Saturday, January 28, 2012

A Welcome Addition to The Conversation About China.

Now playing at the Canadian Defence and Foreign Affairs Institute's weblog:

Brian Lee Crowley is no fool. He's the managing director of the Macdonald-Laurier Institute, the founding president of the Atlantic Institute for Market Studies, and a fine rum lad. A detractor might insinuate something to the effect that if there were a Canadian political party explicitly devoted to the proposition that taxes are carcinogenic and government is cholera, your man Brian would be a ranking member in the politburo of its central committee. But I'm not one of Brian's detractors, so I would never say anything like that.

In today's Ottawa Citizen, Brian enters a conversation I've been lately encouraging sensible Canadians to have about the implications of Prime Minister Harper's unexplained and sudden embrace of a corporate entity run by the Chinese Communist Party that serves as the guarantor of Omar al-Bashir's regime in Khartoum, the bottomless overdraft in Bashar al-Assad's bank account in Damascus, and the specific means by which Tehran's Khomeinists are evading the West's sanctions and double-daring us into a war.

The prime minister would like that entity, Sinopec, to add to its global services the means by which Canada might emancipate itself from its over-reliance on American oil markets, and the stratagem that will allow Mr. Harper himself to look rather more manly in those obligatory White House photo opportunities that put him next to the handsome and swaggering American president with the smirk on his face.

Meanwhile, none of the formerly freedom-loving rednecks who now rally to the prime minister's side in this affair have exhibited so much as a blush as they do so, when everybody knows full well what they'd have done had the New Democrats even hinted favourably in the direction of an arrangement anything like the one the prime minister has embraced. They'd be denouncing the NDP as al Qaida's fifth column in Canada and they'd be busy filling the op-ed pages of the dailies with stout demands that Harper invite a team of US Navy Seals to round up the NDP caucus en masse so they could be executed for high treason in front of city hall in Fort McMurray.

But Brian is not a redneck. He's smart. Unfortunately, in his contribution to this conversation, he's being too smart by half. "All across the political spectrum the cry is heard: process the oilsands here at home. Bank executives, trade unionists, editorialists and others want us to do all the work here." There is very little to disagree with about that, or indeed in anything that follows, until Brian gets around to his point, when he feints to the right.

"We could upgrade and refine some of our production facilities in the east (at the Irving refinery in Saint John, for example), but they are already well supplied by world oil markets, whereas getting large quantities of Alberta crude to them would be costly for little benefit."

For one thing, if Alberta crude really is of "little benefit" to anyone in Canada's mysterious east, then it would be nice if Brian could just come right out and say so. But I don't know anyone proposing to ship bitumen to Saint John anyway.

Shipping bitumen to Ontario for refining, or to Quebec, or upgrading and refining it in Alberta or along the way, would be very profitable if Canada acted like pretty well every other country in the world and encouraged enterprise that added value to its natural resources. This is exactly what Stephen Harper himself was advising, in the form of a promise, in the 2006 election and in the 2008 election and the last election. Heck, we could even invite Chinese capital to invest in infrastructure like that.

In the bargain, we would also emancipate eastern Canadians from the ill luck and unhip circumstance of having to rely upon - dare I say it? - "unethical oil" and "conflict oil" from Saudi Arabia, Venezuela and Nigeria. They'd have buckets of Alberta's fair-traded and shade-grown variety instead.

"Forcing investments of billions of dollars in unproductive capacity and delaying oilsands development won't improve Canada's standard of living, but the reverse," Brian claims.


That's rich. How well I recall the days when Canada's mere possession of a national energy program and the establishment of our own state-owned oil enterprise, Petro-Canada, was a free-market sin that cried out to heaven for vengeance. Now China is doing the nationalizing of our energy resources, and it's Chinese state-owned corporations intruding into our oilsands wealth. Sinopec revenues last year exceeded the tax revenues of Canada's federal government. We're supposed to behold the glories of the free market in this?

We don't even have a Foreign Investment Review Agency anymore. China's version of FIRA - preferential bank loans to dozens of outfits like Sinopec that are run by Chinese Communist Party politburo appointees; draconian restrictions on foreign investment to favour the government's own enterprises; privileges granted to state-owned corporations at the expense of thousands of Chinese businesses they've driven into bankruptcy in recent years; labour-law exemptions gifted to Beijing's monopolies and their foreign joint-venture buddies; grotesque tariffs and duties imposed on imports to the advantage of the multinational corporations Beijing owns and runs - all this makes us looks very much like the chumps we are.

I mean, please. Why do you think Stockwell Day is now a "distinguished fellow" with the Chinese business lobby known as the Asia Pacific Foundation of Canada? Canada's former Minister Responsible for the Asia-Pacific Gateway is not distinguished by a business degree from Harvard or an international relations degree from Georgetown. I don't mean to offend anyone's religious sensitivities here, but as I recall, he is a hayseed who thinks people were eating dinosaurs in the Garden of Eden 6,000 years ago.

As for "delaying" oilsands development, smart people in the oil industry and in the investment banking racket tell me that delaying the sale of the good stuff will only mean fetching a much better price down the road a little ways, but we're giving the easy stuff away to Beijing for pennies, and soon all we'll have left is the nastier stuff that costs almost as much as it's worth just to get it out of the ground. As for the bit about how acting like grownups "won't improve Canada's standard of living," are we supposed to overlook the fact that the number of landed immigrants settling in Alberta has now been eclipsed by the number of "temporary foreign workers" in that province?

I could go on.


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