Castor canadensis, the humble beaver, largest rodent in North America, as observed by American naturalist John James Audubon (Image: Public Domain).

If you forget everything else, just remember this about our country’s incessant and often bitter debate about fossil fuels:

“Canada is never going to run out of oil, just like we never ran out of beavers.”

A beaver, live and contemporary (Photo: Steve from Washington D.C., Creative Commons).

We owe this pearl of insight to Canadian economist Jim Stanford, late of the Canadian Auto Workers Union and Unifor, former Globe and Mail economics columnist, author of Economics for Everyone, and nowadays director of the Australia Institute’s Centre for the Future of Work in Sydney.

It’s something our fossil-fuel-obsessed United Conservative Party masters here in Alberta – where Dr. Stanford, a son of Edmonton, grew up – need to think about when they’re not spying foreign-funded environmentalists behind every bush and under every bed.

That’s because whether they like it or not we may soon face the fate once confronted by Canada’s beaver industry, which made a fortune exporting the pelts of the humble Castor canadensis to the hat makers of Europe for nearly 250 years.

For, as Dr. Stanford observed in a sometimes wry, occasionally profane keynote address to the spring biennial convention of the Alberta Federation of Labour, held in the heart of Calgary, a city that gets pneumonia when the oilpatch catches a cold, “we don’t export beaver pelts any more, OK? And this is worth thinking about.”

“I can assure you it isn’t because we ran out of beavers,” Dr. Stanford observed. “We definitely didn’t run out of beavers. In fact, you can’t get rid of the fuckin’ little things! Right?”

“So, we haven’t run out of beavers, but what happened? People stopped wanting beaver pelts. Technology changed, and tastes changed, and lo and behold, this natural thing that we thought we could just grab and sell to someone else, wasn’t worth so much any more.”

An economist, also live and contemporary, in this case Jim Stanford, nowadays of the Australia Institute’s Centre for the Future of Work (Photo: David J. Climenhaga).

Dr. Stanford’s point, of course, is that as incredible as it might sound in 2019 – or, might have sounded a decade ago in 2009, anyway – the day may be coming soon when what happened to Canada’s world-class ethical beaver industry happens to our world-class ethical oil industry too.

None of this should be a surprise to Canadians, or at least Canadian economists, Dr. Stanford noted, because Canada has always significantly depended on the export of staples like timber, fish, beaver pelts, minerals and oil for its economic well-being, and the problems of such economies are well understood.

“So we have a whole history, and there’s a whole school of economics, Canadian political economy, that has studied the boom and bust cycles, these various waves of staples development and how they’ve shaped Canada’s economy over this time.

“And it’s not all bad. There’s huge benefits to these industries. They have stimulated investment, jobs, regional development. They have had a crucial role to play in the building of Canada as a nation. …”

“But we have to be thoughtful about this and recognize that there’s lots of downsides to an economy that’s unduly dependent on extracting staples resources, not adding value to them, not processing them, just gathering them together and then sending them away, making some money. …”

Those downsides should be familiar to anyone who has spent any time in Alberta. Dr. Stanford catalogued a few: “Wild swings in the prices of the staple products. Huge swings in foreign demand for the staples that we produce. Enormous costs in investing in the infrastructure that’s required to facilitate the export of staples. Conflict and injustice with Indigenous peoples. … The environmental consequences of thoughtless, knee-jerk, maximized staples production.”

Plus, of course, he added, “there’s a new dimension to this challenge now with climate change.”

Alberta Premier Jason Kenney (Photo: David J. Climenhaga).

Which brings us back to what happened to the fur trade, which prospered from the early 17th Century to the mid 19th Century. “A very important and highly technical case study in the risks of staples development is of course provided by this little creature, the beaver,” he explained.

“Any economy based on getting stuff from nature, harvesting it, not processing it, and just selling it to others is just incredibly vulnerable. ’Cause you’re always subject to changes in tastes and technology that will undermine the demand for those natural products. It’s occurred in the past and it will occur again.”

If Alberta Premier Jason Kenney had been running the fur trade, Dr. Stanford mocked, he would not have said, “Maybe we should learn to produce other stuff!”

