Today’s corrosive debates over control of Canada’s natural resources have become eerie replays of past struggles. Perhaps we never learn. Perhaps we simply don’t know the history of those fights, so we voice the same sentiments as long-gone politicians. As Let The Eastern Bastards Freeze in the Dark: The West Versus the Rest Since Confederation makes clear, the West’s fierce insistence on resource control was born in 1870, as was the Rest of Canada’s claim to a share in those resources. Such bred-in-the-bone confrontations have never waned—if only because ambitious politicians still play on regional gulfs to garner votes.
The result is a nation that is divided over how to handle the oil sands, carbon taxes, and inter-provincial pipelines. Canada would be on the brink of paralysis over these issues if Alberta Premier Alison Redford hadn’t recently tugged her fellow premiers into discussions on a national energy strategy. It’s the only way to tackle these problems: the provincial premiers should reach a consensus on such dicey resource questions as carbon taxes or inter-provincial pipeline routes before Ottawa even considers action. This is the legacy that my book explores, and the advice that it can offer for the future.
The problems were built into the nation at its creation, and they twine through the decades as vividly as the tensions between Quebec and the rest of Canada. In the mid-19th century, British politicians understood they could do little to prevent the United States from eventually swallowing up the vast territories to the west of what was then Canada, territories the Hudson’s Bay Company administered. So the Constitution Act of 1867 made a provision for a Canadian takeover. By 1869, two Canadian cabinet ministers had done a deal in London with the HBC to acquire those lands for 300,000 British pounds.
No one told the residents. When Métis leader Louis Riel resisted this arbitrary takeover of his Red River homeland without guarantees of provincial status and control over the lands and its resources, Prime Minister Sir John A. Macdonald compromised. The Red River residents would live in the province of Manitoba, but Ottawa would retain resource control in order to ensure there were homesteads for settlers and a clear path for the railway. In 1905, Prime Minister Sir Wilfrid Laurier also kept resource control when he carved the provinces of Saskatchewan and Alberta out of the territories.
This largely forgotten saga created fierce regional identities. Because all other provinces joined Confederation with control of their own resources, the three Prairie provinces bristled at the discrimination. Whenever the Prairie premiers demanded control, Ottawa resisted. Worse, the other premiers insisted that their taxpayers’ dollars had actually paid for the West—so they owned the lands and resources. If Ottawa transferred resource control, then, at the very least, the rest of Canada insisted upon higher subsidies.
It’s easy to see where these conflicting notions of alienation and entitlement have left us. And the problems will only get worse if we cannot avoid these lessons, because the demand for Western resources will remain strong for decades despite recent North American oil and gas discoveries.
Ever since Louis Riel first pushed for resource control as the key to his community’s destiny, the notion has been pivotal to the West’s identity. When New Democratic Party leader Thomas Mulcair and Ontario Premier Dalton McGuinty argued this spring that Western petrodollars were promoting Dutch Disease—that is, driving up the value of the Canadian dollar with resource sales and destroying Central Canada’s manufacturers—they offered a simplistic diagnosis of North America’s changing economies. More important, they did not understand or acknowledge that resources are central to Westerners’ sense of pride and community.
This debate was never solely between the West and Ottawa: it was the West versus the Rest of Canada, including British Columbia and the federal government. That regional tension persists to this day. When British Columbia Premier Christy Clark demanded a share of Alberta’s resource revenues to permit the construction of the proposed Northern Gateway pipeline from the oil Sands to the Pacific coast, she clearly did not know her history. Throughout the early 20th century, British Columbia stoutly opposed the Prairie Premiers’ demands for resource control if Ottawa did not raise its subsidies and return unused lands along the railway corridor through the province. Although Clark later said that she was not asking for a share of Alberta’s resource royalties, she had already awakened old animosities.
Although a national carbon tax would probably be the most effective way of curbing greenhouse gas emissions, it would be folly to impose one without provincial consensus. When Liberal leader Stéphane Dion called for a federal carbon tax in the 2008 federal election, he lost. Interim Liberal leader Bob Rae has charged that the federal government is “hiding under its chair” while the provinces discuss carbon emissions. That’s a good place for Ottawa to stay—at least publicly. While the best model for any carbon tax is likely an expansion of the federal fuel excise tax, as scholars Jack Mintz and Nancy Olewiler suggested in 2008, Ottawa must lead from behind. Any unilateral federal move would reignite resentments from the decades when Ottawa effectively governed the West as a colony and pocketed the resource revenues. (It would also remind Westerners of the much dreaded National Energy Program of the early 1980s, which imposed federal taxes at the wellhead, the refinery and the pumps.)
There are more lessons. The Constitution allows Parliament to take control of local works that are for “the general Advantage of Canada.” Parliament has not used this power for decades, despite suggestions in the 1970s that it should push Newfoundland and Labrador’s hydro lines across Quebec. The damage to the federation would be incalculable if Parliament tapped a power that it had not invoked since 1961, and assumed jurisdiction over a pipeline corridor from the Athabasca oil sands to the British Columbia coast. What would be unthinkable in Quebec would be equally controversial in the West. Even if the pipeline worked to Alberta’s short-term benefit, even if it expanded Canada’s energy export markets to Asia, old memories never die. As the Premiers mull over a national energy strategy, federal politicians should leave themselves out of the talks. Alberta Premier Redford and Quebec Premier Pauline Marois are now discussing the shipment of Alberta crude through pipelines to Quebec refineries. This is the diplomatic way of the future.
In the end, after painstakingly slow steps to satisfy each region, Prime Minister Mackenzie King finally transferred resource control to the three Prairie provinces in 1930. But squabbles over resources persist because jurisdictions overlap in so many areas, including the environment and taxation. Worse, politicians play to the regions where their voters reside. Those are dangerously divisive tactics. Instead, they should study the past as a guide to the future.
