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Perhaps the problem is in the drawn out regulatory processes and the inconsistent political environment.
CAN-USA Tariff Strife (split from various pol threads)
- Thread starter Remius
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Perhaps the problem is in the drawn out regulatory processes and the inconsistent political environment.
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By inconsistent, do you mean: Approved > Cancelled? (northern gateway)
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That in particular, yes. But more generally everything seems to be set against the needs of a party getting elected. If party A sez Black then party B sez White.
And we have a constant flux. 14 jurisdictions, constantly shifting due to elections. Add in the First Nations (and to be abundantly clear I accept that they have title and it is their property except where they have relinquished property rights by treaty).
We need a legitimate "National Policy" that is accepted by all parties as legitimate.
Investors aren't going to invest if mid way through a project the rules of the game are going to change and the costs become more prohibitive, or worse the entire project gets cancelled.
....
Is our biggest problem, in the west, the rise of the backroom types focused on delivering the next election?
Keith Davey. Gerald Butts. Katie Telford. The Podestas. Morgan McSweeney. David Axelrod. Lyndon Crosby. etc.
....
Same problem with National Defence.
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You Jest.
Carney can "signal" anything to get the Liberals elected, but from years of experience we all know it is just lies to hold power.
I don't believe Cdn voters will ever pull their head out of there ass especially believing the government is giving them social programs free, incl health care. Too stupid to realize the funding is from them, the taxpayer.
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Or....and here's a totally off the wall thought...
1)Take an off the shelf refinery design...or buy one if private industry doesn't want it any more. Here's the current ones. https://natural-resources.canada.ca/sites/nrcan/files/energy/images/Refinery-Map-Large-E.gif
2)Fund it through public/private partnership funding....with the project designated of National importance.
- 1/4 owned by government of Canada (see point 3)
- 1/4rd owned by province on Ontario (or whatever province it's built in). This is the carrot for their voters.
- 1/4rd buy in by First Nations in area + transportation corridor. May be a combination of buy in ownership over time via split proceeds. This is to acknowledge potential impacts.
- 1/4 private equity investment which reduces their risk but also avoids full taxpayer costs.
4) Take 25% of the proceeds and and put it in a separate wealth fund that is a) designed to cover environmental liabilities and b) allow for future economic infrastructure investments.
I get that refineries are stinky, best built down wind of major centers, and low per unit produced profit items (aka big refineries are overall better economically than small ones). But now you have a) helped break the US dependency on refineries. b) provided an option to offshore oil purchases c) added national level infrastructure and d) have a bargaining chip to use internationally.
I have to think it's tough for Canada to be taken serious at discussions like G7 about climate change, human rights, or commitment to international trade embargos when we still import so much oil off the open market - some of which is coming from less than pristine reputation sources. Likewise if you want to talk to say - Germany - about buying new military items you now have a lever to sweeten the deal...X dollars + Y barrels of refined oil for your country at fixed price.
While connections to Eastern Canada are key I also think of even holding terminals at Churchill (for seasonal deliveries) and/or expanded BC options (Prince George and then refined products to Kitamat?).
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I think I would expand Prince George and bring Bowden back on line as fairly easy wins.
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If that's the case, it seems we are not alone>
OldSolduer
Army.ca Relic
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You have to wonder who is pulling JTs strings - because from his media interviews his answers to questions make me wonder if he's even capable of an original thought.
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Perhaps. One thing I lose track of is who should build and run infrastructure. When public money is spent on resource infrastructure, people, particularly those in areas that don't directly benefit, go nuts (Petro-Canada). If it is such a good financial idea, why isn't private industry stepping up. Maybe some kind of PPP is the way to go.
There's a lot of 'we should do X'. Who is 'we'? People (not you) can't rail against things like bureaucracy, size of government/civil service, debt, etc. and also want it to get knee deep in industry.
I'm not smart enough to know whether distinct government-controlled piggy bank, and the money that would have to be drawn from profits, is a good idea or not.
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There are a lot of small gains that can be made quickly.
The tanker station at the end of Transmountain just finished having its navigation buoys fixed up so they can move tankers at night instead of just the day. Clear increase in efficiency. Transmountain as well is looking at adding an additive (near immediate impact) and additional pumps (within the year or two impact) to move more oil at a time. These all taken together are expected to increase the flow to 200-300 thousand more bpd. (approx 22-33% increase in volume).
They also want to dredge to get the Aframax tankers to be able to filled all the way as now they can only be partially filled due to draft issues. That's a longer term project though.
Quebec is looking at a short run to a natural gas terminal in Saugany off the existing line. Thats a multi year project but not a long term one.
BC has changed its market focus for some critical minerals.
Internal trade barriers (at least some of them) are going to be dealt with in a short while, they've already agreed on truck safety and teaching certifications (no announcement but leaks). Alberta and BC have an alcohol agreement again, and I expect Ontario to open up the LCBO for everyones alcohol shortly. A lot of this preliminary stuff is recognizing other provinces standards as acceptable everywhere.
