The Post-Staples State: The Political Economy of Canada’s Primary Industries

The Post-Staples State: The Political Economy of Canada’s Primary Industries Edited By Michael Howlett Department of Political Science Simon Fraser University Burnaby BC Canada Keith Brownsey Department of Public Policy Mount Royal College Calgary, Alberta Canada Submitted to UBC Press November 15, 2005 Table of Contents Table of Contents ii Table of Figures vii Table of Tables viii Acknowledgements .ix Part I – Introduction .x Chapter – Introduction – Michael Howlett (SFU) and Keith Brownsey (Mt Royal College) .1 Overview: Staples and Post-Staples Political Economy Staples Theory .5 The Historical Foundations Debates in the 1970s and 1980s 15 Contemporary Staples Theory 23 Organization of the Book .28 References 32 Part – Consumption Industries: Agriculture and the Fisheries 37 Chapter II: “The Two Faces of Canadian Agriculture in a Post-Staples Economy” – Grace Skogstad (Toronto) .38 Introduction 38 Agriculture as a Dominant Staple: late 19th century – 1930 .41 Depression and War and the National Interest: 1930-1945 42 State Intervention and Restructuring in the Post-war Period .44 State Retrenchment, Regionalisation, and Globalization in the 1980s and 1990s 46 Regional Market Integration and Dependence 47 Integration into the Multilateral Trading Regime 50 Redefining State Fiscal Obligations 51 The Political Organization of the Agri-Food Sector and State-Sector Relations 53 The Structural Inferiority of Staples Producers in a Mature Staples Sector .56 Conclusion 58 References 63 Chapter III: “The New Agriculture: Genetically-Engineered Food in Canada” – Elizabeth Moore (Agriculture and Agri-food Canada) 69 Introduction 69 The first wave of GE food policy: a mature staples context 70 Jumping on the bandwagon: investment in GE food technology 73 Regulation as a tool for promotion and protection .76 The second wave of GE food policy: post-staple pressures and responses 78 ii The road ahead for GE food policy in Canada 87 References 93 Chapter IV - The Relationship between the Staples State and International Trade As Pertains to the Canadian Fisheries Industry - Gunhild Hoogensen .99 Introduction: 99 Trade policy, Staples, and the fisheries .103 Subsidies 108 Trade Agreements 111 The role of the trade agreements and WTO – good, bad, and does it matter? 116 Conclusion: 118 References 121 Chapter V: "Caught in a Staples Vise: The Political Economy of Canadian Aquaculture” - Jeremy Rayner (Malaspina) and Michael Howlett (SFU) 125 Introduction: 125 (Overly) Optimistic Expansion in the 1980s and 1990s 125 Emerging Problems with Aquacultural Development 127 A Post-Staples Policy Process? 130 Aquaculture as a Problematic Post-Staples Industry 131 The Finfish Sector 135 The Shellfish Sector .137 The Existing Canadian Aquaculture Regulatory Framework 138 The Federal Situation .141 Provincial Developments .148 Conclusion 155 References 159 Part – Extraction Industries: Minerals and Forests 169 Chapter VI: Shifting Foundations: a Political History of Canadian Mineral Policy - Mary Louise McAllister, .170 Promising Prospects: Staples and the nascent mineral industry 172 Embedded Interests: Establishing the Staples Economy 176 Shifting Ground: Competing Interests 179 Competitive Pressures on the Resource Industry: 180 Access to Land Issues 181 Adverse Environmental and Social Impacts of Mining .183 The Decline of the Resource Community 188 Uncertain Territory: Complex Environments 190 Emerging Conceptual Perspectives 190 Rising to the Challenge? Responses to Change .192 Seismic Shifts or Minor Tremors in the Status Quo? 193 Conclusions: New Frontiers .198 Chapter VII: “Complexity, Governance and Canada's Diamond Mines” – Patricia J Fitzpatrick (Waterloo) 206 Complexity, Governance and Canada's Diamond Mines 206 The Northwest Territories Policy Community 208 Aboriginal organizations 209 iii Territorial Government 211 Non-Governmental Organizations 212 Proponents 214 Summary 214 Diamond Development in the North 215 West Kitikmeot Slave Society .216 Community Capacity and Public Participation in the BHP Review Process 218 The Implications of Superadded Agreement .220 BHP Independent Environmental Monitoring Agency .223 The Diavik Diamonds (DDMI) Project: Comprehensive Study 224 West Kitikmeot Slave Society Revisited .224 Community Capacity and Public Participation in DDMI EA 225 Superadded Agreements: New Players 227 Advisory Board 229 Cumulative Effects Assessment and Management Strategy 230 Other Diamond Developments in the North 231 Cross Scale Institutional Linkages .232 Conclusion 235 References 