The Post-Staples State:
The Political Economy of Canada’s Primary Industries
Edited By
Michael Howlett
Department of Political Science
Simon Fraser University
Burnaby BC
Canada
Keith Brownsey
Department of Public Policy
Mount Royal College
Calgary, Alberta
Canada
Submitted to UBC Press
November 15, 2005
Table of Contents
Table of Contents......
Table of Figures......
Table of Tables......
Acknowledgements......
Part I – Introduction......
Chapter 1 – Introduction – Michael Howlett (SFU) and Keith Brownsey (Mt. Royal College)
Overview: Staples and Post-Staples Political Economy......
Staples Theory......
The Historical Foundations......
Debates in the 1970s and 1980s......
Contemporary Staples Theory......
Organization of the Book......
References......
Part 2 – Consumption Industries: Agriculture and the Fisheries......
Chapter II: “The Two Faces of Canadian Agriculture in a Post-Staples Economy” – Grace Skogstad (Toronto)
Introduction......
Agriculture as a Dominant Staple: late 19th century – 1930......
Depression and War and the National Interest: 1930-1945......
State Intervention and Restructuring in the Post-war Period......
State Retrenchment, Regionalisation, and Globalization in the 1980s and 1990s....
Regional Market Integration and Dependence......
Integration into the Multilateral Trading Regime......
Redefining State Fiscal Obligations......
The Political Organization of the Agri-Food Sector and State-Sector Relations.....
The Structural Inferiority of Staples Producers in a Mature Staples Sector......
Conclusion......
References......
Chapter III: “The New Agriculture: Genetically-Engineered Food in Canada” – Elizabeth Moore (Agriculture and Agri-food Canada)
Introduction......
The first wave of GE food policy: a mature staples context......
Jumping on the bandwagon: investment in GE food technology......
Regulation as a tool for promotion and protection......
The second wave of GE food policy: post-staple pressures and responses......
The road ahead for GE food policy in Canada......
References......
Chapter IV - The Relationship between the Staples State and International Trade As Pertains to the Canadian Fisheries Industry - Gunhild Hoogensen
Introduction:
Trade policy, Staples, and the fisheries
Subsidies
Trade Agreements......
The role of the trade agreements and WTO – good, bad, and does it matter?......
Conclusion:
References......
Chapter V: "Caught in a Staples Vise: The Political Economy of Canadian Aquaculture” - Jeremy Rayner (Malaspina) and Michael Howlett (SFU)
Introduction:......
(Overly) Optimistic Expansion in the 1980s and 1990s......
Emerging Problems with Aquacultural Development......
A Post-Staples Policy Process?......
Aquaculture as a Problematic Post-Staples Industry......
The Finfish Sector......
The Shellfish Sector......
The Existing Canadian Aquaculture Regulatory Framework......
The Federal Situation......
Provincial Developments......
Conclusion......
References......
Part 3 – Extraction Industries: Minerals and Forests
Chapter VI: Shifting Foundations: a Political History of Canadian Mineral Policy - Mary Louise McAllister,
Promising Prospects: Staples and the nascent mineral industry
Embedded Interests: Establishing the Staples Economy......
Shifting Ground: Competing Interests......
Competitive Pressures on the Resource Industry:
Access to Land Issues......
Adverse Environmental and Social Impacts of Mining
The Decline of the Resource Community......
Uncertain Territory: Complex Environments......
Emerging Conceptual Perspectives......
Rising to the Challenge? Responses to Change
Seismic Shifts or Minor Tremors in the Status Quo?......
Conclusions: New Frontiers......
Chapter VII: “Complexity, Governance and Canada's Diamond Mines” – Patricia J Fitzpatrick (Waterloo)
Complexity, Governance and Canada's Diamond Mines......
The Northwest Territories Policy Community......
Aboriginal organizations......
Territorial Government......
Non-Governmental Organizations......
Proponents......
Summary
Diamond Development in the North......
West Kitikmeot Slave Society......
Community Capacity and Public Participation in the BHP Review Process......
The Implications of Superadded Agreement......
BHP Independent Environmental Monitoring Agency......
The Diavik Diamonds (DDMI) Project: Comprehensive Study......
West Kitikmeot Slave Society Revisited......
Community Capacity and Public Participation in DDMI EA......
Superadded Agreements: New Players......
Advisory Board......
Cumulative Effects Assessment and Management Strategy......
Other Diamond Developments in the North......