When the market for beaver pelts, used to make felt hats, began to wane, he probably wouldn’t even have said, “‘Maybe we should try to get as much value for our beavers as we can while the demand is still there,’ instead of just trying to flood the world market, to respond to a downturn in demand by selling even more. Not very thoughtful!”

“And it will occur to our staples today,” Dr. Stanford averred. “No matter how much we stand up and tilt at windmills, no matter how much we point fingers at environmentalists and others, the reality is the world is going to stop using oil.

“If we get ahead of the process – and there are, believe it or not, places in the world that do produce oil that are thinking down the road – then we can position ourselves for maximum benefit,” he said. “If we just deny that it’s happening, stick our heads in the sand and point fingers, we will absolutely be left behind.”

“And this,” Dr. Stanford concluded, “is the fundamental flaw, the enormous weakness, in Jason Kenney’s vision.”

You can call this the Lesson of the Beaver – Dr. Stanford does – and you can bank on it.

NOTE: The AFL convention took place in early May, and I know I promised readers then that I would soon publish a couple of pieces on Dr. Stanford’s insights. This is the first of those, and I know it took me a little longer than I anticipated. Sorry about that, but the thing about blogging on politics in Alberta is there’s something to write about almost every day! There will be another one of these along shortly. Really. For those of you who want to dig a little deeper into this, though, a good quality video of Dr. Stanford’s full address has been posted by the AFL. It’s long, but it’s worth a listen. DJC 

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  1. Or as Canada’s pre-eminent philosopher and sometime hockey player once said:
    “I skate to where the puck is going to be, not where it has been.”

  2. First, Can you find a way to improve the formatting of your RSS feed? The text is always one big blob.

    But also, Dr. Stanford’s vision is fundamentally flawed! I’d be the first person to stop using oil but the trouble is no viable alternative exists, nor will there be any alternative available in the foreseeable future. Acting like there is an alternative is offensive, comparing oil to the fur trade is ridiculous (we did actually kill off the buffalo!). This is a cute little story told to a gullible public. By repeating this nonsense you’re perpetuating a dangerous myth that furthers the destruction of our environment and pushes the poorest of our society further into poverty (by pointlessly increasing energy prices).

    Kenney may be a moron but Dr. Stanford is a liar, the world will not stop using oil because the alternatives are much more expensive and more harmful for the environment. It’s most dangerous because it suppresses the dialogue that would actually lead to real solutions.

    Intermittent power, and must be duplicated by backup fossil fuel power. Waste of time, money, CO2 emissions and effort.

    Electric Cars?
    The required rare earths for their batteries are only produced in countries with lax environmental regulations (to keep costs down). They are dumping heavy metals into their oceans and rivers in enormous quantities, this is permanent, irreversible environmental damage, death of ocean, almost everyone, especially poorer people die.

    See both windmills and electric cars.

    No CO2 but maybe everyone dies… egalitarian?

    Want to help Alberta?
    Start by building better connections to the rest of the world, build pipelines, upgrade railways (there should be direct high speed rail lines to the US major population centers from Alberta), address transfer payments (we are penalized because large parts of our economy are privatized). Insist that all major Federal Government departments have offices here, that our tax returns are processed here. Leverage our cheap and abundant energy sources into productive capacity in other industries. Aggressively market, our “energy” and not just our energy products. Don’t pick what industries come here, push the benefits of being here to everyone. Go to Ontario and use our energy cost advantage to move businesses out west. Governments of the past and present have played favorites with certain industries; throw that out, be the best place to be and great things will grow here.

    1. “There is no longer any reason to believe that it would be hard to drastically “decarbonize” the economy. Indeed, there is no reason to believe that doing so would impose any significant economic cost. The realistic debate is about how hard it will be to get from 80 to 100 percent decarbonization. For now, however, the problem isn’t technology — it’s politics.” — Paul Krugman, New York Times.

    2. I suspect the “one big blob” you perceive is the given truth you espouse.
      Rather than the discrete lines of logic and argument you just lay out a spew of right-wing nutjob talking points.

      I find it informative that the last 4 sentences in your piece are actually quite helpful to resolving the petro-logjam we’re in here in Alberta. Although neither Kenney nor Notley have any policies to push forward with that agenda. It beggars belief that you, or they, are willing to tolerate the implications of growing and supporting a modern business ecosystem in Alberta and the direct implications to the good ol’ boy petro-network.

