Macdonald-Laurier Institute Managing Director highlights the importance of Canada's natural resource sector – and creating the conditions in which it can thrive.

OTTAWA, May 15, 2014 – It's time for Canada to build a new consensus around the importance of its natural resource economy.

That's the message Macdonald-Laurier Institute Managing Director Brian Lee Crowley delivers in a new commentary, titled "The Natural Resource Sector: Economic Opportunities, Policy Challenges", which is based on a talk Crowley is delivering to Le Cercle de la finance internationale in Montreal on Thursday.

"The old consensus that well-managed natural resource development projects are in the national interest is breaking down," says Crowley in the commentary. "How we respond will perhaps be the single largest influence on our future prosperity and national power".

Crowley argues that natural resources form part of the bedrock of the Canadian economy – and that's only going to become more evident in the coming years. Countries like China, which is in the midst of a plan to build 36 million affordable homes between 2012 and 2015, will be looking to Canada for natural resources such as timber and copper wire. Natural resources are also, unlike other sectors such as manufacturing, not highly cyclical and do not contribute to regional disparities across the country.

However, properly managing these resources takes hard work. Crowley busts the myth that Canada is "lucky" to have a rich endowment of natural resources. Lots of countries are blessed with deposits of oil, gas and minerals, but they don't all convert them into prosperity for their citizens. Why? Because they for the most part lack the necessary commitment to rules, institutions and behaviours.

Canada, by contrast, projects a stable environment to potential investors. The rule of law, the absence of corruption among government officials and a stable taxation and regulatory burden are just some of the factors that allow Canada to utilize its endowment of natural resources. "Companies can invest billions of dollars to unlock opportunities, such as the Alberta oil sands or Quebec's minerals, reasonably secure that they know the fiscal, regulatory, and contractual conditions they will face over a period of years sufficient to recoup their investment and make some money", says Crowley.

But while the federal government continues to do its part to attract private investment in natural resources, not all jurisdictions are putting their best foot forward. Quebec, for example, is in many ways headed in the wrong direction. That province's reluctance to embrace petroleum exploration and development has caused a tepid response from potential investors. Attempts to revise the province's laws and taxation regime that cover mining, meanwhile, have contributed to what l'Institut de la statistique du Québec says is a 10 percent dropoff in mining investment in the province.

The federal government is also facing challenges, driven by a fragmentation of views about the importance of natural resources to the Canadian economy. Vocal minorities, armed with major resources and the ear of the Canadian public, are using administrative tribunals such as the National Energy Board in an attempt to derail major natural resource projects. That's one of the reasons why Crowley is calling for "a new national consensus, an effort that engages Canadians and assures them that they can have confidence that such development in Canada will be carried on in an open and accountable manner, to the highest environmental and ethical standards." A large part of this, he says, is getting Aboriginal communities on board by helping them overcome fears of exploitation and assuring them that natural resource development can be used to their benefit.

Crowley's commentary draws on a number of Macdonald-Laurier Institute publications, including:

An op-ed in the Globe and Mail on how Canada adds value to its resources;

A commentary on the value petroleum extraction and transportation adds to the Canadian economy;

A study debunking the myth, known as Dutch Disease, that a resource sector boom raises the exchange rate enough to lower its manufacturing output;

A study on how the federal government's legal obligations to consult with Aboriginal communities is creating a new opportunity for collaboration;

A study on how developing Canada's natural resources has the potential to reshape the government's relationship with Aboriginals.

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Brian Lee Crowley is the Managing Director of the Macdonald-Laurier Institute, the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government.

For more information, please contact Mark Brownlee, communications manager, at 613-482-8327 x. 105 or email at On Twitter @MLInstitute

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