With strategy in ruins, PM still stands tall
It’s a considerable testament to Stephen Harper’s political skills that he remains in contention to win a fourth straight election later this year. It’s even more impressive that his party continues to retain virtually sole proprietorship of the economy, as an issue.
Why impressive? Just this: Harper’s resilience, one might call it dogged endurance, comes even as his grand economic strategy, laid out with sweeping ambition in late 2011 and early 2012, has collapsed. The strategy had three pillars. Each is now in ruins.
First pillar: Oil. Setting aside a short-lived dip early in 2012, the price of crude held steady in the $110 range, within $10 above or below, from the end of 2010 onward. With the International Energy Agency seeing nothing but burgeoning demand 30 years out, and 174 billion barrels locked in the earth in northern Alberta, Canada would become a global energy Goliath. The regulatory process would be streamlined and project development accelerated. The resulting boom would yield thousands of well-paying jobs, and spinoffs for the whole country.
That edifice is now in shambles. In June of 2014, driven by a collapse in the Organization of Petroleum Exporting Countries’ supply-control regime, crude began its long slide, to where it now sits at below $50 a barrel. It may soon bounce back, as Finance Minister Joe Oliver has said he expects will happen. Many industry analysts think otherwise. The truth is that none of them know — otherwise they’d have foreseen the crash.
But even six months in these doldrums would be an eternity, politically. The oil-market slide has already caused a two-month delay in the 2015 federal budget. The Conservatives have promised us a return to balance, and a $5-billion family tax cut. What if the two are no longer compatible?
Second pillar, linked to the first: Pipelines, it was held, would erase the discount on landlocked Canadian heavy crude, which was costing the federal and Alberta treasuries billions. As recently as 18 months ago, three big projects — Enbridge’s Northern Gateway to the Pacific, TransCanada’s Keystone XL to the U.S. Gulf Coast and Energy East to the St. Lawrence — still showed promise. A fourth, Kinder Morgan’s twinning of its existing Trans Mountain line to Vancouver, seemed a slam dunk.
But U.S. President Barack Obama dithered on Keystone. As time passed and climate-change activists within the Democratic establishment got better organized, dithering became delay, then open hostility. Gateway has ground to a halt due to opposition along the route, including from aboriginal groups. Energy East is running into trouble with environmentalists in Quebec who say it threatens endangered Beluga whales in the St. Lawrence River. Even Trans Mountain is now under protest, on grounds that any increase at all in pipeline capacity is a bad idea.
The logical counter — that oilsands crude will move to market regardless by rail, which is environmentally much riskier, has been undercut by the oil price drop. At $110 a barrel, every last drop will get extracted, shipped, refined and burnt. At $50 or $40, this isn’t as evident.
Third pillar, linked to the first two: A new relationship with First Nations, founded on resource extraction, including mining, with $650 billion worth of projects in the queue. The idea was to address the skilled labour shortage and aboriginal unemployment in one stroke. Training would be the key; so, aboriginal education formed the thematic centrepiece of the PM’s summer Arctic tour in 2013.
Then, once again, the stumble: The First Nations Education Act came apart in disarray early in 2014. The federal government’s relationship with First Nations is now more parlous than ever; there will be no national breakthrough. Complicating matters further, the Supreme Court of Canada ruled last June that First Nations have a say in how huge acreages of their traditional territory, far beyond their reserves, are developed. Who’s to blame? The price of oil, of course, is beyond Harper’s control. But he will have a tougher time explaining why he placed so many strategic eggs in this one basket, given that oil has always been a volatile commodity.
In the case of the second and third pillars, meanwhile, Harper mismanaged his personal relationship with Obama, and allowed idiotically partisan government messaging — $21-billion carbon tax, anyone? — to paint him as an environmental troglodyte, to the point where it became easy for the U.S. administration to stick its thumb in his eye.
The First Nations Education Act was a done deal, as far as I have been able to tell, which came apart in the eleventh hour because of tone, attitude, and bungled human interactions. The prime minister sets the tone: He is ultimately responsible for these failures.
But here’s what’s interesting, and perhaps brilliant, about the shift in the Conservatives’ language since last September: Harper sensed that things would go south, and understood that a flight to the familiar might be his best chance, and adopted the “dark and dangerous” mantra, before the depth of looming problems became broadly apparent.
Which is why, now, as the economy lurches into crisis, he stands positioned as the pillar of safety in an uncertain world. It is, taken together, a remarkable sleight-of-hand.