236 Tables 237 Chapter VIII Knotty Tales: Exploring Canadian Forest Policy Narratives Jocelyn Thorpe and L Anders Sandberg, 240 Introduction 240 The Staples to Post-Staples Narrative 243 Questioning the Staples to Post-Staples Transition 247 The Softwood Lumber Dispute 248 Forests as Carbon Sinks 250 Parks Versus Staples? .251 Summary 253 Staples By and For More People .253 Summary 258 Beyond the Staples to Post-Staples Transition 259 Summary and Policy Implications 265 Conclusion 267 References 270 Chapter IX: “The Post-state Staples Economy: The Impact of Forest Certification as a NSMD (NSMD) Governance System” – Benjamin Cashore (Yale), Graeme Auld, James Lawson, and Deanna Newsom 281 Introduction 281 Emergence of Forest Certification and its Two Conceptions of Non-State Governance .282 Two Conceptions of Forest Certification 284 Key Features of NSMD Environmental Governance 291 Emergence and Support for Forest Certification in Canada 294 British Columbia 297 iv Standards-setting process .301 U-turn .305 Canadian Maritimes .308 Development of the Standards .310 Conclusions: Non-state Governance 315 Part – Transmission Industries: Oil & Gas and Water 319 Chapter X: 1The New Oil Order: The Post Staples Paradigm and the Canadian Upstream Oil and Gas Industry - Keith Brownsey (Mount Royal College) 320 Introduction: 320 The Canadian Oilpatch 323 A History of the Canadian Oil and Gas Industry .327 The Colonial Period 329 The Era of Multinational Domination 330 The Nationalization of Oil and Gas 335 The Era of Benign Neglect 343 The New NEP and Kyoto 347 Conclusions 353 References 357 Chapter XI: "Offshore Petroleum Politics: A Changing Frontier in a Global System" - Peter Clancy, (SFX) 361 Offshore Petroleum as a Distinct Political Economy 363 Spatial and Temporal Dimensions 365 Offshore Petro-Capital as a Political Factor 370 Technology as a Political Variable 377 Science, Knowledge Domains and Epistemes .380 Federalism and the Offshore Domain 383 State Strength and Capacities .386 Offshore Petroleum Regulation in the New Millennium 390 Conclusions 395 References 399 409 Chapter XII Between Old “Provincial Hydros” and Neoliberal Regional Energy Regimes: Electricity Energy Policy Studies in Canada – Alex Netherton 409 Regulatory State / Urban Modernization & Resource Industrialization .409 Keynesian Welfare-State / ‘Permeable’ Fordism, 1946-1987 417 Provincial State Ownership, Mega-projects and Network Reorganization 423 New Interests and Structural Pressures for Change 427 Neoliberal-Sustainable / Regionalization 431 Drivers of Paradigm Change .436 Federalism and Electricity Grids: Interprovincial and Regional 437 Canada-United States Policy Integration as a Policy Driver: Conservation and Trade Regimes 441 The Emerging Supra National Power of FERC 443 Conclusions 451 Electrical Energy Policy: A Research Agenda 456 References 458 v 1Chapter XIII: "From Black Gold to Blue Gold: Lessons from an Altered Petroleum Trade Regime for An Emerging Water Trade Regime" - John N McDougall, (UWO ) 472 The Cost of Bulk-Water Transmission 473 The Emerging Trade Regime Affecting Oil, Gas and Water Exports 477 Free Trade Agreements and Water Exports and Investments .482 Conclusion: The Effects of Free Trade Agreements on National Resource Policies 493 References 495 Part – Conclusion: Toward a Post-Staples State? 499 Chapter XIV - Contours of the Post-Staples State: The Reconstruction of Political Economy and Social Identity in 21st Century Canada - Thomas A Hutton.500 Introduction: the post-staples hypothesis in context 500 New dynamics of regional divergence in the post-staples state 511 Conclusion: normative dimensions of the post-staples state .523 References 527 Chapter XV - The Dynamic (Post) Staples State: Responding to Challenges— Old and new - Adam Wellstead 532 Introduction 532 Contemporary Staples Economies 535 Defining the Staples State 541 Minimalist State .541 Emergent State and New Industrialism: The Staples State’s Golden Era 543 KWS Legacy and Crisis: Wither the Staples State? 