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September 7th, 2016 ~ Vol. 85 No. 35
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British Columbia Economy Leads the Nation
Rick's Corner
JOHN PUNDYK
Feature Writer
British Columbia leads the nation in economic growth this year, and for this reason, the Crowsnest Pass is a good place to be.

BC is doing well because their economy is more diversified than Alberta’s. To be straight, they just have more irons in the fire.

No pun intended, but one of these irons, is steelmaking coal. This coal makes up almost 10 per cent of BC’s export earnings, and the price of this coal on the spot market has jumped from US$75, at the beginning of the year, to US$140 at the end of August.

The enthusiasm for steelmaking coal is so high that a Virginian coal company is in the process of buying three idle met coal mines near Tumbler Ridge.

When this happens, hundreds of well paying jobs will be added back to the economy. If everything goes as planned, the sale of these mines should be completed this month.

There is an opportunity here, not only for BC, but also for Alberta because many of the steelmaking coal seams mined in British Columbia don’t just stop at the provincial border.

The need for high quality steelmaking coal is growing. Even though there is a slowdown in China, there is much need for steel in India and, unlike China, India is not very well endowed with high quality coal.

A very strong argument can be made that the only two places which can compete with Australia on cost are Russia and Canada, and of the two, Canada should be able to outcompete Russia.

Both countries are very large and face the difficulties of moving resources, in this case steelmaking coal, over very long distances.

Russia has a very weak currency; the Ruble is the lowest it has been in many years. This makes their coal cheaper to produce, but this is not enough.
continued below ...
The Russian infrastructure is terrible and, hard as they may try, this cannot easily be corrected. The roads and the rail systems in Russia are just not adequate enough to support a head to head competition with Canada.

There are many in Canada who would like to see our resources left in the ground in the name of saving the environment. People are passionate about it, and of course protecting the environment is very important.

But there also needs to be a balance between saving the environment and the reality that we need good paying jobs to support all the other things which we, as a society, deem important.

Hospitals, education, roads, and even the enforcement of environmental rules, all get done through taxes generated when people are working.

This balance between the economy and the environment is achieved through consultation and environmental rules. But the rules mean nothing without strict enforcement.

No country is perfect when it comes to this process, but some are better than others.

According to Transparency International Corruption Index, Russia is ranked 119 out of 168. This puts Russia somewhere between Guyana and Sierra Leone, which is not too comforting when one considers the consequences of not enforcing rules of environmental protection.
continued below ...
Canada, on the other hand, is ranked 9 out of 168, which cracks the top ten of the least corrupted places to do business. This puts us ahead of Australia, which the index ranks 13th.

Why is this important?

This is important because steel, which is needed for the modernization of places like India, has to come from somewhere.

India needs steel for the most basic of things, including sanitation and shelter for its hundreds of millions of poverty stricken people.

If we give into the proposition that leaving Canadian resources in the ground is the only way to protect the environment, we may unwittingly be pushing resource development to places where there is no environmental protection enforcement at all. This could be harmful to the planet.

Perhaps because of our fixation with exporting oil and gas, Alberta has not taken full advantage of the opportunity to diversify our economy with steelmaking coal.

This is especially important now, with the Alberta government’s move to shut down thermal coal mines across the province.

It shows Alberta’s strong commitment to removing industries that pollute, but it also creates an opportunity for Alberta to expand its exporting capacity of steelmaking coal within tight environmental controls.

This will help to preserve and possibly multiply many of the high paying jobs which contribute so much to our province and to our local economy. This is a good thing.
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September 7th ~ Vol. 85 No. 35
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