The New Staple State: Political Economy and Public Policy Regimes in Canada’s Primary Industries



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Part V: Conclusion



Chapter XIII - The Dynamic (Post) Staples State: Responding to Challenges—Old and new - Adam Wellstead (Alberta)




Introduction


Canada’s relatively abundant natural resources continue to an important thread of its cultural, economic, political, and social fabrics. Typically, traditional staples such as agriculture (Skogstad in Chapter 3), fisheries (Hoogensen in Chapter 5), forestry (Thorpe and Sandberg in Chapter 8) mining, electrical energy, and oil and gas production defined the Canadian image to the world as “hewers of wood and drawers of water.” Over the past twenty years, resources such as offshore petroleum (Clancy in Chapter 10) and aquaculture (Rayner and Howlett in Chapter 4) have emerged as new staples whereas the issue of bulk water exports to the United States, as highlighted by McDougall (Chapter 7), has become a controversial subject of much debate. Since resource exploitation began in the mid 17th century with fishing in the Gulf of St. Lawrence and the New France fur trade, trade issues have dominated throughout the entire resource sector. Trade related issues such the restriction of live beef exports, the softwood lumber dispute, and the sale of electricity remain at the forefront of contemporary governmental agendas. New issues, in particular climate change and genetically modified foods, have emerged, resulting in potentially negative impacts on their respective sectors (Moore – Chapter 4) (Brownsley – Chapter 9). A number of notable influences have been identified as common threads within all natural resource sectors: new forms of state engagement, transnational organizations, globalization and subsequent trade liberalization, environmental group pressures, First Nation’s land claims, and the threat of domestic resource depletion. Related to these influences is the growing degree of complexity involved in understanding each of these sectors. Complexity within resource sectors can be explained in part by the overlapping of the above issues and sectors, the increased number of non-state actors vying for influence combined with the willingness of state officials to share power with them, and the evolutionary impacts of federalism upon resource sectors (Lindquist and Wellstead 2001). Despite these changes, state involvement remains a cornerstone of Canada’s natural resource sector. This chapter examines the evolution of the contemporary staples state.

This chapter has two interrelated goals. First, it seeks to examine the emergence of a new form of staples state resulting from regional and global asymmetries. In Chapter 2 Thomas Hutton chronicled the importance of the post-staples economy as the driving force behind new political and social identities. Hutton (Chapter 2) succinctly argues that the “rapid growth and hegemony of metropolitan cities, new rounds of industrial restructuring and attendant opportunities and destabilizing tendencies, processes of globalisation and transnationalism, the environmental movement and its nascent political affiliates, and redefining shifts in the nature of political discourse and policy practices” are strategic to the restructuring of 21st century Canada’s “social identity and political economy” (2005). Hutton’s argument is based on empirical examples that are either from a national or a British Columbian perspective. He also acknowledges his research is nascent and that further investigation is required. After reviewing the chapters in this volume Hutton’s post-staples state thesis is amended by adopting the unique position that the staples state still remains important within Canadian political economy research. While the contemporary staples state is faced with the same influences as the post-staples state, this staples variant continues to be dominated by path dependent properties that are different from those trends that direct the country and British Columbia. Predominately staples dependent regions, most notably Atlantic Canada and the Prairies, require a conception of the state that reconciles the contemporary with its past. To do so, Bob Jessop’s discussion of the competitive state’s ascendancy is examined in its relationship to both staples and “post-staples” states. There are two forms of competitive states that are relevant to a discussion of the Canadian (post) staples state: the Schumpeterian and Richardian competitive states. The main characteristics of the Schumpetarian competitive state as well as its development closely correspond to Hutton’s discussion of a post-staples state. The importance of the Schumpetarian competitive state is the focus of The Future of the Capitalist State. The Richardian competitive state receives only a passing reference (one paragraph). However, its characteristics leads to the argument that it in fact describes the contemporary staple’s state that continues to flourish throughout many parts of Canada. Below, we describe these two images of the competitive state and its relation to the Canadian staples context.

The second goal of this chapter is to make clear linkages between macro-level analyses of the competitive state with meso-level policy frameworks—more specifically the policy-making process. Nearly all the chapters in this volume touch upon both the role of the state and public policy implications. A simultaneous understanding of both is critical because policy decisions are precipitated by larger state factors. For example, Netherton (Chapter 8) describes the closed hydro-electric policy regime characterized by path dependencies within the context of trade liberalism. In this chapter, a neo-pluralist theory of the state permits political scientists the opportunity to engage at both levels of analysis while preserving theoretical rigor but permitting mid-level theoretical empirical examination.

