**CANADA**
2NC- Quebec Secession
High demand is critical to the Canadian Economy
Kremmidas 11 – Chief Economist at the Canadian Chamber of Commerce (Tina, “The Impact of Oil Prices on the Canadian Economy,” June 2011, The Canadian Chamber of Commerce,
Conversely, if higher oil prices are a reflection of robust global economic activity that boosts demand for oil,Canada benefits as foreign demand for Canadian goods and services rises. When the increase in prices is caused by higher world demand, the net effect on Canada’s real GDP is positive. Despite recent supply disruptions stemming from geopolitical unrest, the Bank of Canada has come to the conclusion that a large, sustained increase in demand stemming from rapid growth in emerging market economies has been the primary driver of the most recent boom in commodity prices. However, only 10 per cent of Canada’s exports go to emerging market economies, and Canada exports very little in the way of non-commodity items to these nations. Thus, Canada’s economy is not likely to benefit as much as it has in past oil-price booms that were driven mainly by U.S. growth.
A hurting Canada economy will cause Quebec secession
Nuechterlein99- A political scientist and writer who resides near Charlottesville, Virginia. He is the author of numerous books on American politics and foreign policy. (Donald, CANADA DEBATES A VARIETY OF DOMESTIC ISSUES, September 1999
The fourth news story, which did not get quite the attention of the other three, reported that the federal government, headed by Prime Minister Jean Chretien, plans to stake out its position regarding a new referendum that Quebec will probably hold on independence sometime in , 2000. Chretien seems determined to lay down two bench marks for this referendum: What should be the wording of a proposal given to Quebec voters as they make a choice between continued association with Canada, or independence? And what result should constitute a clear mandate for separation from Canada? A year ago the supreme court decided that the federal government and the other provinces will be obliged to negotiate with Quebec, if there is a clear answer to a clear question stated in a referendum. Chretien has now set up a working group of federal officials to plan Ottawas strategy around these issues. He hopes that Quebeckers will reject a clear question about pulling out of the Canadian Confederation. Our visit to Nova Scotia and New Brunswick provided insight into the reactions of Canada's French-speaking population living outside of Quebec. The Acadians of Nova Scotia, who were expelled by the British (ethnic cleansing) two and a half centuries ago because of Britains renewed war with France, live in relative harmony with their English-speaking neighbors there, and in New Brunswick where they number nearly forty percent of the population. I engaged one Acadian fishermen in conversation, in English, and he seemed firm on the separation issue:: "We don't agree with the Quebecois. If they want to leave Canada, let them go. We like it better this way." His colleagues nodded in agreement. As an American who has visited Canada many times over thirty years and studied the rise of Quebec nationalism, I find it difficult to suggest an outcome of the next round in the national unity debate. Current opinion polls in Quebec show that pro-independence forces are somewhat below the 50 percent margin that would trigger formal negotiations with the rest of Canada on the terms of separation. The current premier, Lucien Bouchard, is a crafty nationalist who will not put the question to another referendum unless he is convinced it will obtain a majority vote. My guess is that if Bouchard has doubts about reaching at least 50 percent in favor of independence, he will first call a provincial election and hope to increase the majority of his Parti Quebecois. That would give him more confidence about winning a referendum. An important factor influencing many Quebeckers will be their degree of satisfaction with the Canadian economy. At present, prosperity reigns in most parts of the country and many Quebec voters may worry that their province will suffer economically if it separates.Canada enters the 21st century with a strong economy and a central government in firm control of parliament. That government will use all its influence to dampen pro-independence sentiment in Quebec, and we should know in , 2000 if it or Quebec nationalists are in the ascendancy.
