Does Canada need a 'Belt and Road' approach to economic development?
I have written a number of times about Canada’s challenges growing the export economy and attracting international investment. Getting back to a sustained level of economic growth requires the triad: talent pipeline, export economy and investment.
Should Canada develop its own Belt and Road initiative?
The Belt and Road initiative involves Chinese investment in specific industries around the world but particularly in developing countries. I don’t want to get into the geopolitics of it but the economic development angle is very interesting. Essentially, China invests in large scale infrastructure and other industrial projects and its firms and industries get involved in the development.
A Canadian version could involve the energy transition. We want countries to transition away from coal-fired electricity - to a mix of natural gas for baseload/peaking and renewables. Canada could use some of its $700 billion invested in the CPP or the hundreds of billions invested in other government pensions or private sources to provide the investment for big projects. We could get other countries or institutions involved. Our companies could get involved, we could export more of our natural gas, etc.
It’s not like Canada hasn’t done this before.
Brascan Corporation (I’ll let you imagine the origin of the name but the first four letters involve a certain South American country where my wife was born) involved Canadians playing a role in the early development of hydroelectric power generation, street car lines, and gas and telephone systems in South America. The power business came first, beginning in 1899. Natural gas distribution was also a big part of the company. My limited research indicates it was seeded with private capital but leveraged public sources such as the International Bank for Reconstruction and Development (World Bank).
Imagine if Canadian companies, government, workers and capital was deployed around the world on the energy transition. Obviously the capital is earning a return (the Chinese investment includes interest), companies are boosting export revenue for Canada, and workers (engineers, construction workers, consultants, etc.) and earning high wages and getting to put their skills on a valuable effort around the world.
Just a thought.
We have natural energy up the wazoo... but we need pipelines from Alberta and Saskatchewan to the coasts! New Brunswick is sitting on a treasure trove of natural gas, and Canada is sitting on enough uranium to power the world for hundreds of years, but we have an underfunded cutting-edge nuclear power industry and New Brunswick's gas stays in the ground because of public perceptions. France is close to 80% nuclear (half of it from modern load-following reactors) and their grid is over 95% carbon-free—and yet it has the cheapest power in Europe and leads Europe in energy exports! Russia is funding its war with natural gas sales to ostensibly clean-energy-conscious countries like Germany.
The United States is making loud imperialistic noises, and we should take their 'America First' policy seriously. But instead of developing the resources we have, we are investing in American wind, solar and electric car technology which puts us at a disadvantage against more highly-populated countries. Our present trajectory will lead to a doubling of electricity rates before we become 'carbon-neutral,' fuelling inflation and hurting our power-hungry industries. If we continue to increase our lean toward American technology, investment, and investment opportunities, we will effectively become the 'fifty-first' state. Trump has rung the bell, making American wishes and intentions clear, and it is indeed time for Canada to grow up! Our GDP is 2.14 trillion (ninth in the world), Russia's is eighth at 2.24 trillion (World Bank 2022), and we are at least equal to Russia in natural resources—We should act like the economic superpower we are and turn sharply toward Asia, Europe and South America!
Would love to see Canada export it's CANDU nuclear technology (and of course build more CANDUs in Canada too). It's been a few decades since the last CANDU was built outside of Canada but my understanding is the supply chain and expertise is still strong with all of the ongoing refurbishments. With a renewed global focus on nuclear, it seems like a clear opportunity!