The tanker station at the end of Transmountain just finished having its navigation buoys fixed up so they can move tankers at night instead of just the day. Clear increase in efficiency. Transmountain as well is looking at adding an additive (near immediate impact) and additional pumps (within the year or two impact) to move more oil at a time. These all taken together are expected to increase the flow to 200-300 thousand more bpd. (approx 22-33% increase in volume).
They also want to dredge to get the Aframax tankers to be able to filled all the way as now they can only be partially filled due to draft issues. That's a longer term project though.
Quebec is looking at a short run to a natural gas terminal in Saugany off the existing line. Thats a multi year project but not a long term one.
BC has changed its market focus for some critical minerals.
Internal trade barriers (at least some of them) are going to be dealt with in a short while, they've already agreed on truck safety and teaching certifications (no announcement but leaks). Alberta and BC have an alcohol agreement again, and I expect Ontario to open up the LCBO for everyones alcohol shortly. A lot of this preliminary stuff is recognizing other provinces standards as acceptable everywhere.
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I'll be honest that I'm only peripherally involved with the oil and gas industry and even the forestry industry has so many variables it's not funny to try to figure it all out.
There are projects that having the government run make for excessive costs. I watched the fiasco of Trans- Mountain building less than a km away from me. At the same time they were building I saw private industry build similar sized pipelines in roughly 1/3rd the time for the same lengths...partially due to good planning, partially due to less political requirements for contractors, partially due to it not being a huge job but many interconnected small ones allowing for more contractor bids (20 km segments not 400km).
But at the end of the day the operating profits for a pipeline are different from a government who gets not only pipeline profits but also the increased tax revenue from such a product getting shipped. So you can afford to be running a lower profit margin on the pipeline shipping if you also know it will lead to sector wide revenue tax increases to offset that lower initial return.
In the forest industry I've seen sawmills closed "due to market conditions" which often means that the profit margin is not there according to a specific set of company criteria. A second company comes in and restarts the old mill, does a couple of minor tweaks for product/market and is back in business and often more profitable due to a different set of standards.
Unfortunately with any major resource project that involves cross-provincial boundaries or offshore the federal government has a large say. And the process as written is so vague and undefined that its amazing anything is getting done. Even in my local forestry world a simple stream crossing on a trout stream is taking 9+ months from DFO to get approved...for 18 months max work period allowed. This could be an ice bridge on a frozen dry ephemeral (seasonal flow) and it's still 9+ months...depending on who reviews the file and application time.
First Nation consultation is often complex and covers many topics. And for much of the country the players are well understood. But one of the biggest issues I have with the subject is the Coastal Pipeline fiasco where the democratically and federally recognized council were in favor of the project yet the federal government recognized traditional house leads instead.....so who do you consult with? Aware that not all are in favour of the Indian Act, the consultation process or the role of the Crown in past and present dealings but with most communities they have nominated a voice to represent their interests. Or how about the Federal government recognizing different groups and areas of interest than the provinces?
My point of the above is the road of good intentions and lack of clear strategy has created a situation where only governments can have any chance of getting through some of the major road blocks...procedurally, financially, and possibly legislatively. And until we clean up some of the roadblocks in the way it will be tough to attract the private investment to take over.
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Or, government created the roadblocks. With a bunch of help from the courts and lawyers.
Early development depended more on capital development and less on navigating volumes of regulations and armies of inspectors.
I suggest that even as late as the 1960s people could contemplate major infrastructure on the basis of "let's try it and see what happens".
I know that in my own very narrow field that has been the tale of my forty years in my profession. It used to be that if somebody had a bright idea we would patch together a plant, bottle up some product and see if it sold. Now it requires two years and a prospectus only to be told you need another year and a bunch of experiments.
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I think it would depend on if the project was economically feasible for the private, and if the project is strategically important.
If it’s something that the private sector could profit from, they should be funding it 100%. If it’s not, but strategically important to the country, then the government should fund it
Premier WAC Bennett of B.C. led the free-enterprise Social Credit for 20 years. In that time, he nationalized hydro, rail and ferries because while the private sector either couldn’t or wouldn’t build the infrastructure, it was vitally important in order to develop the province’s resources.
If it’s something that the private sector could profit from, they should be funding it 100%. If it’s not, but strategically important to the country, then the government should fund it
Premier WAC Bennett of B.C. led the free-enterprise Social Credit for 20 years. In that time, he nationalized hydro, rail and ferries because while the private sector either couldn’t or wouldn’t build the infrastructure, it was vitally important in order to develop the province’s resources.
quadrapiper
Army.ca Veteran
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Not sure of the specific economic and corporate circumstances that drove these closures, but it grates seeing logs leaving the woods around here and passing vacant, weedy acreages that used to be sawmills.
Sounds like something that hiring more federal civil servants would help with.
Would be lovely if someone would grasp that nettle and reform the Indian Act. That whole representative issue needs sorting: who cares who it is, each nation gets one voice, and it's not the job of an outsider to parse Indian Act electeds versus "executive" traditional versus elders versus whatever other factions might be present.
