of conflicting commercial plans. Instead of allowing the hot springs to be developed, John A. Macdonald declared the area a protected space. Banff is now one of the primary tourist destinations in Canada and the world, receiving almost 5 million visitors a year.
The Northwest Rebellion was a brief and, ultimately, unsuccessful uprising by the Métis people. It was some 15 years after the Red River Rebellion, but the issues were much the same. The Métis people were concerned about the distribution of land following the influx of immigrant settlers, the effects of poverty and the fate of the buffalo, which were being hunted to extinction. There were numerous skirmishes and battles—including the Battle of Batoche, where Métis people gather annually in July to celebrate their culture and heritage—that resulted in the defeat of the Métis people and the hanging of Louis Riel.

Both of these events are significant to the character and development of western Canada and for this reason alone they are important to remember. It also strikes me that the larger issues they represent are still ones that we are dealing with as a region today. Namely, we are still trying to figure out how to balance environmental conservation with economic development, the rights and roles of aboriginal people in western Canada and everything in between.

Today, Canada’s environmental record is one of the worst among OECD countries and the West contributes substantially to that record. Across 25 environmental performance indicators used by the OECD, Canada is not among the five best countries on any measure and is among the five worst on 17 of them. We have a resource-based economy that relies on high energy and water inputs and extraction techniques that are detrimental to environmental conservation. There is an ongoing debate between industry, governments, NGOs and citizens on precisely where the balancing point between economic development and environmental conservation should be. One of John A. MacDonald’s legacy from this debate was the creation of Banff National Park. I wonder if we can hope to be as successful in carving out a positive legacy from today’s environmental debate?

Similarly, across every measure of social and economic well being, the Aboriginal population in western Canada fares poorly compared to the general populace. According to census data the Aboriginal population is three times as likely to not have a high school education, more than twice as likely to be unemployed, roughly half of all Aboriginals survive on an annual income of $10,000 or less, over 20% report some form of physical or sexual abuse, they are much more likely to be incarcerated, have a diabetes prevalence rate of 3-5 times the general populace, and there are many other equally depressing statistics. Many of these statistics reflect the symptoms of poverty, the same thing Aboriginal leaders were concerned about in 1885.

My point is that we have been dealing with the similar issues around the environment and Aboriginals for 125 years. While we pause to recognize these historic events, now is perhaps also a good time for new, out of the box, thinking and creative approaches. We should be looking very carefully at the policies and programs of other countries (e.g., Australia and New Zealand) with similar challenges to find and implement their best practices. Maybe we should create a policy platform to educate and then employ aboriginal people in environmental conservation. That might help both the social conditions of Canadian aboriginal peoples and our environmental record.

Whatever we do, we need to get serious about it now, 125 years seems long enough.

Posted by: Shawna Ritchie

Thoughts from the CEO – Long-form Census

Tue, 09 Nov 2010 16:37:00 GMT

Only rarely does the Canada West Foundation as an organization express a view on policy issues. The norm is to speak through our research reports and their authors, and to avoid institutional endorsement of particular policy options or views. However, the debate over the long-form census is an exception, a case where the issues seem so important that they call for an institutional response. Thus in a variety of forums, the Foundation has joined with other Canadian think tanks in calling upon Prime Minister Stephen Harper’s government to reverse its decision to make the long-form census voluntary.

But why has the Canada West Foundation taken up this crusade? In part the answer comes from our methodological experience and expertise; we know that a voluntary census will not produce reliable data. This is not an opinion; it is as close to a fact as one can get in the complex world of statistical analysis. The government’s argument that a voluntary census will work if mailed to more people and backed up by massive advertising is simply wrong. We will pay more for less, which seems an odd strategy in this fiscal environment.

But does it matter if data quality is corrupted? I would argue that in a knowledge-based economy, paying more for poorer data makes no sense. We need more rather than less evidence-based policy design, and the movement away from the current long form census is movement towards policy impoverishment. It is also a signal to the world that we don’t take ourselves seriously, that we’re content to rely on hearsay and guesswork.

All of this, of course, may seem rather abstract, so let me give you a concrete illustration from the Foundation’s work. Part of what we do involves mapping patterns of demographic change in a highly dynamic, growth-driven region of the country. We know that the region has been transformed fundamentally since the census in 1971, the year the Foundation was created, and we believe that understanding and mapping that transformation is fundamentally important in coming to grips with the future of the West in Canada, and within an increasingly competitive global economy. Self-knowledge is not everything, but it is an important start.

However, if we move to the short-form census alone, or coupled with a deeply flawed voluntary long form census, we will no longer be able to map the demographic evolution of the West. When asked to describe how our linguistic and ethnic diversity is changing, to map the migration of Aboriginal peoples into urban centers, to understand patterns of integration, assimilation and migration for new Canadians, we will have to fall back on guess work and assumptions. I can’t believe that we will settle, that we should settle, for “by guess and by golly” when we can do so much better.

Now, none of this means that the status quo should be exempt from criticism. We could certainly eliminate the threat of jail for failing to complete the census, a threat that has never been carried out in any event. We can and should review the content of the long form. And, if we’re smart, we can further insulate the Census operation from political influence.

In short, we can do better, but the long-form census is one baby that should not be thrown out with the bath water.

Posted by: Roger Gibbins

How is BC Doing? A Look at the Latest Economic Data

Tue, 17 Aug 2010 03:05:00 GMT

Trying to get a handle on BC business conditions now is a little bit like nailing jelly to the wall.

The recent economic numbers look pretty good with employment and output both staying in positive territory and doing better than in Canada as a whole.

The unemployment rate, at over 7%, is higher than we might like, but still better than the national rate. The number of people working has been rising, with unemployment only staying high because better times are encouraging more people to enter the workforce. Problems of labour shortages are now just beginning to arise and, so far, only in very specific cases. For example, CP Rail is now very short of workers in the smaller towns in both BC and Alberta with 200 vacancies.

The BC list of major projects continues to grow as the number of new projects being added to the list exceeds in both in quantity and value those that are completed. Even though not all the proposed projects are firmly nailed down yet, this picture is very different from the post-Olympic falling off a cliff that some were forecasting.

To the great relief of all Vancouver and Lower Mainland home owners and to the great disappointment of baby boomers elsewhere who were hoping to retire here, housing prices seem to have stabilized in the metro areas of BC at levels not too far below what they were at their frenzied peak. This means that the net worth of households and individuals is back where it was before the last recession.

Retail sales (including new car sales) and wholesale trade are moving up, but not as strongly as they were in boom that preceded the last recession.

Finally, most small and medium sized businesses and professional practices are managing to keep busy and are optimistic about the future. This last point should be treated with caution. Operators of smaller businesses are almost always optimistic.

However, there is more happening in BC than the relatively good news outlined above. Tourism is one sector that has declined, with US visitors down about 5% and overseas tourists down 1%. After a brief up tick, lumber prices are soft again, seeing no signs of life yet in the US housing market. Though still basically healthy, prices for energy and other commodities have declined from their peaks. Those who deal with new stock issues or new housing developments are not being overwhelmed with work.

