Danielle Smith's speech to the Reseau Liberte - Quebec Convention
En Francais: Ladies and gentlemen, I thank you for this opportunity of speaking to you. It is an honour. And it is a pleasure to visit your wonderful province — to renew old friendships and begin new ones — and to hear and see a culture and place so very different from my own.
Alberta and Quebec are like two houses on the same street. From the outside they are just houses
– you pass by them every day, but you know little about them. It makes so much difference to be invited inside. Thank you for inviting me inside. I specially want to thank Eric Duhaime and Roy Eappen for allowing me the opportunity to speak here today about something I care deeply about, our relationship as neighbours and how we can improve it.
Chers amis Quebecois, I would speak to you in French if I could, but I can’t. Like most Canadians, in Quebec and across our great land, I speak only one language. Most people in Quebec speak only French, and most Albertans speak only English. It’s one of the remarkable achievements of our federation that we Canadians have worked together on this basis so well for two centuries.
I’m sure what every Albertan notices in Quebec – beyond the obvious fact that it is almost all French- speaking – is that it is old. By Alberta standards, it is positively ancient. It exudes history in a way that Alberta does not. Three years ago you celebrated your 400th anniversary. Not long ago we Albertans celebrated our 100th anniversary. It’s startling to think that when you here in Montreal were starting to install electricity in your homes in the 1870s, there were Cree and Blackfoot hunting buffalo where the city of Calgary stands today.
We are a very young province. And when I come here and walk through the Old City, I am reminded just how young we are.
I mention this now because history matters. History defines us as a political community – our structure and language, our good and not-so-good tendencies, our attitudes and assumptions. Whether we realize it or not, these are all in large measure bequeathed to us by history.
Which brings us to the subject I want to talk about – federalism and why it must change. Federalism is shaped by three forces. The first is history. The second is economics. The third is politics.
If Canadian federalism fails – as indeed it may do –it will not be because of history. We Canadians have a very good history – one of constructive compromise, and of doing mighty deeds together.
When, for example, your forebears bridged the St. Lawrence River from Quebec City to Levis a hundred years ago, it was the longest cantilever bridge ever built. Nobody had done it before. We were great visionaries, we Canadians, and great doers. We were over-achievers, and proud of it.
We took risks – in fact 75 men died building that bridge, due to a catastrophic miscalculation by the engineers – but we kept going, and we succeeded.
Creating a prosperous civilization out of a vast, raw wilderness was no job for sissies and naysayers. It was a challenge of heroic scale, and we proved equal to it. So should we fail now as a federation, we can’t blame history. Morally, materially and constitutionally our predecessors built remarkably well.
Neither will we be able to blame the economy. We have everything anyone could ask for to succeed and flourish, to be as much a world economic leader in the 21st century as we were in the first half of the last century. I will talk about the contribution my own province makes to our national and our world economy in just a moment.
No, if Canada dies, the failure will lie in politics. It will be because politicians killed it. If Canada fractures into its component pieces – or simply dwindles into global irrelevance as we have slowly been doing – the fault will lie entirely with our political class. Not just with petty-minded politicians, but also our timid and conformist political intellectuals and a complacent media. Inside and outside Quebec, knowingly or through negligence, they have suppressed our history and hamstrung our economy.
Now I cannot possibly prove this sweeping allegation in a mere twenty-five minutes. But luckily someone else has already done it for us. Brian Lee Crowley, one of Canada’s foremost political economists, has laid out the case point by point and page by page in his landmark 2009 book Fearful Symmetry. If you’ve read Fearful Symmetry you already know the case – and if you haven’t read it this is what Crowley says.
What we have been told about our national past – about our common achievements, our founding attitudes and values, our economic development and constitutional purpose – is a systematic fabrication foisted upon us by the left-wing intelligentsia that took political control of our country in the 1960s during the ministries of Pearson, Lesage and Trudeau.
Prior to that – all the way back to the very beginnings of Canada before Confederation – we were a radically free-enterprise and small-government nation – moreso even than the Americans. “Better British liberty,” our ancestors proudly declared, “than American equality.”
Good heavens, where did that spirit of liberty disappear to? What we now tout as traditional Canadian values and virtues – unearned entitlements, paying people not to work, paying regions not to succeed – and not to secede – all these were unthinkable to the stalwart people who founded and built Canada. Today’s celebration of the easy ride and what’s-in-it-for-me were not the essence of Canadian character, they were the complete antithesis of it.
