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: 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.

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.

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.”

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.

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.

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.

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.

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.