Canada is endowed with an abundance of natural resources and these resources are owned by all Canadians equally. Large multi-national corporations are authorized by Canadians to develop/mine/exploit these resources on behalf of Canadians and for the benefit of Canadians. If, for some reason, Canadians were not receiving fair value for their natural resources wouldn’t it make more sense to just leave the resources in the ground? Let’s assume that the large multi-national corporation ( say LMNCOR for brevity) will always make decisions that are in the best interests of their shareholders. Then assume that LMNCOR can save money in the development of a resource by having the engineering, construction and manufacturing done off-shore. Now ask the question – how would that decision to off-shore benefit Canadians that work in engineering, construction or manufacturing? What is the impact of the job loss to the Canadian economy? LMNCOR knows that the jobs lost in Canada because of the off-shoring policy will hurt the Canadian economy but benefit the corporation’s bottom line. Is there also some offsetting benefit to the Canadian economy that eludes the rest of us? Let’s also assume, for the time being, that the quality of work done off-shore is at least as good as the work done in Canada and that Canadians are not getting the work because they just can’t compete. These are the assumptions that the managers at LMNCOR make in deciding to off-shore a project to save money. What if the quality of the off-shore work is not as good or even inadequate and the managers at LMNCOR have made a terrible mistake( suspend your disbelief for a moment). After all, the assumption of good quality is just that, an assumption. What are the risks of inadequate quality in design and construction and who assumes the bulk of the risk should things go wrong? Problems with quality in design or construction will be evident only after a facility ( mine or refinery for example) is in operation and there is a release of toxic material into the environment or similar engineering disaster. The consequences of an environmental disaster will be borne by Canadians, especially future generations.
Wait a minute – LMNCOR is proud to advertise the benefits they provide to the local economy by creating jobs and career opportunities. LMNCOR does not however advertise the harmful effects to the economy when they remove jobs and career opportunities by off-shoring a project. This is like a drug manufacturer failing to mention the negative side-effects of a drug in an advertisement( which would be illegal for the drug manufacturer). Paradoxically jobs are added and jobs are taken out of the economy by LMNCOR – a win-lose proposition for the Canadian economy. LMNCOR’s actions will sometimes benefit and sometimes hurt the Canadian economy because LMNCOR’s actions are in the best interests of the shareholders and these actions are not always in the best interests of the economy. So there it is. Canadians are not involved in the engineering, construction or manufacturing because of the off-shoring policy. The Canadian economy takes a hit with the jobs loss. LMNCOR’s bottom line improves because of the real or imaginary cost saving. Canadians accept the risk of an environmental disaster for little or no reward.
Most of us understand the concept of risk and reward but where is the value proposition for Canadians with all risk and little reward in the development of our natural resources. The only reasonable conclusion is to leave the resources in the ground until there is a fair balance between risk and reward for all Canadians. Natural resources are non-renewable so it behooves the custodians of the resources to maximize the benefits for all Canadians present and future and it should be a crime to do otherwise.
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