Farmers have bigger things than KXL to worry about

Farmers have bigger things to worry about than the generally-expected cancellation of the Keystone XL pipeline by the new U.S. Joe Biden administration.

Farmers obviously realize the oil industry is not a core part of the agricultural economy, but it provides lots of off-farm jobs to many farm folk, plus the royalties and economic activity of the oil patch create a lot of revenue for Alberta, Saskatchewan and the federal government. That money pays for a lot of stuff farmers benefit from.

But KXL wasn’t in most people’s reasonable expectations of the future as soon as it was obvious Biden or another Democrat could win the U.S. presidential election. The Democrats’ green wing, all the way back to the Obama era, has demanded the pipeline project be halted. In recent months, with Biden’s emphasis on a “green recovery” and “building back better,” it was obvious that the pipeline would not survive a Biden victory. So, for most people, the Keystone cancellation isn’t anything surprising or something that requires much rethinking of the Canada-U.S. relationship.

However, farmers do have real reasons to fear what might happen in that relationship if the Democrats indulge in the kind of protectionism that has often played a major role in U.S. left-of-centre thinking. The Republicans have traditionally been the party that supports free and open trade, optimistic that the U.S. doesn’t need protection and the country will benefit from both trade with the rest of the world and will be strengthened by competition. The Democrats have tended to turn a more jaundiced eye to international trade, suspecting it will operate in a way that undercuts U.S. jobs by allowing producers in other countries with weaker labour, environmental and safety standards to offer lower prices than could be offered by U.S.-based production.

It’s hard to see what issues Biden and the Congress will champion this term, and what they will pay lip service to but not take much action on. I wrote about that in my column this week.

Some, like Alberta Premier Jason Kenney, want Ottawa to hit back at the U.S. – for daring to act like its president has the right to approve or disapprove of critical infrastructure entering the country.. And it wants Ottawa to stick the costs to the U.S. by suing for compensation. I don’t know anything about the legalistics of that, but I do know it would push Canada down a confrontational road with the U.S., right when we need all the political capital we have in Washington and at 1600 Pennsylvania Avenue.

Farmers need the federal government to have lots of political capital left to challenge any plans that come out of the White House or Congress to block, disadvantage or affect Canadian farm products. Farmers have faced too many trade actions to ignore the risk of something being brought in that plays well in the crop and livestock-heavy Midwest, in southeastern pig-producing regions, and in the western cattle producing country. Canada’s going to need to have some goodwill in Washington for when the inevitable challenges to Canadian agriculture trade arise. Starting out with quixotic crusade against a KXL decision that is not going to be reversed, or annoying the Americans with attempts to extract financial costs for an agenda item they widely broadcasted before the election, and indeed back to the early 2010s, would attach Canada to a loser position. If Canadian farmers want to be winners when one of the farm sectors gets targeted, or to at least mitigate the damage, it needs the federal government to stick to fights it can affect.

Already there will be huge demands from eastern Canadian manufacturers to ensure they’re not cut out of a massive  U.S. spending program due to “Made in America” provisions. Being able to get some attention to ag issues will be a challenge anyway. As upsetting as the KXL cancellation is to Alberta and Saskatchewan citizens, who will be paying the bill, and Jason Kenney, who gambled on an approval, and as bad a symbol as it is for the free flow of goods and services across the border, farmers need to look beyond this immediate cross-border tiff and keep their attention on and trying to fend off any incoming attacks on Canadian agriculture.

 

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