Lawrence Solomon
National Post
November 16, 1999

Privatizing resource sector is best way to protect wilderness

The World Wildlife Fund and other environmental elites — in a confused bargain with their government and industry counterparts — are selling out Canada’s environment to industrial interests.

Following the 1987 recommendations of the United Nations’ World Commission on Environment and Development, many Canadian environmentalists lobbied our federal and provincial governments to protect part of the wilderness — generally they demand 12% of a province’s territory, in line with the UN report — while tacitly agreeing to let industry loose on most of the rest. In Ontario’s Lands for Life pact last year among some environmentalists, loggers and the government, environmentalists signed off on a plan that gives forestry companies a moral claim to exploit most of the province’s Crown forests. Environmentalists, in their naivete, think they’re balancing the needs of industry with the needs of the environment, but their calculations are topsy-turvey. In any rational world, industry would get not even 12% of the land, and the overwhelming expanse of the country’s resources would be preserved for its natural beauty.

These environmentalists, along with most Canadians, are captive to the myth that Canada has a resource-based economy. Yes, our forests do cover much of this enormous country, which does have one of the world’s largest concentration of fresh water in lakes and rivers, and which, together with coastlines along three oceans, give us vast inland and offshore fisheries. We do have fertile farmland from coast to coast and we do have a wealth of oil, gold and other mineral resources. But despite these riches, ours is an urban economy. Canada’s entire resource sector amounts to less than 6% of our GDP, about the same size as the construction industry and one-third the size of the financial or manufacturing sector. Although the resource sector often dominates the news, with farmers, fishermen and foresters in seemingly endless disputes, this sector is off the macroeconomic radar screen at Statistics Canada, whose economists have not analyzed the resource sector in recent times. If Canada’s system of national accounts were to be designed from scratch, the line items that appear today — agriculture, forestry, fishing, and even mining, by far the largest of our resource industries — would be too small to warrant separate categories.

Far from being an economic heavyweight, the resource sector’s importance is overstated even at 6% of GDP. Without subsidies to the farm economy — which, as a whole, runs at an economic loss — agriculture’s share of GDP would shrink dramatically. Without government intervention in logging and forestry — which is designed to sacrifice our forests to stave off unemployment in remote communities — forestry’s share of GDP would likely shrink even more. If mining CEOs weren’t so skilled at mining governments for tax breaks, and weren’t so able at avoiding the responsibility of cleaning up after themselves, mining’s share of GDP would fall, too.

But most of all, the resource sector would shrink because our forests, mountains, lakes and rivers are usually worth far less as board-feet of timber and storage ponds for mine tailings than as objects of splendour. Though rural folk may think their most important exports to the cities are the raw commodities they produce, the rural economy is more highly valued as a natural playground, whether in the form of cottage land or tourist destination.

GDP — which counts all activity, whether productive or destructive — is a poor measure by which to judge a sector’s importance. A better measure is profits. Prince Edward Islanders think their economy depends on agriculture and tourism, in that order. In fact, the farm economy is run as an elaborate federal-provincial make-work project — for every dollar that a PEI farmer makes tilling the soil, governments contribute more than $4 in subsidies. Potatoes, PEI’s chief crop, provides 4,500 jobs while losing money; the tourism industry 20,000 while making money. The productive PEI economy — and the source of PEI’s wealth — is its natural beauty.

On the opposite coast, B.C. residents view their salmon fishery with great pride. But B.C.’s commercial salmon fishery has little value: $100-million a year, or about one-fifth the value of its salmon sports fishery, which doesn’t deplete fish stocks. In Ontario, large-scale logging would all but disappear if the government privatized its Crown forests — say by selling them to the loggers who now depend on them for their livelihood. As owners, loggers would soon understand that the best way to exploit the value of their holdings is in hunting and fishing lodges, in cottages and camping sites, in cross-country ski resorts and in selling private woodlots to urbanites who will simply set them aside for their conservation value.

Whenever environmentalists, industry and politicians — three of the most powerful special interest groups in society — sit down together to carve up provincial resources, the natural environment is the inevitable loser. Not understanding that the environment — with its countless ecological niches, each capable of arousing wonder in an individual destined to fall in love with its offerings — is often the ultimate value-added product, these special interests are only too willing to grind it down wholesale into near-worthless raw commodities or theme parks.

As it does in Third World countries, in Canada the World Wildlife Fund seeks to establish a network of “ecologically representative protected areas,” as if the environment can be reduced to a sterile scattering of museum pieces. Industry seeks a rich swath of subsidies, such as in Ontario, without which large-scale environmental destruction cannot happen. Throughout Canada government seeks to pacify these two agitators, and to boast to the public at large about what it has accomplished in our name.

Responses to: Environmentalists sell out environment

by Patrick Reid
Lawrence Solomon does an absolutely wonderful job of balancing abysmal ignorance with unmitigated arrogance. In one short article, Mr. Solomon trashes all rural areas of Canada, farmers, miners, forestry people, fisherman and an entire province.

Mr. Solomon with unmitigated arrogance suggests that all of the rural and northern area of our country should be a playground for the supposed rich urbanites who would appreciate these areas as “objects of splendour.” Mr. Solomon’s knowledge of the economic contribution of the resource industries, their history and their importance to the Canadian economy is non-existent.

Nationally, the mining industry generates $26.5-billion in value and one in seven export dollars is from mining. Mining accounts for one-half of the rail revenues and two-thirds of the port volumes, supporting infrastructure we all benefit from. Mining employs one of every forty working Canadians, some of whom work in urban areas. One hundred and fifty communities depend on mining as the main engine of economic growth. Mining comprises approximately 20% by volume and value of the shares traded on the Toronto Stock Exchange.

More importantly, where does Mr. Solomon think that cars, computers, high-rises, food, trolleys and subways come from? Are they all manufactured in Japan and shipped here? Without the mineral industry, the agriculture industry and forestry industry, and their basic commodities, there would be no houses, apartment buildings, subway cars, computers or glass or stainless steel sinks in our homes.

With the wisdom of Solomon, Mr. Solomon consigns all of these rural and resource people to the economic slagheap in favour of some pristine utopia that only he can see.

In the interest of public dialogue and education I am sending Mr. Solomon a copy of the Ontario Mining Association’s report, “The Economic and Fiscal Contribution of the Mining Industry in Ontario” and our booklet, “Facts & Figures,” which outlines the positive impact of mining in Ontario and Canada.

Patrick Reid, President
Ontario Mining Association, Toronto.
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by Monte Hummel

There is a curious sense of unreality to Lawrence Solomon’s claim that those of us who are trying to protect wilderness in Canada are the ones who don’t appreciate the value of its natural splendour and beauty (Environmentalists Sell Out Environment, Nov. 16). He suggests that if Canadians just privatized all our forests, then these treasures would be rescued from the evils of exploitation and converted over night to “natural playgrounds” for our now largely urban society. No need to set aside representative protected areas such as our national parks (a “sterile scattering of museum pieces,” according to Mr. Solomon). And no need to treat rural or northern cultures with respect or dignity, because “ours is an urban economy.”

This may all sound great to Solomon’s Urban Renaissance Institute, but might I suggest a trip out of the city think-tank to round out his perspective just a tad?

Monte Hummel, president
World Wildlife Fund Canada, Toronto.