Canadian policymakers should avoid delaying or blocking natural resource development in rural communities, writes Sean Speer.
By Sean Speer, August 8, 2017
Expanding economic opportunity in rural and remote communities has bedeviled Canadian governments for decades. Various schemes have been tried and failed. Many of the same challenges persist.
Regional development agencies such as the Atlantic Canada Opportunities Agency and Western Economic Diversification are emblematic. Both are marking their 30-year anniversary this year. But it’s hard to find much to celebrate. A considerable body of research casts doubt on their basic usefulness.
Promoting regional economic development isn’t easy. Different regions and cities have pre-existing advantages. There are limits to what public policy can do to change this.
It doesn’t mean that policymakers shouldn’t care about enabling economic opportunity in rural and less prosperous communities. It just means that they ought to be clear-eyed about their limitations.
Which is why it’s so important that governments don’t stand in the way of rural opportunity. Politicians talk so frequently about job losses stemming from free trade or technological innovation but rarely as a result of government policy. But far too often policy choices – deliberately or inadvertently – stand between workers and opportunity. Harvard economist Ed Glaeser calls it a “war on work.”
We recently witnessed an example of such “policy-induced dislocation” with the abandonment of the Pacific Northwest LNG project in British Columbia. The project would have brought $36 billion in capital investment (twice as much as Ottawa’s much-vaunted annual infrastructure spending) and thousands of jobs to rural parts of the province including Indigenous communities.
Public policies that delay or block the development of these natural resources undermine these communities and their citizens.
But it was scuppered in part due to regulatory delays and policy uncertainty. It’s a missed opportunity to say the least.
What’s most unfortunate is that it’s working-class people in rural parts of the province that lose out the most. The recent drop in oil sands investment illustrates this point. The loss of jobs among lower-income earners and blue-collar workers is nearly quintuple the losses among the highest-paid workers according to one estimate. Bankers and lawyers in major cities move on to the next deal. Working-class people in rural communities have fewer options and are often forced to uproot their families.
Some 500 communities across Canada are dependent on mining, forestry and energy for their livelihood. Public policies that delay or block the development of these natural resources undermine these communities and their citizens. It amounts to an anti-regional development policy.
Policymakers must therefore come to see the role for resource development in promoting economic opportunity in rural parts of the country. International estimates anticipate ongoing global demand for our natural resources. Choosing not to develop them will thus leave value in the ground and preclude jobs and investments that will invariably go elsewhere as we’ve seen on the LNG file. It’s a lose-lose – especially for rural communities.
Rural Canadians aren’t looking for corporate subsidies or other government handouts. But they do expect that their government won’t make it harder for them to find work and support their families. It sure doesn’t seem like too much to ask.
A political variation of the Hippocratic Oath – “do not harm” – ought to be at the centre of a pro-regional development policy. Enabling rural communities to cultivate Canada’s natural resource endowment can provide jobs and opportunity and offer a better future. It’s the least the government can do.
Sean Speer is a Munk Senior Fellow at the Macdonald-Laurier Institute.
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