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Derrick Hunter: Economic security depends on energy security. It’s time for our leaders to act like it

Commentary

We’re watching energy prices skyrocket as Russia invades Ukraine and sanctions are applied on Russian exports.

Downstream, this shows up directly in higher consumer costs at the gas station and in home heating bills. Indirectly, since energy costs are embedded in everything we consume, it manifests as widespread inflation in all the other consumables that we take for granted in modern society. For example, rising natural gas prices lead to shortages in fertilizer which in turn results in reduced crop yields and higher grain prices. Economic security depends on energy security.

Calm societies result from economic security achieved largely through stability in the price and quantity of the necessities of life. History has shown repeatedly how easily rampant inflation can bring down a government when the cost of living exceeds the ability of the citizenry to pay. The Arab Spring erupted in large part due to food price inflation“However, there was one factor unnoticed that had a global impact but affected the Middle East the most. Food Prices, more specifically the rising price of grain, says Lester Brown, president of the Earth Policy Institute.” https://medium.com/something-about-everything/food-riots-and-the-arab-spring-4886e4c3604#:~:text=Obvious%20reasons%20that%20ignited%20the,last%20and%20least%20authoritarian%20regimes. for example. “Nothing so weakens a government as inflation,” said John Kenneth Galbraith.

Modern politicians understand that periods of high inflation are toxic for political careers. Consequently, we are beginning to see surprising policy reactions to this recent round of energy inflation. California is sending cheques to car owners. Canadian premiers are debating the suspension of provincial gas taxes. Left-leaning politicians in both countries are demanding windfall profit taxes be applied to energy producers to be rebated to consumers.

But hang on a second; many of these same people who are now concerned about energy affordability are the same ones who have been putting up barriers to increasing supply and introducing carbon taxes, the whole point of which is to increase prices, thereby diminishing demand and leading us into a clean energy nirvana. It appears that for all the bloviating about the need for higher prices to curtail demand, there is an underlying concern that when the consumer must open his or her wallet a little wider to pay for something, higher prices might turn out to be a problem.“The latest Ipsos poll, conducted exclusively for Global News between Sept. 20 and 23, shows Canadians have vastly different views on what should be done to try to mitigate the impacts of climate change, and 46 per cent do not want to spend any additional money in the form of taxes or higher costs of goods.” https://globalnews.ca/news/5948758/canadians-climate-change-ipsos-poll/ That probably explains why the Canadian carbon tax has been promoted as having minimal net cost to the consumer.

The idea that energy security didn’t matter, and we could painlessly transition to renewables, or at least export our carbon footprint to parts of the world that were not pursuing net-zero was a comforting narrative when we thought we had reached the end of history.The End of History and the Last Man is a 1992 book of political philosophy by American political scientist Francis Fukuyama which argues that with the ascendancy of Western liberal democracy—which occurred after the Cold War (1945–1991) and the dissolution of the Soviet Union (1991)—humanity has reached ‘not just … the passing of a particular period of post-war history, but the end of history as such: That is, the end-point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government.'” https://en.wikipedia.org/wiki/The_End_of_History_and_the_Last_Man Now though, the world is quickly waking up from a thirty-year stupor and re-discovering that there are bad actors out there who pose a threat to our way of life. This exposes all the bad decisions we made that increased our dependence on those it turns out we cannot trust. Perhaps it wasn’t such a great idea for Germany to rely exclusively on Russia to provide it with natural gas. Perhaps it wasn’t such a great idea for Canada to rely heavily on China for pharmaceuticals and PPE in the event of a pandemic. Perhaps it wasn’t such a great idea for Joe Biden to cancel the Keystone XL pipeline so that he’d have to go begging dictators in Venezuela, Saudi Arabia, and Iran for supplies after applying sanctions on Russia.

For that matter, perhaps if Canada had built pipelines to tidewater and LNG terminals, we’d be able to help Ukraine in a tangible way, rather than merely “convening” and “rooting for the underdog”.

We are getting a hard lesson in geopolitical reality; the world remains a dangerous place and many people are at risk of starving or freezing due to the reprehensible actions of an autocratic leader. Even a quick resolution to the Ukraine conflict wouldn’t change the fact that the Western world now knows that it cannot be dependent on despots in Moscow, Beijing, or Riyadh for critical inputs that drive modern life. It will take years to build alternative supplies and re-shore supply chains but that will be necessary if we wish to ensure our economic security.