Apart from or maybe in spite of all the numbers, there has been a change in how people feel—the animal spirits that economists talk about that determines how we act. People and businesses are being more cautious now that markets are not continuously rising and few jobs are going begging. Families are being more careful and are thinking about saving rather than spending. Look for a very modest increase in back-to-school sales this year.

Businesses of all types and sizes are seeing their customers becoming much more price and value conscious. No longer can a supplier tell a customer or a client “good, fast, cheap—pick two”. People are learning from Wal-Mart, one of the biggest buyers as well as one of the biggest sellers in the world. In order for Wal-Mart to offer its customers the lowest possible prices, it must get the lowest possible prices from its suppliers and will examine suppliers’ books to insure that their costs and margins are such that they are earning just enough to be able to stay in business.

All purchasers, whether they are deficit-ridden governments, more cautious consumers or businesses that are themselves under pressure, are now sharpening their pencils to get the maximum value for the lowest price. Whether in construction or consulting, very competitive bidding is now the norm. Professions are not immune. Corporations are now questioning their law firms about the venerable institution of billable hours and seeking a more certain and cost effective way to get their legal work done.

It is no longer a seller’s market whether you are providing goods, services or your own time in a job. But there is still a reasonable market out there for the goods and services that our businesses can turn out if we are efficient and effective. Big and small organizations in BC and Canada are now getting back to business and showing how productive they can be. It was the lack of productivity and cost-effectiveness that has hindered Canada’s competitiveness in the past. Today’s market challenges and the positive way the business sector is responding to them should result in great increases in productivity and competitiveness in the future.

Posted by: Roslyn Kunin

Fall 2010 Student Internship

Mon, 16 Aug 2010 17:12:00 GMT

We are now accepting applications for two positions in the Jim Hume Student Internship Program for the September to December 2010 term. The application deadline is 5pm (MDT) Friday August 20, 2010. Only applicants selected for an interview will be contacted.

Two internship positions are available. The internships are open to current students and recent graduates (up to 18 months) of a Canadian post-secondary institution, with majors in economics and/or political science. Successful applicants will:

Have advanced analytical, research and communication skills, and the ability to conduct research and analysis on major energy, environmental and economic challenges in the western Canadian context.

Have a passion for public policy and be able to work collaboratively to develop robust, evidence based, and thoughtful public policy recommendations for the benefit of Canada.

The internship starts on September 8, 2010 and ends on December 23 2010 (16 weeks). The interns will work out of the Canada West Foundation’s Calgary office, will be paid $18/hour and will work 37.5 hours per week.

Please send the following items BY EMAIL to William Kimber with “FALL INTERNSHIP” in the subject line:

cover letter outlining why you are interested in doing an internship at a public policy think tank, and how your capabilities fit the internship requirements above;
resume, including awards and publications; and
an unofficial transcript of your grades.

The program is designed to provide post-secondary students with a rewarding experience working at one of Canada’s leading public policy research institutes.

Posted by: Jason Azmier

Op-Ed: China’s Drive Will Help it Thrive

Mon, 16 Aug 2010 17:07:00 GMT

Everyone knows that the growth of China as a supplier, market and competitor is important to western Canada. The incredible work ethic of its people ensures that growth will continue. I have been visiting China since 1986. China has made amazing advances from the near biblical conditions that existed in much of that country only 25 years ago, and that development is continuing.

Basic necessities
Consider the basic necessities to start a family. Back in the 1980s, a suitable marriage partner in China needed four things – three rounds and a sound.

The first round was a bicycle, the then-ubiquitous means of moving whole families at once and even to haul furniture. The next round was a sewing machine, vital when clothing was scarce and had to be kept in repair and altered to fit a succession of wearers. The third round was a watch – about the only item of conspicuous consumption the average Chinese citizen could aspire to then. The sound was a radio, the first step in entertainment and communication.

Now, consider how that list has changed. Radios disappeared in favour of colour televisions. Cell phones proliferated. Both of these items imply the availability of electricity and connectivity. In the cities, refrigerators and air conditioners are taken for granted. And the most eligible marriage partner now has a condo and a car. Bicycles have become so scarce in Beijing, tourists wonder why there are narrow ramps on the staircases to overpasses.

Daunting challenges
There are challenges to ongoing growth in China: corruption and escalating housing costs. The Chinese government admits to these, and is taking steps to correct by arresting corrupt officials and limiting access to mortgages for second dwellings. But others are not mentioned, like so-called “mass incidents” when people protest dislocations, unemployment and other sources of discontent. The pollution is so bad, it reminds me of an old Tom Lehrer folk song: “Don’t drink the water and don’t breathe the air.”

Even so, China will continue to grow because so many Chinese people are ambitious and willing to work hard to achieve their goals.

How hard? One young man spoke to me in fluent, colloquial English that he had learned by watching Friends and Desperate Housewives on television. Turn your TV to a Chinese channel and guess how long it would take you to speak fluent Chinese.

Here’s another example. An athlete – a swimmer – was training in the Yangtze River, a filthy stream, brown with silt and waste. The swimmer had tied a big red buoy to his back so that he would be visible to the boats, barges and ferries that plied the river.

Ready to sacrifice

I thought about his determination to train and then I thought about some British Columbians who said they would not be able to exercise because there is now HST on gym memberships.

A Chinese university student would allow himself to be locked into the library at closing time so that he could maximize his study time. His parents struggled to keep him in university and he wanted to be able to pay them back, treat them well and provide well for his own future family. He wondered why North Americans, whom he perceived as already being well off, would go to university – not realizing that most students here do not work a fraction as hard as he did.

In any country, it is the efforts of individual people that determine success. With people like those mentioned above, China, even with all its problems, will continue to advance. Will we be in a position to take advantage of that growth?

Dr. Roslyn Kunin is director of the B.C. office of the Canada West Foundation.

Posted by: Roslyn Kunin

More Than Just Tourists: Canadians in the International Economy

Mon, 16 Aug 2010 03:59:00 GMT

Manhattan is full of restaurants, galleries, and art studios that inhabit buildings once used for packing meat, tanning leather or sewing clothes. Those industries and jobs left Manhattan long ago, but the city continues to prosper because it found other economic activities to replace the old ones.

In the not-too-distant future, Canada’s office towers may, like Detroit’s, be sitting empty. But if we are careful, they may be bustling with people, perhaps in industries that don’t even exist yet. If we prepare now for the inevitable changes that will ripple through our economy, we will enjoy continued prosperity.

One thing Canadians can do is build on our already strong international connections and make the country a truly cosmopolitan place. The economy is a global system, and successful jurisdictions are those that not only compete with other jurisdictions, but also those that team up with them to generate new ideas for how to create wealth.

We need to see the rest of the world as more than a market and more than a threat (although it is both of these things). That requires us “getting out there” and building international business relationships with individuals, firms and governments—not to simply sell our wares, but to collaborate on new ventures as well. We have done a great job shipping oil, beef and auto parts to the US, but it’s time to make some significant additions to our economic repertoire. We can become a global trendsetter.

