Skip to content

Canada's keystone sector

Ken Baerg: Canada's economy is underpinned by a healthy resource sector - and as necessary stimulus and relief spending adds up, we'll need it more than ever.

In a matter of weeks, and with astounding ease, the entire nation has adopted a whole new lexicon - a set of shortcuts and acronyms that have suddenly become common parlance ranging from CEBA to CEWS to CERB. And anecdotally, the federal government’s funding for businesses and individuals hit hardest by COVID-19 is flowing into accounts faster than natural gas through a 36 inch pipe.

A helpful metaphor perhaps – but one used with non-metaphorical intention. For in the absence of natural gas and the development, extraction and sale of other valuable natural resources, the government would be severely hampered in its attempts to fund these programs.

This is a fact. What remains something of a mystery is the unwillingness for many to connect the dots between these government subsidies and private sector business investment of all kinds, most notably, in the resource sector.

There is no doubt a good majority of us believe the federal government is moving in the right direction with its historically unprecedented and colossal spending programs in light of COVID-19. But we have to realize that these programs are not funded by some yet-to-be-identified mystical pot of gold.

They are funded primarily through private sector investment which in turn drives revenue centres for our governments through corporate taxes, income taxes through job creation, payroll taxes and withholdings, carbon taxes, royalties, etc. And the ledger for the government is no different than it is for a household or small business:  deficits cannot continue forever and debt must be serviced.

Now is a great time to acknowledge, in plain terms, how this system works. To make the connection in blunt terms, every Canadian receiving a form of wage subsidy today has the resource sector to thank for a portion of it. Whether or not you support Alberta oil, the Trans Mountain pipeline or Coastal GasLink is not of consequence right now.  What is of consequence is the fact that you are a direct beneficiary of that activity.

When one considers the sectors hit hardest by the pandemic – hotels, restaurants, airlines and entertainment to name a few – it is evident that recovery will require collective willingness to begin spending discretionary dollars. The recovery in those spaces will be unpredictable. Notwithstanding the fact that resource prices have also taken a heavy hit, the resource development sector continues to provide a great many jobs to Canadians with wages far in excess of the average while providing us with services and products that have become essential to our survival.

Today, we can all appreciate the value of clean virus-free clothes made possible by our washing machines and dryers powered natural gas flowing into our homes. Today, we can all appreciate the value of the raw materials in our forests that go into making toilet paper and medical masks. Today, we can all appreciate the value of the critical minerals extracted to power our computers and phones – the devices we used to stay connected to friends and family.

As we edge closer to being on the other side of this pandemic, it will be fascinating to observe what we chose to remember and what we chose to forget.

What will be the public’s tolerance for deficit spending? Will we willingly borrow our way to a brighter now only to saddle our children with a future mired in national debt? Will we acknowledge the quiet but critical role resource development plays in driving revenue for programs we all enjoy? Will we choose to see the extent to which safely extracted, sustainable natural resources allow us to stay safe, connected, employed?

Will we turn our minds to the industries that drive job creation and an economically viable tax base for the programs on which we rely?

Let’s hope it’s the latter.

Ken Baerg is the Executive Director of Canada Works, the Council of Progressive Canadian Unions, a collaboration of leading labour unions – large and small, active in all sectors of the economy who share a passion for advancing positive, partnership-based labour relations that fosters shared prosperity through partnership, innovation and choice.