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Canada's fossil fuel industry may soon face the fate of the beaver

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Economist Jim Stanford. Photo: David J. Climenhaga

If you forget everything else, just remember this about our country's incessant and often bitter debate about fossil fuels: "Canada is never going to run out of oil, just like we never ran out of beavers."

We owe this pearl of insight to Canadian economist Jim Stanford, late of the Canadian Auto Workers Union and Unifor, former Globe and Mail economics columnist, author of Economics for Everyone, and nowadays director of the Australia Institute's Centre for the Future of Work in Sydney.

It's something our fossil-fuel-obsessed United Conservative Party masters here in Alberta -- where Dr. Stanford, a son of Edmonton, grew up -- need to think about when they're not spying foreign-funded environmentalists behind every bush and under every bed.

That's because whether they like it or not we may soon face the fate once confronted by Canada's beaver industry, which made a fortune exporting the pelts of the humble Castor canadensis to the hat makers of Europe for nearly 250 years.

For, as Stanford observed in a sometimes wry, occasionally profane keynote address to the spring biennial convention of the Alberta Federation of Labour, held in the heart of Calgary, a city that gets pneumonia when the oilpatch catches a cold, "we don't export beaver pelts any more, OK? And this is worth thinking about."

"I can assure you it isn't because we ran out of beavers," Stanford observed. "We definitely didn't run out of beavers. In fact, you can't get rid of the fuckin' little things! Right?"

"So, we haven't run out of beavers, but what happened? People stopped wanting beaver pelts. Technology changed, and tastes changed, and lo and behold, this natural thing that we thought we could just grab and sell to someone else, wasn't worth so much any more."

Stanford's point, of course, is that as incredible as it might sound in 2019 -- or, might have sounded a decade ago in 2009, anyway -- the day may be coming soon when what happened to Canada's world-class ethical beaver industry happens to our world-class ethical oil industry too.

None of this should be a surprise to Canadians, or at least Canadian economists, Stanford noted, because Canada has always significantly depended on the export of staples like timber, fish, beaver pelts, minerals and oil for its economic well-being, and the problems of such economies are well understood.

"So we have a whole history, and there's a whole school of economics, Canadian political economy, that has studied the boom and bust cycles, these various waves of staples development and how they've shaped Canada's economy over this time.

"And it's not all bad. There's huge benefits to these industries. They have stimulated investment, jobs, regional development. They have had a crucial role to play in the building of Canada as a nation. …"

"But we have to be thoughtful about this and recognize that there's lots of downsides to an economy that's unduly dependent on extracting staples resources, not adding value to them, not processing them, just gathering them together and then sending them away, making some money. …"

Those downsides should be familiar to anyone who has spent any time in Alberta. Stanford catalogued a few:

"Wild swings in the prices of the staple products. Huge swings in foreign demand for the staples that we produce. Enormous costs in investing in the infrastructure that's required to facilitate the export of staples. Conflict and injustice with Indigenous peoples. … The environmental consequences of thoughtless, knee-jerk, maximized staples production."

Plus, of course, he added, "there's a new dimension to this challenge now with climate change."

Which brings us back to what happened to the fur trade, which prospered from the early 17th century to the mid-19th century. "A very important and highly technical case study in the risks of staples development is of course provided by this little creature, the beaver," he explained.

"Any economy based on getting stuff from nature, harvesting it, not processing it, and just selling it to others is just incredibly vulnerable. 'Cause you're always subject to changes in tastes and technology that will undermine the demand for those natural products. It's occurred in the past and it will occur again."

If Alberta Premier Jason Kenney had been running the fur trade, Stanford mocked, he would not have said, "Maybe we should learn to produce other stuff!"

When the market for beaver pelts, used to make felt hats, began to wane, he probably wouldn't even have said, "'Maybe we should try to get as much value for our beavers as we can while the demand is still there,' instead of just trying to flood the world market, to respond to a downturn in demand by selling even more. Not very thoughtful!"

"And it will occur to our staples today," Stanford averred. "No matter how much we stand up and tilt at windmills, no matter how much we point fingers at environmentalists and others, the reality is the world is going to stop using oil."

"If we get ahead of the process -- and there are, believe it or not, places in the world that do produce oil that are thinking down the road -- then we can position ourselves for maximum benefit," he said. "If we just deny that it's happening, stick our heads in the sand and point fingers, we will absolutely be left behind."

"And this," Stanford concluded, "is the fundamental flaw, the enormous weakness, in Jason Kenney's vision."

You can call this the Lesson of the Beaver -- Stanford does -- and you can bank on it.

NOTE: The AFL convention took place in early May, and I know I promised readers then that I would soon publish a couple of pieces on Dr. Stanford's insights. This is the first of those, and I know it took me a little longer than I anticipated. Sorry about that, but the thing about blogging on politics in Alberta is there's something to write about almost every day! There will be another one of these along shortly. Really. For those of you who want to dig a little deeper into this, though, a good quality video of Dr. Stanford's full address has been posted by the AFL. It's long, but it's worth a listen. DJC

David Climenhaga, author of the Alberta Diary blog, is a journalist, author, journalism teacher, poet and trade union communicator who has worked in senior writing and editing positions with The Globe and Mail and the Calgary Herald. This post also appears on David Climenhaga's blog, AlbertaPolitics.ca.

Photo: David J. Climenhaga

Jim Stanford's keynote address to the 2019 biennial convention of the Alberta Federation of Labour.

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