Energy East; a 19th Century Economic Model

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Mr Montpetit believes that a pipeline such as Energy East is an archaic way of exploiting our natural resources. To refuse Energy East, is the only way to adapt to the realities of the 21st century.

             Energy East; a 19th Century Economic Model

Just like the rest of Canada, Quebec wants a diversified economy based on full employment, the use of its natural resources, and its know-how. Let’s not lose sight of the fact that Energy East is more than just a steel pipe. It is the logical extension of the industrial policies of the last 10 years. This is a political and economic infrastructure which will influence the direction of our economy for the next decades.

Unfortunately, for the past ten years, the economic policy of Canada has relied on the exportation of an unrefined natural resource without any added value. As long as the market price of a barrel of oil was over $80, it was easy money! This put the Canadian dollar on steroids. A Canadian dollar on par with the U.S greenback made our manufactured products non-competitive to our most important trading partners, especially the United States.

This archaic policy has had a devastating effect on our manufacturing sector, in Quebec as well as in Ontario. Tens of thousands of jobs have been lost. So much so that Ontario, the traditional pillar of Canada’s economy, has had to receive equalization payments for the first time in its history. With the fall in the price of oil, the Harper government was forced to talk of  »recession » during the 2015 electoral campaign.

One does not need a degree in economics to understand the necessity of exploiting our natural resources with value added. Which is the more profitable? To sell iron ore at  »une cenne la tonne » as in the Duplessis era or sell a finished product like an angle-iron ( 2 X 2 X 1/4 X 20 ft) for $38.24? Since the weight of the angle- iron is 64 lbs, that means selling our iron for $1.67/lb instead of one cent per ton. Similarly, to export unrefined ‘dilbit’, is to to exploit a natural resource as our ancestors did at the time of the United-Canadas in 1840. At that time, we were exploiting another natural resource, wood.  »Cages » (or rafts), of logs came down the Ottawa River to be loaded on boats . Transforming the logs into planks and beams was reserved for the economy and workers of England. We were not an economy; we were a colony in the service of England!

By building Energy East, Quebec -and Canada – are regressing to a 19th century economy in which we would become a  »company town » , one of those small mono-industrial municipalities whose fortunes are linked to the fluctuations of the price of commodities on international markets. To build Energy East is to allow Quebec as well as Canada to become just such an economic dinosaur.

In the beginning of the 21st century, should Canada, an industrial nation of the G8, have a diversified, knowledge-based economy? Or will we allow ourselves to again, become a  »company town’, an economic dinosaur at the mercy of the price fluctuations of the Market? Even Saudi Arabia wants to diversify its economy so as not to remain dependant on oil[1]. So why does Canada wish to return to the status of a resource economy of the 19th century? Is a policy that hamstrings our manufacturing and service sectors good for our future?

Not only will Energy East export our crude oil, it will also export all the greenhouse gases(GHG) associated with its refining and combustion. It is impossible to respect our commitments at the Paris Conference without also exporting our greenhouse gases[2].

«To be or not to be. That is the question!» Will we know how to adapt to the 21st century economy and its technological revolution? Even more important, will we know how to do what is necessary to avoid disastrous climate change?

The dinosaurs, which did not know how to adapt to reality, have disappeared! It is Darwin’s Law.

To refuse Energy East is to adapt to the new reality!

Gérard Montpetit

La Présentation, Qc.

J0H 1B0

April 11, 2016