Further Integration of Canada's Energy Resources with U.S. War Economy

Policy of Exporting Electricity to the U.S.

– Fernand Deschamps –

Calgary action against War President Joe Biden's visit to Canada, March 23, 2023.

The joint statement issued by Prime Minister Justin Trudeau and U.S. President Joe Biden during his visit to Ottawa on March 23-24 announced the launch of a one-year "Energy Transformation Task Force." The statement informs that the task force, amongst other things, is to "accelerate cooperation on critical clean energy opportunities and supply chains," to secure and strengthen "grid integration and resilience," and "develop cross-border alternative fuel corridors." Under the heading, "Invest in Our Collective Defense and Security," they state that they "will focus on two key sectors – pipelines and electricity – due to their criticality to our economies and their cross border nature."

What they mean by "our collective defense and security" is in fact a thinly veiled declaration that U.S. forces henceforth have a green light to enter Canada unimpeded. Indeed, the statement issued by Trudeau and Biden says: "Further, we reiterate that in each of our countries, should an adversary choose to target critical infrastructure systems, we will both respond."[1]

Joe Biden's message to Parliament, before the combined House and Senate, is most clear: The United States wants Canada to continue to play its full role in supplying the U.S. economy with raw materials such as rare earths and minerals critical to the U.S. war economy, and "clean" electrical power to transform them into such items as semiconductors at IBM plants in the U.S. They are then to be packaged at the IBM plant in Bromont, Quebec which he said is "expanding with the support of the Canadian government." A news release from the Prime Minister's office that day said that Canada and the U.S. are each making significant investments "creating good middle-class jobs for workers on both sides of the border."

This is also what was meant at the joint Trudeau-Biden press conference on March 24 when Biden said: "And by the way, we each have what the other needs. [...]The idea that somehow Canada is somehow put at a disadvantage – because we're going to probably be investing billions of dollars in their ability to package what is coming out of the semiconductor area – I don't get it. How's that in any way do anything other than hire and bring billions of dollars into Canada? [...] We greatly need Canada, in terms of the minerals that are needed. Well, you guys – we don't have the minerals to mine. You can mine them. You don't want to produce – I mean, you know, turn them into product. We do."

This is what IBM's Senior Vice President and Chief Research Officer was referring to when he spoke about "collaboration" that will "help strengthen [...] the global supply chain." Not a peep was heard from the subservient Canadian elite in response to the arrogance of declaring Canada a hewer of wood and drawer of water for the mighty U.S. empire.

Federal Government's Decision to Secure U.S. Supply of Electricity

In 2019, the Canadian Energy Regulator came into being through the adoption of the Canadian Energy Regulator Act, which replaced the National Energy Board (NEB) that had been set up 60 years earlier by the Diefenbaker government.

In the Speech from the Throne on September 27, 1962, the Diefenbaker government referred to the NEB, created in 1959, as being "responsible for regulating [...] international and interprovincial pipelines [...] international power lines, as well as Canadian imports and exports of energy." The NEB was important to the Diefenbaker government because it could encourage the signing of "large scale, long-term contracts for the export of power surplus to Canada's needs, present and potential" in order to "expedite the development of major power projects in Canada which are too large to be supported by the domestic market."[2]

Hydro-Québec, the major producer of hydro power in Canada, has a long history of building huge power dams such as the James Bay hydro project with the help of U.S. finance capital and exporting part of its electricity to the United States. This was the case when in 1962, Quebec's Lesage government nationalized most of the major private producers of hydro power which it was able to do it with the backing of Wall Street financiers.[3]

Like the NEB, the Canadian Energy Regulator's mandate is to "regulate companies that own and/or operate" 73,000 kilometres of "international or interprovincial pipelines," to "regulate power exports and the construction and operation [of 1,400 kilometres of] international and designated interprovincial power lines," as well as "and Canadian energy imports and exports."[4]

The following graphs show that Canada has always played a greater role in exporting electricity to the U.S. than in importing it, both in the most recent decade as well as over the last 30 years, as privatization and deregulation of North American power companies encouraged cross-border trade.

Canadian exports-imports of electricity to the United States, 2010-2022.

Canadian exports (blue) and imports (orange) of electricity to the United States, 1991-2021, showing on the top centre which provinces contribute.

According to the Government of Canada website, the passage of the Canadian Energy Regulator Act had become necessary so as to help to "restore investor confidence, re-build public trust and advance Indigenous reconciliation" -- all "while ensuring good projects go ahead and our energy resources get to markets responsibly."