Cross Scale Institutional Linkages......
Conclusion......
References......
Tables......
Chapter VIII Knotty Tales: Exploring Canadian Forest Policy Narratives - Jocelyn Thorpe and L. Anders Sandberg,
Introduction......
The Staples to Post-Staples Narrative......
Questioning the Staples to Post-Staples Transition......
The Softwood Lumber Dispute......
Forests as Carbon Sinks......
Parks Versus Staples?......
Summary
Staples By and For More People......
Summary
Beyond the Staples to Post-Staples Transition......
Summary and Policy Implications
Conclusion......
References......
Chapter IX: “The Post-state Staples Economy: The Impact of Forest Certification as a NSMD (NSMD) Governance System” – Benjamin Cashore (Yale), Graeme Auld, James Lawson, and Deanna Newsom
Introduction......
Emergence of Forest Certification and its Two Conceptions of Non-State Governance
Two Conceptions of Forest Certification......
Key Features of NSMD Environmental Governance......
Emergence and Support for Forest Certification in Canada......
British Columbia......
Standards-setting process......
U-turn......
Canadian Maritimes......
Development of the Standards......
Conclusions: Non-state Governance......
Part 4 – Transmission Industries: Oil & Gas and Water
Chapter X: The New Oil Order: The Post Staples Paradigm and the Canadian Upstream Oil and Gas Industry - Keith Brownsey (Mount Royal College)
1. Introduction:......
The Canadian Oilpatch......
A History of the Canadian Oil and Gas Industry......
The Colonial Period......
The Era of Multinational Domination......
The Nationalization of Oil and Gas......
The Era of Benign Neglect......
The New NEP and Kyoto......
Conclusions......
References......
Chapter XI: "Offshore Petroleum Politics: A Changing Frontier in a Global System" - Peter Clancy, (SFX)
Offshore Petroleum as a Distinct Political Economy......
Spatial and Temporal Dimensions
Offshore Petro-Capital as a Political Factor
Technology as a Political Variable
Science, Knowledge Domains and Epistemes
Federalism and the Offshore Domain......
State Strength and Capacities......
Offshore Petroleum Regulation in the New Millennium......
Conclusions......
References......
Chapter XII Between Old “Provincial Hydros” and Neoliberal Regional Energy Regimes: Electricity Energy Policy Studies in Canada – Alex Netherton
Regulatory State / Urban Modernization & Resource Industrialization......
Keynesian Welfare-State / ‘Permeable’ Fordism, 1946-1987
Provincial State Ownership, Mega-projects and Network Reorganization......
New Interests and Structural Pressures for Change......
Neoliberal-Sustainable / Regionalization......
Drivers of Paradigm Change
Federalism and Electricity Grids: Interprovincial and Regional......
Canada-United States Policy Integration as a Policy Driver: Conservation and Trade Regimes
The Emerging Supra National Power of FERC......
Conclusions......
Electrical Energy Policy: A Research Agenda......
References
Chapter XIII: "From Black Gold to Blue Gold: Lessons from an Altered Petroleum Trade Regime for An Emerging Water Trade Regime" - John N. McDougall, (UWO )
The Cost of Bulk-Water Transmission......
The Emerging Trade Regime Affecting Oil, Gas and Water Exports......
Free Trade Agreements and Water Exports and Investments......
Conclusion: The Effects of Free Trade Agreements on National Resource Policies..
References......
Part 5 – Conclusion: Toward a Post-Staples State?
Chapter XIV - Contours of the Post-Staples State: The Reconstruction of Political Economy and Social Identity in 21st Century Canada - Thomas A. Hutton
Introduction: the post-staples hypothesis in context......
New dynamics of regional divergence in the post-staples state......
Conclusion: normative dimensions of the post-staples state......
References......
Chapter XV - The Dynamic (Post) Staples State: Responding to Challenges—Old and new - Adam Wellstead
Introduction......
Contemporary Staples Economies......
Defining the Staples State......
Minimalist State......
Emergent State and New Industrialism: The Staples State’s Golden Era......
KWS Legacy and Crisis: Wither the Staples State?
Competitive State: A Reconsideration of the Staples State
Governance......
Anthropology of the state and neo-pluralism......
Policy Communities and Networks: Drivers of Richardian (Staples) Competitive States
Conclusion......
References
ENDNOTES......
Table of Figures
Figure 1. Policy Instruments, by Principal Governing Resource......
