OTTAWA, Feb. 21, 2013 /CNW/ - A failure to carefully regulate the
Canadian bitumen industry is putting Canada on a dangerous economic and
environmental trajectory, says a new report released today by the
Canadian Centre for Policy Alternatives (CCPA) and the Polaris
The study's original, integrated analysis shows that the current bitumen
path is creating the double threat: a "staples trap," whereby the
faster Canada exports its bitumen, the less diversified, productive and
resilient the economy becomes;" and a "carbon trap," which locks Canada
into an carbon dependent development path, making the costs of future
climate adaptation much more difficult.
"Canada's current bitumen strategy is not only damaging to the
environment, but is leaving our economy highly vulnerable to shrinking
markets for bitumen, as the world moves to less polluting fuels," says
Tony Clarke, co-author of the report, pointing out that export prices
for Canadian bitumen (like natural gas before it) are already falling
due to evolving market conditions.
"Another consequence is an unbalanced and vulnerable boom-bust economy
where production is increasingly concentrated in unprocessed products;
where manufacturing and other tradeable industries contract; and where
production and employment shift to non-tradeable industries, damaging
Canada's productivity and wellbeing," says co-author Jim Stanford.
The study presents a wealth of empirical data indicating the negative
side effects of unregulated bitumen developments for Canada's trade,
exchange rate, productivity, and income distribution performance and
proposes a two-track approach to steer away from the "bitumen cliff:"
 regulate more tightly the bitumen industry to slow the pace of
extraction, enhance Canadian content in upstream and downstream
activities, and attain a better balance between sectors and regions of
the economy; and
 reorient Canada's economy around more balanced, innovative, and
"We need to encourage a different way of thinking on the part of
policy-makers and Canadians generally, and steer a course that is
consistent with the our nation's long term economic and environmental
interests," Clarke says.
"We must overcome the false polarization between the economy and
environment, and recognize that the future course of these enormous
developments cannot be left to a largely deregulated market and the
self-interested choices of private industry," says Stanford.
The Bitumen Cliff: Lessons and Challenges of Bitumen Mega-Developments
for Canada's Economy in an Age of Climate Change, by Tony Clarke (Executive Director, Polaris Institute), Jim Stanford
(Economist, Canadian Auto Workers), Diana Gibson (former Director of
Research, Parkland Institute in Alberta), and Brendan Haley (Ph. D.
candidate, Carleton University) is available on the CCPA website: http://www.policyalternatives.ca
And on the Polaris Institute web site: http://www.polarisinstitute.org
SOURCE: Canadian Centre for Policy Alternatives
For further information:
Kerri-Anne Finn, CCPA Senior Communications
Officer, at 613-563-1341 x306