Causes U.S. –Russia Nuclear War
New World Order Intelligence 96 (May, 1996,
Lamont's forecasts, based upon all of this input?Canada will disintegrate shortly after Quebec separates via a Unilateral Declaration of Independence[Bouchard threatened to do this on April 28th, 1996]. Quebec will become a socialist, somewhat aberrant and unpredictable state which will ultimately be refused entry to NAFTA by the US and Canada. The Canadian provinces will seize more and more power from a weakened Federal government, become individual or regional "mini-states" themselves , and turn their eyes southward. BC and Alberta will withdraw into "Cascadia", a union of those two provinces with California, Oregon, Washington State, Idaho and Alaska, forming a bloc with the ninth-largest economy in the world. BC and Alberta will apply for admission into the US, and be accepted immediately.Manitoba will hook up with Minnesota around a Red River union. Saskatchewan will join with Montana, Colorado, and Wyoming in the Rocky Mountain Corridor. Manitoba and Saskatchewan would be given associate status with the US, depending - among other things - on how cooperative they are in facilitating the export of Canadian water to the United States. Ontario would sink into the embrace of the US Great Lakes states.Canada's Atlantic Provinces would form an "association" with New England.The US federal government, Lamont asserts,will not be "happy" with this turn of events - it will complicate security and defense arrangements , multiply the difficulties in observing and fulfilling a wide range of current bi-lateral agreements and treaties , etc. But it will be "persuaded" by the addition of vast water resources, wood, immense mineral troves, multi-billion barrel oil and tar-sand reserves, etc, to America's economic base and strategic reserves. The Russians, who have always regarded Canada as a less-belligerent "buffer" across the Arctic between the U.S. and themselves become increasingly resentful of Canada's absorbtion into a Continental Union. The hardline communist/nationalist faction having triumphed in Moscow, they begin armed "probing" flights across the Arctic divide in an attempt to test out the effectiveness of the NORAD radar early-warning system after Quebec's separation and Canada's slow collapse . Feeling even more threatened by the growing American colossus, the Russians become even more aggressive and "trigger happy". The same treaties that reduced US/USSR missile forces permitted the Russians to increase their terrain-hugging bomber-launched cruise-missile stockpiles, and they take full advantage of this . Canada, the "international diplomatic buffer", has ceased to exist.
Quebec Secession Ext.
The question of Canada’s economy is the question of Quebec’s secession
Dion 96 –Member of Parliament for the riding of Saint-Laurent–Cartierville in Montreal since 1996 (Stephane, Notes for an address on the Economy and National Unity to the Members of the Business Council on National Issues, March 26,
In light of the result of the Quebec referendum on October 30, I am sure you will all agree that the possibility of Canada's breaking up must be taken very seriously. As I said in my visit to Vancouver on March 2, our country is in danger. The possibility of separation has never been as real. Many people would like Canada's situation to be comparable to that of other countries, which are focussing exclusively on deficit reduction and job creation, which our government has indeed been dealing with very well since 1993. We cannot stick our heads in the sand, however. We cannot ignore that we are the only stable democracy facing the danger of secession. Secession is a grave decision, and it is so rare under normal circumstances that it has never happened in established democracies that have had at least ten consecutive years of universal suffrage. The constitutional debate is beginning to weigh heavily on the mood of Canadians. Some are saying openly that they are tired, that they've had enough. Others have simply resigned themselves, and have the impression that Quebec's secession may be inevitable. The link between the economic situation and the danger of secession is obvious. Talking about the Canadian economy also means talking about the danger of secession. You are living with the consequences of that. For people who do business in Montreal, you know that you would have to be blind not to see the negative consequences. Even Mr Bouchard had to acknowledge that in an interview with LE POINT on Thursday. In his own words, "... I won't deny that there may be some foreign investors who are saying ‘well, let's wait until things are settled between Montreal and Quebec City before going to Montreal.' (Radio-Canada, LE POINT, Thursday, March 21, 1996) In response to the urgent call by the business community, he has had to acknowledge that there is indeed a link between political uncertainty and economic instability.
