Canada and the winds of change

I am a frequent guest commentator on China Central Television (CCTV) News Dialogue, China’s leading English language newsmagazine program. Started in 1994, it now reaches 80 million subscribers from around the world.

So why the big name drop?

I was recently asked to be a guest on a show discussing Canadian Prime Minister Stephen Harper’s visit to China.

The issue came up as to why a prime minister who declared in 2006, in a direct reference to China and human rights issues, “I think Canadians want us to promote our trade relations worldwide, and we do that, but I don’t think Canadians want us to sell out important Canadian values” was now in 2012 on a trade mission to sell Canadian oil derived from tar sands to China.

My answer was: What a difference the year 2007 plus five more years make.

As we have been stuck in the economic doldrums, Canada has weathered the financial crisis better than most countries.

With oil reserves that put them at No. 3 in the world, worth tens of trillions of dollars, and new technologies which are bringing down the environmental and economic cost of extracting it, Canada sees its chance to become an energy superpower.

Canada has largely been on the sidelines as other resource rich countries have cashed in. Watching Russia, Brazil, South Africa and Australia diversify their markets has definitely pointed to a new economic development model and one which countries like China are eager and able to fund.

So, here’s the rub. The United States has joked about and taken Canada for granted for years. We have always assumed that its smaller population, two-lane highways, semi-socialist government and lack of capital would keep it, if not subservient to us, at least in our shadow.

Oil sands or tar sands, depending on which side of the table you are sitting on, are either the dirtiest way to continue our energy addition or a safe and prudent way of maintaining our vital economic and security interests.

Rather than debate the merits, let’s focus on why Canada is moving quickly:

1. They want to establish infrastructure to process and create destinations for their oil.
2. They need to avoid the environmental lobby which has targeted “tar sands” as an evil and unnecessary competitor to renewable energy.
3. They want to break their dependence on the U.S. market, which currently soaks up 97 percent of their energy exports.
4. They have the perfect excuse, due to the failure to pass the Keystone XL pipeline project. Never mind that passage of the bill is favored generally by both sides and is just being used as a political hot potato, it gave Prime Minister Harper carte blanche to pack his bags and begin his courtship of a willing China.

Harper’s government is also no longer as political naive as they were in 2006, when they tried and failed to get a meeting with Hu Jintao.

It was a hardly surprising snub given his government had been making favorable noises about Taiwan, having meetings with the Dalai Lama, sounding off on Chinese civil rights and allowing parliamentary assistants to made a point of being filmed interviewing dissidents while they were in China.

This time around, they have allowed the extradition of Zeng Hanlin and Lai Changxing, two of China’s most wanted fugitives, and put in place an able advance team, led by an Asian Canadian from Alberta, Gary G. Mar. Gary is a well-spoken former provincial senator and cabinet member who when asked on air why Canada was courting China, replied, “The only thing better than one good customer is two good customers.”

Is Harper selling “important Canadian values” to make Canada an energy superpower, or is he taking necessary and prudent action to ensure Canada seizes an opportunity before it is lost? You decide.

So, what does this have to do with Wisconsin? Canada is our largest trade partner, but the days of taking this for granted may be numbered. The days when the United States dominated the world’s manufacturing are dwindling. The realization that resource-rich countries like Russia, Brazil, S. Africa, Australia and Canada can and will export their resources directly to manufacturing powerhouses like China and India, and bypass the U.S. and EU spells trouble for our economic status quo.

For a long time we have depended on being the lynchpins of added value, importing raw materials, processing them into products and controlling world markets, but the new economic order is bringing new competition into play. This will have political as well as economic consequences. So, as you look into your crystal ball to determine where you need to be, look carefully at your assumptions. As always, change is opportunity, so the silver lining will be there for those who look.