This is the Trudeau government's much touted "green shift," which is included in Finance Minister and Deputy Prime Minister Chrystia Freeland's "Made-in-Canada" 2023 budget. She likens the export of Canada's vast natural resources, such as gas, oil and now critical minerals -- so important to the U.S. war machine -- to a "new national project" similar to that, at the turn of the 20th century, of the "new Transcontinental Railway" that "connected Canada and the Canadian economy for the first time."[5] In this "new national project" to "build our generation's version of the Transcontinental Railway, one that will protect our environment," she now includes exporting "clean" electricity to the world.

Like Diefenbaker's 1962 claim to be working for the establishment of "a national energy grid," Freeland is promoting the idea that the Canadian people will reap the benefits of this sell-off of natural resources to the United States."Clean energy" is a euphemism for dispossessing the Indigenous Peoples and using the public treasury to finance the infrastructure that the U.S. needs.

"Canada has the potential to become a clean electricity superpower with a cross-Canada electricity grid that is more sustainable, more secure, and more affordable," she says.[6]

In the tax measures the Trudeau government is putting in place to achieve this, there is "a 15 per cent refundable tax credit for eligible investments in:

"- Non-emitting electricity generation systems: wind, concentrated solar, solar photovoltaic, hydro (including large-scale), wave, tidal, nuclear (including large-scale and small modular reactors);

"- Abated natural gas-fired electricity generation (which would be subject to an emissions intensity threshold compatible with a net-zero grid by 2035);

"- Stationary electricity storage systems that do not use fossil fuels in operation, such as batteries, pumped hydroelectric storage, and compressed air storage; and,

"- Equipment for the transmission of electricity between provinces and territories."[7]

These measures are almost a verbatim repeat of the pay-the-rich schemes set out in the Canada Growth Fund (CGF) established last fall by the Trudeau government. As K.C. Adams pointed out in a background article titled "The Fall Economic Statement: Much Ado About Nothing": "the CGF will use public funds to 'scale up' private companies and 'capitalize on Canada's abundance of natural resources and strengthen critical supply chains' to serve the U.S. war economy."[8]

This is implied in the 2023 budget when, at the outset, it states that "Canada's electrical system includes a mix of private, public, and Indigenous-owned assets. The government believes a clear and predictable incentive that is available to this range of asset owners is needed to accelerate our progress toward a net-zero grid." It adds that "the expansion and transformation of Canada's electricity system will require major investments and enhanced partnerships between governments and the private sector."[9]

Notes

1. Joint Statement, Prime Minister Trudeau and President Biden, March 24, 2023.

2. Excerpts from September 27, 1962 Throne Speech:

"[...] The development and use of Canada's resources of energy must be a central feature of the programme for national economic growth. The twenty-fourth Parliament has laid the groundwork for this in the National Energy Board Act and in other measures.

"It is hoped that arrangements will soon be completed that will make it possible to submit for your approval the Columbia River Treaty and the legislation required in Parliament to implement it.

"The national oil policy introduced by the Government two years ago has brought about a gratifying increase in the production and sale of Canadian oil. 

Studies will be continued, in co-operation with the provinces, in relation to the long distance high voltage transmission of electrical power and the development of potential sources of hydro-electric power with a view to the ultimate establishment of a national power grid, which will facilitate the orderly utilization of the hydro-electric potential of Canada in the interests of expanding Canadian development and progress. Discussions are in progress with the Government of Manitoba in respect to studies of the Nelson River system.

"My Ministers have come to the conclusion that large scale, long-term contracts for the export of power surplus to Canada's needs, present and potential, should now be encouraged in order to expedite the development of major power projects in Canada which are too large to be supported by the domestic market. Such exports can also strengthen our balance of payments."

3. See "Hydro-Québec's Trajectory," TML Daily, December 2, 2022. 

4. "A Modern, New and World-Class Federal Energy Regulator For The 21st Century," The New Canadian Energy Regulator Handbook, Government of Canada.

5. For an overview of the building of the Canadian Pacific Railway and the outlook and contending interests of the ruling circles in Canada and the British colonies in Canada at that time, click here to see the short documentary produced in 2009 by the Cable Public Affairs Channel as part of its Telling Times series.

6. Budget 2023, Chapter 3, Affordable Energy, Good Jobs, and a Growing Clean Economy, "A Made-in-Canada Plan," Government of Canada, page 67.

7. Ibid, page 79.

8. "Economic Matters of Concern to the Polity: Fall Economic Statement, Much Ado About Nothing," K.C. Adams, TML Monthly, November 2022.

9. Budget 2023, Chapter 3, Affordable Energy, Good Jobs, and a Growing Clean Economy, "A Made-in-Canada Plan," Government of Canada, pages 79-80.

(With files from TML, Government of Canada, White House, The Globe and Mail, Radio-Canada, Canadian Encyclopedia)

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This article was published in

Volume 53 Number 4 - April 2023

Article Link:
https://cpcml.ca/Tmlm2023/Articles/M530042.HTM

Website:  www.cpcml.ca   Email:  editor@cpcml.ca