That is Crowley’s first main point. This is his second. One thing more than anything else drove this great plunge of ours into big, centralized government at all levels, and continues to drive it. That one thing – unfortunately there is no nice way to say this – is the omnipresent doomsday question of what will it take to appease Quebec. For what Quebec demands Ottawa must give to all.
Crowley explains in plain language and compelling mathematics how this perennial conundrum has twisted our Confederation into a constitutional pretzel that no longer makes sense politically, historically or economically.
Before this began in the 1960s Quebec was a perfectly viable, self-sustaining province, and by the standards of the time a fairly productive and prosperous one. Today it is one of the most publicly indebted jurisdictions in the world, and the least productive of Canada’s larger provinces. And the same policy change that reduced Quebec to dependency has been even harder on the Atlantic. That region today is but a ghost of its earlier self, one where those who stay cling to subsidized legacy industries, the luckiest people work for the government, and the resolute move to Ontario or Alberta.
To which I would add that the megabillion-dollar cost of much of this endless sloshing of funds between regions has left Alberta as the whipping-boy of the federation. How can Albertans not be just a little bit resentful? Three weeks ago NDP leader Jack Layton jetted here to stir up angst and resentment against Alberta by saying things about our base industry which simply are not true.
Liberal leader Michael Ignatieff is doing the same by proposing a massive new wealth transfer out of Alberta through a cap and trade scheme. Your own Premier last year went to Copenhagen to accuse Alberta of crimes against the planet, and then sent a trade mission to Alberta to hussle up some oilsands business – all while receiving billions in net program benefits through the silent federal siphon that pulls money from Ontario and Alberta into Quebec and the Atlantic.
The cynicism and bare-faced hypocrisy are breath-taking to us back home in Alberta.
Let me tell you about this oil industry that we Albertans love, and that everybody else apparently hates. They say gasoline prices are too high. They say our fat-cat oil companies make obscene profits. They say the industry is a big polluter, particularly the oilsands.
Is any other resource in the world so essential and yet so despised?
We Albertans – certainly the more thoughtful among us – see it differently. Not just because so many of our people work in the business, or in businesses that heavily benefit from it. Not just because it puts roofs over our heads and food on the table. It’s also because we know that we have built our industry into one of the most significant petroleum sources in the world.
So even if you never become the huge fan of this business that I am, let me share some facts about it, and hopefully you’ll better appreciate the Alberta perspective.
If we count oil, natural gas, and liquids like propane, Alberta produces 4.6 million barrels of oil equivalent per day. That’s BOE. I want you to remember this acronym because I’m going to use it again.
Alberta produces more hydrocarbons on a barrel of oil equivalent basis or a BOE basis than any member of OPEC except Iran and Saudi Arabia. That’s right. In fact only four jurisdictions in the world produce more hydrocarbon fuel each day than Alberta: the United States, Russia, Iran and Saudi Arabia. Alberta has become a global player in a global business.
Listening to the opposition parties, you would never know Alberta has made Canada a world petroleum superpower right up there with America, the Middle East and the former Soviet Union.
You’d think we were just some dumb, duck-killing country cousin getting rich off a petroleum seep.
To federal politicians – especially eastern ones – Alberta is the punching bag of Confederation. Our stunted federal political discourse has truly deteriorated into a race for the bottom. Who can make our economy less prosperous the fastest? That’s why I say, if Canada fails it will be the politicians who killed it.
One of this month’s popular political myths, accepted uncritically by politicians and reported in the press, is that Alberta’s oil industry is “subsidized.” To most people the word subsidy means the government took a big wad of cash from their pockets and dumped it into big companies, the same way they did a few years ago with Chrysler and General Motors.
If that’s what we’re talking about, then there are no “subsidies” to oil companies. What’s really being talked about are capital cost or depreciation deductions on private sector investments. You spend billions building an oilsands plant or a heavy oil upgrader…creating wealth and jobs…and you get to deduct it from income taxes payable. That’s not a subsidy. All industries qualify for and receive this kind of tax treatment all across Canada.
The truth is our energy industry pays a lot of tax – an awful lot of tax. In 2006 – the last census year we’ve got – our oil and gas producing industry paid $4 billion to governments for exploration and development rights, $15 billion in production royalties, $6 billion in federal and provincial corporate income taxes, and $1 billion in municipal property taxes.
Then there’s the equipment and service sector all across Canada that supports this development.
