My Brief To The Foreign Affairs And International Development Committee On Bill C-300
Robert Ouellette, November 24th, 2009
Editor, Corporate Knights Forum; Chair, the Sierra Club Ontario Chapter; VP Special Projects, Zerofootprint Inc.
RE: Bill C-300
Ladies and gentlemen of the committee, I am not here to argue from a fringe position that Canadian mining companies should be environmentally sustainable and socially accommodating because those things are morally right, as true as that may be.
Instead, I want to convince you that Bill C-300 can make Canadian companies more competitive in a changing global economy. I formed this opinion as someone with an Ivey MBA who, as a former aviation analyst, helped sell the first production Dash-8 aircraft to a major oil company in Africa. I have explored good, even great resource projects from Colombia to Papua New Guinea. My message to you is grounded in real-world experience and business best practices.
The message is simple. Change, when it is disruptive like the environmental and social shifts we face today, creates market risk for entrenched businesses as well as for countries.
Bill C-300 will help Canadian companies be more competitive and successful in an uncertain world, rather than less so. It will help mitigate risk rather than cause it. Why is that? To appropriate a phrase from well-known Canadian writer William Gibson, it is because, “The future has arrived, it is just not evenly distributed.”
If we understand how social and technological change is distributing that future, we can help secure Canada’s place as a dominant participant in the new economy. If, on the other hand, we ignore the risks of disruptive market change, we will be like industries that fail to innovate and who lose their business to smarter, faster competitors.
Canada became a G-8 country in large part through the exploitation of its natural resources. Throughout the 20th Century we built a reputation as world leaders in mining exploration, engineering, and finance. Today, about 60% of the world’s mining companies are Canadian. 40% of financing for international mining projects is raised in Canada. These are enviable statistics that reflect our ability to succeed.
The competitive landscape, however, is changing or has already changed, and we need to change with it. Why? Let’s look at the facts.
In Canada’s economy, the mining, oil and gas sector ranks 11th in its contribution to our GDP at 4.5%, just slightly ahead of Information and Cultural industries in its economic power, and behind Transportation and Warehousing. If we factor in the long-term environmental costs—the so-called externalities—the sector’s real economic contribution is further weakened.
In addition, with every passing month we discover more about the long-term environmental impact of some of the activities from this sector. This is especially true in regions of the world where regulatory control is weak or non-existent. Judging by recent scandals in Africa and elsewhere, if certain companies do not have to worry about social and environmental costs, they won’t. That behaviour cannot continue if we want Canadian companies to be world leaders.
Let me explain why. The global information economy is collapsing the distance between all people, including the powerful and the formerly powerless. As a result, developing economies that we once dismissed as minor players will soon be major economic forces.
For example, if information technologies and education can make the city-state of Singapore into an Asian-Pacific powerhouse, what will happen when access to information and technology is more widely dispersed? Indonesia, a favourite base for our resource extraction activities, has 220 million people who are waiting for that opportunity. Collectively, they represent a massive market that can be a game-changing socioeconomic force.
Combine regional population growth together with social-networking technologies and the demand for a green economy, and any questionable activities of foreign owned mining companies will be thrust into the public realm, both locally and globally. This power shift represents a threat to Canada’s strong international reputation. It also is a risk to investors.
The truth is communications technologies used by affluent populations change the rules of the new great game of geopolitics. No longer do we have to worry just about the big powers. Today, given the right circumstances, almost every small region of the globe can bring down a company or even hobble powerful countries if the people there believe they have been ruthlessly exploited, their land decimated, or otherwise injured by outside forces.
But good business people know that every changing market presents an opportunity as well as a threat.
Canada as a development Brand can stand for the highest environmental and social values as well as for great engineering know-how. Think of today’s marketplace as analogous to the one faced by once upstart Four Seasons when it took on established hotel companies Hilton and Ritz-Carlton.
A Canadian business leader understood that the growing management class and the newly affluent were looking for service excellence when they travelled for work or pleasure. It was because Mr. Sharp brought the best of Canadian labour values to the hotel business that he was able to build the world’s dominant luxury hotel brand. The entrenched players were pushed aside by his understanding of the power of social change.
Canada and its extraction-based companies share a similar opportunity to create new markets and add new value in a volatile global economy. In order to do that, we have to embody the best practices of our traditional strengths while also adding environmental and social excellence across our global brand.
If we export to the world the social and environmental excellence we expect at home, if we distribute a future that solves big problems rather than creates them, Canadian extraction companies will thrive internationally. Bill C-300 can be a market catalyst that will help provide the impetus for that success. For that reason I ask that you pass this legislation.