546 Competitive State: A Reconsideration of the Staples State .549 Governance .552 Anthropology of the state and neo-pluralism .554 Policy Communities and Networks: Drivers of Richardian (Staples) Competitive States 556 Conclusion 559 References 562 ENDNOTES 571 vi Table of Figures Figure Policy Instruments, by Principal Governing Resource 139 Figure – Certfied Forest Land 318 Sources 318 Figure - Offshore Petroleum Management Issue Areas and Instruments 399 Table Policy Process Focus of the Volume’s Chapters 558 vii Table of Tables Table Canadians Living on Farms 61 Table Changes in Canadian Farm Structure, Selected Years 61 Table 1: Modern land claims agreements settled in Northwest Territories and Nunavut 237 Table 2: Northern and Aboriginal Employment Targets (as identified in the Socio-Economic Agreement) and Actuals at Ekatitm 237 Table 3: Local Business Supply Targets at Ekatitm (as identified in the SocioEconomic Agreement) 237 Table 4: Northern and Aboriginal Employment Targets (as identified in the SocioEconomic Agreement) and Actuals at DDMI 238 Table 5: Local Business Supply Targets at DDMI (as identified in the SocioEconomic Agreement .238 Table 6: Capacity of the Institutions affecting diamond development in the north 238 Table 1.2, Conceptions of forest sector NSMD certification governance systems 284 Table 2: Comparison of FSC and FSC competitor programs in Canada 289 Table 3: Key Features of NSMD governance 291 Table Economic indicators for Canada’s natural resource sectors 536 Table The role of resources in provincial exports: 1997-2001 averages .538 Table Evolution of the staples state 548 Table Modes of Coordination within Competitive Capitalist States .552 viii Acknowledgements ix Part I – Introduction x 23 The government transfers to the railways were put in place in 1984 following the abolition of the statutory Crow’s Nest freight rates 24 For example, the CFA President publicly chastised the Agriculture Minister in 2002 for proceeding with a plan to redesign farm income risk management programs despite farmers’ opposition Doing so, he said, posed “a real danger that the relationship between governments and the industry will be jeopardized and will be undermined irreparably” (Friesen, 2002:14) 25 These data are available at: http://www.statcan.ca/english/Pgdb/econ124a.htm; and http://www.statcan.ca/english/Pgdb/econ117a.htm Average farm size varies depending upon the province, (grain) farms are larger on average in Saskatchewan See also Bowlby and Trant 2002: 26 Commercial farms have revenues over $100,000 Small and medium-sized farms, 35% of all farms, have revenues between $10,000 and $100,000 The remaining 34% of farms are hobby firms which account for 1% of production and are totally dependent on off-farm income 27 The Alberta and Manitoba Wheat Pools merged and were subsequently purchased by United Grain Growers to become Agricore United, in which the multinational grain company, Archer Daniels Midland, has a major share 28 These transfers brought the average farm family income up to that of non-farm families and resulted in an average net worth for farm households above that of non-farm households (Culver et al 2001) 29 I gratefully acknowledge funding from the Social Sciences and Humanities Research Council during the period when most of the research for this chapter was gathered The views expressed here not necessarily represent those of my employer 30 Colin Woodard, “A run on the Banks: How factory fishing decimated Newfoundland cod” E, Norwalk, Mar/Apr 2001, 34-39 31 World Trade Organization, available at: http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm, internet 32 Jeremy A Sabloff and C C Lamberg-Karlovsky, eds., Ancient Civilization and Trade, 1st ed (Albuquerque: University of New Mexico Press, 1975) 114 33 Ibid 34 Bernard M Hoekman, and Michel M Kostecki, The Political Economy of the World Trading System: From GATT to WTO (Oxford: Oxford University Press, 1995), 22 35 Brian Hocking and Steven McGuire (eds) Trade Politics: International, Domestic and Regional Perspectives (London: Routledge, 1999), 149 36 Ibid 37 Ibid., 38 Apostle, et al, 32; Mary Quayle Innis, An Economic History of Canada (Toronto: The Ryerson Press, 1935), 182 39 Ibid., 40 Donald C Masters, The Reciprocity Treaty of 1854: Its History, Its Relation to British Colonial and Foreign Policy and to the Development of Canadian Fiscal Autonomy, Vol (Toronto: McClelland and Stewart Limited, 1963), xvii 41 Ibid., viii 42 Donald C Masters, The Reciprocity Treaty of 1854: Its History, Its Relation to British Colonial and Foreign Policy and to the Development of Canadian Fiscal Autonomy, Vol Vol (Toronto: McClelland and Stewart Limited, 1963), 19, 26, 28 Establishing a ‘most favoured nation’ principle to be extended to other trading partners was one such hope 43 Ibid., 10 44 Clement, and others, 169 45 Mary Quayle Innis, An Economic History of Canada (Toronto: The Ryerson Press, 1935), 282 46 Richard Apostle, et.al., Community, State, and Market on the North Atlantic Rim: Challenges to Modernity in the Fisheries Toronto: University of Toronto Press, 1998, 64 47 Mary Quayle Innis, An Economic History of Canada (Toronto: The Ryerson