Will Oilsands Make Us A Player?

It's been a bad week for Finance Minister Ralph Goodale. Before that, it was a bad month, and before that, a bad year.

Last week, he was accusing his parliamentary critics of "character assassination" for daring to suggest that the RCMP investigate whether some Bay Street traders were given early warning of an imminent government announcement regarding income trusts.

Then it was off to London to announce to the G7 finance ministers that Canada's oilsands "will change the geopolitics of the world." Goodale loves that soundbite. He's used it at least a dozen times since June in both formal speeches and press interviews. By now, somebody should have asked a follow-up: These oilsands that will change the "geopolitics of the world"--will they also affect the national unity of the nation? Will they have an impact on the budgetary balance of the budget? Or is it just that the attempt to speak English causes the minister a headache of the head?

Sometimes people say sensible things in silly ways. But in this case, Goodale's less than articulate words are fully appropriate to his less than well-considered message.

Canada's oilsands surely will change--are changing--the international energy market. But let's heed the caution of Fatih Birol, chief economist of the International Energy Association, as quoted in yesterday's National Post: "We think oilsands plays ... the role of a being a price-cap mechanism and can play a part in world oil diplomacy ... but we do not think it will make a major revolution in the markets."

That's obviously true, isn't it? As the most expensive source of petroleum, the oilsands will remain a supplier of last resort for many years to come.

Yes, the oilsands assure markets that the world will not "run out of oil."

Yes, they will deter Middle Eastern producers from pushing the price too high.

And yes they will ensure the continuing prosperity of the Alberta oil industry.

But the fundamental geopolitical and geoeconomic problems posed by oil will not be resolved by the oilsands: Too much oil lies under the control of some of the world's most unstable and irresponsible governments.

Ralph Goodale must know that. So why does he embarrass himself by pretending otherwise?

Let's try a guess.

Under the leadership of the Chretien-Martin Liberals, Canada's voice in the world has faded to inaudibility. Canadians understandably don't like this--and their dislike has begun to ring alarm bells at Liberal HQ.

That's why Paul Martin has promised to increase the defence budget and expand the Canadian military. That's why Defence Minister Bill Graham has been talking in uncharacteristically robust tones about the need for armed forces capable of--get this--"defeating enemies." Imagine!

But even more than plans for the future, the Chretien-Martin Liberals need excuses for the past. And Goodale's burblings about the oilsands are just that: an excuse.

Here's the argument that (I surmise) Ralph Goodale and the Liberals want you to buy:

If the arrival of oil from the oilsands will transform Canada into a major force in the world--why then, it surely follows that the lack of oilsands oil explains why Canada has not been a major force till now. Doesn't it?

In other words: Don't blame the Liberals for starving the military, for under-investing in intelligence, for turning their backs on Canada's allies. When they did those things, the oilsands had not yet changed world geopolitics. Now the oilsands are coming on line--and just wait, everything will be different.

Convinced? No, I didn't think so.

Canada was hardly a poor or unimportant country before the oilsands. It's not some desert emirate that relies on a single extractive industry. If Canada went AWOL from the world between 1993 and 2005, it was because Canada's leaders chose to go AWOL. The world is a big place, but they were small people. And in their smallness, they counted on others to keep the hemisphere and the world safe for them.

It was not a creditable choice, but it was a choice all the same. It had nothing to do with a lack of wealth--and everything to do with a lack of will and imagination.

If Canadians want different choices made, they are going to have to hire different people to make the choices. In this regard, at least, the oilsands--whatever they mean for the global energy market--will change precisely nothing for Canada. It's this January's election, and only that election, that holds the potential to change everything.