Quebec, shale gas and Pandora’s Box

I already received an email this morning suggesting that no one has the right to tell Quebec which industries it can or can’t development.   If they were to re-read my column in the Economy Lab they would see the following sentence:

“No jurisdiction should be compelled or cajoled to implement any industrial development that is deemed to have a substantial environmental risk….”

But I go on to say: “it becomes complicated when the jurisdictions using that argument are in the minority.”

In other words, Quebec’s natural resources minister, Martine Ouellet, says “she doesn’t believe the controversial method of extracting natural gas from shale, known as “fracking,” can ever be done safely.”  Her counterparts in BC, Alberta, Saskatchewan and Newfoundland would say the opposite.

Now, it may be that Ms. Ouellet will be proven right.  Maybe compelling evidence will emerge that fracking is very dangerous and other provinces will shut the industry down.  Maybe the Ministers of natural resources in BC and Alberta will send letters to Ms. Ouellet thanking her for her foresight.

Or, maybe President Obama is right and shale gas is a game changer that will provide the U.S. with a competitive advantage for several generations.

It just seems to me that this issue will emerge as a big deal in the deliberations about changes to the equalization program that are currently underway.

The western provinces have always pushed for natural resource industries to be removed from the equalization formula.  Now that other provinces are actually rejecting those same industries – I would be highly surprised it if didn’t become a flashpoint issue.

As I say in the piece, this might be just what the PQ wants – to stir up resentment in the West and convince Quebeckers that the West is trying to tell them what industries they can and can’t develop.    But not all Quebeckers nor all Canadians want that province to separate.  Most Canadians support the concept of equalization – as do I – as a fundamental, binding attribute of our country.

But this issue could start to challenge that view.

2 thoughts on “Quebec, shale gas and Pandora’s Box

  1. Absolutely & totally agree with the information in your article in the Toronto Globe & Mail.
    I am ashamed to count myself as a New Brunswick citizen seeing the amount of short sighted citizens in this province putting up those silly signs “No Shale Gas” or “No Uranium Mining”. Where in hell do they think the equalization payments are coming from that support the health system, education, etc. here. Well for their shrunken up brains, they come from the “have Provinces” like Alberta, Saskatchewan and BC.
    I hope that I am long gone when finally these “have” provinces finally say, “enough is enough” and cut off the flow of capital to the “have not” provinces like New Brunswick and Quebec.
    I can see the concerns here re aquifers being in danger, etc., if prudent environmental measures are not taken but to attempt to kill a possible resource that might stop us from bleeding to death in debt without giving the Government and Industry a chance to put in place the rules and standards and believing that these rules will NOT be enforced is damn stupid!

    Keep up the great work!

  2. I read an article last week in the globe or the post…can’t remember which…claiming that Canada is the most educated country in the world. This is great and may or may not mean anything with respect to the economie. Despite this our primary industry is natural resources because we have an abundance…at least for now.

    I am not an economist but I understand that in order to have a strong and robust economy we need a strong middle class. David, please correct me if I am wrong. Manufacturing and natural resources have historically been a good place to get this. A robust middle class economy is the main reason we have all the services and perks and safety nets we know and love today. We can whine and moan all we want but manufacturing is largely gone and not coming back soon. Low skill manufacturing will follow the path of lowest cost and there is nothing we can do about it. So that leaves natural resources. The nice thing about them is that they must be pulled out of the ground here because they are here. If Canadians and especially NB’ers want to maintain our way of life we need to put our educated heads together and figure out how to do resource extraction in a responsible manner and get on with it.

    The other truth behind shale in NB is that it’s not happening anytime soon because the gas is deep. Making it expensive to extract and the price of gas is way too low right now. So we have time to figure it out and implement some best practises. As for the protesters I say keep going because you keep the lawmakers honest.

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