In short, it seems likely that our three-decade experiment with globalization, if not dead, is certainly unwell. If the Russian central bank can be deleted from the world financial system as easily as a Canadian trucker, who could blame any nation that fears running afoul of the United States for adopting alternative forms of financial transacting that don’t require the cooperation of Western governments? We already see this occurring in things like India arranging to purchase Russian oil in rupees, in China’s replacement system for the SWIFT system (CIPS), and in Putin’s demand to be paid for natural gas in roubles. Our adversaries are building alternatives to the Western financial system; where is our alternative to the critical commodities we source from them?

Perhaps currency isn’t really what is being printed in enormous quantities by the Federal Reserve or the Bank of Canada. Perhaps we are discovering that actual currency is oil, natural gas, wheat, uranium, fertilizer, gold, etc.; real assets that we need that cannot be printed or otherwise wished into existence but that are gladly accepted in any country.

To that end, it never made any sense for green politicians and environmentalists to advocate destroying our fossil fuel supply chain without first building its replacement. Energy transitions always take decades. Electricity from renewables can make an important contribution but need to be backed up with natural gas, coal, or nuclear energy. The cost of upgrading the North American electrical grid will run into the trillions. The quantity of minerals required to convert the world’s automobile fleet to EVs away from internal combustion will be enormous and most of the known deposits are controlled by countries we can no longer rely on. Battery technology is nowhere near ready to meet our needs. Bad things happen when reality collides with platitudes.

Sean Speer: Win for what? The cause of social mobility would resonate with voters

Commentary

At this stage in the Conservative Party’s leadership race, we’re starting to see the different candidates cohere around their respective campaign narratives. This political and policy positioning can tell us a lot about who the candidates are, what they stand for, and how they would lead the party. 

I’ve previously written about Pierre Poilievre’s gatekeepers narrative including how it might manifest itself as a public policy agenda as well as its potential political fecundity. At its core, though, the gatekeepers narrative is fundamentally values-based. It seeks to animate Conservative Party members with a diagnosis of Canada’s economy and society rooted in conservative ideas. 

The second major candidate, Jean Charest, has chosen a different approach. His overarching narrative, Built to Win, eschews a values-based appeal and instead relies on a pragmatic political case that he’s best placed to lead the party in the next general election. In simpler terms, it puts electability over ideology. 

Charest’s campaign is effectively encouraging Conservative members to set aside fundamental issues of ideology and values and instead make a political calculus about which leadership candidate can have the broadest appeal to Canadians. Implicit in this message is that Poilievre’s rougher ideological edges may turn off some swing voters and that his own moderate politics and temperament are more likely to reach them. 

There are two problems, it seems to me, with this assumption. The first is that although it’s a common view that Conservatives need to shift to the political centre to grow their support, it’s not entirely obvious that that’s the right diagnosis or solution to the party’s recent trend of electoral losses. The idea that there’s a bunch of Canadians who voted for the Liberal Party in 2019 and 2021 and remain open to the Conservative Party seems somewhat implausible. 

Perhaps it’s possible that the policy outcomes of the new parliamentary agreement with the New Democrats will be so fiscally profligate and economically damaging that they will shake loose a critical mass of the elusive “fiscally conservative yet socially liberal” voters that we always hear about. But at present there just aren’t enough Scott Brisons or Christy Clarks to sustain a new centrist version of the Conservative Party. 

There are, however, signs that one of the reasons that the party lost in the last election was the rise of the People’s Party, whose vote totals in 21 ridings were larger than the margins by which the Conservative candidates lost.“The PPC failed to win any seats in the Sept. 20 election, but gathered 5.1 per cent of the popular vote — up from 1.6 per cent in the 2019 federal election.” https://globalnews.ca/news/8212872/canada-election-conservative-vote-splitting/ This includes 12 ridings in Ontario, five in British Columbia, two in Alberta, one in Quebec, and one in Newfoundland. 