Press, 1935), 286 48 Clement and others., 169-170 49 Apostle, et.al., 75 50 Ibid Note that Newfoundland joined the Canadian Confederation in 1949, and was therefore subject to Canadian political interests as opposed to just Newfoundland interests 51 Ibid., 76 52 Ibid., 79 53 Ibid., 33 54 Apostle, et.al., 45 55 Canadian Embassy, Washington, D.C., Treaties and Agreements in Force between Canada and the United States, Government of Canada, internet Available at: http://www.canadianembassy.org/government/treaties-en.asp#21 NAFTA does not include specifics about the fisheries, and therefore is only applicable in indirect ways such that the fisheries are an integral part of Canada’s exports According to the FAO, the NAFTA does not pay any specific attention to fish and fish products, and additionally does not cooperate with the FAO on fisheries matters As well, [a]t this time, there are no provisions in the GATT or NAFTA to equalize foreign access to coastal fishing.’ (Wathen, 1996: 83) However, NAFTA cannot be ignored due to its pre-eminence in the Canada-US trade relationship As noted by Christopher L Delgado et.al, institutional developments that apply to sectors outside of the fisheries have great implications for the fisheries nevertheless 56 Daniel Pauly and Jay Maclean, In a Perfect Ocean: The state of fisheries and ecosystems in the North Atlantic Ocean (Washington: Island Press, 2003), 127n 57 Delgado, et.al., 66 58 William E Schrank and Walter R Keithly, Jr “Thalassorama: The Concept of Subsidies,” Marine Resource Economics, vol.14, 1999, 153 59 Ibid., 154 60 Ibid., 159-160 61 Ibid 62 Ibid., 114 63 Ibid 64 Giovanni Anania, ed., Agricultural Trade Conflicts and GATT: New Dimensions in U.S.European Agricultural Trade Relations, ed Giovanni Anania (Boulder, CO: Westview Press, 1994) 518 65 Ibid., 114 66 North American Free Trade Agreement, Art.103 67 Trade Policy Review: Canada, November 1996, internet Available at: http://www.wto.org/english/tratop_e/tpr_e/tp48_e.htm 68 Trade Policy Review: Canada, November 1998, internet Available at: http://www.wto.org/english/tratop_e/tpr_e/tp98rev1_e.htm 69 Ibid 70 ibid 71 Director General Mike Moore, ‘Globalizing Regionalism: A new role for Mercosur in the Multilateral Trading System,’ WTO NEWS, Buenos Aires, 28 November 2000 72World Trade Organization, Legal Texts: General Agreement on Tariffs and Trade, internet Available at: http://www.wto.org/english/docs_e/legal_e/gatt47_02_e.htm 73 Multilateral Trade Negotiations on Agriculture: A Resource Manual Agreement on Agriculture Rome: FAO, 2000), internet Available at: http://www.fao.org/docrep/003/x7353e/X7353e11.htm 74 Michael Swenarchuk, General Agreement on Trade in Services: Negotiations Concerning Domestic RegulationsUnder GATS Article VI (4) Toronto: Canadian Environmental Law Association, 2000, 75 Alan P Rugman, and John S Kirton, Environmental Regulations and Corporate Strategy: A NAFTA Perspective, ed Julie S Soloway (Oxford, England: Oxford University Press, 1999) 76 Ibid, 55 77 Ibid, 56 78 Ibid., 57 79 Ibid 80 Ibid., 81 Ibid., 58 82 ibid 83 Ibid 59 84 Alan P Rugman, and John S Kirton, 229 85 Kyle Bagwell and Robert Staiger, “National sovereignty in the world trading system,” Harvard International Review, 22, 4, Winter 2001: 54-59 86 Ibid 87 ibid 88 Michael Weinstein and Steve Charnovitz, “The Greening of the WTO” Foreign Affairs, vol.80, issue 6, Nov/Dec 2001: 147-156 89 Ibid 90 Carl Pope, “Race to the top: The biases of the WTO regime” Harvard International Review,23, 4, Winter 2002, 62-66 91 The scope of the BC fishfeed industry (and the contents of fish food) was recently highlighted when Washington State fish farmer found their supplies delayed at the border by the BSE incident, “Canadian BSE case causes fish feed holdups” May 22, 2003, www.intrafish.com (accessed May 23, 2003) 92 It is often claimed that there are at least 17 federal departments and agencies with a finger in the aquaculture pie In fact, from a regulatory point of view in shellfish aquaculture, there are just three key departments, DFO, Environment Canada, and the Canadian Food Inspection Agency, 93 Both sections contain provisions for habitat to be harmed or deleterious substances to be discharged by Regulation or by Ministerial Order (Fisheries Act RSC ss 35 (2), 36(4),(5),(6)), creating the possibility for a classic “permitting” regime as has been proposed by the Commissioner for Aquaculture Development: “By providing clear and transparent standards, regulations under section 36 could give confidence to stakeholders that environmental interactions are managed (OCAD,2002: 23).The continuing