Cynics will say “this is wildly naïve—we are a small player and we will never be a trendsetter or leader in international business ideas.” This sort of self-defeating nonsense needs to be ignored. There is absolutely no reason why Canadians cannot be partnering with Indian firms to develop biotechnology, or with Russian gas explorers to provide new gas field services, or with the Chinese to design more sustainable cities. Canada is overflowing with highly educated, entrepreneurial people with a great deal to offer the global economy—we just have to take more advantage of these assets. We have wealth, we have a multi-cultural society, we have political stability, and we have the freedom to experiment and create.

Some practical things that we could do to up our game include transforming our colleges, polytechnics, and universities into hotbeds of international study and research. What if Canada had the largest body of international students in the world? What if tens of thousands of researchers from across the globe were in labs at our universities? The connections made with these students and faculty would facilitate all sorts of future business partnerships. Some of this is already underway, but we’ve got a long way to go.

We could also encourage Canadians (especially young adults, but older ones too) to spend a year or two in another country, or at least in another part of Canada—not as tourists, but as students and workers seeking new perspectives and broader minds. Some of those who go abroad won’t come back, but most will—and they’ll come back smarter, brighter, and full of new perspectives.

It’s not that outrageous an idea. In many countries, particularly Australia and New Zealand, the “overseas experience” (or OE as it is commonly called) is practically an expected rite of passage for young people. It requires the buy-in from parents to encourage the OE, but that’s not yet part of our culture in Canada. It may also require a shift in thinking for employers, too. Finding ways to encourage staff to go on a work exchange program for six months (similar to the sabbatical leave for academics) would be a powerful investment in the creative powers of its employees.

The OE also works in reverse. If Canada can attract lots of young people from other countries to do their OE here, some will stay to make up for the Canadians who don’t come back. They’ll inject new perspectives and ideas into the labour force. Others will go home with all sorts of personal connections to Canada that will expand our international presence.

We are already working hard to attract more tourists to Canada, and there is an economic benefit in that. But a truly cosmopolitan frame of mind demands that we move beyond welcoming tourists for a week or two.

Ultimately, the future of Canada’s economy lies in the ideas we generate and turn into commercial ventures. The more international our outlook and the greater our ties with international partners, the more likely it will be that our ideas will turn into profitable ventures—now and in the decades to come.

This post is the first in a series based on a forthcoming book entitled “Re-Writing the Code: Changing Canada’s Economic DNA” by Todd Hirsch and Robert Roach.

Posted by: Rob Roach

Organizations Opposed to Changing the Long Form of the Census

Mon, 16 Aug 2010 03:50:00 GMT

This list was compiled by W. T. Stanbury (wstanbury@prodigy.net.mx) and Armine Yalnizyan, Canadian Centre for Policy Analysis [last update:July 20,2010 ]

1. Atlantic Provinces Economics Council
2. Caledon Institute of Social Policy
3. Canada Census Committee
4. Canada West Foundation
5. Canadian Association for Business Economics
6. Canadian Association of University Teachers
7. Canadian Council for Policy Alternatives
8. Canadian Council of Social Development
9. Canadian Economics Association
10. Canadian Evaluation Society
11. Canadian Federation of Francophone and Acadian Communities
12. Canadian Institute of Planners
13. Canadian Jewish Congress
14. Canadian Labour Congress
15. Canadian Marketing Association
16. Canadian Medical Association Journal
17. Canadian Nurses Association
18. Canadian Public Health Association
19. Canadian Research Data Network Centre
20. C.D. Howe Institute
21. Centre for the Study of Living Standards
22. City of Calgary
23. City of Edmonton
24. City of Red Deer
25. City of Toronto
26. Conference Board of Canada
27. Co-operative Housing Federation of Canada
28. Environics Analytics
29. Evangelical Fellowship of Canada
30. Federation of Canadian Municipalities
31. Glendon School of International and Public Policy
32. Information and Communications Technology Council
33. Inuit Tapiriit Kanatami
34. Institute for Research on Public Policy
35. Medical Health Officers Council of Saskatchewan
36. Nanos Research
37. National Specialty Society for Community Medicine
38. National Statistical Council ( acts in a consultative capacity for StatsCan).
39. Ontario Council of Agencies Serving Immigrants
40. Province of Manitoba
41. Province of PEI
42. Province of Quebec
43. Quebec Conference of University Rectors and Principals
44. Regional Municipality of Halton
45. Regional Municipality of Peel
46. Rotman School of Management
47. Social Planning Council of Sudbury
48. Statistical Institute of Quebec
49. Toronto Association of Business Economists,
50. Toronto Board of Trade
51. Toronto Public Health
52. Toronto-Dominion Bank (per its chief economist)
53. United Way of Canada
54. United Way of Greater Toronto
55. University of Toronto School of Public Policy and Governance

Note: there are other lists and this one may not be exhaustive as it is difficult to keep track. If you know of others, by all means do share them!

Senate Reform in Perspective

Mon, 16 Aug 2010 03:17:00 GMT

Last Friday Prime Minister Harper appointed Salma Ataullahjan to fill the last Senate vacancy. Ms. Ataullahjan is a former Conservative candidate and has pledged to support the Conservative government’s efforts to reform the Senate. Considering the fact that with this appointment, the Conservatives have the same number of voting members in the Upper Chamber as the Liberals and independents combined, the possibility of Senate reform is greater now than ever! But, as the Globe and Mail’s Jeffrey Simpson noted, Senate reform is “a subject that animates a few Canadians and bores the rest.”

This does not mean that the Senate is not an important issue. The Canadian Senate needs reforming— it is undemocratic and, although intended to be a regional balance to the House of Commons, it is not an effective regional voice in Ottawa. Reform has the potential to make the Senate more representative and to improve the functioning of the Canadian political machine.

Yet, as a young(ish) person concerned with issues of public policy—a self proclaimed policy wonk wannabe—even I struggle to care about Senate reform.

Why?

For one, Senate reform is not a “sexy” issue like climate change or animal rights. Therefore, you do not see protestors out scaling the walls of parliament to hang giant banners demanding that the Canadian Senate be reformed.

But it is more than that.

Senate reform does not address the issues that really matter. There are much more pressing issues in Canadian politics, like citizen disillusionment with government and politics. Only 58.8% of eligible Canadians voted in the 2008 federal election. The issue is even more prominent among young Canadians as only 37.4% of this sector of the population voted in the same election! Voter apathy is often attributed to increased identification requirements, people being too busy to vote and even “lazy, incompetent young people.” But, perhaps the most common reason given is that people increasingly just do not care about politics.

However, according to Statistics Canada, the reality is that people (particularly youth), “are interested in political issues,” and “committed to the tenets of democracy,” but they are, “wary of politicians.” So, what the voting statistics really are is a symptom of Canadian politics lacking: 1) trust in politicians, and 2) long-term vision on the part of our policymakers. What our politicians are selling, Canadians just aren’t buying!

This should not be a surprise. To the first point, the question has been asked in countless polls: whom do you trust? The answer is usually the same. Doctors and nurses tend to come first, the police are near the top, and journalists and politicians rank at the very bottom.

