This economy isn’t a lunchroom where provinces can swap like children their baloney for goodies
There would be a time when Canada was referred to as a nation of traders. Perhaps we still are, somewhere. At home we might too call ourselves a nation of garish wheeler-dealers, with provinces brashly bartering support for economic pet projects as if the whole federation was simply a shabby bazaar – as opposed to, say, a serious G7 economy.
Alberta and B.C. are feverishly haggling out a pipelines-for-power arrangement, with Christy Clark’s government attempting to interest Alberta in buying B.C.’s excess hydro-electricity. Alberta says it is possible, as long as B.C. would like to purchase into its West Coast oilsands pipelines. Meanwhile, Saskatchewan Premier Brad Wall is working his own pipeline angle, linking a federal bailout for Quebec’s sickly Bombardier to approval for that Energy East pipeline.
Marketplaces, from commodity exchanges to local flea markets, are wonderfully efficient things for clearing inventory and maximizing social benefit, obviously. But markets only work well when they’re free. There’s nothing like this here. They are sellers offering fraudulent goods to largely captive buyers. There are no possible substitutes available while there is when a buyer can at least resort to a Ford when she can’t find the best price on the Lexus, or a firm can buy iron ore from Brazil if it’s less expensive than Australia’s. Bc may be the only province that stands between Alberta and the Pacific Coast. Any path to the Atlantic must cross Quebec.
B.C. is sensible to peddle its hydro power to Alberta. Being lucky enough to have vastly more tributaries than its eastern neighbour, it’s its eye on being a “clean energy superpower” – partly by “supplying hydroelectric capacity to Alberta” as B.C.’s lieutenant-governor Judith Guichon explained in her own throne speech last month. B.C. is a motivated seller: the province is neck deep in the $8.8 billion Site C dam project and it has been desperately trying to find buyers for the 5,100 gigawatt hours of annual energy it’ll produce by 2024, based on the province’s former NDP leader, Adrian Dix. “Suddenly, the idea of Alberta emerged,” Dix said, calling the Site C dam “a caravan in search of an oasis.”
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And Clark sees a hydro deal as “great for us,” since it means “profit for BC Hydro, meaning it is good for (B.C.) ratepayers.” That doesn’t necessarily turn it into a good deal for Alberta, that Alberta would want it, or that Albertans should be compelled to purchase it. Yes, Alberta’s NDP government will quickly turn off all coal-fired generators, which produce 38 per cent from the province’s energy. But Alberta also sits on the lake of cheap natural gas, and borders three U.S. states. One of these, Idaho, has a power company that, like B.C.’s, is covered with “clean” hydro electricity. Idaho can also be perched atop a payload of geothermal potential. And it has a few of the lowest electricity rates in the United States, with prices for industrial users well below what B.C. companies pay.
But Alberta quickly found a large part around the B.C. electricity deal. It would consider taking some of Clark’s hydro surplus off her hands. But, Premier Rachel Notley said, sales would need to be “tied to inter-jurisdictional product distribution infrastructure” – meaning, B.C. would have to quit to carry up plans for oilsands pipelines, as Clark has tried doing in imposing several “conditions” on supporting Northern Gateway, one of which naturally features a juicy kickback to her province. “We won’t be buying more power when we can’t get our resources to promote,” Alberta’s energy minister Marg McCuaig-Boyd said last week. And hey, B.C.’s available to that. B.C.’s energy minister, Bill Bennett, says he has “no problem with – Alberta linking the two,” and that he thinks they “can try to conduct business together.”
Lost in all this spirited bargaining is the fact that B.C. brings nothing real towards the table – and, obviously, that Alberta’s government should make power deals based on what’s best for Alberta electricity’s grid, and never leave ratepayers paying for interprovincial pipeline politics. B.C. has no veto over federally regulated pipelines. But here you go offering to throw in to the negotiations a sanction it does not really have and that Alberta need not buy (but Alberta ratepayers will finish up funding). The same is true, as Wall himself has pointed out, of Quebec’s jurisdiction over the Energy East pipeline. But, he was initially to suggest that if Ottawa were to write a $1 billion cheque to bail out Bombardier, it ought to “be produced in the context of also what’s happening towards the energy sector-,” indicating that any handout Ottawa sends to Montreal ought to have a guarantee that Energy East will be presented passage through Quebec.
Forget that. There is no fair pact to be struck here. Energy East is a private project with economic merit, Quebec has zero say around the matter, and Bombardier has been and can continue to be a bonfire that politicians use to incinerate taxpayers’ money. This economy isn’t a lunchroom where provinces can swap like children their baloney for goodies. And if it’s come to that, it is because the top minister has failed to act like an adult and stand up as firmly for vital pipelines because he should be standing against bailouts for billionaires who ruin their aerospace companies.
Absent any leadership in the Trudeau government, it’s hard responsible Alberta, B.C. and Saskatchewan for relying on such absurd dickering. But it is worth remembering that those same three provinces pioneered between them the interprovincial-barrier-smashing New West Partnership Trade Agreement. These same provinces were once national leaders on provincial free trade. And yet, what all this bartering is dependant on is certainly not a lot more than shoddy protectionism, as each province holds hostage the interests of another, unless and until each one of these gets the ransom it relates to.
