This op-ed by Parkland Institute director Trevor Harrison appeared in the March 13, 2016 edition of the Winnipeg Free Press.
In recent months, as the price of oil sank, some media pundits, politicians, business people and academics in the oil-producing provinces have harshly condemned those in other provinces for — as they view it — obstructing the building of pipelines to carry oil to foreign markets.
The anger generated has been non-denominational, striking out at B.C. Premier Christy Clarke and Montreal Mayor Denis Coderre among others, but does share a common theme: pipelines are justified in the national interest.
The latest adherent to the national interest argument is Jim Grey, a veteran of the oilpatch. In preparation for a talk he recently gave in Calgary, Grey argued Canada’s provinces must put aside their differences, instead considering only the wider interests of Canada. "Under this situation as it exists today," he said, "I doubt we could build the Trans-Canada Highway. I doubt we could build the CPR."
Grey is not the first pipeline supporter to invoke the CPR, and will likely not be the last. Celebrated by Pierre Berton and Gordon Lightfoot, among others, the CPR has long held a special place in Canadian national mythology.
There is an enormous irony in the CPR comparison, however.
Canada’s railways served many purposes, one of which indeed was national unity in the face of American threats that the western region might be annexed. But trains were also the third rail — so to speak — of a national program of development. The National Policy, proclaimed in 1878, was based on tariff protections for industrial goods (made largely in central Canada), immigration and railways. The policy was sold as good for all of Canada but in truth, it particularly favoured central Canada’s nascent industrialists, a view shared by many western residents in the decades that followed.
The National Policy became part of prairie folklore, one easily conjured up when, in the early 1980s, the Trudeau Liberals introduced the National Energy Program. Like the National Policy, the NEP was promoted as being in the national interest. And, indeed, it contained many elements with which a lot of Canadians, even in Western Canada, agreed — among them an intent to increase Canadian ownership and control within the petroleum sector.
The NEP faced powerful critics, however. The oil-producing provinces, led by Alberta, denounced the federal government’s intrusion into an area clearly under provincial jurisdiction: resources. But the NEP also faced enormous opposition from the oil companies (the vast majority of which were foreign-owned) that did not like government interference in the marketplace. The Reagan White House, a staunch defender of American corporate interests, similarly let its displeasure be known in no uncertain terms.
The Organization of the Petroleum Exporting Countries, however, delivered the NEP’s final blow. Then, as today, the cartel’s members were overproducing oil; the glut led to an abrupt worldwide crash in oil prices. The Trudeau government’s tepid nationalism quickly dissipated, replaced a few years later by the "open-for-business" philosophy of the Mulroney Tories. In 1988, Brian Mulroney’s government sold free trade as being in the national interest. In the years following, some Canadians did well by free trade, but the economic road overall has been rocky.
The oil industry was among free trade’s immediate beneficiaries. It wanted open and unfettered access to the large American market and got it. But markets are fickle.
Today, the world is once again awash in oil. As a result, the price of oil is less than US$40 per barrel, well below what Canadian-based producers need to make extracting it a lucrative venture. Adding to this problem, there has been a substantial increase in oil and gas production in the United States, reducing that country’s need for imports.
Then, there is the issue of climate change. Governments and publics everywhere increasingly want something done about the problem. They do not want — in the term used by economists — the real costs of production "externalized" onto the natural environment or future generations.
Desperate, hoping perhaps against hope, despite the current low price that makes pipelines seemingly moot, proponents continue to push hard for new pipelines to be built. And — you guessed it — in making their arguments they once again invoke the national interest as the reason for their construction.
I have no doubt, at least, some pipelines will be built, many of them spanning Canada from sea to sea — and perhaps — to sea. And this construction will result in some jobs, though not as many as their proponents claim. But, in the end, should the price of oil remain low or the refiners in some places decide they want to buy cheap oil from offshore rather than pay the Canadian premium, will Canada’s petroleum producers suddenly shout "Buy Canadian"? Will there be renewed demands for policies to protect the oil industry? In the immortal words of Sarah Palin: "You betcha!"
The idea of a national or — perhaps a better term — collective interest should not be entirely discarded. Public health care provides just one example. But we should all be skeptical when the national interest is too easily invoked. Appeals to national interest too often cloak what is, in fact, self-interest.