Canada: Resource Profits Are Us
Canada: Resource Profits Are Us
By Yves Engler; April 2nd, 2013 - Dissident Voice
[Note: See also Canadian mining companies subject of worldwide protests.]
Two recent developments within corporate Canada help explain Stephan Harper’s more imperialistic foreign policy.
Canada’s growing ‘petro state’ has driven a more extreme, anti-internationalist, foreign policy. With tar sands production growing from 600 000 barrels per day in 2000 to 1 600 000 today this basically guarantees that Canada will oppose or flout international agreements to reduce greenhouse gas emissions. Environment minister Peter Kent made this point forcefully in March when he described the Kyoto Protocol as “probably the biggest foreign policy mistake the previous Liberal government made.” The politicians most committed to tar sands expansion have an incentive to build hostility towards international accords and the UN.
Another development that helps explain the Conservatives more aggressive foreign policy is the incredible growth in Canada’s mining sector. Canadian mining companies’ overseas investments increased from $30 billion in 2002 to $210 billion last year. More than 60 percent of the world’s mining companies are listed on this country’s stock exchanges and as much as 80 percent of global mining equity financing takes place in Canada.
Overseas mining profits make up a big part of corporate Canada’s yearly income. And it’s not just resource companies benefiting. In October, for instance, Toronto-based law firm Fasken Martineau announced that it would take over South Africa’s Bell Dewar. According to the Globe and Mail, “Fasken Martineau says its expansion there is primarily driven by its mining industry clients as they increasingly invest not just in South Africa but across the continent.”
Similarly, Canadian banks have set up shop in a number of countries specifically to service miners. ScotiaBank, for example, announced that it would expand its operations in Peru to do more business with mining clients.
Canadian mining profits are heavily dependent on a quarter century of neoliberal reforms. Privatizations of state-run mining companies, loosening restrictions on foreign investment and reductions in government royalty rates have greatly benefited Canadian miners. International Monetary Fund Structural Adjustment Programs that pried open African economies to foreign investors in the 1980s and ‘90s have enabled a 110 fold increase in Canadian mining assets across the continent – from $250 million in 1989 to $29 billion today.
The situation is similar in many Latin American countries. For instance, there were no Canadian mines operating in Mexico in 1994. By 2010 there were about 375 Canadian-run projects. Before the reforms that came with the North American Free Trade Agreement, Mexico’s constitution dictated that land, subsoil and its riches were the property of the state and recognized the collective right of communities to land through the ejido system.
Constitutional changes in 1992 allowed for sale of lands to third parties, including multinational corporations. Combined with a new Law on Foreign Investment, the Mining Law of 1992 allowed for 100 percent foreign control in the exploration and production of mines. With hundreds of projects in Mexico, Canadian mining companies have been the biggest winners from these reforms.
Today any government in the world that increases resource royalty rates or nationalizes extractive industries is a threat to Canadian mining interests. Yet, these types of reforms are often the first pushed by governments and social movements resisting neoliberalism. A July 2012 Globe and Mail business headline described the phenomenon this way: “In Latin America, nationalism stumps Canadian [resource] companies” while that same month an Embassy headline noted: “Canadian mining firms confront new wave of Latin American nationalization.”
Put simply, Canadian mining profits are closely tied to maintaining, if not expanding, a particularly rapacious form of ‘free’ market capitalism. This reality has pushed Ottawa towards a more aggressive international posture.
Yves Engler is the author of Lester Pearson's Peacekeeping: The Truth May Hurt. His latest book is The Ugly Canadian: Stephen Harper's Foreign Policy.