Thursday, 5 May 2011

Election Hangover

Everyone else is having their say on what Monday's election results mean, so why not, and I am trying to be analytical, not partisan. .

For those who care about developing a more rational "food system",  based not simply on who can produce it the cheapest,  Monday night's results are a crushing disappointment.  The Liberals and the NDP (and the Greens) had spent a lot of time and effort developing  national food strategies that would have put more emphasis on regional food networks, stepping up inspection of imported food, food labeling, and making that important link between the food we eat and our health. The  Liberals, with all the soul searching they'll be doing, will probably put their food strategy in the same filing cabinet as the Green Shift, and that's unfortunate. The NDP put more emphasis on what they call fair trade, looking into international trade deals to see if Canadian farmers are being treated fairly. That's a noble exercise, but will be a hard sell in a majority Conservative parliament.

When it comes to agriculture and food, the Conservatives promised (much like in every other area) more of the same: export oriented,  more free trade, Canadian farmers who are competitive on a world scale will be successful, those that can't, will fail. The challenge here in the Maritimes (see earlier posts) is that production costs are higher here, and that "North American" price for livestock and grains (kept lower by those large U.S. subsidies that come in the mailbox to American farmers) makes farming here marginal or money losing.

Just before coming PEI in 1980, I spent time working for CBC radio in Calgary.  I caught a glimpse of what drives the current Conservative party on resource issues, and what makes up Stephen Harper's mindset.  We have to remember that Stephen Harper (much like George Bush who was born into privilege in the U.S. North-east, but then  re-created himself as hard nosed Texan) made a similar passage.  Harper grew up in Toronto, the son of an accountant with Imperial Oil.  He dropped out of the University of Toronto, and ended up working in the mailroom of Imperial Oil in Calgary, and then decided to go back to school. That's when he came under the influence of the The University of Calgary's renowned economics department, and it's well know head Tom Flannigan.   Flannigan, and the U. of C., are entrenched in free market economics (Milton Friedman,  low taxes, small government, decentralization, property rights, etc. etc.), and Harper  took all that on, and became one of its most skillful promoters.  Now he's the Prime Minster with a majority government.
(He still looks pretty goofy in a cowboy hat, but, like Bush, has transformed himself, in his own mind anyway, into a  frontiersman).

What will be telling for the Maritimes (and we saw this clearly in December of 2008 when Harper steadfastly refused to take the global financial collapse as a time for Government intervention)  is that he will (in my opinion) diminish the role of ACOA, equalization, transfer payments, and so on, arguing the budget has to be balanced, but there's more at play. He simply doesn't believe government has a central role in economic development. It's not that he'll refuse, it's that he doesn't believe it should happen.  There's a difference.

When it comes to Agriculture policy and resource issues, Western Canada, and Alberta in particular, has always been tempted by that huge, rich (used to be anyway) market  just south across the border.  That's why Westerners see export markets as the best way to prosperity, and any government intervention to help Canadian producers in the East that could jeopardize these export markets (through a trade fight)  is to be refused. It's why  Trudeau's National Energy Program  which kept oil and gas at a lower domestic price, was so viscerally hated in the West.

There's one more impression I came away with that's harder to justify, but I think is very important. Gaining enormous wealth by punching a hole in the ground, collecting and marketing the oil and gas, creates a mindset that anyone can make it if they have enough guts and determination.  In other words there's no excuse for people not to succeed, and the government shouldn't coddle those that don't. I remember arguing with someone in Calgary that it was Peter Lougheed  who guaranteed Imperial Oil a profit if it would start developing  the oil sands. The government never had to pay of course, but surely that's government intervention in a big way, and takes away from the swagger of the so-called risk takers in the oil industry (we agreed to disagree).

All this means people in the Maritimes are going to have to work harder at finding local solutions to problems, think a little more about their neighbours, and where they spend their consumer dollars (that's not a bad thing).  Harper will be under tremendous pressure from the business media, his supporters in Alberta, Tom Flannigan, to use these four or five years to show Canadians what a true Conservative government really looks like.  My biggest worry is what's called the Dutch Disease. Holland gained enormous wealth form North Sea oil, driving up the value of the guilder, and making anyone outside the oil and gas business uncompetitive in export markets. I think Canada will go through the same thing, putting tourism, and the important export markets for food, lumber, and so on at risk. Harper and others will be proud of a "strong, confident Canada" but not all Canadians will feel the joy.

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