lack of transparency in enforcement is at issue in a private prosecution being brought by a prominent member of the anti-aquaculture coalition, Dr Alexandra Morton, alleging DFO’s failure to enforce the relevant provisions of the Fisheries Act (http://www.friendsofwildsalmon.ca/) 94 Exceptions include the Canadian northern territories, where authority over mining has been devolving from the federal government to the territorial and First Nations governments and other areas of Canada where some comprehensive agreements have been settled with First Nations (See chapter 12) 95 The NWT and NU became separate territories, as per the Nunavut Final Agreement, on April 1st, 1999 96 Concerns associated with boards include that representatives are to serve as individuals, and as not representatives of appointment organizations, and boards serve an advisory, rather than decision making function 97 The mine is now called EKATItm 98 Although a coalition of Northern Environmental NGOs (Canadian Arctic Resources Council, Ecology North and Canadian Parks and Wilderness Society) were offered funding to participate in the assessment they declined the resources as being inadequate Funding was later provided to CPAWS, and the Status of Women Council of the Northwest Territories 99 This situation is not only the case in forestry towns, but across Canada as well, especially in this phase of neoliberalism (see Gabriel 1999) 100 The idea of improving upon nature assumes a hierarchy between nature and culture, where culture is gendered male and considered superior to nature, which is associated with femaleness For more in depth analyses of this kind of thinking, which has supported and naturalized many complex forms of inequality and domination, including among others the hierarchy of man to woman, and Western culture to cultures considered ‘uncivilized’ or ‘primitive’, see Plumwood 1992; Merchant 1989; Bordo 1993 101 This paper draws on a more detailed analysis in Cashore, Auld, and Newsom (2004) Much of the research for this project came from a wide range of in person interviews in Europe and North America For brevity, we limit direct citations to these research interviews We are grateful to Steven Bernstein, whose collaborative work on a related project has greatly improved our analysis 102 Originally the FSC created two-chambers – one with social and environmental interests that was given 70 percent of the voting weight, and an economic chamber with 30 percent of the votes There are current three equal chambers among these groups with one third of the votes each Each chamber is further divided equally between North and South 103 BC members of the coalition included BC Pulp and Paper Association, Council of Forest Industries, Interior Lumber Manufacturers’ Association (Canadian Sustainable Forestry Certification Coalition 2000) 104 This group included, the Confederation of Canadian Unions, the Pulp, Paper and Woodworkers of Canada Union, the Union of B.C Indian Chiefs, the Canadian Environmental Law Association, Greenpeace Canada, and a number of others 105 Personal interviews, senior officials, Haindl, Augsburg, Germany, May 4, 2001 106 Personal interview, official, Canadian High Commission, London, England, April 25, 2001 107 Personal interview, senior official, British Broadcasting Corporation Magazine, London, England, July 3, 2001 108 Personal interviews, senior official, Forest Alliance of British Columbia, Vancouver, Canada, September 19, 2000 and senor official, British Columbia Council of Forest Industries, Vancouver, Canada, September 1, 2000 109 Personal interview, official from BC forest industry (see Appendix 2) 110 Of the top nine companies in BC, Weyerhaeuser/MacMillan Bloedel, Canfor, Doman (Western Forest Products) and International Forest Products all announced intentions to pursue FSC certification, while Weldwood and West Fraser supported through cash contributions and/or participation in FSC processes (Cashore, Auld and Newsom 2004: Chapter Three) 111 The principle now states that “Management activities in high conservation value forests shall maintain or enhance the attributes which define such forests Decisions regarding high conservation value forests shall always be considered in the context of the precautionary approach,” [Forest Stewardship Council, 1999 #2052] 112 The opposing view was raised in a number of personal interviews with environmental group officials (see Appendix 2) 113 The other economic member of the steering committee was a small woodlot owner 114 These groups included the New Brunswick Endangered Species Coalition, the Margaree