If it's jurisdictionally strategic, that sounds almost like a "commons" item: even if private enterprise could make a profit from it, perhaps best to set it up so it's insulated from the vagaries of capital.
McG
Army.ca Legend
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I’ve too often observed PPP to be Public Money, Public Risk, Private Profit. The Partnership is just Potemkin.
If something is too big for private industry but vitally important to the public, maybe generating revenue streams for private individuals is not a requirement.
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I'm assuming you're in BC...but northern Ontario or parts of Alberta tell similar stories. In some cases it was we have a wood supply that spans large areas but only want to pay trucking for short hauls....so over harvesting of the close wood vs. even flow leads to ever increasing costs. In other cases it was a species preference...we really like the profits on Douglas Fir (or White/Red Pine in Ontario) and don't want to deal with the smaller, less valuable species like black spruce.
One local company I deal with runs their mill on the primary goal of maximum 2x4 production...so every log comes in and is scanned/optimized for the amount of 2x4's it can produce...and at the end scans those pieces of lumber into grades. Their competitor next town over scans a similar log and looks at how much value it contains and optimizes the milling for less lumber but higher grades/more profitable pieces. It's competing business plans over market share vs. quality.
Part of the issue here is the Federal government has had huge turnover and keeps putting folks into the role that don't understand the industry. There have been some pretty amazingly un-trained staff on the Federal level assigned - "how do you know how big the creek is" not knowing someone walked the whole length during layout - but also some conflict from the industry side who is not used to dealing with DFO and doesn't always fully understand/respect their roles. It's two cogs trying to mesh but each is missing a few teeth to align well.
That's the way it works in Alberta at least...and I believe in NE BC under Treaty 8. Can't speak wider as the First Nation consultation process came in after I left BC and Ontario. A First Nation or Metis group recognized by the province is provided some funding (a constant rub point over how much) to allow for a community designated point of contact - some are lawyers, some are locals, others contractors. But each community decides who gets to represent their interests.
Unfortunately the Federal government recognizes different groups and areas of interest than the province....which makes things...interesting.
Note all of this is for the minimum standard and project proponents (which might be industry or government) can include more groups but it's not simple.
daftandbarmy
Army.ca Fossil
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This is a good article... we've got lots of fibre, I see the 'lack of vision' she mentions play out alot ...
Canada’s Forestry Sector: Born on Third Base, Hampered by Policy
The enormity of Canada’s forest resource is hard to overstate. We have 234.5 million hectares of commercial forests, of which only 0.4% is harvested each year. Unlike other jurisdictions globally, deforestation (the permanent clearing of forest to make way for non-forest use) is a minor issue here, accounting for only 0.02% of our forest. We account for only a third of a percentage point of global deforestation despite having almost a tenth of the world’s forests.
Canada also has 35% of the world’s certified forest area, a term to describe third-party sustainable management standards. Increasingly, these are administered by Indigenous Peoples, whose management of forest resources has increased 135% since 2003. Canada competes on both quantity and quality.
Yet despite the big numbers, and a highly profitable 2021 thanks to a COVID-era construction and renovation boom, the Canadian forestry sector has spent much of the 21st century on the back foot. The softwood lumber disputes, pine beetle and other infestations, wildfires, and regulatory burdens have all diminished the sector’s ability to compete and grow. While the value of Canada’s forest sector is still increasing, our production volumes and global market share are in decline. Between 2013 and 2022, Canada’s share of global softwood lumber production declined from 13% to 10% by volume. Canada’s share of global wood pulp production (mechanical, semi-mechanical, and chemical) declined from 10% to 4% over the same period.
This is not due to a lack of demand but rather a lack of vision. As an economic sector, forestry is not a 19th or 20th century phenomenon. It is foundational to construction and housing, and a solution to many of our low-emissions material needs. Other nations have thriving forest sectors, even as ours slowly diminishes. A key difference is a lack of policy support. In Canada, the forestry sector is the victim of, at best, inattention, and at worst, obstruction.
Canada's Forestry Sector: Born on Third Base, Hampered by Policy - Policy Magazine
Canadian policy debates have become locked in a perceived dichotomy between acting on the climate and growing a strong economy. Winners and losers, trade-offs
www.policymagazine.ca
Brad Sallows
Army.ca Legend
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That's a government problem. Private companies are regulated by governments, and also cannot run indefinite deficits. Governments literally make the rules, and can run near-indefinite deficits (absolutely indefinite if they are prepared to take any fiscal measures necessary). Either a venture is on average (across years if necessary) profitable without subsidy, or it is not. If a venture isn't profitable, the choices are to subsidize private involvement or use a wholly publicly-operated entity. (In theory I suppose a government could compel a private entity to operate at a loss, but that ride would eventually end.) Both private and public operations are subject to the whims of government, but non-subsidized private operators cannot lard up with administration and overhead costs - they are constrained by market forces.