To the second point, we see a government that tends to launch attacks at people rather than policy. Our political leaders seem most concerned about how their actions are going to play out in public opinion polls rather than thinking about how they will impact Canada’s future. They are not rock stars whose job it is to entertain. Politicians should be thinking about what Canada can and should be and what needs to be done to get us there. They should be thinking about the next five or ten years, not just the next five or ten minutes.

That is what matters. If you want people to care, you need to address the issues that matter. Citizen disillusionment with politicians and the political system is one major issue, one not addressed by the current Senate reform proposals. Again, it is not that the issue of Senate reform does not have merit. However, tinkering with the mechanics of the Senate when people are increasingly apathetic about democracy is a little bit like a pilot fiddling with his headset when the plane is crashing—it really just misses the point. People do not care— and they won’t—at least not until the bigger fish are fried.

Posted by: Candice Powley

Canada’s Census: Handle with Care

Mon, 16 Aug 2010 03:46:00 GMT

A few blogs ago I mentioned that the March budget contained hints that the Conservative minority government was attempting to leave a shrunken government as its permanent legacy. In a recent op-ed I also lamented the absence of long-term thought in current federal economic policy. But now, Industry Minister Tony Clement has apparently accomplished both of these feats by altering the way Statistics Canada collects demographic data across the country. I am talking here of the decision, in anticipation of next year’s Census, to replace the usual Long Form (which was randomly sent to one Canadian household out of five) with a voluntary survey.

Does this matter? Isn’t this just a data collection methodology debate among statistical eggheads and data geeks? Well, the instant uproar was started among that group (of which I am a proud, card-carrying member), but the impact of this decision will be felt everywhere in Canada. Other people have explained very well how the loss of detailed census data will greatly complicate the work of anyone in this country whose job it is to make informed decisions requiring some detailed knowledge of who Canada’s population is. This is especially the case for public policy specialists who work in areas concerned with planning. Just think of people who must figure out the location and the size of hospitals, public transit and roads.

Census information forms the backbone of too many Canadian systems and processes to count. The new approach is the statistical equivalent of changing the diametre of gas pump spouts across the country. It can physically be done and there is a way for everyone to adapt to it, but the adjustment itself is so complicated that you better have a pretty darn good reason for making the change in the first place. I do not think that this is the case here.

Apparently, the Harper cabinet decided to proceed with the change because of growing complaints from the population. Minister Clement told the press that “every MP has had complaints” about what is perceived as intrusions into people’s privacy. Well, I have two things to reply to this. First of all, filling in a census form with personal information is a very small price to pay in order to benefit from informed public policy. Secondly, the complaints the government will receive about this change probably outnumber the initial privacy-related batch already. From left to right, in both the private and the public sector (ranging from federal to municipal), not to mention NGOs and think tanks like Canada West Foundation, many people have expressed concern about the risk of losing access to precious information.

One of the most unexpected aspects of this is the stealth surrounding the change. No consultation whatsoever took place, and the announcement consisted in a mere posting in the Gazette of Canada on June 26 (a Saturday). Contrast this with all the opinion-seeking our Prime Minister went through before selecting the next Governor General.

Statistics Canada has been ranked the world’s no. 1 statistical agency many times and takes great pride in producing good data. As an “arm’s length” federal agency, it is supposed to be outside of the small politics game. When I worked there in the 1990s, the only time we realized we had a Minister at all was during budget cut time. Apart from this, we were allowed to do our number-crunching work alone with no interference. Otherwise, how could our data be credible?

Some will say “This is not a truly important issue. Get your priorities right. Do something about child poverty instead.” Sure. Now, tell me, how do you measure child poverty to start with?

(Note: click PM Harper July 5 to read the letter sent to the Prime Minister by Dr. Roger Gibbins, President and CEO of the Canada West Foundation.)

Posted by: Jacques Marcil

Thoughts from the CEO

Tue, 09 Nov 2010 16:38:00 GMT

Policy discussions about climate change and energy have been inextricably linked, as climate change policies all come back to how we produce and consume energy. Indeed, climate concerns more than anything have sparked a global debate on energy policy, and on the complex transition towards a carbon-constrained economy.

Over the past year, however, this linkage has weakened as political interest in climate change has faded, although not disappeared, in the face of the global recession and the collapse of the December UN climate conference in Copenhagen. Climate policy played no role at the recent G8 and G20 meetings in Toronto where world leaders wrestled with finding the right balance between stimulus and deficit reduction while showing no inclination to step into the international climate policy void left after Copenhagen.

But, if public interest in climate policy is waning, this is not the case with energy policy. In effect, the complex climate debate has been transferred to an equally complex debate about energy security, changing patterns of energy supply, and efforts to transform patterns of energy consumption, a debate fueled most recently by the Gulf oil spill.

Although there is general agreement about the shape of our energy future, that we will become increasingly reliant on renewable forms of energy, there is no agreement on the extent and pace of the transformation. The energy future is being sketched without any clear game plan as to how that future might be realized.

The shift in political focus from climate change to energy policy is of great importance to the Canada West Foundation given the West’s vast endowment of energy assets ranging from hydro to hydrocarbons, and everything in between—nuclear, wind, solar, geothermal, biomass and even tidal. If energy policy is the global challenge of the next 20 years, as I firmly believe it will be, then global policy debates will inevitably ripple across western Canada. We have a great many cards to bring to the policy table, but also significant challenges with respect to environmental protection and the greener production of conventional energy resources.

The Canada West Foundation has responded to this transformation of the policy agenda in a number of ways. First, we have been very active in helping to shape a national debate on energy policy (see Getting It Right and Towards a Canadian Clean Energy Strategy).

Second, we have projects in play addressing the opportunities and challenges we face in moving towards a new energy economy where the proportionate contribution of hydrocarbon resources will decline over time.

Third, we are building our internal capacity through the appointment of Michael Cleland as our Executive in Residence on the energy file, hiring a new energy economist, and recruiting additional research capacity through the internship program. The Foundation will also roll out a major energy project this fall.

The goal is not to become an organization dominated by the energy file, but rather to have the capacity to contribute in a significant and constructive way to regional and national policy debates about our energy future. Getting policy frameworks right is critically important for the sustainable economic prosperity of western Canada, and for that matter of Canada.

The Foundation therefore needs to be involved, and involved we will be. Watch this space!

Posted by: Roger Gibbins

Policy Issues in Aboriginal Education

Sun, 15 Aug 2010 23:30:00 GMT

The United Way of Winnipeg just released a report which other western provinces should study carefully. Entitled Eagle’s Eye View Second Edition, it updates an earlier 2004 report. An environmental scan of the aboriginal community in Winnipeg, one of its objectives is to inform and influence policy in the public, private and voluntary sectors. With its focus on Winnipeg, it neither describes the circumstances of aboriginal people throughout the Manitoba nor through the West. Nonetheless it is a useful document for western observers.

