Column / Don Newman

The mantra is a familiar one: “Canada is a trading nation. It must be out in the world dealing and exchanging goods with as many countries as possible.”

Canadian politics are soon to be dominated by a three-way debate about the country’s economic future. A debate that could stand that premise on its head, reshape how Canada does international business and guarantees its international security. The arguments will be put forward by factions in the governing Liberal Party and will resonate in the Conservatives in the Official Opposition. And it could affect the supply and confidence agreement between the governing Liberals and the New Democrats that is meant to keep the Trudeau government in office until 2025.

The debate will partially centre around how and if Canada should use its remarkable stocks of natural gas, hydrogen and oil that are increasingly in demand in an energy-starved world that is becoming more constrained by shifting geopolitical rivalries and realities.

And it will also centre around how quickly Canada can shift its trading patterns and reposition its supply chains to eliminate autocratic governments and replace them to do business with democratic friends and allies that share our values.

Canada has pledged to hit the target to limit GHG emissions to net zero by 2050. But can Canada develop those resources for its own use and for foreign export markets and still be a leader in global efforts to reduce GHG emissions both in this country and worldwide?

Environmentalists say the target can be attainted if Canada restricts the development of its resources, pursues alternative fuel sources, practises conservation and places a cap on the use of carbon energy sources and a carbon tax to dissuade the use of carbon-based fuels.

Pragmatists say all conservation measures have a place in the Canadian economy, but that resources still have to be further developed, pipelines and other infrastructure built and export markets for natural gas, hydrogen and oil vigorously perused. As global warming and its impact on climate and weather disruptions become more apparent, people and governments become more cognizant of the dangers that could lie ahead.

But the global energy crisis triggered by Russia weaponizing the energy it usually sells and ships to Europe as part of its war against Ukraine, has made Europe and other parts of the globe realize they have to find other sources to meet its energy needs. With its abundant supplies Canada is a sought after supplier.

The current Liberal government of Justin Trudeau is the “greenest” in history. But it is also the government that’s twinning the Trans Mountain pipeline and on its watch a liquefied natural gas (LNG) pipeline line is about 70 percent finished to transport gas across British Columbia to the West Coast for export. The facts of economic life have forced it to be that way. 

Those are just the projects now under development. The basis of the world economy is shifting, and Canada will be forced to shift along with it. The Russian invasion of Ukraine is at the moment just the most visible part. The increasing belligerence of China in the Asia-Pacific and particularly its increased pressure on Taiwan mean what has been the engine of a great deal of the world’s growth for the past 30 years is going to change. China and the United States are already in a trade war and that only seems likely to worsen. Less significant overall but very significant to Canadians is that relations between our country and China are strained as they have not been in years. 

That is why, along with  the energy issues Canada, will also have to redesign its economy to realign its supply chains and export markets with countries that are known friends rather than unpredictable enemies. 

Recently in Washington, Finance Minister and Deputy Prime Minister Chrystia Freeland made a speech calling for just such a new economic order. This  would have countries with shared democratic values deepen their economic relations, reorient their supply chains to exclude adversarial, autocratic governments and strengthen energy and economic links. Such moves are necessary now, she said, because anyone who thinks democracies can have normal economic relations with countries like Russia and China is engaged in wishful thinking.  

Contributing writer and columnist Don Newman, an Officer of the Order of Canada and Lifetime Member of Parliamentary Press Gallery, is Executive Vice President of Rubicon Strategy, based in Ottawa.