Chinese SOEs and Non-Renewable Resource Development in Alberta

Canadian Prime Minister Stephen Harper highlights the economic benefits of responsible resource development in the north.

Pacific Prospective features the research of graduate students.

Memo #294

By Daniel Wood  – dwood [at] alumni.ubc.ca

Canada’s abundance of non-renewable energy resources, such as conventional and synthetic crude and natural gas, are vital to the national economy. According to Statistics Canada, jobs from this sector currently contribute to 4% of Canada’s total labour force and 6.2% of its GDP. Meanwhile, the number of non-renewable resource development projects in Alberta that have received investment from Chinese state-owned enterprises (SOE) is increasing. This trend reflects both China’s hunger for resources and our industry’s need for financing to help pay for necessary infrastructure development, capital, and productivity improvements to keep the royalties flowing. Though attitudes to this state of affairs vary, the fact is the entrance of Chinese SOEs into the process has the potential to change the conversation, and perhaps for the better.

Many Albertans currently earn a very good living wage by working for non-renewable resource development companies and know that their children will be afforded the same employment opportunities as long as the industry continues to grow. However, the Canadian public outside of Alberta is often apprehensive about the speed, scale, and scope that many of these oil sand development projects should take. Still others are strongly at odds with the expansion of this industry at all, often because they believe there has been a lack of extensive, deliberate consultations with key stakeholders, such as First Nations or environmental groups.

Emerging alongside all of these groups are Chinese SOEs that are being driven into the sector by China’s need for a more robust national energy security strategy. These companies have the potential to revolutionize the consultative process between the various stakeholders in Canada by voicing their perspectives as a growing force with long-term interests in the industry. Their thirst for resources may therefore be the catalyst for adopting a more pragmatic approach to stakeholder negotiations that focuses not only on individual corporations’ profit motives, and the Canadian industry’s growing need for financing, but also lends a fresh ear to environmental and First Nation concerns. If these SOE’s can help bridge the gap between the old stakeholder groups to expedite further development, then all of Canada will stand to benefit.

 

Daniel Wood is an M.A. candidate in the Asia Pacific Policy Studies program at the University of British Columbia, Vancouver.

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Canadian Prime Minister Stephen Harper highlights the economic benefits of responsible resource development in the north.
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