The media response on Thursday, June 24, 2010 was two draw out four bullets of good news and three bullets of bad news. Those positive bullets briefly outlined improvements in employment, incomes, numbers of homeowners and reductions in the number of single-parent households. The bad news focused on a loss of native languages, the earnings gap and high rates of child poverty. The headline was “City aboriginals making gains” and, yes, it is important to underscore those markers of progress.

However, the pressure on a society to improve public policy seems inevitably to be proportional to the size of the fire on the burning platform. These first media stories might well leave the reader with the impression that since things have improved over the past decade all we need to do is to wait for another census or two and before long things will be substantially more equal.

But if you look more carefully at the numbers, you can see more clearly the pressing need for western Canadians to consider the policy that influences the trajectory of aboriginal people:

Aboriginal unemployment (that is, the inability to get a job for those searching for one) dropped from 25% to 12% between 1996 and 2006 compared to the general population of Winnipeg where it dropped from 7% to 5%. While it is a significant gain to reduce aboriginal unemployment in the city by more than a half over a decade, aboriginal people were still more than twice as likely to be unemployed.
The proportion of Aboriginal people living below the poverty line dropped measurably from 75% to 62% between 1996 and 2006 compares to a drop from 21% to 17% in the general population. These data suggest that the significant improvement in employment over the past 10 years has not been associated with the kind of employment that generates salaries adequate for raising a family. Aboriginal people are still more than three times as likely to be living in poverty in Winnipeg.
The aboriginal population 15 years and over who have achieved a high school certificate or higher education attainment, grew from 38.2 % to 60.2 % between 1996 and 2006. While this is a significant achievement, it also means that 39.8% of aboriginal people over 15 years of age have not gotten grade 12 or any postsecondary training. This compares to 21.5% in the general population. In other words, over that period, aboriginal people are almost twice as likely to have an education level that presents a barrier to meaningful employment.

Education is the most important policy instrument we have for improving employment, reducing poverty and strengthening the present and future economy of Western Canada. Canada’s education systems, widely believed by most Canadians to be amongst the most important of our social programs are not yet robust enough create equitable results.

Tom Carson is the Director of the Canada West Foundation’s Manitoba Office.

Posted by: Tom Carson

Ideas to Address Alberta’s Water Challenges

Sun, 15 Aug 2010 23:18:00 GMT

Southern Alberta was awash with water this past week: fields were flooded, roads were closed, and homes were ruined. As such, it’s very hard to imagine that Alberta is facing water scarcity challenges when water is so unpredictably abundant.

Yet, the province’s water supply is facing stresses and strains. Demand for water is increasing due to a burgeoning population and economic growth. Water is over-consumed and underpriced. Climate change and the variability of the hydrological system (so well demonstrated by recurrent droughts and the recent floods) are other factors that can affect water supply. (For more information see Canada West Foundation’s Water Backgrounder series.)

Water challenges are real and they are happening right now. One proposed way to address these challenges and improve upon the current management system is to introduce market-based mechanisms, such as pricing or the regulated trading of water allocations.

On Monday, June 21, the Alberta Water Research Institute (AWRI) hosted a conference in Calgary entitled The Value of Water. The event marked the culmination of the first phase of a major project on market-based instruments, led by the Canada West Foundation. The daylong conference was only a drop in the metaphorical bucket. Attempting to define the value of water leads to a score of questions, including: is water a basic human right? Can water be priced like a commodity?

Keeping in mind these broader questions, the agenda focused on whether financial market mechanisms could contribute to the sustainable management of Alberta’s water resources. Water policy experts and representatives from industry, government and non-government institutions actively debated the viability and implications of market-based solutions for the environment, economy, and society.

Here are two of many points that stood out for me from the discussion:

Charging for water can lead to increased water conservation. Market mechanisms can benefit the environment by encouraging conservation. If prices are high enough, they can create an incentive to reduce water consumption. For instance, if a company decides to use less water, more water will be available for other users. No additional water needs to be withdrawn. The next, and more challenging, step is to make sure that we don’t overdraw water from our rivers. That is, we need to make sure that ecosystems have the sufficient amount of water needed for sustainability. Forgetting about environmental needs could lead to negative long-term consequences.

Water is inextricably linked to other policy arenas. Although pricing incentives may lead to more efficient and equitable allocation of water, can pricing incentives affect productivity, and therefore the economy? For example, what outcome would an increase in water prices have on a farmer who grows an extremely water-intensive crop? Would changes in price affect how much of the crop is grown or even if that crop can continue to be grown? And how would that change ripple down the supply chain? Water policy can have far-reaching implications—either positive or negative—on the environment, economy, and on society.

This is a time of opportunity for water policy in the province—a time of change, relationship building across sectors and industries, and of innovation. Specifically, Monday’s conference laid the groundwork for future dialogue on the potential of market mechanisms for water policy in Alberta.

All five reports and presentation from The Value of Water conference can be downloaded from the AWRI website here.

Saskatchewan Tax Survey Project

Sun, 15 Aug 2010 23:03:00 GMT

In the last decade the economy of Saskatchewan has changed dramatically—the Canada West Foundation now refers to it as the West’s Powerhouse. While I believe this accurately capture what Saskatchewan has become, we in Saskatchewan must continue to be aware and evaluate our situation in comparison to other jurisdictions in the world. We rely on trade to generate a significant portion of our GDP and we compete with the world for this business. Therefore, not only must the Saskatchewan tax system be fair, transparent and easily administered—it must be competitive.

The Canada West Foundation has just launched a new project that will make recommendations on keeping the Saskatchewan tax regime competitive. There have been significant changes in the economy and public policy since the last independent tax review was completed in 2005. These changes include:

The Province of Saskatchewan becoming part of the New West Partnership;
The lingering global financial crisis and its impact on government revenue sources (and expenditures);
The significant decrease in personal taxes that were introduced in the fall of 2008;
The changing provincial revenue structure (less reliance on federal transfers and own source taxes and more reliance on royalties from non-renewable resources);
The revamped royalty structure in the Province of Alberta; and,
The growing amount of revenue collected from the Corporate Income Tax.

This project is the broadest independent review of the tax regime since 1965. It is sponsored by the Saskatchewan Chamber of Commerce, the Institute of Chartered Accountants of Saskatchewan, the Association of Saskatchewan Realtors, the Certified Management Accountants of Saskatchewan and the Certified General Accountants of Saskatchewan. The review and recommendations will pertain to all provincial sources of tax revenue, the royalty structure as it relates to oil and gas and the municipal property taxes as they are levied in Regina and Saskatoon.

If you are a resident of Saskatchewan, the Canada West Foundation is looking for your input to this project. We want to hear from you so that our discussions and debates can be as well informed as possible. I encourage you to complete a short survey (10 minutes) at www.sasktaxsurvey.ca

There are number of questions in the Survey that relate to these taxes:

Are the right types of taxes (income, consumption or wealth) being relied on?
Is there a different impact on the economy by different types of taxes?
Do people tend to avoid taxes if possible?