Besides employing more than 800,000 Canadians directly and indirectly, oil and gas support industries paid $9 billion in corporate and payroll taxes. Then there’s taxation on consumer products. In 2006 there was $5 billion paid in federal excise taxes on gasoline and diesel fuel, $8 billion in provincial excise fuel taxes, and $2 billion in fuel GST.
So the total taxes and royalties paid on oil and gas from concept to consumer in 2006 from this so-called “subsidized” industry was at least $50 billion.
A more comprehensive study would surely reveal that no single industry in Canada pays more to governments at all levels than the oil and gas industry. What we really need is for federal politicians to spare us the “subsidy” rhetoric and leave this essential industry the economic tools it needs to continue keeping Canadians healthy, wealthy, moving and warm.
On the subject of fuel, there has been a lot of talk of alternative energy sources in the past few years, particularly those with a lower carbon footprint than petroleum and coal. It’s a good idea.
Quebec’s massive hydro-electric resources benefit everyone – environmentally, if not financially. If the world is truly running out of oil as rising prices would indicate, having energy options is essential. Cleaner and greener options are even better.
But however good they may be, they are not nearly able yet to replace hydrocarbons. A recent report by Calgary’s AltaCorp Capital compares the actual cost of natural gas, conventional oil and oilsands with the most popular alternatives such as ethanol and biodiesel for vehicles, wind power, and solar panels. It even adds a new tax of $50 a tonne on carbon dioxide to simulate environmental equivalency.
So using that barrel-of-oil equivalent again, oilsands crude costs $75 per BOE. Keep that figure in mind – $75 – as I rattle off the relative cost of using the others.
Corn-based ethanol costs consumers $130, soy-based biodiesel is $150. Onshore wind power is $160 per BOE, offshore wind power is $340, and electricity from solar panels costs about $430 – almost six times the cost of oilsands.
So you see, all the alternatives require massive subsidies to be competitive. And we’re not talking here about methods of tax-accountancy, we’re talking straight-from-the-wallet consumer and taxpayer cash.
Which brings me to my last point about oilsands and Alberta. I can’t think of any resource or industrial development in the modern world that has been so economically valuable, so responsibly developed on so massive a scale, and yet so thoroughly vilified.
Well I’m here to tell you I’m from Alberta, Albertans develop oilsands, it’s good for Canada and the world, and I’m proud of what we do. Notwithstanding that oilsands have been subjected to the most effective smear campaign in the history of the transnational environmental movement, when you balance factual negatives against factual positives, oilsands are a homerun winner for Canada.
They are good for the Canadian economy. They employ people in and from all parts of Canada. The oilsands are so vast that we need people and companies from all across Canada, including Quebec, to help us develop them. To give you an idea, one project in one year – CNRL’s Horizon project in 2008 – counted 1,334 workers from Quebec, and awarded 55 contracts to Quebec companies worth $450 million. Over the next 25 years, Alberta’s oilsands will deliver an estimated 376,000 person years of employment in Quebec, and boost Quebec’s GDP by $23.1 billion.
Oilsands are good for the environment. Billions of dollars of oilsands wealth have been reinvested in developing cheaper, cleaner, more efficient extraction methods. Mining will be used on less than 3% of the land. By law, open pit mines must be returned to their natural state, including putting back the same natural grasses, bushes, creeks and streams that were disturbed. By law, oilsands companies must get rid of their tailings ponds when they are done with them, and new technology will dramatically reduce the time needed to do this. And oilsands emissions aren’t really all that much different than emissions from conventional sources – by the time you take oil out of the ground in Saudi Arabia, ship it, pipe it, truck it, refine it, it’s practically the same. Unless you’re lucky enough to live with Avatar movie mogul James Cameron in the pristine pretend world of Pandora, what keeps your community clean is a reliable supply of cheap energy, responsibly produced.
And third, the oilsands are good for human rights. Many of the world’s oil-producing nations are politically unstable and even terrifying – Libya, Yemen, Venezuela, Iraq, Iran, Sudan.
President Barack Obama may consider turning his back on “dirty” Alberta oil. His only alternative is “bloody” oil, because when you buy oil from Africa and the Middle East, that’s what you’re paying for. Canadian oilsands do not fund international terrorism, nuclear bombs in theocratic dictatorships, and royal palaces overlooking slums. No, they fund schools, and hospitals, and economic opportunity all across Canada and they contribute substantially to international prosperity as well.
