SHould Canada nationalize its resource sector?
Boomtime for Mafia governments - POLITICAL ECONOMY | Mineweb
Boomtime for Mafia governments - POLITICAL ECONOMY | Mineweb
Boomtime for Mafia governments
- Thread starter Johnnny
- Start date
Venezuela is a mess and they should not have nationalized everything in sight. Who wants to live there?
The Aussies taxed mining corporations because they are making tons of money and the public should share in the boom. Nothing wrong with that as it equalizes wealth.
The Aussies taxed mining corporations because they are making tons of money and the public should share in the boom. Nothing wrong with that as it equalizes wealth.
See how long it takes for those mining companies to pull up stakes and operate else where. BC used to actually have a mining industry until the government pulled that very stunt - the industry hasn't recovered to this day.
Mind you, there will be a lot of people in those other nations where the resource companies relocate to thanking the Aussie government when they start to get the benefits in greater/better employment, more $$ in the tax base to support social programs, infrastructure, etc.
Mind you, there will be a lot of people in those other nations where the resource companies relocate to thanking the Aussie government when they start to get the benefits in greater/better employment, more $$ in the tax base to support social programs, infrastructure, etc.
Are you referring to the unions? They were a distant second in terms of cost and capacity.
I have a family member that was with Cominco (before Teck Cominco), he was a senior guy in management. He has stated in the past that the province applied the screws too harshly and too often. It became too expensive to do business in the province and the board later began to shop elsewhere in the world as to where they could spend the billions of development dollars.
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So far as Africa and parts of Latin America are concerned takeovers in the resource sector are probably a reaction to decades or even centuries of seeing their resources exploited by foreigners. The history of many of these nations is that they have very little to show after allowing foreign developers to have their way. They probably feel that in taking control of their own resources they can't do much worse. Unfortunately, most governments in Latin America and Africa are riddled with corruption, making domestic development of their resources almost as bad as foreign exploitation. The main difference seems to be that corrupt national politicians get the cash instead of foreigners.
So far as Canada is concerned the picture is somewhat different. First of all, the major foreign interest in Canada is the USA and the NAFTA agreement gives the US free access to all Canadian resources. This cannot be changed without first canceling NAFTA.
Second, any attempt by Canada to take control of its own resources - even by buying them fairly from the corporations involved will almost certainly lead to a strong adverse reaction from the US which will almost certainly threaten to cut off trade with Canada in many areas in an attempt to force Canada back into line. This was pretty clearly shown in the 1970s when Canada attempted to buy up a share of the Canadian oil industry.
Third, too many Canadian politicians are already in the pockets of foreign multinationals or ideologically bound to the idea of unrestricted free trade.
So far as Canada is concerned the picture is somewhat different. First of all, the major foreign interest in Canada is the USA and the NAFTA agreement gives the US free access to all Canadian resources. This cannot be changed without first canceling NAFTA.
Second, any attempt by Canada to take control of its own resources - even by buying them fairly from the corporations involved will almost certainly lead to a strong adverse reaction from the US which will almost certainly threaten to cut off trade with Canada in many areas in an attempt to force Canada back into line. This was pretty clearly shown in the 1970s when Canada attempted to buy up a share of the Canadian oil industry.
Third, too many Canadian politicians are already in the pockets of foreign multinationals or ideologically bound to the idea of unrestricted free trade.
It gives the Americans access to purchase or invest in those resources without punitive tariffs, duties or taxes... It's also a 2-way street, Canada has that same access to American resources.
That's nothing but speculation. As far as the 1970's were concerned, NAFTA was not in place.
Speculation and conspiracy theory...
Sure, I'll give you that I wouldn't trust a politician as far as I could throw 'em, but to make the statement that Canada can never control it's own resources because of this is tin-foil-hat talk.
I'm hesitant about nationalising the resource sector. If we're dealing with a monopoly, maybe requiring it to gradually transform itself into a consumers' co-operative would be a good start. The problem with nationalization is that labour unions get their hands in it and before you know it, they're squeezing the governent to subsidize them all the time so as ot get higher pay cheques.
By simply transforming it into a consumers' co-operative, you're still getting the accountability to consumers that would come from nationalization, but without the government investment and interest in it, and so if its workers start to ask for too much pay, the company could be forced to shut down and those same worker would then be laid off. This balancing of pressures would help ensure workers get fair pay but not excessively high pay. There is a difference there.