Before you go to the survey, think about this statement:

Businesses don’t pay taxes, only people do

Amounts initially paid by businesses could be passed forward to consumers (higher prices) or back to the suppliers of capital or labour (lower dividends or wages). The timing of these shifts will depend on a number of circumstances.

It is important to participate—we can continue to be the West’s Powerhouse if we have the right social and economic framework.

This survey will be open to the public until July 31, 2010 and we will report on our findings in the fall of 2010.

Mr. Jack Vicq is the Director of the Saskatchewan Office of the Canada West Foundation.

Posted By: Jack Vicq

Looking at China’s currency adjustment in advance of the G20

Sun, 15 Aug 2010 22:45:00 GMT

We in Vancouver can identify with our fellow citizens in Toronto as they put up with the inconveniences generated by security for the G20 meetings. Vancouver had its share of disruptions related to last winter’s Olympic Games; but, at least, we had one mother of a party during the Games to compensate. Will there be any reward for Toronto, Canada and, in particular western Canada from the G20 meetings?

Often these high level—to say nothing of high cost—meetings are not very productive and close with an amazingly content-free statement to the media. But, perhaps, the 2010 meetings will be different. Already, and even before the official meetings get underway, China has grabbed the headlines by announcing more flexibility for its currency, the yuan.

First, we should ask why China made this statement now. China has been under very considerable pressure from the United States to allow the yuan to move up against the US dollar. This would make Chinese goods more expensive and a little less competitive in the American market. It would also make US goods and services cheaper for China to buy. Both of these changes would help bring more balance to the one-sided trade that the US now has with China. By making its statement now, China hopes to deflect any criticism of its exchange rate policies. After all, it has already announced it will be adjusting them.

Then we should note exactly what China has said and not said. A conclusion that this means China will soon have a free floating currency would be reading far too much into China’s statement. Instead, China has said that it will allow the yuan to move within an unspecified range against an unspecified basket of currencies. Keeping the range narrow means that there would be little change from the present situation. Deciding what currencies should go into the basket and what weights they should have gives China far more control over the yuan than a free market would allow. In an extreme case, they may not choose to put the US dollar into the basket or they may weight it very low.

To look at what this means for Canada and the West, we would need to know if and to what extent the Canadian dollar will be in China’s currency basket. However, we can be fairly certain that any changes—even if they are little and late—will be in the direction of raising the yuan against the Canadian dollar. This will have a relatively small effect on our imports from China. Already many common goods are now made in lower cost countries like Vietnam.

It will make Canadian resources and Canadian companies that produce those resources cheaper for the Chinese to purchase. So we can expect continued strong sales of our resources into China and increased interest by China to purchase the companies that produce these resources. The former will help maintain a strong economy in Canada, especially the resource rich West. The latter will require vigilance to make sure that any organization operating in Canada follows our laws and maintains our standards. Any change is not likely to be massive, but it will be very interesting to see exactly what and how much China does and how all this plays out.

Dr. Roslyn Kunin is the Director of the Canada West Foundation’s British Columbia Office.

Posted by: Dr. Roslyn Kunin

Op-ed: China’s Potential Impact on Western Canada

Sun, 15 Aug 2010 06:11:00 GMT

Sometimes a rubber chicken dinner is only that, but sometimes it flings open the windows on new insights, as did a small University of Alberta dinner, held in Calgary, that explored the potential impact of China’s expanding economy on western Canada.

Admittedly, China’s economic growth is not a new story, and like most people I have had an ongoing fascination with events in China. However, this casual “tourism of the mind” has not fully come to grips with the sheer magnitude of the new Chinese reality.

Many Canadians still see China primarily as a huge potential market without also seeing China as a major potential investor in Canada. Indeed, the impact of Chinese investment in western Canada may well rival the impact of expanding markets.

There is a also a temptation for western Canadians, who are hard-wired for economic booms and busts, to see China’s current prosperity as a blip rather than a transformative event, to believe smugly that China will be brought back to earth by rural poverty, the demographic repercussions of Mao’s one-child policy, and environmental stress. Recent growth has been so out of line with our experience that it is easy to believe that China is a bubble waiting to burst.

And yet, this bubble is likely to be our enduring reality, and even if it does burst or deflate, the impact on the Canadian economy will be direct and immediate. For this and other reasons, the Harper government has shed its initial coolness to China and is moving to strengthen economic and political ties. Gone are the days when Canadians sat on the sidelines, hectoring and lecturing the Chinese on human rights issues.

We are also realizing that access to China’s markets and investment is much more difficult than we first thought. China’s growing appetite for energy will be immense, but moving land-locked western Canadian energy resources to Chinese markets will not be easy.

Part of the challenge is physical infrastructure, the ports and rail lines we need to connect the West to Asian markets. Although Canada has made some significant strides with the Asia-Pacific Gateway initiative, an effective gateway also implies cultural understanding and language skills. It is about coming to grips with different traditions with roots that go back thousands of years. Effective gateways are as much cultural as they are physical, and cultural understanding must flow both ways.

China’s economic success may even challenge some of our most basic political values, ones that go back to the Protestant Reformation. We believe, and with good reason, that strong liberal democratic institutions foster economic prosperity, that democracies with competitive party systems are the best positioned to succeed. Perhaps, but China is offering the world a different model with considerable success if not principled appeal.

While there is no question that Chairman Mao got so much wrong and so little right, it is less clear that the same condemnation holds for China’s current leadership. There may well be different paths to the same end of economic prosperity.

Of course, we should not be overly Pollyannaish about China’s boom, while keeping in mind that a China in distress will also have dramatic impact on the global and Canadian economies. We can never be certain what the future holds. Nevertheless, if we want a glimpse of the world to come, it is more likely to be found on the streets of Beijing or Shanghai than on the streets of Europe or North America.

Roger Gibbins is President and CEO of the Canada West Foundation. Canada West Foundation is committed to sustainable prosperity in Western Canada, and the only think tank dedicated to being the objective, nonpartisan voice for issues of vital concern to Western Canadians.

Posted by: Roger Gibbins

Water Backgrounder 8: Water for Life Strategy

Sun, 15 Aug 2010 06:08:00 GMT

In the coming month, the Canada West Foundation will be releasing an extensive new research report entitled From H20: Turning Alberta’s Water Headache to Opportunity. In the lead up to this important event, we are releasing a series of water background information sheets to help set the context of the water debate.

The following is an excerpt from the eighth release entitled “Water for Life Strategy.”

“At the turn of the millennium, a severe and multi-year drought elevated concerns about water in Alberta, especially the future of water resources management. In response, the Government of Alberta initiated a province-wide public consultation between November 2001 and June 2002 to gather the opinions and ideas of Albertans in crafting a provincial water strategy. What emerged was Water for Life: Alberta’s Strategy for Sustainability, which was released in 2003 and updated in 2008. The strategy recognizes that Albertans’ quality of life—and life itself—depends on a healthy and sustainable water supply for the environment, for growing communities, and for Albertans’ continued economic wellbeing.

