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Dispatch from Canada: Dutch disease, Greek Disease or Oil Sands Fever in the Pipeline? Plus Chevron-Texaco case lands in Canada!

Demonstrators protest against tuition hikes in downtown Montreal

By Leah Temper.

Spatulas against Woks, wooden spoons against colanders, pots meeting pans – this is the sound of discontent in Canada these past few weeks. The student mobilizations in Quebec which have been raging over a 3 month (and counting) strike – the longest ever student strike in North America – have been given even further impetus by the Quebec Provincial Government’s enactment of a draconian law, bill 78, aiming to limit and criminalize freedom of association and assembly. The response has been nightly caceroladas or casseroles – to mark the 100th day of the strike an estimated 300,000-400,000 people marched in full violation of the new law, a raucous celebration of civil disobedience that has already began infectiously spreading across the country.

What began on the surface, as a conflict over a raise in tuition fees — 75% over 5 years, or 374$ a year, is now broadening into one of the most powerful and inventive social movements protesting anti-austerity in the world, with important lessons for citizens elsewhere that are battling even harsher “belt-tightening” measures and the hollowing out of social services.

The symbol for the student protests is a red square. This comes from the Quebecois expression “carremente dans le rouge” — squarely in the red, an allusion to the debt that Canadian students find themselves saddled with upon graduation.  And while critics trying to dismiss the students’ claims like to point to the fact that Quebec students pay by far the lowest fees in the country, this is precisely because of a history of struggle and resistance that dates back to the quiet revolution of the 60s.  The proposal of CLASSE, the largest student union, is to create a relatively tiny tax on Canadian financial institutions to benefit education. Despite the crisis, banks in the country secured record profits in 2011, up 15% from the year before. Negotiations continue, but as support swings behind the students in the face of the repressive response, the students’ victories so far, as in the past, show that mobilization, done right, can reverse or put a brake on the drive to slash public institutions and commodify the commons.

Oil Sands Fever

Amidst attempts to dismiss the students as suffering from some kind of “Greek Disease”, the more serious malady Canada is suffering from is Dutch Disease, as alleged by NDP leader Thomas Mulcair, who maintained in an editorial that the petro-fuelled Canadian dollar has been artificially inflated by oil-sands exports by companies that don’t pay the full cost of their pollution, harming the competitiveness of other sectors of the economy and leading to the loss of 250,000 manufacturing jobs in recent years, most in the Eastern provinces of Ontario and Quebec.

The term “Dutch disease,” was coined in the 1970s, to describe the adverse effects the discovery of large natural gas fields off the coast had on the Dutch manufacturing sector in the 1970s through overvaluation of the Dutch currency. Is there a cure for this particular strain  – dubbed “Oil Sands Fever” by the Pembina institute? Mulcair suggests a crackdown on water and air pollution that would boost the upfront costs for companies developing the oil sands, thus lowering export profits and easing upwards pressure on the dollar. Sadly, this anti-pollution message has been painted in the popular press as an East v. West battle.

The other until now ignored aspect of Dutch disease is the growth of political corruption that often accompanies resource revenues, as exemplified by the Harper’s governments push to get this dirty crude to market at all costs.

The Enbridge pipeline

The proposed Enbridge pipeline Northern Gateway pipeline, which would run from Bruderheim, Alberta, to Kitimat, B.C., where tankers will bring the crude to Asian markets, will traverse the territories of over 50 aboriginal communities in the North of Canada, almost all of whom are vehemently opposed to the project.

Harper’s strategy here has been two pronged – on one hand he has instituted measures to streamline environmental assessments of energy and other resource projects, cutting the federal departments involved in the process from 40 to 3 and giving the cabinet the power to override even these decisions. On the other, he has embarked on a witch-hunt against environmental organizations, demanding that environmental charities “provide more information on their political activities, including the extent to which these are funded by foreign sources.”

Harper’s attempts to criminalize and stifle Environmental Justice Organizations and deny First Nations their right to consent, just as law 78 attempted to quell the student uprisings in Quebec, will only lead to long drawn-out litigation.  So these battles will probably move to the courts – the last potential haven it seems for those seeking environmental justice in Canada.

Chevron-Texaco case lands in Canada

This at least, is the hope of a Toronto-based litigator who (on behalf of plaintiffs from Sucumbios and Orellana in Ecuador) is asking an Ontario Judge to recognize an Ecuadorean Court Ruling against Chevron Corp. who was found guilty and fined 18$ billion for disastrous management and pollution in the Amazonian operations of TEXACO, whose environmental liability Chevron inherited.

Chevron is resisting any enforcement of the court decisions in Ecuador delivered on 14 February 2011 and 3 January 2012, despite earlier urging a US judge that the case should be tried in Ecuador and that they would abide by any ruling there. Chevron currently holds no assets in Ecuador. But as Canada recognizes judgements in foreign jurisdictions as per a 2003 Supreme Court Ruling, Chevron’s liability could lead to the seizing of part of its 20% stake in the Athabasca Oil Sands Project, in which the company had in 2010 a daily production of 349,000 barrels of oil and 30 million cubic feet of natural gas. This is the first attempt to enforce the court decision delivered abroad against Chevron on the Ecuador case and the result will constitute an important precedent for finally delivering the justice for the victims that Chevron has managed to elude until now.

In Canada, as in Ecuador, companies should take responsibility for their impact on the environment — not taxpayers, not the youth and not future generations. Hopefully Canadians will see through the cloud of the oil sands fever and demand that the polluters should pay and that the Canada economy is not as “crude” and one-dimensional as some would like us to believe.

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