This piece was submitted to ForeignPolicy.com in response to Adrienne Klasa’s June 15 blog post “Canada: The world’s newest petrostate isn’t playing nice anymore.”
The Iranian government depends on oil for more than a third of its revenues. In Qatar, oil income makes up 70% of government revenue. In Iraq and Kuwait, it’s more than 90%, with almost every dime in the national budget coming from oil.
That’s why those countries are what we call petro-states. Well, that and the fact that their energy industries are controlled almost entirely by their governments. There’s a reason for that: those OPEC regimes live or die based on their ability to commandeer their fossil fuel resources, and the income they generate.
Calling Canada a “petro-state,” as Adrienne Klasa recently did in a Foreign Policy article, isn’t just wildly illogical, since Canada’s oil sector — which is, by the way, privately owned and separate from government control — comprises all of about 4% of total government income at all levels. That pejorative term devalues the diversity and sophistication of the Canadian economy.
It also deprecates Canada’s democratic system, one of the healthiest, most consistently stable and prudent Parliamentary democracies anywhere on the planet. Canada happens to have the third biggest oil deposits in the world, it’s true. But what makes Canada unique is that, unlike genuine petro-states, we also have a prosperous and egalitarian society that values peace, democracy and human rights.
A recent effort by Canada’s Conservative government to pass a sweeping omnibus budget bill doesn’t change that. As in any democracy, partisan opponents of the party in power make it their business to forcefully oppose legislation proposed by the government. The Conservatives’ majority control of Parliament means that it would take some government members to break rank and vote against their own party in order to scuttle the bill. That didn’t happen. The House of Commons voted in favor of the budget. MPs will have to face voters at the next election and persuade them whether they made the right decision or not. That democratic accountability doesn’t exist in Iran and Qatar.
Whatever controversy arose over the budget bill was largely political. Canadians were hardly “up in arms” about Bill C-38, as Ms. Klasa claims. Attempts to organize national protests by groups hostile to prime minister Stephen Harper’s government fell noticeably flat: A demonstration on Parliament Hill drew all of an estimated 100 people.
Nor is the Conservatives’ decision to bundle miscellaneous new laws into an expansive bill a particularly novel move. As John Ivison, national affairs columnist at the National Post noted recently, the Liberal party seemed to forget “the 13 years of Liberal majority, where they had ample opportunity to bar the use of omnibus bills. And they might have done so, had they not been so fond of them.”
One thing Canadians very much do like about the budget bill is the new efforts to better monitor groups that enjoy charitable tax breaks and subsidies and yet violate long-standing Canadian laws against excessive political activity. The proposal that would require charities to provide more thorough information about their political activity and funding by foreign sources was supported by 80% of Canadians surveyed by national polling firm Angus Reid — making it the most popular item in the budget.
Canadians are well aware that certain groups, many of them environmental activists, have for years been accepting charitable tax breaks while devoting far more time to fighting political campaigns against the resource industry and government. Their intensive, international campaign against developing Canada’s oil sands has seen them hijack the regulatory process and get subsidies to do it.
In one recent case, a single group succeeded in signing up 1,600 of its supporters to each testify at the hearings into a pipeline that would carry oil from the oil sands to the west coast for export, dragging the hearings out for years. The government’s plan to streamline approval processes is an attempt to eliminate the opportunity for this kind of mischief. Its promise to better enforce existing charitable laws won’t stop activists from speaking out against such projects one bit; it will make sure they stop taking money intended for truly charitable causes and putting it towards their political campaigns.
It’s true that the Conservative government supports developing the oil sands, and pipelines to bring Canada’s oil to market. The previous Liberal government did, too. Both parties share the belief that the oil sands are an incredible opportunity for Canada — just as it is for Americans looking to wean themselves off their dependence on OPEC’s petro-states. But unlike Iran, Kuwait or even Venezuela and Russia, Canada without the oil sands would still look a lot like Canada with the oil sands: Net export revenue (less imports) for Canadian oil is just around $30 billion, or just over 6% of the total value of exports, compared to some OPEC countries where it accounts for nearly all export income. Ten years ago, when the oil sands industry was still in its infancy, Canada was already sitting at the G8 table.
The reasons for Canada’s economic strength have to do with a lot more than our resource deposits. Unlike actual petro-states, Canada has a highly skilled workforce, entrepreneurial and creative business leaders, a firm commitment to the rule of law, and an unwavering dedication to maintaining one of the most stable, equitable, peaceful and healthy societies in the world. Foreign Policy has been covering Canada long enough to recognize that prevailing truth. It’s disappointing that a routine Parliamentary spat over a budget bill would prompt one of your writers to discredit that hard-won reputation by calling Canada a dirty name like “petro-state.”