The strategy is a broadly-worded document with a vision for water that spins tightly around three specific objectives: (1) safe and secure drinking water, (2) healthy aquatic ecosystems, and (3) reliable and quality supplies of water for a sustainable economy. The strategy goes on to identify three core areas of focus in achieving these objectives:

Vastly expanding our knowledge and research of the province’s water, its water challenges, and potential solutions: This is perhaps the most critical element affecting Alberta’s ability to manage water effectively. The strategy commits the province to enhancing scientific knowledge of Alberta’s water resources, better understanding of both current and emerging water issues, and ensuring that Albertans are aware of the issues and have the knowledge and tools to make good decisions. In short, a critical part of the solution is to invest in knowledge, research, and technology.

Developing partnerships to manage the province’s water resources within local and regional watersheds: Each watershed has its own unique set of issues. Best practice asserts that water be managed within the local and regional watershed. To give this realization traction, to involve all stakeholders, and to promote shared responsibility, three partnerships are envisioned. The provincial Alberta Water Council (AWC) is a multi-stakeholder advisory body that will oversee overall implementation of Water for Life, examine water issues across the province and prioritize them, provide policy advice, and recommend solutions to the province. Regional Watershed Planning and Advisory Councils (WPACs) will take the lead in watershed planning and will foster stewardship, educate water users, and create and implement watershed management plans for all major provincial watersheds. Local Watershed Stewardship Groups (WSG) will gather together volunteers to protect their local creek, streams, or stretch of river.

Conservation: The strategy notes that within each watershed there is a limited amount of water that can be withdrawn or diverted for use and still maintain a healthy aquatic ecosystem. Once this limit has been reached, there is no further water available without significant ecological effects. In several watersheds, the available limit has already been reached and others are approaching the limit. A key focus is to improve the usage of water, by conservation, increased efficiency, and higher productivity. The strategy calls for the development of water plans for various industry, implementation of best practices, water re-use, and a significant conservation effort that would increase the productivity of water province-wide by 30% in 2015.”

Click here for the full text of “Water for Life Strategy.”

Posted by: Casey Vander Ploeg

A Useful Money Jar with a Long Name

Sun, 15 Aug 2010 03:29:00 GMT

If you’re like me, the name Alberta Climate Change and Emissions Management Corporation doesn’t ring a bell. It sounds like a crown corporation (it isn’t) with a vague mandate (quite the contrary). So what exactly does it do?

In the spring of 2009 Alberta put in place a climate change policy. Large greenhouse gas emitters had to cut down emissions, buy carbon offsets or pay $15 per tonne emitted per year. Alberta then created CCEMC (for short) as an arms-length corporation to act as the money jar for the funds resulting from the third option.

In fact, CCEMC does more than just pile up the “polluter fine” money, it also redistributes it as grants to finance research and development projects aimed at mitigating climate change. A rigorous evaluation process has been put in place for all the applications it receives, some of them highly technical. This year’s grants (the first batch in CCEMC’s short history) will spread $71 million among 16 projects, each one jointly funded 50/50 by CCEMC and the project’s proponent.

I learned this (and more) at a public speaking event in Calgary, part of a series named Changing the Climate: Canada’s New Energy Environment, which was hosted by Canada West Foundation and the Calgary Chamber of Commerce.

Eric Newell, the chairman of CCEMC (and former CEO of Syncrude) talked about the grant program but also about the overall energy/environment picture in Canada. Plenty of interesting stuff. He wrapped up by reminding us that under current conditions, the growth in the global demand for energy is so high that huge investments would be necessary to allow supply to keep up. Therefore, the need to reduce demand is very high. He did not elaborate as to how to reduce demand – that would require a whole new presentation, I’m sure.

Personally, I think that a national carbon tax is the way to go, especially for gasoline, one of my pet peeves. In my view, the day taxes on gasoline are high enough will be the day idling cars have become as rare an occurrence as someone smoking inside a public building.

Jacques Marcil is Senior Economist at Canada West Foundation and author of Currents, the Foundation’s monthly economic bulletin.

Posted By: Jacques Marcil

WATER BACKGROUNDER 7: The Evolution of Water Policy in Alberta

Sun, 15 Aug 2010 02:51:00 GMT

In the coming month, the Canada West Foundation will be releasing an extensive new research report entitled From H20: Turning Alberta’s Water Headache to Opportunity. In the lead up to this important event, we are releasing a series of water background information sheets to help set the context of the water debate.

The following is an excerpt from the seventh release entitled “The Evolution of Water Policy in Alberta.”

“Water allocation systems decide who gets to use what water, especially in times of scarcity. The heart of Alberta’s system is “prior allocation,” which is common in most western Canadian and American jurisdictions, and has been used in Alberta since passage of the Northwest Irrigation Act (1894). Systems of prior allocation grant the right to use water based solely on a “first-come-first-served” basis. Prior allocation is often called “first-in-time-first-in-right” or FITFIR. Systems of prior allocation grant first right over water to the first or most “senior” license issued. Water is allocated year by year based on the available supply, and then parceled out among users. A water license or allocation does not guarantee the right to water, however. An allocation only guarantees the right to take water if sufficient water is available. Under prior allocation, that right falls first to those who hold the oldest or most senior license, who have the right to use all of their water allocation before “junior” license holders can exercise their water right. In Alberta, private individuals, corporations, organizations, and municipal governments all hold water licenses. Some of the most important are held by Alberta’s 13 irrigation districts, which then transfer water to irrigators based on their amount of acreage. License holders do not pay for the water that they withdraw. In applying for a water license, a one time payment is made based on the volume of the water involved.

Advantages: Under prior allocation, Alberta has been successful in harnessing its water resources for economic and social development. Prior allocation provides an assurance to water users that they will have enough water in the future to justify and recoup their investments in water infrastructure, whether that be a self-supply system or a modern and water-efficient centre pivot. Prior allocation provides a measure of economic security, and ensures that investments are made and used, rather than abandoned or made unprofitable due to a lack of water. Prior allocation is simple to understand, largely accepted, and allows everyone to know “where they stand.”
Disadvantages: At the same time, no system of allocation is perfect. Prior allocation, left to itself, has no mechanism to share water in times of scarcity, does not prioritize water based on its intended use or purpose, and provides little incentive to conserve. Prior allocation does not easily address new water issues that may arise, and works against accommodating new needs for water or even the changing use of water. Prior allocation entrenches senior rights and a particular type of water usage at the expense of new usages—even if the new usage is more economically or socially important, beneficial, efficient, productive, or highly-valued. In times of scarcity, the ecosystem can also become compromised if the usage rate of allocations rise despite lower flows of water. However, government certainly has the option of restricting water taking during such times, and has often done so. The bigger concern during scarcity is a certain amount of inequity that comes with the system. In times of water scarcity, those with “junior” licenses may not be able to access water as “senior” license holders have the priority.”

Click here for the full text of “The Evolution of Water Policy in Alberta.”

Posted By: Casey Vander Ploeg

WATER BACKGROUNDER #6

Wed, 14 Jul 2010 19:07:00 GMT

In the coming month, the Canada West Foundation will be releasing an extensive new research report entitled From H20: Turning Alberta’s Water Headache to Opportunity. In the lead up to this important event, we are releasing a series of water background information sheets to help set the context of the water debate.

