By Alex Whalen
(Alex Whalen is Director, Atlantic Canada at the Fraser Institute)
Early into his second term in office, Nova Scotia Premier Tim Houston has announced that natural resource development will be a key part of his government’s agenda. In a letter to his caucus recently and in comments to reporters, Houston said he wants to take the ‘no’ out of Nova Scotia because you “can’t expect Nova Scotia to prosper when we ban industry after industry after industry.”
The premier is absolutely right.
According to recent research, incomes in Nova Scotia are among the lowest in Canada and the United States, and economic growth has stagnated on a per-person basis.
Why?
In part because, on a per-worker basis, Nova Scotia has the lowest levels of business investment in the country. Of course, higher levels of business investment give workers the tools and equipment to be more productive, and industries with high levels of investment tend to have higher wages and salaries.
In Canada, natural resource industries consistently dominate the list of the most productive industries in the country. Therefore, to end Nova Scotia’s low-investment, low-wage dynamic, the Houston government should help create better conditions to bolster natural resource development.
Consider just a few of the province’s natural resource opportunities. In mining, the province is home to critical minerals (copper, lithium, etc.), which are increasingly in demand for batteries, smartphone production and other technologies. The province is also home to more traditional products such as gypsum, lime and stone. Nova Scotia boasts trillions of cubic feet of natural gas both onshore and offshore, and the potential for offshore oil production.
Premier Houston has also mentioned the potential for expanded wind and hydrogen production in the province. Together, these opportunities could bring massive amounts of investment and many high-paying jobs to Nova Scotia.
So, why hasn’t this happened already?
Simply put, government policy has been a major deterrent, which is why the premier is correct to raise the issue of regulation. When surveyed, mining investors consistently report that government regulation and red tape deters investment in natural resources in the province.
A similar survey of global petroleum investors found that environmental regulations remain a strong deterrent to investment in Nova Scotia. And that’s not surprising; Nova Scotia has banned hydraulic fracturing of natural gas and the mining of uranium, even though these activities have manageable risks and take place in many other jurisdictions (which, ironically, harness these resources then sell them to Nova Scotians).
Aside from outright bans, both the provincial and federal governments impose a high regulatory burden on businesses, including the natural resource industry.
To be sure, Nova Scotians want to be responsible stewards of the environment. On this front, Houston has said he “will look at what can be done safely. That is the lens.” Yet in recent years, Nova Scotia has gone far beyond what’s needed to simply ensure safety and care for the environment. If Premier Houston can eliminate unnecessary regulation and remove government as a roadblock to resource development, Nova Scotians will likely see higher incomes and increased living standards across the province.
Alex Whalen is associate director of prosperity Atlantic region for the thnk-tank, Fraser Institute. His office is at Duke Tower, Scotia Square. The Notebook