Environmental Society, First Nations, the Falls Brook Centre, and the Sierra Club of Canada 115 In addition to Irving, G.P.I Atlantic and B.A Fraser Lumber Ltd had expressed early interest in the FSC standards network 116 FSC-Canada’s central office was still in its organizational stages during most of the initial Maritimes drafting process 117 Membership included officials from the Nova Scotia Woodlot Owners and Operators Association, the Falls Brook Centre, First Nations Forestry, G.P.I Atlantic, B.A Fraser Lumber Ltd., FSC CanadaJ.D Irving, Margaree Environmental Society and the New Brunswick Endangered Species Coalition 118 At this stage, the Canada Working Group required all future regional initiatives to create a four-house (economic, social, environment, and First Nations), and they also allowed the election of non-members to regional standards committees 119 I wish to acknowledge financial support from the Social Sciences and Humanities Research Council of Canada, under the project "Policy Innovation and Management on the Eastern Continental Shelf: the Politics of Offshore Petroleum Development in Nova Scotia and Louisiana." 120 As a minor exception to this, small delivery systems carry small volumes of Canadian municipal water a few miles to adjacent American towns across the border An example is the sale of water by the town of Coutts, Alberta, to the nearby community of Sweetgrass, Montana See Scott, Olynyk and Renzetti (1986), p 184 It is worth noting, in the context of the discussion below of delivered water prices, that the price charged for these exports (in 1982) was Cdn$0.42 per cubic meter 121 Costs vary depending principally on the capacity of the tanker, the number of days consumed by the round trips, and the state of the oil tanker market Moreover, these estimates cited not include the cost of on- and off-loading facilities For all of the foregoing estimates, see Feehan, pp 13-15 122 These figures compare reasonably well with other sources on water prices in the western United States See Canadian Environmental Law Association (1993 p.99), which reported that, "prices paid for water in the Los Angeles area by various categories of water users in 1990 ranged from $362 to $857 per acre foot." For a more recent comparison, see NUS Consulting Group (2001), which records "national" (presumably average) prices (in $US/cubic meter) in selected countries, including 0.52 for the United States, 1.11 for the United Kingdom and 0.37 for Canada 123 It is worth noting that, allowing for the broad-brush character of these estimates, the unit cost of delivery for this project over a fifty-year life-span has been calculated by the present author at US$0.68 per cubic meter (based on data provided by Judd) 124 The plausibility of this cost estimate may be measured against the cost projections in 1982 for a much more modest plan to transfer water from the Mississippi/Missouri drainage to the High Plains region from Texas to Nebraska, which the U.S Army Corps of Engineers estimated could run as high as US$0.64 per cubic meter (Scott, Olynyk and Renzetti 1986 p.177) Meanwhile, Judd also provided figures for the cost of agricultural water in the California market at the time at 5-to-10 times below the prevailing cost of urban water of only US$0.25-0.50 per cubic meter – in other words, pennies or fractions of pennies per cubic meter 125 Scott, Olynyk and Renzetti (1986 p.179) similarly point to the manner in which regulatory and economic factors combined to undermine the viability of the Alaskan natural gas pipeline project aborted in the late 1970s: “This $40 billion project was half built when the U.S importers belatedly discovered in the late 1970s that gas from contiguous states would be less expensive than Alaskan or Canadian supplies This discovery has led to financing difficulties and project delays so that it is now uncertain when, or even if, the pipeline will be completed.” 