U.S. Key
Canada is dependent on U.S. oil consumption
Shufelt 12 - National Post Staff Writer (Tim, “Crude Awakening; Canadian Energy Producers Will Have To Step Up Their Game If The U.S. Becomes Self-Sufficient In Meeting Its Needs,” National Post's Financial Post & FP Investing (Canada), June 19, 2012, Lexis)#SPS
The great divide between the capacity of the United States to produce oil and its ability to consume it has, for decades, dominated the global oil trade. This oil deficit has created the world's largest national market for foreign crude, which has happily allowed energy exporting powers to find a dependable source of riches in Americans' thirst for oil. The viability of the Canadian oil sands, for one, is predicated on exploiting that shortfall. But as the U.S. increasingly produces more oil while using less of it, the global energy market is reshaping, reversing established trends on both the production and consumption sides of the U.S. oil industry. Entrenched trade relationships are changing and oil-producing countries such asCanadaneed to rethink their dependency on U.S. consumption. "The U.S. has become the fastest growing oil and natural gas producing area of the world," noted a recent report by Citibank analysts, who predicted North America will become "the new Middle East by the next decade." By applying to shale oil properties the same hydraulic fracturing techniques that recast the North American natural gas industry, once dwindling U.S. crude supplies are now increasing. Today, so-called tight crude, primarily produced from the Bakken shale property in North Dakota and the Eagle Ford formation in Texas, is filling pipelines and flooding refineries.
Low Oil Prices Bad
Oil Prices are key to Canada’s economy- decline drives up the defecit
CBC News 12- Canada Broadcasting Company (N.L. warns plummeting oil price may drive up deficit, Jun 19, 2012,
Newfoundland and Labrador Premier Kathy Dunderdale is warning further belt tightening may be necessary if the price of oil continues to drop much lower than the government forecast in its budget preparations. "We are watching very carefully, and our deficit may end up at the end of the year larger than we forecasted .… We are keeping a very tight grip on the purse strings at the moment in terms of sanctioning spending that we announced in the budget,” Dunderdale said at a Newfoundland and Labrador Oil and Gas Industries Association (NOIA) conference in St. John’s Tuesday. "It’s early on, and I hope we are going to recover, but we will have to wait and see. [The price of oil] is trending down, and there is no prediction that it is going to go up anytime soon." Brent Crude was trading around $95.82 per barrel on Tuesday morning, far below the average price of $124.12 that the government set as the annual average for its budget. Dunderdale said one third of the province’s revenue is derived directly from the petroleum sector. She said the industry provides direct employment for more than 3,000 people but indirectly employs for thousands more.
Higher oil prices feed a strong Canadian dollar
WSJ 7-3 (July 3, 2012, Canadian Dollar Trades At 6-Week Highs As Oil, Stocks Gain,
TORONTO--Strong gains in oil prices and equity markets gave a boost to the Canadian dollar Tuesday, helping the loonie outperform its G10 currency peers and trade at six-week highs. The U.S. dollar was down about 0.45%, at C$1.0124 late Tuesday, a low not seen since May 17. It was at C$1.0172 late Monday, according to data provider CQG. The loonie's rally was "surprising," given the recent round of weaker data from Canada's major trading partner, the U.S., said Win Thin, senior currency strategist at Brown Brothers Harriman in New York. Poor U.S. data typically hits the Canadian dollar and the Mexican peso the hardest. But crude prices gained sharply, as tensions escalated over Iran and as investors speculated that the recent batch of weaker economic indicators might trigger a fresh round of demand-enhancing economic stimulus.Light sweet-crude futures on the New York Mercantile Exchange climbed more than 4.4% on the day. Equities were also stronger, with the Dow Jones Industrial Average gaining 0.5% on the day and the S&P 500 gaining 0.6%. Stocks closed early on Wall Street, ahead of the July 4 holiday. The Toronto Stock Exchange was solidly higher in late-afternoon trade, up about 2.5%. "We have taken a pause from all of the negative sentiment," said CIBC's Mr. Mikolich. "For now I think people are trying to bask in the absence of any new disasters." These are the exchange rates at 3:55 p.m. EDT (1955 GMT) and 8 a.m. EDT (1200 GMT) Tuesday, and late Monday.
