Wednesday, August 30, 2006

Interventionist Alberta

Peter Foster at Financial Post:

As Claudia Cattaneo pointed out in yesterday's Post, Mr. Melchin's apparent desire to promote further resource upgrading in the province is particularly bizarre when Alberta is experiencing massive labour shortages, which are in turn driving up the price of new capital projects. In fact, many companies are planning to move oil sands bitumen upgrading outside the province. Mr. Melchin clearly regards this trend as undesirable and seemed to be suggesting "incentives" to keep upgrading within the province. This is a terrible idea.

Where resources are upgraded depends on economic logic, that is on the presence of expertise and capital, on projections of cost and on access to markets. To "promote" local upgrading with tax dollars is not merely to mess with market signals and breed corporate rent-seekers but to play beggar-thy-neighbour with other jurisdictions.

Meanwhile, the notion of some godlike "integration" of industrial ventures with ever-shifting government policies and the never-ending demands of so-called "civil society" (i.e. environmental NGOs) is sheer folly and/or a recipe for a further proliferation of well-expensed bureaucratic meetings.

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