Figure 1 – Certfied Forest Land......
Sources......
Figure 1 - Offshore Petroleum Management Issue Areas and Instruments......
Table 5. Policy Process Focus of the Volume’s Chapters
Table of Tables
Table 1. Canadians Living on Farms
Table 2. Changes in Canadian Farm Structure, Selected Years
Table 1: Modern land claims agreements settled in Northwest Territories and Nunavut..
Table 2: Northern and Aboriginal Employment Targets (as identified in the Socio-Economic Agreement) and Actuals at Ekatitm .
Table 3: Local Business Supply Targets at Ekatitm (as identified in the Socio-Economic Agreement).
Table 4: Northern and Aboriginal Employment Targets (as identified in the Socio-Economic Agreement) and Actuals at DDMI .
Table 5: Local Business Supply Targets at DDMI (as identified in the Socio-Economic Agreement.
Table 6: Capacity of the Institutions affecting diamond development in the north......
Table. 1.2, Conceptions of forest sector NSMD certification governance systems......
Table 2: Comparison of FSC and FSC competitor programs in Canada......
Table 3: Key Features of NSMD governance......
Table 1. Economic indicators for Canada’s natural resource sectors......
Table 2.The role of resources in provincial exports: 1997-2001 averages
Table 3 Evolution of the staples state
Table 4. Modes of Coordination within Competitive Capitalist States
Acknowledgements
1
Part I – Introduction
Chapter 1 – Introduction – Michael Howlett (SFU) and Keith Brownsey (Mt. Royal College)
For generations provinces like British Columbia and Quebec were known for their forestry resources, while others like Prince Edward Island, Saskatchewan and Manitoba were known for their farms. Ontario mining was legendary, as were the oil and gas wells of Alberta and the fisheries of Newfoundland, New Brunswick and Nova Scotia. It was common wisdom that fifty cents of every dollar in British Columbia came from the forestry industry and that aawmills, pulp and paper, and shingle mills and other related industry employed hundreds of thousands of people in cutting, hauling, and producing various wood products. Those days are gone. The Douglas Fir no longer reigns in British Columbia’s economy but rather, eco-tourism, film and television production, aquaculture and other industries have taken a strong if not leading role in the province’s economy.[1] While still important to British Columbia’s economy, as with most other provinces, the original ‘staples’ resource industries of farming, fishing, mining and forestry have given way to service and other types of business. The wheat economy of the prairies has diversified into various agricultural products from canola seed to cattle as well as undergone a process of consolidated into large agribusiness. On the east and west coasts, the Atlantic cod fisheries have vanished and the Pacific salmon stocks have dwindled. Even in the energy sector a hegemony of high valued goods has emerged. The staples of hydroelectricity and crude oil and natural gas have been transformed by environmental regulation, decreasing conventional reserves of liquid hydrocarbons, conflict over land use, new technology, and scarcity of supply. As well, there is a security premium on oil and gas reserves that adds to the final production and consumption cost.
No longer tied to the original staples industries, Canada has become an advanced industrial economy but one which remains different from the typical model of advanced manufacturing and services found in Europe, the US and Japan. The new base of the Canadian economy retains its origins in early staples industries with many new activities grafted onto those traditional sector. This transformation of the old staples political economy has ushered in some elements of a new political and social order at the same time that it as exacerbated or worsened many elements of the old. Over the last several decades the transformation of significant components of Canada’s staples economy has led to demands for many institutional, legal and political reforms which would better represent the Canada’s new globalized and regionalized configuration of business and social life.
Changes in the staples economy are illustrated by the rise of social movements, urbanization and an increasingly disconnected regional politics. They are also a product of the globalization and regionalization of markets. All together, the transformation of the staples economy has been attributed to such factors as industrialization and urbanization, resources depletion, increasing competition from low cost producers, immigration from non-European countries, the regionalization of markets and industrial restructuring as well as the rising importance of social movements and knowledge elites. Simply put, the traditional staples industries within Canada have been affected by a variety of factors which together have transformed the Canadian political economy.
The contributors to this volume provide an overview of the changes in Canada’s political economy. Each tries to answer a series of questions. First, what was the traditional staples economy? Second, how were the various staples industries organized within the centre-periphery model? What was the political impact of the staples model of development? What factors led to change within a particular industry? How did a post-staples economy evolve? How does it differ from a staples economy? And what are the political consequences of the post-staples society? The different contributors examine industries as varied as diamond mining in the Northwest Territories and aquaculture off the coast of British Columbia. Yet, within the wide parameters of the post-staples paradigm there is a congruence of events and processes which can be identified as a new model of economic and political development which is dramatically different from its predecessor and which has altered domestic social relations.