  3. Thank you David, great post. I was fortunate enough to be introduced to Harold Innis’s staple theory by Professor Mel Watkins, as a student in Toronto about half a century ago. Innis’s book The Fur Trade in Canada: An Introduction to Canadian Economic History (1930) is one of the first texts to examine the economic role of resource extraction, and as well, looked seriously at the economic role of first nations peoples.

  4. We are a colony and we have always been a colony. The goal is to extract as much wealth as quickly as possible and move on. Kenney and others who have no real ties to Alberta understand this, why don’t the majority of Albertans? Do oil executives retire and stick around? No the move to the west coast or go south.

  5. We buy our natural gas to heat our homes by the gigajoule. A gigajoule delivered to my house now that there is no carbon tax is $4.14. To create the same amount of energy with electricity requires 277.8 kilowatt hours(kwh) of electricity. I pay 19.2 cents per kwh all in(generation and transmission). So one gigajoule of electricity costs me $53.34. I am absolutely astonished than anyone that can do math believes we can replace natural gas with electricity to heat our homes. This past winter in February with my house(1300 sq. ft well insulated) and two equipment shops I used 63 gigajoules of natural gas. At today’s natural gas price that is 260.82, at the time with GST, carbon tax and admin charges it was over $500. That same 63 gigajoules in electricity is $3361.85. Now the first thing someone will say use an electric heat pump, which is an air conditioner with a valve that reverses the flow in the pump so it produces heat. These work wonderful down to an outside temperature of 0 celsius but without supplemental electric heat are virtually useless below that temperature, Google it if you don’t believe me. There is no doubt you can build and design a new home that requires very little heat and I certainly encourage that but what do you do with the millions of existing homes? This dream of a totally de carbonized world is that of some who lives in computer modelled world not the real world! Enjoy your day.

    1. Brian, are you comparing apples and oranges? I just looked at my most recent gas bill in which I paid $67.71 for 1.03 GJ – the rest was all fees and delivery charges. If you are comparing just the gigajoule price of gas to the all-in price of power you are letting deceit tarnish what might be a valid point.

    2. Not to be trite, but the Inuit have been heating their homes with little more than seal oil and body heat for millennia, and in the coldest region in the world. Not suggesting the solution is as easy as that, but if a (previously) non-literate hunter-gatherer society could do it, why can’t we?

  6. Good lesson. “Those who cannot remember the past are condemned to repeat it.” – so says George Santayana. This little lesson has never been disproved, indeed, not even improved.

    So the numbskulls in charge, the nitwits, the know-nothings, the carpet-baggers, the unindicted criminals that comprise and lead our current provincial gov’t have set out a fantasy that supports their view of the world. And importantly, it is supported by lots of like-minded (ht Doug Ford) people. This seems to be all the rage in governance circles these days. But there is no substitute for facts; popularity does not equal principal despite strongly held beliefs since at least Klien times.

    So if that’s all this brain trust can offer, bend over and pick something up from the ground and sell it to the first rube who appears, as an economic strategy, then what is next? My first thought was water.
    Then I read this post:

    Do these people not have a single thought for their children and their children’s generation?

  7. The story of the beaver is a good one to illustrate through our own history, how industries rise and fall, at the whim of tastes and changing technologies and economies elsewhere in the world. The good news, is that even though it was probably incredibly disruptive at the time, Canada came out of it for the better and eventually developed other industries that helped sustain and grow our country even more Of course this is not anything unique to natural resource industries or Canada. How is British Steel doing these days or how about the auto industry in Detroit?

    Of course the reflexive reaction of most politicians, even those that are supposedly against government interference is to fight to protect declining industries, as the jobs of the present have more votes than the potential jobs of the future. In the short run, the major issue may be building a pipeline or two more for Alberta to export petroleum related products, but in the long run the real issue will be how to transition Alberta from being an oil based economy to something else. Unfortunately, we seem to have a tendency currently to put all our eggs in one basket, both politically and economically and deny or fight against what is happening all around us. Maybe this is the same approach taken by Detroit and other places. We are not only denying climate change, but the future. I hope we will wake up from our comfortable sleep walking soon. We don’t really want Calgary or Edmonton to become the next Detroit, do we?

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