Canada West Foundation Blog

By: Robert Roach

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.

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.

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

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.

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.

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.

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.

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.

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.

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?