I think we should ask ourselves how our federal discourse became so disconnected from reality and so utterly irrelevant to anything that matters. Our pioneer predecessors did not build our federation and help win two world wars burdened by the kind of misguided and listless political leadership we see today. How did this happen? And how can we fix it?
I have no answer to these questions beyond this.
Stop looking to Ottawa.
This country was built by small-c conservatives on the autonomy of provincial governments and the fundamental principle that they – as stewards of their land, providers of care, and decision makers in their own right – are the masters of their own destiny.
Every time Quebeckers send a Bloc MP to Ottawa, they unwittingly and ironically cede some of that destiny to the federal government in the guise of fighting for political sovereignty. What they’ve really done is legitimized federal interference in their provincial affairs. After all, you wouldn’t send these provincially focused representatives to Ottawa if you didn’t want Ottawa’s attention on your provincial issues.
This largely theoretical argument gets real awfully quick when you have federal parties who continue to cross constitutional lines between federal and provincial jurisdiction with their election platforms.
Consider some of the promises we have seen thus far in this federal election. A national day care program. Increased health care transfers. Even a national transit strategy.
When you’ve got wannabe Prime Ministers talking like premiers and mayors – and a voting public that is apparently okay with that – we’re going to see more of the same from Ottawa – damaging public policy that compromises true reforms on important issues in the name of delicate national politics.
If Alberta and Quebec are ever going achieve what they are capable of, we have to stop viewing Ottawa as a vehicle to get us there.
That is what we are doing with the Wildrose in Alberta. So with that in mind, let me say what Alberta will do if the Wildrose Party forms our next provincial government. But first I will have to explain something that many people find hard to grasp.
The biggest cost of government in my home province is the huge difference between what Ottawa takes out in taxes and premiums and what it sends back as federal spending. We regard this as the net cost to us of Confederation. At last count it was $20 billion a year.
By comparison, even our health care system costs us only $15 billion. And for that we at least get health care. For our $20 billion annual overpayment to the federal government we get nothing, not even gratitude.
The situation is similar in Ontario. In fact it is worse, because Ontario’s manufacturing economy has been so battered by foreign competition. Ontario is in rough shape – it is even receiving a small equalization payment – yet it is still subsidizing federal programs in receiving provinces at about the same level we are in Alberta – provinces which offer levels of public services Ontario can no longer afford for itself.
The same is true in lesser degree in British Columbia and Saskatchewan.
As quickly as possible a Wildrose provincial government would seek a new association with all the net-payer provincial governments. The aim would be to propose to the recipient provinces, first and foremost Quebec, constructive ways of shifting the basis of assistance from dependency to productivity gains in all regions. For this and this alone will enable the net-recipient provinces in the long run to build their own provincial economies and keep their best and brightest at home, instead of seeing them head west for jobs in Fort McMurray.
That is the first part. Honest negotiation among provinces that deal with reality, not just political platitudes. But that is limited, because provinces have no power in Parliament, and the national parties have no interest in federal reform.
The second stage of federal reform is to develop a provincially elected Senate. Such a Senate can be developed under the existing constitution – no amendments are required, only a little political will and a spirit of constructive compromise among the provinces. It comes down to this. The Senate has the power to defeat the federal government if necessary. It has never used this awesome power because it is not elected. If it becomes an elected chamber representing provincial rights and interests, it has the power to compel fundamental reform. That is why our party will be fielding candidates to run under the Wildrose banner in our province’s next Senate election, expected next year. We look at a provincially elected Senate as a crucial step in neutralizing Ottawa’s ability to interfere in our province’s areas of jurisdiction.
There is, I know, pervasive scepticism that anything in Ottawa can ever be reformed, but negativity is a luxury Canadians can no longer afford. Pessimists never succeed. I firmly believe that if our province – or any province – finds the courage to start talking honestly to the rest about the federal problems facing this country, these problems can be solved. It’s the only way problems are ever solved.
En Francais: In conclusion, my fellow Canadians, we owe it to those who came before us, and to those who will come after, to rediscover and re-establish the virtues and institutions which gave us this wonderful land in which we live. We need to re-embrace the dignity and satisfaction of hard work, self-restraint, plain speech and national commitment. We need to revive the true spirit of federalism, and stop pitting region against region. If we start treating each other with more candour, consideration and respect, I think we will be amazed at how far we can go.
Merci.
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