It may not be a perfect one-for-one—there’s evidence, for instance, that People’s Party voters were pulled from across the spectrum based on the politics of vaccines—but it seems clear that these political developments harmed the Conservative Party.“In short, PPC voters were not simply typical Conservative supporters leaning furthest to the right on a range of issues that include government spending, taxation, climate change and immigration. They were, on average, a unique cluster of voters who have rejected the overwhelming public consensus on the need to be vaccinated to contain the spread of COVID-19.” https://theconversation.com/who-voted-for-the-peoples-party-of-canada-anti-vaxxers-and-those-opposed-to-vaccine-mandates-171575 At a minimum, it suggests that Poilievre’s message of freedom may be more politically salient than a message of mere moderation. 

But, in any case, this question about how to grow the Conservative Party’s general election support isn’t the main problem with Charest’s narrative. That is the presumption that Conservative Party members are going to be responsive to a value-neutral message about electability. 

It’s far from obvious that such a transactional message will resonate with Conservatives who, if the party’s three previous leadership races are dispositive, will want to support a candidate who shares their values and priorities. The risk, therefore, is that the idea of Built to Win leaves many Conservatives feeling unsatisfied and unmotivated. 

Charest’s electability message needs to be matched with a political narrative rooted in conservative ideas. He needs his own alternative to Poilievre’s gatekeepers message if he’s going to connect with Conservative Party members. 

It can’t be manufactured or made up. A candidate needs to be personally committed to his or her campaign narrative or it’s bound to fall apart. Conservative members in particular, and Canadians in general, can discern insincerity. 

The good news for Charest is that his campaign launch speech may have presented a path forward. In those remarks, he argued that those of us who are born in Canada or came here through immigration have effectively won the lottery. The basic idea is that the country is home to a set of ideas and institutions that enable people to live out their values and aspirations with a reasonable shot at success however one defines it. 

Charest’s underlying point is that those foundational conditions that make Canada the equivalent of a winning lottery ticket need to be protected, sustained, and strengthened. Yet they have eroded over time due to various factors including the Trudeau government’s inattention to economic growth and dynamism. 

This narrative resonates with me as someone who has deeply benefited from the culture of intergenerational mobility and spirit of egalitarianism within Canadian society. I happen to think that it’s a powerful message that’s well rooted in conservative ideas and the conservative worldview. I’ve previously made the case, for instance, that Conservatives should prioritize intergenerational mobility as the basis of a “cause-driven conservatism.”

There’s evidence that such policy attention is increasingly needed. Although Canada’s record on social mobility is generally positive—we’re regularly in the upper tier of OECD countries—the mobility picture differs among places and groups, and there’s even new evidence that overall social mobility is declining.“Canadians born into high-income families tend to grow into high-income adults, and those born into low-income families tend to remain low income, Statistics Canada says. Middle-class Canadians have the greatest economic mobility.” https://www.advisor.ca/news/economic/statistics-canada-finds-less-income-mobility-across-generations/ People are sensing it too. Polling tells us that more than six in 10 Canadians are pessimistic about the future of the next generation. A 2017 survey showed that nearly 70 percent anticipate that today’s children will be worse off than their parents.

This feeling that middle-class progress has stalled is, according to Ipsos Public Affairs CEO Darrell Bricker, driving a lot of the frustration that we’re seeing expressed in our politics.Ontario 360 Transition Briefings 2022: The Issues That Will Drive The Next Ontario Election It manifests itself in thwarted aspirations about homeownership, growing concerns about job precarity and financial instability, and just a general sense that the Canadian equivalent of the “American Dream” is being lost. The Canadian lottery ticket, in other words, doesn’t come with the same odds as it used to. 

There’s a huge opportunity therefore to organize a policy narrative and accompanying policy agenda around the idea of boosting social mobility and renewing middle-class progress. As a matter of public policy, it would necessarily manifest itself across a wide number of policy areas including the economy, child care and other family policies, housing, education, criminal justice, immigration, mental health and addiction, and so forth. It could, in other words, knit together a set of seemingly disparate policies in the pursuit of an overarching cause that itself is a values-based expression. 

In terms of an overarching narrative, the idea of strengthening the Canadian lottery ticket and in turn renewing middle-class progress could appeal to Conservatives, particularly to the extent that it emphasizes an amalgam of economic freedom and a pro-family vision. It would also resonate, however, with the suburban swing voters who Bricker points out are increasingly pessimistic about their own futures and the futures of their children. 

The key point here though is that Built to Win is a necessary yet insufficient narrative. It fails the basic “why” question: Win for what? The cause of social mobility should be Charest’s answer.