Otherwise if there's no monopoly situation, then I say leave it alone. Though since the resources themselves belong to the Crown, definitely the government reserves the right to sell those resources at a price of its choosing and the companies can take it or leave it. And the government has a duty to ensure it gets a fair price for those resources and not sell them off so cheaply.
By simply transforming it into a consumers' co-operative, you're still getting the accountability to consumers that would come from nationalization, but without the government investment and interest in it, and so if its workers start to ask for too much pay, the company could be forced to shut down and those same worker would then be laid off. This balancing of pressures would help ensure workers get fair pay but not excessively high pay. There is a difference there.
Otherwise if there's no monopoly situation, then I say leave it alone. Though since the resources themselves belong to the Crown, definitely the government reserves the right to sell those resources at a price of its choosing and the companies can take it or leave it. And the government has a duty to ensure it gets a fair price for those resources and not sell them off so cheaply.
You would never survive nationalizing your resources, those who want to are in a minority and if it started becoming a major issue, those pushing for it will just disappear. The banking industry would just not allow it to happen.
All it would take would be for a majority of Canadians to vote in MPs who want to nationalize the resource industry, and it would be done.
It would also be a stupid move, but that's beside the point.
Nationalization of resources by any country especially Canada or the U.S. would be a tremendous mistake and lead to many deaths including those civilians who will die defending land they think is theirs and not the governments.
You mentioned that the resources belong to the Crown, is that really so? I thought the Crown was just a traditional figurehead now, and Canadians owe nothing to it anymore.
You mentioned that the resources belong to the Crown, is that really so? I thought the Crown was just a traditional figurehead now, and Canadians owe nothing to it anymore.
The Crown refers to the Government, of which the Queen is its head.
I guess a US equivalent would be to refer to resources on public lands? Or do you use some other term for that?
But essentially those resources belong to the government and so the government can ask for whatevr price it wants for them.
But I get the impression it's been selling them off at rock-bottom prices, at least in Canada anyway, and that just means more taxes.
The private sector wouldn't have to wait too long to get back in the game. The public sector would collapse under itself and would eventually beg private groups to re-enter the market and fix the mistakes.
that said, the historical track record of nationalized resources have been dismal at best (included would be "consumer co-operatives" aka the peoples resources). I can't think of one example where the resources were exploited efficiently AND there was no instances of corruption and personal gain of one or a few individuals.
So how do you ensure checks and balances when that resource is monopolized?
When there is no monopoly, fine. But when there is a monopoly, it needs to be kept in check, either by nationalizing it or ensuring that consumer have a vote on the board of directors somehow so that the company not exploit its monopoly position unjustly.
Are you suggesting that it is currently monopolized or are you suggesting that a co-operative arrangement addresses that?
Buy 1 share of an oil company and you do have a vote; even better, don't purchase the product(s) of those companies with which you disagree... Run 'em out of business and the message gets through to those that are left that they dance top the tune that the consumer calls.
I don't know the details. My guess is that more common resources are not likely to be monopolized owing to many companies exploiting the same resource in various parts of the world.
Other less common resources might be monopolized, or maybe not. Again, I don't know the details. My guess is that few if any are monopolized, but in the event of a natural monopoly situation occurring, then I can see four options:
1. Ignore it and let the people choose whether to pay the exorbitant prices or go without, with the company making a killing;
2. Introduce extreme government regulation possibly requiring it to split into multiple companies. This is the policy today and all that does is introduce redundant companies in the economy where one single company would be more efficient;
3. Nationalize it. This has the advantage of ensuring that any profits made from the company benefit the Canadian people, in theory. The problem though is that unions get in the way, still drive prices up, and keep the money for themselves and maybe share it with management;
4. Gradually transform it into a consumers co-operative. This has the advantage of maintaining one unified company when that is more efficient, while still ensuring consumers have a vote on the board of directors of that company.
Among these four options, I'd say the best way to deal with a natural monopoly (Natural monopoly - Wikipedia, the free encyclopedia) is to gradually transform it into a consumers' co-operative.
That said, I don't know if that applies to any of Canada's resource industries at present, but merely that if it does, then that would likely be the best way to handle it.