Ponder the thought of discounted energy?

When I say it, eyes glaze over. When Scott McCain, president and chief operating officer of the Maple Leaf Foods Agribusiness Group, says it necks start getting sore from that quick snapping motion.

From the TJ yesterday. Scott McCain:

“My biggest concern in some of the business climate in Atlantic Canada is trying to find ways to offset the disadvantages we have with respect to scale and competing with other businesses that are global in nature,” said McCain. “If we are on the path of building an energy hub in electricity, oil and gas. .. my question is, can government and industry and citizens get their head around providing some of these commodities at a potential discount to global prices to create an incentive for industry to locate there, to grow there and produce there.” McCain posed his question during a panel discussion on the future of energy sector development in Atlantic Canada during a summit hosted in Toronto by East Coast Connected, Dalhousie University and the Rotman School of Management.

Rotman School is too busy advocating tax cuts to worry about something that actually may give the the region a real competitive advantage. However, I take this as a very good sign.

Give David Shipley at the TJ a pulitzer for getting this topic – an extremely important one – into the mainstream.

Give McCain kudos for linking the two – energy hub and actually offering cheap energy – into a longer term view.

David Wheeler, dean of the faculty of management at Dalhousie University, said the region shouldn’t embrace cheaper energy as a way to sustain or lure in industries. Instead, “Atlantic Canada should get used to higher energy costs in order to encouraged much-need investments in renewable energy and diversification from fossil fuels,” he said. “Those in lower income groups and targeted industries with a future should be shielded from some of the rising costs,” said Wheeler.

Now, this is trickly. Wheeler, in his cushy six figure salary, saying Atlantic Canada should “get used to higher energy costs”.

That’s the problem with these guys. Some jurisdictions in North America will be ‘low cost’ energy locations. Some will. That is a fact. Why shouldn’t it be Atlantic Canada? In addition, why does lower cost energy have to be in conflict with diversification from fossil fuels? Wouldn’t Churchill Falls 2 be diversification from fossil fuels? Wouldn’t nuclear energy be diversification from fossil fuels?

The truth is guys like Wheeler look at national and international realities (and they are real) roll out the same old platitudes for this region.

Why doesn’t the genius of Wheeler tell us how to keep the 40% of Dalhousie graduates that leave Nova Scotia each year? Why doesn’t his academicship tell us how to avoid the chronic out-migration? Why doesn’t he advise New Brunswick on how to limit the growth of Equalization?

I’d like New Brunswick to embrace alternative energy but I also think that there will be places in North America that will offer cheap energy and there will be industries looking for it.

Maybe 10 out of 10 on the irony scale but biofuels development is an energy intensive effort. If you had cheap electricity, the business case for biofuels development would be better here.

Maybe Wheeler didn’t think that one through.

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0 Responses to Ponder the thought of discounted energy?

  1. nbt says:

    Rotman School is too busy advocating tax cuts to worry about something that actually may give the the region a real competitive advantage.

    You can’t discount the importance of tax cuts to an economy, David!

    That’s why I like the balanced approach being advocated by McKenna lately instead of the ethos amongst the central planners (tax, tax, tax…spend, spend, spend).

    However, I understand their push since historically they [government friendly consultants and agencies] are usually the very few that benefit from regional development projects and grants in our province. Sooner or later they will realize that many will have to fall on their sword if they ever want this province to move forward and their son or daughter to remain in the province.

  2. richard says:

    “David Wheeler, dean of the faculty of management”

    Is there any reason to listen to anyone in a business school? No. No one should look to business schools for solutions; they are about yesterday and today, not tomorrow. Business schools, econ and bus admin faculties are just a drain on resources, created to meet a demand that has no basis in reality.

    “You can’t discount the importance of tax cuts to an economy, David!”

    Yes you can, especially given the contradictory evidence re tax cuts and economic growth. You must have gone to a business school.

  3. nbt says:

    So you’re discounting the effect of tax cuts and limited spending, eh richard? I guess you don’t remember what happened to the Canadian economy (and our fiscal capacity) after 1995.

  4. richard says:

    “tax cuts and limited spending, eh richard”

    Now you are changing the subject.
    There is no good data to show that tax cuts had anything to do with gdp growth after 1995.

  5. Gawain says:

    You have a valid point when criticizing Wheeler and management schools for ossified thinking. They do indeed tend to agglomerate Atlantic Canada into a national perspective, with predictable results.

    Unorthodox views are conspicuously absent with the exception of the psycho-babble spouted by Florida and his accolytes (…unleashing the full creative potential of each and every human being…).

    The fact is that valuable work has been done on policy paradigms, initiatives and institutional models bearing on local innovation systems that promote regional economic development.

    Where is the political will?