Canadian Northern Corridor would allow energy to move freely across country

Rating: High school and post-secondary

Summary: Markham interviews energy economist Kent Fellows, School of Public Policy at the University of Calgary, about a new study he co-authored, “The Canadian Northern Corridor: Planning for National Prosperity.”

Related links:

The Canadian Northern Corridor: Planning for National Prosperity – study

Does Canada need a coast to coast energy corridor for hydrogen pipelines? Maggie Hanna thinks so – video interview

Andrew Scheer’s “national energy corridor” proposal a good idea, but many potential pitfalls ahead – video interview

Donald Trump wants to ‘dominate’ global energy markets, Canada should counter with National Energy Corridor – Markham On Energy column

This interview has been lightly edited.

Markham Hislop: The idea of a national Northern corridor for Canada has caught on in the last three or four years. It all started with a 2016 study from the School of Public Policy. One of the authors was professor Kent Fellows. We’re going to talk to Kent about the latest study on a Northern corridor.

Why do we need a corridor and what does that look like?

Kent Fellows: One of the things that are fundamental to a well-functioning economy is being able to move goods and services throughout that economy and with your export partners. And we’re not terrible at that in Canada, but we could get a lot better.

And not just external trade, you hear a lot about export markets and import markets. It really is moving goods in both directions between Canadian, provinces and territories, and also between us and our export markets. Negotiating trade agreements is great, but those agreements aren’t worth a whole lot if we can’t physically move the goods and services between these regions.

So transportation infrastructure is really important to that corridor.

Markham Hislop: We’re seeing a bit of a change in the Canadian economy over time. Mining may become even more important because as we have a lot of minerals that are required for batteries now, and batteries are a growing business. And we also see things like hydrogen that we might need pipelines for. And we may see – this is my take, not everybody agrees – we may never see another oil pipeline built in this country.

Nevertheless, all we do know is that whatever it is that whatever we’re making, we need to get it more efficiently to domestic and international markets.

Fair to say?

Kent Fellows: Yeah. I think it’s really important to be more mode agnostic, especially if we’re thinking long term. And so you think back in the history of Canada and we have these bold national infrastructure projects, like the Canadian Pacific mainline, the Saint Lawrence Seaway the TransCanada natural gas mainline, the TransCanada highway. And a lot of those things are done for option value. They’re done perspectively.

If you go back a hundred or 150 years and try to talk to the CPR about the things that they would be hauling today, I think a lot of the original framers would be mystified by what we haul via rail. That we’ve got propane cars that are going across the country, all this stuff. And so thinking much longer-term it’s important to be mode agnostic, but important to set up in institutions that can actually facilitate this infrastructure growth because that’s the problem we’re having in building the regulatory side of things and making sure we’re dealing with that appropriately.

Markham Hislop: The National Policy of 1885 was the idea was that the Canadian Pacific Railway would bind the country together East to West. Manufacturers from Ontario would ship their products to Western Canada and commodities like wheat would go to East to Ontario and Quebec. The problem now is the same. It seems to me Canada had the same problem as it does now, which is the trade flows more naturally north and south than it does east and west.

I interviewed your colleague, Blake Shaffer here last week about creating more efficient electricity markets? Manitoba to BC should be one regional market and Ontario to the East Coast should be the other. But electricity sales flow north and south. And you can say that about a lot of the Canadian economy these days.

So why do we need a national corridor as opposed to two regional corridors?

Kent Fellows: A national corridor doesn’t have to get done all at once, right? As long as you’ve got a longer-term plan, you can start with regional plans and then think about linking those regional plans together.

North-South trade with the US is, is important. It’s still important and it’s going to continue to be important. But if we think about growth markets, they’re probably more off the continent [in Asia]. It’s important for provinces in the middle of the country to be able to get their goods to the coasts.

There’s also a shared national identity. And this is something that we’ve come across in later research.

A great example is the TransCanada Skyway, which was a project that not a lot of people are necessarily familiar with, but this is the series of microwave towers for telecommunications across the country. That brought us the first national broadcasts of stuff like Hockey Night in Canada that were really important for Canada’s shared national identity.

There are just so many different dimensions to this and thinking about it from a federal perspective, constitutionally transportation as a federal mandate. So you hope that they will have some hand in this in even dealing between different provinces.

It’s important to be able to get goods from Ontario to markets in Alberta. If you’re working in the oil sands and you want an oversized vessel right now, you can ship that vessel for manufacturing in the United States because you have an oversized corridor to bring it in from the south. It may be cheaper to source it in Ontario. I don’t know, but we can’t get it here without taking it down to the US first.

So there are all these different dimensions. There are just so many things where there’s potential benefits here in, into doing it, doing it at a national level, with a longer term strategy.

Markham Hislop: Let me flip that argument on its head. The economy is changing. We’re getting more technology-dependent. We can do things in Western Canada now that used to only be done, say in Southern Ontario. Like, make cars; you can manufacture electric vehicles anywhere. If we’re going to have a higher flow of those kinds of goods and services, and particularly goods between regions, then a National Corridor actually makes sense heading forward.

Kent Fellows: Absolutely. And as you mentioned, technology and telecommunications if you’re thinking more North, not just about the provinces, but you think about the Northern territory. So even the Northern parts of some of these provinces, so Northern Ontario, Northern Quebec, we have not been very good as a country in getting broadband high-speed telecommunications into those regions. And that really limits their ability to contribute and benefit from the rest of the economy.

I think COVID has put this into very sharp relief because we’re doing so many things online, it is harder to get those connection speeds in the North. It’s harder for those communities to connect and so great for the provinces, but probably critical as we look further North into making sure that we’re all benefiting from the Canadian economy.

Markham Hislop: Is there a movement afoot to make the Northern Corridor a reality? Is there interest on behalf of the provincial governments and the federal government?

Kent Fellows: So I want to be a little bit careful at the Cchool. I mean, we’re we’re not in an advocacy role, we’re in a research role. But I will note that there are a number of different proposals. Some of them a little bit more regionally focused, some of them nationally focused, and we’ve also had very good feedback on the research agenda in particular from the Council of the Federation. So that’s the group of Canadian provincialgovernments and the federal government. They’re generally supportive. You know, there are holdouts, Quebec has not so big on, on oil pipelines being part of the quarter, but that’s part of the research. And those are some of the questions that we want to continue answering, but so far the results and the feedback has been fairly favorable if skeptical, which is exactly what you want to hear as an academic.

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