126 Scott, Olynyk and Renzetti (1986 pp.205-24) contains a good overview of the cost-benefit calculations bearing on major water transmission systems, some of which touch on this conundrum Elsewhere (pp.178-9) the authors makes the point that "the delivery of Canadian water would be a very unattractive alternative to developing the political will to make better use of the water supplies already available in the south and southwestern United States." In other words, if water were priced at its market value, especially for agricultural uses, the United States would not have to worry about importing it 127 See McDougall 1991 The NAFTA provisions concerning energy regulation are further discussed below 128 The obligation of the Government of Canada to extend an international minimum standard of treatment and expropriation to foreign investors is contained in Articles 1105 and 1110 of the NAFTA In addition, NAFTA includes a “proportionality clause” (Article 315) which specifies that the government of a member country cannot reduce or restrict the export of a resource to another member country once the export flow has been established 129 Shrybman cites the possibility that foreign investors holding riparian rights or licences under federal or provincial permits and attempting to exercise them for purposes of bulk water exports "might assert a claim that any denial of the opportunity to so represents "expropriation under the expansive terms of Article 1110 Alternatively, water use permits, which are silent with respect to the particular purpose for which the license was granted, might also give rise to claims under Chapter 11." 130 See Table on “Alberta’s Exports” Absolute numbers were rounded by the author 131 Notes The extraction of natural resources was of course also central to the daily life, industry and cultures of the First Nations, but we are principally concerned here with the role of staples in the evolution of Canada’s national economy 132 To illustrate in the B.C case, with the erosion of staple processing along the Fraser River, and the associated decline of cohorts of resource processing workers (principally forestry and fisheries and adjacent communities, production and social linkages between the Greater Vancouver ‘core’ and resource ‘periphery’ have appreciably weakened (see Hutton 1997 for a more extensive discussion of this phenomenon) 133 For an illustration of the operations of core-periphery linkage systems in Québec, see Polèse 1982 134 As Peter Pearse has observed, however, British Columbia is in some years a net importer of raw logs (Pearse, personal communication) 135 Some regional development models stressed the essentially binary structure of metropolitan and ‘hinterland’ development trajectories within a provincial core-periphery setting (see for example Davis and Hutton, 1989) But the increasing diversity of Canada’s nonmetropolitan communities (including processes of industrial diversification, and the formation of new labour cohorts) suggested by this sample of communities in transition underscores the need to avoid essentializing development modes and prospects for areas beyond the large-city-regions, in favour of a more nuanced appreciation of tendencies toward increasing industrial diversity and differentiation 136 For a useful elucidation of the concept of ‘existence value’ of resources in a staple economy setting, see Roessler and McDaniels (1994) 137 To the problems cited by Rayner and Howlett in the aquaculture industry we could perhaps add increasing foreign ownership and control represented by multinational corporations, and conflicts with groups dependent on natural fisheries (commercial fisheries, sport fishing, First Nations) concerned about contamination from fish farm waste products and the inter-mingling of native Pacific salmon species with escaped farm (Atlantic) salmon 138 A well-known illustration of the potential of community ingenuity in creating a post- staples development future is the case study of Chemainus, B.C, described in Barnes and Hayter (1992) Stimulating work on community diversification strategies in Canada also includes the research conducted by the Community Economic Development unit of Simon Fraser University, and a SSHRC-supported project on economic development among medium-size communities directed by Mark Seasons at the University of Waterloo 139 I deploy the term ‘post-staples state as a descriptor of significant change in Canada’s development trajectory, somewhat in the spirit of Daniel Bell’s social forecast of ‘post-industrial society’ three decades ago Neither of these concepts—Bell’s post-industrial society, and my notion of a ‘post-staples’ state—is intended as an ‘absolute’, as even episodes of quite fundamental and far-teaching industrial and socioeconomic change necessarily encompass a sublation of conditions, both contemporary and historical, rather than a complete and totalizing break with the past Rather, these concepts represent ventures in capturing important new phases of economic change, together with the complex social, cultural, spatial and political causalities and outcomes that comprise basic shifts in development mode 140 Within Canada’s urban system there is a clear hierarchy of influence and power, associated with specialization and competitive