The following is an excerpt from the sixth release entitled “Issues in the Major Rivers in Alberta.”

“Each of Alberta’s major rivers and river basins are experiencing their own unique set of stresses and strains. While there can be some overlapping concerns, the challenges of one river system are not identical to those of others. A quick overview of some of the key issues affecting each of Alberta’s major rivers:

North Saskatchewan River Basin: The North Saskatchewan supports the industrial heartland of Alberta, including the great majority of the province’s thermo-electrical generation. The basin is home to two large dams including the Big Horn Dam (creating Lake Abraham) and the Brazeau Dam (creating the Brazeau Reservoir). The biggest concerns center around huge withdrawals for cooling in thermal power plants and the effects of return flows on downstream water. Studies show water quality upstream from Edmonton at 98 out of 100, but quality downstream falling to 74 out of 100.

South Saskatchewan River Basin: The South Saskatchewan River Basin is the most concentrated and fastest growing region in the province and contains Alberta’s most productive soils and climate. At the same time, the Bow, Oldman, and South Saskatchewan rivers have been closed to new surface water allocations since 2006. The Bow is the most densely populated sub-basin, and the most actively managed. There are 11 hydro facilities on the Bow and numerous dams and reservoirs. Concerns on the Bow include water shortages, elevated nutrient and pesticides in downstream reaches and ongoing development in the sub-basin’s headwaters. The Oldman is also heavily managed, home to one of Alberta’s largest dams, and is used heavily for agriculture, which holds almost 90% of all allocations on the river. Concerns include nutrient loading from crop cultivation as well as intense livestock production. There is also growing pressure on groundwater resources. The Bow and Oldman converge to form the South Saskatchewan River, which is used less for agriculture (30% of all allocations) and more for municipal purposes (60% of all allocations). A key issue for the South Saskatchewan is water quality impacts from water use on tributaries upstream. The Red Deer River is the least used river in the SSRB. Concerns here include the need to reserve capacity to possibly meet apportionment requirements in the future (this has rarely happened to date, however) and pressure to supply additional water to regions both south and the north.”

Click here for the full text of “Issues in the Major Rivers in Alberta.”

Published By: Casey Vander Ploeg

WATER BACKGROUNDER 5: Doing More With Less

Wed, 14 Jul 2010 19:06:00 GMT

The following is an excerpt from the fifth release entitled “Doing More With Less.”

“Almost 80% of all water allocated for the petroleum sector is reserved for the oil sands, with 65% allocated for oil sands mining and 12% for thermal or in-situ recovery through cyclic steam stimulation (CSS) or steam assisted gravity drainage (SAGD). Another 13% is allocated for gas and petrochemical plants, and 10% for oilfield injection purposes. Here too, there have been some dramatic changes in how water is being used.

As conventional oil and gas reserves decline, Alberta has seen an increase in oilfield injection to enhance recovery. This has not, however, correlated with an increase in water used for this purpose. For example, in 1975 about 80 million m3 of water was injected for enhanced recovery. In 2007, less than 60 million m3 was used. This is a clear gain in water efficiency. Perhaps more important, the type of water being used for injection has also changed. In 1975, about 80% of the water used for oilfield injection came from fresh surface water sources. In 2007, about 40% of all oilfield injection came from fresh surface water sources. The use of saline or brackish groundwater for oilfield injection has grown from 2% in 1975 to over 40% in 2007 (Alberta Energy Resources Conservation Board 2006).

The search for water efficiencies is also ongoing in the oil sands. Petro-Canada’s Mackay River in-situ project is instructive in this regard. Mackay River is a fully-functioning zero liquid discharge SAGD operation where brackish groundwater comes up with the bitumen. This water is treated and then heated to produce steam. Petro-Canada claims that more than 90% of this water is continuously recycled, and the operation withdraws very little water from underground aquifers. While the oil sands industry standard is typically 2-5 barrels of water for each barrel of oil produced, Petro-Canada’s Mackay River operation uses 1/6th of a barrel of new water for each barrel of oil (CAPP 2008). If oil sands expansion is to continue to any large degree, such efficiency gains will become even more important.”

Click here for the full text of “Doing More With Less.”

Published By: Casey Vander Ploeg

STATE OF THE WEST: Population Change

Wed, 14 Jul 2010 19:08:00 GMT

The West Will Not Grow Its Way Into Greater Importance in Canada

Here in the West, you occasionally hear people talking about the region growing its way out of what many see as our second class status in Confederation. Ontario and Quebec dominate national politics because way more people live there than in the West. The combined population of Ontario and Quebec (21 million) is double that of the West (10 million). Strong population growth in western Canada will cut deeply into this advantage—or so the theory goes.

The problem is that the numbers do not support this theory.

Western Canada is currently home to 30.8% of Canadians. On the one hand, this means that the West is a significant part of the Canadian family; on the other hand, it remains a minority within the country. What’s more, the region’s share of the national population is not projected to change much over the next 25 years.

Some History

Western Canada’s population was very small in 1901 at just under 600,000 people—only 11.1% of Canadians called the West home at that time. Massive waves of immigration caused the region to grow at a rapid pace. By 1931, the West had over 3 million residents and accounted for just under 30% of the national population. The region grew by a whopping 410% between 1901 and 1931 while the rest of Canada grew by a more modest 54%. Saskatchewan, for example, jumped from 91,000 people to 492,000 in the 10 years between 1901 and 1911.

The West’s demographic fortunes took a turn for the worse during the Great Depression. The region continued to grow (though Saskatchewan saw its population shrink), but the rest of Canada grew faster. Hence, the West’s share of the national population dropped to 26.4% as of the 1961 Census. Ten years later, the West was once again growing faster than the rest of the country and its percentage of the national population began to rise. This time, however, the rise has been much less dramatic than in the first part of the 20th Century. In terms of population growth, Canada is currently tilted west, but the incline is modest rather than steep.

About a Third Today, About a Third Tomorrow

Statistics Canada’s projections do not indicate a radical shift in the relative demographic weight of the West in Canada. The West is currently home to 30.8% of the national population and the projections show that this number will be between 32% and 34% by 2036. Barring major unforeseen changes in immigration, fertility, internal migration and other factors, the West is expected to be home to roughly the same percentage of Canadians as it is today. Our share will be slightly higher, but not much.

Although the time lag is long (the current planned redistribution of seats in the House of Commons will not take place until well after the 2011 Census results are in), the West’s slightly higher share of the national population in 2036 should translate into a few extra seats in the House of Commons. But if the plan is to wait until the West has the demographic weight to have more influence on national politics and policy, it is likely to be a long time before this happens (if it ever does).

This another reason why it makes sense to continue to work toward better representation of all regions within the national government regardless of their population size.

The demographic and economic trends that have shaped and will shape the West are collected and analyzed in the forthcoming edition of the Canada West Foundation’s State of the West 2010 report. Chapters from the report will be released on the Canada West Foundation website over the summer with the full report available in September.

Posted By: Robert Roach