Canada: The Failed Experiment

At the premier’s conference in New Brunswick this week we were once again given a glimpse into the disjointed and fractured makeup of the Canadian federation. The disparities, differences and dysfunction that Canada embodies speaks volumes about the desperate need to overhaul the entire federal system or perhaps even dissolve it.

Two of the key planks in the federal government’s agenda have been the development a solid approach to environmental issues and the creation of an east / west power grid. Both concepts are lofty goals for a federation that includes thousands of miles of terrain, widely varied economies, differing cultures and diverse needs.

The reality is that Canada, as a nation is a failure. Its shear size does not allow a one size fits all formula and it never will. Regional or provincial issues and priorities rarely if ever align and the premier’s meeting this week proves the point.

The Environment:

While some provinces, especially Ontario, would like to see a hard cap on carbon emissions, resource dependent provinces like Alberta are dead set against the idea, preferring instead to see limits tied directly to production. In a nutshell one would wants a set limit on emissions while the other wants a formula based on output.

The problem with not instituting a hard cap is that it doesn’t do much for the environment. As production levels increase so do the level of pollutants and with Alberta planning to increase tar sands production by anywhere from 200% to 500% over the next few years, in an effort to meet U.S. demands, a per ton formula would simply see emissions rise dramatically with the increased output.

On the flip side of the equation, capping total emissions might improve the environment but would kill development and economic growth in the Alberta and essentially hamstring the oil industry. Simply put, if a company can only produce X emissions, when they reach that magic number they are at a stand still and can’t grow or expand.

Enter the much talked about concept of an emissions trading market, an idea some provinces support and others don’t (no surprise there). Ths market would allow companies or provinces who are below emission standards to sell some of their excess credits to higher emission producers for a profit and in doing so give those companies that have maxed out the opportunity to expand and produce more product and more pollutants, at a price.

While Ontario is in favor of the approach, since it would likely be a profitable situation allowing them to sell credits, the problem is that it will cost provinces that are dependent on resource production such as Oil.

Not every province can have depend on a manufacturing economy like the one in Ontario. Someone has to supply the raw materials such as oil and minerals the manufacturers there need and those "supplier" provinces don’t want to be penalized by having to pay extra to the very province's they are supplying.

The East / West Power Grid:

For the past few years the idea of a nation wide power grid has been talked to death but no progress has been made. Such a grid would help ensure the security and free flow of power across Canada and has been touted as the direction of the future. While places like Newfoundland and Labrador have abundant power supplies others, like Ontario, have a huge hunger for that power.

As things now stand most of the transmission lines in Canada run from North to South or from Canada to the U.S. In order for Canada to ensure its energy security and independence the federation needs to develop a link across the entire Country. The roadblock in this case is Quebec.

With Quebec already having made Billions of dollars from power produced in Labrador and with billions more continuing to roll in, the idea of a nation wide power grid is a frightening prospect.

Quebec premier Jean Charest said at a press conference this week, "There will be no talk of a federal line".

As things exist today Quebec has the potential to increase its revenues dramatically by holding the latest Newfoundland and Labrador power project, the Lower Churchill, for ransom in the same way it did the Upper Churchill.

It will do this by forcing Newfoundland and Labrador to pay for improvements to Quebec's transmission capacity and also charging a rental fee for using those lines. The other scenario for Quebec would see the province simply buy the power at a cut rate as the only available purchaser and then resell it into the market for an obscene profit. The latter approach being the technique already used today to rob Newfoundland and Labrador of its resource revenues from the Upper Churchill under a contract that will remain in effect for at least another 34 years.

The government of Quebec sees a federally controlled national grid as a threat to its ability to rape, rob and plunder the people of Newfoundland and Labrador well into the future and wants no part of such a plan.

The province of Newfoundland and Labrador is geographically cut off from the rest of Canada by Quebec and has been forced to virtually give away its power resources in the past in order to get them to an outside market. Quebec wants that reality to continue and is willing to kill the idea of a national power grid in order to make sure it does.

Newfoundland and Labrador is left to decide if it will once again give away one of its most precious resources, fund an extremely expensive sub-sea transmission line, give up on the project all together or try to find a way to attract local industry that can use the power domestically. The latter is clearly the preferred option of the general public but one the provincial government doesn’t seem enthusiastic about for some mysterious reason, but that's another topic.

In a few weeks the government of Newfoundland and Labrador is set to release it’s energy plan for the next few decades. It’s expected some insight into their plans for the Lower Churchill may be gleaned from that document but whatever happens its clear that consideration must be given to the Quebec factor.

A Failed Experiment:

Canada as a nation is a failure. You cannot manage such a diverse area by defining regulations, standards, wealth distribution, environmental policy or much of anything else from an ivory tower in Ottawa.

The best option for everyone is not for Quebec alone to separate, as they've been threatening to do for years, but for the various provinces and regions to form separate and fully autonomous states. States that can then work together, under some sort of EU like union, on mutually beneficial issues while going their own way on others.

In this way the separate states will at least be able to deal with each other as equals rather than as powerful provinces pitted against weaker ones. A situation that exists today.

With political decisions made in Ottawa and political clout centered in just a few provinces the rest of Canada is left at the mercy of the majority. Federal politicians, who live and die by the polls, will always side with the larger porivinces, Ontario, Quebec and to an increasing degree Alberta.

It’s becoming increasingly clear to Canadians from coast to coast to coast that the federation is little more than a bad marriage between incompatible partners. Staying together while sniping at each other and arguing over every little issue isn’t going to make things any better. The sooner the marriage is formally ended the better off everyone will be.

Perhaps the new Canadian buzz word shouldn't be "Soveriegnty", "Separation" or "Autonomy". Perhaps a "Divorce" might be more in order. We can always cite "irreconcilable differences" as a valid reason.