advantage, as well as urban scale A national workshop on Urban Transformation in Canada convened at the University of Toronto in December of 2004 concluded that five major city-regions—the Greater Toronto Area, the Montreal cityregion, Vancouver and the Lower Mainland, Ottawa-Gatineau, and the bipolar Calgary-Edmonton corridor—will constitute increasingly the dominant drivers of growth and change in the Canadian economy, society and polity in the 21st century (see web-site of the SSHRC National Research Cluster on Urban Transformation in Canada) 141 This phenomenon is replicated in some respects at the provincial level, as observed in the ‘structural conflicts’ between provincial governments and the major city-regions (which constitute to some extent an alternative and competing power source); this is exemplified in the political struggles between Toronto and Queens Park, and Montréal and the provincial government situated in Québec City There are also dynamic (as well as ‘structural’) features of this relationship, influenced by the nature of political control in the provincial government, and the quality of leadership and personality embodied in the premiership and mayoralty, each of which is subject to change over time 142 That said, medium-size and smaller communities which have attracted culturally- diverse and artistic migrants are becoming increasingly diverse in socio-cultural composition, and have in many cases succeeded in mobilizing both long-established creative talent and newcomers to promote arts and cultural activity Creative industries and associations within these communities also access the Internet and other media of advanced telecommunications to interact with distant colleagues, partners and audiences Timothy Wojan has written about the potential of creative industry development in rural areas (Wojan, 2994), while William Beyers of the University of Washington has conducted research on what he terms ‘high flyers and lone eagles’, New Economy exponents working in the more remote districts of Washington State 143 As examples in the Canadian context, Montréal ‘lost’ both its national primacy in corporate control and financial activity, and its historical ‘Western gateway’ role, in the 1970s; while Vancouver has seen a steady stripping of its head office sector since the acceleration of globalization and de-regulation of the 1980s, producing by 2005 a decidedly ‘post-corporate’ downtown 144 P J Taylor of the Global and World Cities research network in Loughborough University, England, has proposed a sectorally and functionally more diverse nomenclature for assessing rank-order of world cities, including a typology which includes social, cultural, and political (as well as economic) indices of global hierarchy and engagement (Taylor, 2004) 145 For a sampling of the rich and diverse Canadian scholarship on the influence of immigration and multiculturalism on the remaking of Canada’s cities, see the web-site of the ‘Metropolis—Immigration’ RIIM network [ http://riim.metropolis.net/ ] 146 Stojanovich describes a mobilized diaspora as ‘an ethnoreligious collectivity whose elite members are communication specialists diasporas engage in international commerce as insurance against the political risks of privilege in a single polity’ (1994: p 80) 147 In the classic Canadian style, early DREE and DRIE programs focussed on strategies for the most serious cases of regional deprivation and disparity, but over time (and exigencies of political pressure) evolved to encompass most of the country beyond the largest and most successful city-regions A similar experience has been observed in the case of the federal Cities Agenda, which initially was designed to address the special conditions (problems as well as opportunities) of the largest cities, but following relentless lobbying and advocacy now includes medium-size and even smaller urban communities 148 In conducting an assessment of the merits of the competing schools of comparative advantage and dependency theory, Thomas Gunton suggests that given the importance of resource rents, staples can continue to play significant roles in regional development in Canada, although the escalating costs of resource extraction require a tighter scrutiny and management approach (Gunton, 2003) The employment and community viability implications of a steadily shrinking resource sector workforce, however, cannot be avoided in any forecast of the broader development potential of staple extraction in this country 149 British placed heavy tariffs on Baltic and American timber in favour of Canadian timber (Marr and Paterson 1980)