China will no longer buy Alberta’s canola, pork, and very little of its oil. And, surprise surprise, there will be no billion-dollar bailout for Albertan farmers,who lost 1/3 of their cash crop income, as has been pumped into the oil and gas industry recently. And, rather than face the glaring facts of reality, Martha and Henry have chosen to bury their heads in white sands, which they can neither eat, nor sell. E LaMont Gregory MSc Oxon
.. with the election of Jason Kenney, and his illiberal entourage, it can be stated with certainty:
There Will be Trouble Ahead
On election day, the future of Alberta’s agriculture as well as its oil and gas sector was decided, and not as a result of any natural phenomenon, but due to decisions made by Albertans themselves.
The conventional wisdom is that the government you elect, is the government you deserve.
And, speaking directly to Alberta's current circumstances, it is the madness of folly to expect to profit, when you bite the hand that feeds you.
Now that Kenney is elected, it does not matter which pipelines or railways are built,how much canola is grown, or how many pigs are raised, because the intended market for all these proposals and activities is China, ultimately, and that market is closing, rapidly.
In a binding political understanding attached to the NAFTA negotiations with the United States, both Canada and Mexico signed a codicille, as it were, stating that neither Canada nor Mexico would enter into any direct bilateral trade agreements with China.
Needless to say, China viewed Canada's signing that binding political agreement as a betrayal. And, with the arrest of the Huawei executive in Vancouver, also under US insistence, the Chinese have retaliated, first cutting off canola sells to China, and now pork exports, among a growing list of other measures. In fact, the Chinese literally announced the Canadian pork ban, while Kenney was meeting with Trudeau (pictured below).
Amazon had a twenty-year expansion plan, over which time they would move gradually into Europe, and then South Asia (India), and eventually East Asia (China). In other words, those markets would rest idly waiting for Amazon to come and organize its business in their countries.
Alibaba emerged and became the largest Amazon-like business on earth, by establishing in the Asian markets, and now Alibaba, dwarfs Amazon, in both size and reach.
Intelligently, Amazon refined its business model from the idea of expanding horizontally, that is, simply doing what it was doing just in more places, to one of vertical growth, by delivering a wider range of goods, including food products, even highly perishable ones, in the places where it was already doing business.
Alberta's canola farmers are faced with a similar decision, either to find other buyers, plant a different crop, or to form cooperatives and get into the business of producing canola oil -- the same way Florida orange growers, became Florida orange juice marketers.
For the many years, a pipeline from Alberta east, south or west has been an on-again, then off-again quagmire.
And, arrogantly, as did Amazon initially, Albertans cherished the idea that China would just rest idly and wait for Alberta, and its neighbors to sort out their differences and eventually …
The discovery of vast quantities of what could be called Eastern Russian Select, changed all that.
Facilities for processing all grades of oil are many years in the making. Enormous investments are made in infrastructure, plant processing equipment, and in training the workers, engineers, managers and scientists who will operate these facilities.
No one would engage investments of this nature and scope without knowing, with as reasonable a degree of certainty as possible that the feed stock for such facilities would be forthcoming.
In a word, China has simply moved beyond processing Albertan oil, because there is too little Albertan oil available on world markets.
Now, Albertans will have to do what they should have done when the money was literally rolling in, that is, use and refine its own oil and gas and produce whichever derivative is most in demand at the best price, when it is in demand and at the best price.
Something that you can only do, if you are in the refinery business.
But for Kenney, this will portend to all his nationalistic and xenophobic tendencies, blame the other.
And, stands as proof positive that elections can be won by prying Conservatives further away from their already indifferent commitment to liberal democracy.
However, Albertans have a rational alternative, that is, to move away from divisive politics and embrace the idea that we are all in this together. No one has a monopoly on morals or ideas, as to the best way to achieve our desired common goal.
And, that goal is prosperity for all Albertans.
- The future is now -
Chinese announce ban on Canadian pork sells to China, while Kenney met with Trudeau. Kenney ran a divisive campaign in Alberta, by making a series of though-talk promises about how he was going to turn things around in Alberta's favour. The harsh reality is that the US has placed a dependent Canada in an impossible position. Perhaps, Kenney will now go on to Washington and demand that the Americans 'unsign' the political agreement banning Canada from direct bilateral trade negotiations with China?
Notley also snubbed the Chinese recently, and you can read about that in an upcoming article entitled: 'Notley, and the fire at the medieval cathedral of Notre-Dame in Paris'