Low oil prices kill Canada’s oil sector, which is key to the overall economy
TERTZAKIAN 12 - economist, investment strategist, author and public speaker. He is Chief Energy Economist & Managing Director at ARC Financial Corporation, an energy-focused private equity firm. (PETER, “Lower oil prices will crimp industry spending,” The Globe and Mail, Jun. 12 2012,
A billion dollars every week. That’s the rate at which the oil and gas industry invests capital into Canada. Other than 2009 – the depths of the financial crisis – that pace of injecting money into the economy has been fairly steady since 2006. However, leading indicators suggest that corporate wallets are getting leaner. Spending is likely to slow down in the second half of this year, contributing to a year-over-year decrease of about 15 per cent. Commodity price weakness is the biggest factor contributing to the slowdown. Natural gas prices are at their lowest level in over a decade. Per barrel, North American crude oil prices have lost $15 of their lustre in the past month. Discounted Canadian oil prices relative to U.S. markets are further eroding revenue and cash flow. And it’s cash flow that matters, because producers typically reinvest every dollar of what they realize back into the ground. Right now the industry’s fortunes are particularly sensitive to variations in oil price. In Canada, the combined sale of conventional oil plus oil sands now represents 90 per cent of the revenue mix. The remaining 10 per cent is natural gas, which has been marginalized by low price and declining production. The dollars are big on 3.7 million barrels a day of Canadian oil production (all grades). Every $10 (U.S.) per barrel drop in the benchmark price of West Texas Intermediate (WTI) oil trickles down into a loss of about $125-million (Canadian) per week in after-tax industry cash flow. Even before the recent oil price slide, the talk around the Calgary Petroleum Club was one of greater austerity. Those sentiments were echoed in first-quarter financial reports and recent announcements. A review of the guidance of 29 publicly-traded oil and gas producers – large and small companies representing about 40 per cent of Canada’s conventional (non-oil sands) volume output – reveals that 21 of them are cutting back. Year-over-year, the announced spending cuts average 20 per cent, although this theme of frugality is not uniform. From our 29-company sample set, Figure 1 shows a histogram of the expected change in conventional capital expenditures (excluding the oil sands), 2012 versus 2011. The range varies from a near complete shutdown (-75%) to a robust increase (+50%). There is a predictable polarization of spending behavior in Figure 1; companies leaning to the left of the spectrum are those with a lot of natural gas baggage. Cashed up companies with a good inventory of light tight oil (LTO) prospects are on the positive side of the scale. The guidance expressed in Figure 1 was taken back at the end of March, when the price of oil was well above $100/B. Not anymore. If the price of oil remains in the mid $80/B range, we should expect to hear of further spending restraint, especially on the conventional side of the business that represents 60 per cent of the industry. The other 40 per cent is composed of oil sands projects that are funded by deep-pocketed multinationals that are less affected by near-term fluctuations in cash flow. So, current spending on oil sands is unlikely to budge much from $20-billion per year. A lagging consequence of commodity price weakness is lower drilling activity (non-oil sands), which is already a reality in natural gas play areas. Conventional oil drilling is now likely to pull back too. Summer rig activity is already looking a bit weak. It’s not that $85 (U.S.) is a bad price for a barrel of light oil; the issue is that cash flow for investing into high-cost horizontal wells will be crimped relative to prior years. And much of the industry is now exclusively dependent on cash flow, because debt is reigned in and the public markets are in a foul mood to finance with equity. Appropriately, we can say that the well for new capital is dry. So, in the near term the industry must live within the means of its flagging income statement. After the Financial Crisis, capital expenditures by Canada’s oil and gas industry fell from $54.4-billion in 2008, to $33.6-billion to 2009. That 40 per cent cut was momentarily disastrous. By comparison a 15 per cent drop in 2012, to an estimated $47-billion, is a mild correction. And not quite a billion dollars a week.