This chapter first outlines the economic importance of contemporary staples production at both the national and provincial level. The next section chronologically defines the staple’s state in relationship with popular characterizations of from its pre-20th century form to the present competitive state. The competitive state is examined in greater detail, in particular, the Schumpetarian and Richardian variants. The third section discusses the importance of governance and the forms of coordination within competitive states. An overview of neo-pluralism and the anthropological aspects of the state follow this macro-level discussion of the state. From these two sections, an analysis of staples policy communities is examined. [MORE]


Contemporary Staples Economies


Originally, the staples thesis, an export led model of economic growth attempted to how regional natural resource endowments led to the autonomous demands for and dependence upon exports, their spreading effects (linkages) to the rest of the economy, and to technological changes. From the 1920s through to the 1940s, economic historians, in particular, W.A. Mackintosh and Harold Innis applied the staples thesis in order to explain Canada’s early economic development. Although the staples thesis no longer explains current economic growth, some Canadian scholars have employed the staples thesis in their research. This is particularly the case of regionally based studies examining resource development and underdevelopment. For example, Marchak’s (1983) analysis of British Columbia’s declining forest economy and its impact upon labour and forest dependent communities in Green Gold relied heavily upon the staples thesis.

The prevailing view of Canada’s economy, as well as some provincial economies, is a shift from dependence on staples production beginning in the 1960s to emergence of “post-staple” based economy and with it, new forms of governance. Hutton’s (1994) (Chapter 3) analysis of British Columbia’s economy indicated a departure from staples production. These changes were the result of substantial natural resource depletion, increasingly capital and technological intensive resource extraction from lower-cost staple regions, and the transformation from pure extraction to increased refining and secondary processing of resource commodities. These changes it is argued will lead to a sectoral shift from natural resources to the service sector as the focus of economic growth. Similar observations have been made about the post staples evolution of British Columbia’s forest economy (Barnes and Hayter 1997), (Hayter 2000). Hutton (Chapter 3) also highlights the importance of the city-region driving the subordination of resource extraction over the past several decades.


Table 1. Economic indicators for Canada’s natural resource sectors



Year (2002)

Forestry

Minerals

Energy

Total
Natural
Resources

Canada

Gross Domestic Product
($ billions)

$29.9
(2.8%)

$38.1
(3.6%)

$65.3
(6.2%)

$133.3
(12.7%)

$1 050.9
(100%)

Direct employment
(thousands of people)

361
(2.3%)

355
(2.3%)

225
(1.5%)

941
(6.1%)

15 411
(100%)

New capital investments
($ billions)

$2.7
(1.3%)

$4.5
(2.2%)

$38.2
(18.6%)

$45.4
(22.1%)

$205.3
(100%)

Trade ($ billions)

  • Domestic Exports
    (excluding re-exports)

$43.1
(11.8%)

$47.7
(13.1%)

$49.7
(13.6%)

$140.5
(38.5%)

$365.1
(100%)

  • Imports

$10.5
(3.0%)

$47.2
(13.5%)

$17.3
(5.0%)

$75.0
(21.5%)

$348.4
(100%)

  • Balance of trade
    (including re-exports)

+$32.6

+$1.9

+$33.2

+$67.7

+$47.9

Source: Natural Resources Canada (2003)

Table 1 above supports argument that Canada’s resources are declining in their overall national economic importance. Less than 7% of Canada’s workforce is employed in natural resource sectors and they contribute to less than 13% of national GDP despite the fact that Canadian exports of resources more than doubled between 1990-2001, growing from $72.0 billion to $167.5 billion or annual rate of growth of just under 8.0 per cent for the period (Department of Foreign Affairs and International Trade 2003). However, this resource-based growth rate was less than the 10.7% average annual rate recorded by non-resource exports, which increased from $76.9 billion to $234.8 billion (Department of Foreign Affairs and International Trade 2003).


Table 2. The role of resources in provincial exports: 1997-2001 averages




Revealed comparative advantage

Export dependency

British Columbia

1.87

75.87

Alberta

1.97

79.95

Saskatchewan

2.19

88.56

Manitoba

1.42

57.41

Ontario

0.46

18.60

Quebec

0.99

39.99

New Brunswick

2.24

90.60

Nova Scotia

1.59

64.30

Prince Edward Island

1.94

78.76

Newfoundland & Labrador

2.38

96.48

Yukon

2.13

86.20

Northwest Territories

2.45

99.08

Nunavut

2.46

99.64



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