Overview: Staples and Post-Staples Political Economy
A staple refers to a raw, or unfinished bulk commodity product which is sold in export markets. Timber, fish and minerals are staples, usually extracted and sold in external markets without significant amounts of processing.[2] The significance of having an economy based on exporting unfinished bulk goods lies with how it affects policy-making in specific resource sectors by creating continuing issues with resource technologies, profits, rents, location and availability,[3] how it affects policy-making in related areas such as the environment[4] or transportation infrastructure,[5] and also how it affects policy in less directly affect areas such as welfare, health and social policy.
As the Toronto School of staples theorists noted, many consequences for government and society flow from having an economy based on exports of such unfinished bulk goods. Their significance lies not only in how they affect resource policy-making by creating continuing issues with resource location and availability, provide only a limited need for education and technical skills in frontier resource communities, entrench a system of metropolitan-hinterland links in both economy and culture, but also in how populations, governments and industries in staples-dependent areas react to their continued vulnerability to international market conditions. As Naylor and others have shown, the development of a staple-based economy, for example, triggers government and private sector investments in large-scale infrastructure activities such as transportation and communications facilities required to co-ordinate the extraction and shipment of bulk commodities to markets in distant lands designed, as well as provisions of export subsidies and credits designed to facilitate trade and the distortion of the banking and financial system away from consumer and small business credit to a concentration on large industrial loans and profits. [6]
The fact that staples reliant countries have tended to focus on markets in foreign lands is significant, in itself. As most staples-based countries have a monopoly or near-monopoly on the production of only a very few resources or agricultural goods, producers must sell at prices set by international conditions of supply and demand. While international demand for most resources—outside of wartime—has increased at a relatively steady but low rate, world supplies of particular primary products are highly variable. A good harvest, or the discovery of significant new reserves of minerals or oil, or the addition of new production capacity in the fishery or forest products sectors can quickly add to world supplies and drive down world prices until demand slowly catches up and surpasses supplies, resulting in sudden price increases triggering a new investment cycle and subsequent downturn.[7] As Cameron has noted, these fluctuations in international supplies account for the “boom and bust” cycles prevalent in most resource industries and, by implication, most resource-based economies, and lead affected populations to press governments to provide a range of social, unemployment and other types of insurance schemes as well as make large-scale public expenditures in areas of job creation and employment.[8]
While most observers would agree that historically Canada can be characterized as a staples economy and that this has had a significant impact on the evolution of Canada's resource regimes and practices, as the discussion in other chapters of this book show, there is considerable disagreement over whether this depiction continues to characterize the overall Canadian economy and whether and to what extent it will continue to do so in future years.[9]
Staples Theory
The Staples approach was developed primarily by Canadian economists and historians whose works are rooted firmly in the historical examination of the development of the Canadian economy. They describe the effects of this development on Canadian social and political life. The school derives its name from the emphasis on staples industries, which, following Gordon Bertram, are defined as those industries ‘based on agriculture and extractive resources, not requiring elaborate processing and finding a large portion of their market in international trade’ (1967, p. 75). Staples theorists view Canadian political economy as having been shaped by the export of successive staples over the course of Canadian history from the earliest colonial times to the modern era.
Following Gordon Laxer, we can identify four main ‘analytical assumptions of the staples school’ (Laxer, 1989b, pp. 180-181). First, staples theorists believe that the key to understanding Canadian history is to discover the export commodity that the economy depends on. They argue that the Canadian state and Canadian capital devote themselves singlemindedly to discovering and extracting bulk resource commodities or staples that have a ready export market. The money thus derived is used to pay wages to Canadian workers and finance imports of goods demanded by Canadian consumers. Canadian economic growth, then, is intimately linked to the demand for staples in the industrialized nations, and this demand has shaped economic development in Canada: any shift in demand for the staple in question, while inconsequential for the importing country, has a pervasive impact on the local economy, which is dependent on its export. An example is the fading away for the fashion in beaver-felt hats in Europe, which had a serious, debilitating effect on the early nineteenth-century Canadian economy, which was almost completely dependent on the export of furs (Innis, 1956).