The Post-Staples State: The Political Economy of Canada’s Primary Industries

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New Interests and Structural Pressures for Change

The economic virtue of the new regime is that is simplified and internalized all decisions and transaction costs. The political virtue of the regime was that its centralization of effective decision- making power. While the closed political opportunity structure was important in helping the utilities undertake controversial long term energy mega-projects, they also were an increasingly liability in a socially complex and dynamic democracy. The closed nature of electrical energy policy regimes invited considerable confrontation from three sets of actors. From hydro and to a lessor extent nuclear and coal projects came social and environmental dissent from those directly affected the projects. Of these, confrontation with Aboriginal peoples became the most pressing constraint on energy strategies. Later, in the 1980s, as the costs of energy projects were being considered, class based organizations began to seek influence on rate and investment decisions.

Energy mega-projects were based upon new pipeline and electricity transmission technologies that allowed for the development of remote energy resources and their transmission to southern urban markets. Aboriginal peoples displaced by reservoirs, river diversions and other changes to the sociosphere attributable to hydro mega-projects were the one societal group targeted to pay most directly for energy strategies designed to benefit the majority. Yet the energy policy regimes that emerged out of the 1950s and 60s still retained historical racist and authoritarian assimilation assumptions, unleashing protracted contestation between First Nations and provincial governments over energy policies and regimes of compensation and mitigation. Jane Jenson and Papillon Martin use the concept of a changing paradigm of citizenship to illustrate the changes in Cree-Quebec relations that accompanied Quebec’s hydro strategy. (Jenson and Martin 2000) Several stages are noted that are applicable to most Canadian Aboriginal peoples. At first Aboriginal peoples were simply removed, without choice, often with little compensation and no negotiations. In the 1960s Aboriginal peoples gained the right to vote in federal elections and other racist legal constraints. Still assimilation tendencies were very much evident–as evidenced by a 1969 White Paper that proposed to extinguish all traditional title and treaty rights for a negotiated compensation package. By 1973, however, Aboriginal political leadership had completely rejected liberal citizenship and instead began to assert a collective claim to resources, termed “Aboriginal rights” through land claims agreements–or treaties for lands to be taken and compensation for lands taken.

An intense political opposition to the emerging Aboriginal rights emerged in provincial circles by those fearing that these new resource and policy claims would halt or stop the mega-project energy strategies. At mid-decade the James Bay Cree used the judiciary to force Premier Robert Bourassa’s Liberal Government to negotiate a comprehensive settlement of their claims during construction. A similar “negotiating” with a bulldozer in the back yard process occurred in Manitoba, resulting int the signing, in 1978 of the Northern Flood Agreement. In these processes Aboriginal political movements and allies in Churches, the new left, nationalist and environmental groups, used domestic political and legal resources to open a crack in the notoriously closed and powerful hydro regimes.

A large paradigmatic shift in northern development policies occurred with the publication Justice Thomas Berger’s Report of the Mackenzie Valley Pipeline Inquiry. Berger defined a new paradigm of resource development which, in essence, called for an inclusive policy process and the construction of a social contract (through instruments like land claims agreements) between First Nations and the state before resource industrialization could occur. (Berger 1976, 1977) By 1982 this recognition included the listing of Aboriginal rights (not completely defined) in the new Charter of Rights and Freedoms, and a commitment to negotiate their precise constitutional status.

The representation of environmentalists or environmental objectives in the policy regime was less successful. The first stage, environmental impact assessment policies, would emerge slowly and diffuse into provincial decision-making more unevenly and concern a wider range of issues than provincial energy strategies. Without express ‘horizontal’ enforcement from either the judiciary or from senior levels of government, the environmental agenda was much slower to climb up the regulatory agenda.

Still several new environmental policy initiatives emerged. (Jaccard, Nyboer and Makinen 1991) Clearer legislative mandates and new regulatory regimes were put in major Canadian provinces. Policy makers moved away from thinking about new energy supplies to thinking about the gains from better use of resources. Vertically integrated utilities experimented with new policy concepts such as integrated resource planning, a sophisticated resource conservation strategy. In recognizing that demand is in part manufactured or created, Canadian utilities experimented with Demand Side Management (DSM) programs. For example, “Power Smart” and other conservation and energy efficiency programs initiate conservation practices ranging from subsiding improvements in housing technology, to the creation of energy efficiency standards for public lighting, electrical appliances and electronic components.

In the 1980s utilities also experimented by seeding the use of more environmentally benign “green” technologies, a policy first put in place by the United States with the 1978 Public Utilities Regulatory Act (PURPA). PURPA set an important trend by encouraging non utility industrial producers of electricity, as well as small producers of electricity from more expensive alternative technologies, (what is generally now termed an “independent power producer” (IPP), to sell to major US utilities. The policy logic was that seeding small amounts of alternative supply technologies into the supply at uneconomic prices would eventually lead to a significant supply diversity as they gained economic viability in the future, assuming continuation of rising electricity costs. Eventually, natural gas producers, relying upon a new and significantly more efficient and small scale combined cycle turbine technology, used provisions of the US legislation to gain a foothold in the electricity market, an process that took the pressure off utilities to purse mega-projects.

During the 1990s the Green Plan and federal environmental assessment policy initiatives became the focus for the development of provincial sustainable development programs, just as the hydro policy paradigm shifted towards the neoliberal-sustainable model. Doern and Gattinger argue that the new policy regime is actually a complex dual system–comprised of the vertical regulation of the policy sector and a set of new horizontal regulatory frameworks concerning the environment and market management. In this new regime, political control and accountability are indirect, reflecting the increasing complexity surrounding the intersection of different highly developed regulatory regimes. (Doern and Gattinger 2003)

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