Christy Clark and the Great False Choice of 2014

Our premier capped off 2013 — the most impressive year of her political career — with a trade mission to Asia, where she hopes to sell fracked-in-B.C. natural gas. Speaking in Tokyo on December 2, Clark offered a startling glimpse into her vision for our province’s economy.

It could be that Clark was simply telling some overseas businessmen what they wanted to hear. Or perhaps her new messaging reflects her true economic beliefs. Either way, British Columbians are about to be offered a false choice.

Here’s what Clark said in a speech at a natural resources conference, according to the Globe and Mail’s Justine Hunter:

The fundamental challenge for B.C. – and in fact, all developed economies in the world – goes beyond the recent global downturn and a fragile recovery. We need the courage to take a broader and deeper look, and admit the truth about most of the developed economies around the world.”

Amen, Premier. You’re absolutely right. Please continue.

“When was the last time we had real growth? It was the 1950s and ’60s, when 6- or even 8-per-cent growth was the norm.”

Well, okay. Bear in mind, the post-war boom was a different era. The global population only cracked 3 billion in 1960. That year, Canada’s GDP was $2,295 per person. Oil cost less than three dollars a barrel. Even adjusted for inflation, that’s less than a quarter what we pay now. With all that cheap energy, it’s not surprising the economy grew.

“That wealth set a standard for government investments – for infrastructure, for health and education, for social programs.”

Canada’s corporate income tax rate was also 50%. Again, a different era.

“But over the past four decades, economic growth for most developed economies has been more like 2 or 3 per cent at best.”

That’s right. As we’ve burned all the easy, irreplaceable energy, costs have gone up. And because we’re still heavily dependent on fossil fuels, when oil prices spike — the economy slows down. You can’t build infinite economic growth on finite resources. That’s not philosophy, it’s physics.

So how can we afford to maintain the high standards that were set more than 40 years ago?”

To start with, we could focus on four things: equality, efficiency, education, and energy security.

By equality, I mean sharing wealth in ways that reduce the overall burden on social services. Efficiency means reducing the amount of energy we currently waste. Education means training and retaining more innovators and problem-solvers, so our province can stay competitive. And energy security, frankly, means leaving some of our fossil fuel wealth in the ground. What we do withdraw should primarily be used here at home — to power our transition to a sustainable, low-carbon economy.

Why, what did you have in mind?

“There are two choices. Manage decline year after year – and get by with less. Or take a bold step and grow the economy. I say let’s grow the economy.”

(Cue polite Japanese hand-clapping.)

Did you catch that? This is the great false choice of 2014. Get used to this rhetorical framework, because you’re going to hear it a lot this year: “Either we build more pipelines, or grandma languishes on the waiting list for surgery.” “Either we run more oil tankers down the coast, or close another school.” “Either we frack our own province for the foreign LNG market, or we all shiver in darkness and deprivation.”

It’s blackmail, and it’s premised on three deeply problematic assumptions.

The first assumption is that fossil fuels, including liquified natural gas, will be a fiscal bonanza for the province. The second is that energy exports lead to balanced government budgets, and funding for social services. The third is that 6-8% economic growth, year after year, would be a good thing for British Columbia.

Assumption #1: The LNG bonanza. Simply put, B.C. is late to the party. Russia holds the largest natural gas deposits in the world, with a liquefaction terminal already built and more on the way. Russian companies pay Russian wages, Russian taxes, and operate according to Russian environmental standards. They also share a land border with China, with an agreement to ship gas by pipeline — skipping the entire process of putting it on a boat. Further south, Australia is building seven LNG terminals at once. Meanwhile, Asian countries are in talks to form a buyer’s club, to bargain down the price of natural gas. All of this adds up to lower government revenues than Clark predicts. (Click here to read more from Ben Parfitt in The Tyee.)

Assumption #2: Social services. If you believe that accelerated resource development makes for well-stocked public larders, take a look next door. Alberta, the province with all the oil, has somehow drained its rainy-day fund and fallen into a $2.8 billion deficit. They have the highest wages in the country, but they also have the lowest. A steady flood of new workers is straining government programs and facilities. Strapped for cash, the environment ministry is currently outsourcing enforcement duties to industry. Dependence on commodity exports has been a blessing for producers, but a curse for government. That’s something for B.C. to think about, before we tie our fortunes to LNG or bitumen. (Click here to read more from Graham Thomson in the Edmonton Journal.)

Assumption #3: Infinite growth. This is a fantasy, one that serves politicians more than it serves ordinary people. At 8% growth, the B.C. economy would double in size every nine years. There’s no way our infrastructure could keep up. In fact, it would be a nightmare — for workers, for municipalities, and the environment. Ask planners in Kitimat, B.C.’s latest gold rush town. The fact is, Christy Clark made promises on the campaign trail that were too good to be true. Now she’s grasping for a short-term solution, which is exactly what the fossil fuel industry has to offer. Another spurt of growth, until the market crashes or the resource runs out. Then what — find another, riskier, finite source of energy? That’s no way to run a province. (Click here to read more about infinite growth in the Vancouver Sun.)

To save her own political skin, Clark appears willing to sign our whole province to a Faustian deal. What she fails to realize is that the solutions whispered by energy lobbyists are in fact the source of the problems she now faces as Premier.

“There are two choices. Manage decline year after year – and get by with less. Or take a bold step and grow the economy. I say let’s grow the economy.”

There’s another option, and that’s to focus on the four E’s: equality, efficiency, education, and energy security. What’s more courageous — to do the same thing we’ve been doing for the last fifty years, or to ready our economy for the next fifty? That’s the real choice, the one faced right now by Christy Clark. I hope her bravery is real.


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