Season 2: #6 See the North

Good government costs money, and heaven knows Canada needs more income, even as we end the oil age. Canadians can look north to become wealthy. The resources to get rich are there only if we do it right.

Transcript

5          See, the North

From his first day in office in 2025, Trump attacked Canada. He promised tariffs, and made countless demands that were unreasonable. He continued to proclaim that he wanted Canada as a 51st state. It just keeps getting worse. I am speaking in mid-March 2025. Every day is a fright.

Efforts to predict the future are doomed to be overtaken by events. The leaders now in place in Canada will try to navigate the fog of disinformation and confusion. They deserve support, and an appreciation that shit happens. It is a time for unity.

Hopefully, a military invasion can be avoided. Canada should have the strength to survive a trade war and can endure political insults. Regardless of how events unfold in the coming months and years, it is essential that Canada acquire greater wealth. 

It’s the economy, stupid!  You may know the slogan.  With all that Canada is now going through, there needs to be a plan for economic success in the long run, and not by cutting taxes or programs. It is best done by generating income.

Whether it is to pay for defense, to manage debt, or to provide good government, the nation needs revenue. Canada has the potential to acquire the revenue through an industrial strategy that takes advantage of what we already have. 

To re-imagine Canada’s future, look at a map of our country with fresh eyes. Turn away from the south and look north, past where most Canadians live. This huge land mass is the key to making Canada the wealthy country we wish it to be. That is, a Canada of peace, order, good government, with a healthy economy and a sustainable planet. 

To create a Canada that fits this description in fifty years is a tall order. Every detail in a strategy towards this desired outcome must be successful. It is not too much to say that the fate of future generations is at stake. 

Look at the map again. How much of Canada have you actually visited? This land is so incredibly vast. Even those who live in the North can barely imagine the diversity and scale of a country encircled by three ocean coastlines, covering five time zones.

Our southern border wanders along a line near the mid-point between the North Pole and the equator. Most Canadians huddle along this line, on the fertile land close to the American border. Few Canadians ever venture far north. When on vacation, we go south! 

This wilderness is Canada’s greatest barely tapped wealth. It is a vast reservoir of precious minerals; massive boreal forests; endless lakes and rivers; and an amazing variety of ecosystems. Yes, these ecosystems are under threat, and that too must be addressed. And yes, this is no doubt what Donald Trump wants.

Throughout history, humans have harvested the wealth of this rich land. For millennia, it sustained the First Nations. Then, Europeans arrived and got rich on fur, fish, lumber, wheat, minerals, oil and gas. Their exploitation was a tale of boom and bust, of cycles of wealth that give way to shattered dreams and environmental destruction. 

We can see the current bust cycle with our own eyes, as the world grapples with climate change. Canadians can hear the death bell tolling for the zombie oil industry. Albertans know this in their heart of hearts, even as their loudest leaders cheer on the oil industry. That industry is making them rich. American demand for energy, and two new pipelines that will allow exports from the west coast, will in theory keep Alberta oil and gas pumping for years to come. The oil and gas that flows through those pipes will pump pollution into the atmosphere, ensuring climate change will march on to catastrophe. Unless, of course, we convert those pipelines to carry hydrogen.

Canada’s best hope is that this catastrophe can be limited. The damage is already severe. Canada still has a very narrow opportunity to reduce the most dire climate probability. This can be achieved first, by building extraordinary wealth so we can afford to go green, and second, by investing in massive climate restoration. 

The first step is to make Canada rich beyond the imagination of current politicians. The source of the true wealth Canada needs to unlock is the treasure buried in the north. It is Canada’s great competitive advantage. The land holds known mineral reserves that if exploited, could pay for all the dramatic costs we will face at home and abroad. It is a simple reality that metals like gold, copper, iron, and rare earth minerals will be in constant demand as long as there is civilization. 

This is an opportunity for Canada. Canada is a relatively wealthy country. Our economic weaknesses are well documented by opposition critics, but usually overstated. The national debt is too high, but Canada has an excellent credit rating. The debt can be managed, even with a trade war deficit. It is not good, but also not a crisis. The criticism over debt is political more than financial. 

By way of example, note that the American debt hawks in Congress never consider raising taxes on the ultra-wealthy. If they really cared about debt, they would do this. During the big post-war boom of the 1950’s, the taxes on the wealthy were much higher than today, and with fewer loopholes and tax havens. The rich demand smaller government, so they can get richer. 

Meanwhile, demand for government services from the majority of people continues to grow. The reality is that good government services are expensive, and they exist for a reason. We take them for granted, though without doubt they can be better run and more effective.  Those savings, however, are minor. The services are essential.

The United States is now giving Canada a demonstration of what can happen if those services are gutted. Both debt and inflation rise, health care and education services fall. Government offices go dark. Bad things get worse. What we will see is a cautionary tale.

 Were it not for the cost, most Canadians would want more government action, not less, on climate, health care, education, poverty reduction, Indigenous restitution, national security, international assistance, and a host of other demands. These issues are real, and cannot be ignored. To meet demand, Canada needs good government, not less government. 

Tax increases to pay for this would be counterproductive without similar action in other nations.  It would drive investors and the wealthy away. The solution, then, is for Canada to generate more income from a new source.  

Currently, trade wars aside, Canada has many economic sectors that are strong, and are essential to any modern economy. They must withstand the trade storm. But none has the potential to generate truly great wealth with the exception of mining. Oil and gas will fade. Industries like forestry, farming, manufacturing, finance, culture and others can hold their own. None of these, however, are game changing. Only mining has this potential. 

To unlock that northern potential Canada could commit to a national industrial strategy of green mining. That strategy would require clean, green mines, fossil-free energy, and a totally new relationship with the First Nations. Do all these properly, at a competitive price, and Canada can find the wealth it needs.  

Donald Trump also wants this wealth. He has described Canada as the 51st State. He has stated his desire to take water and minerals from Canada. He raises false charges that Canada is a significant source of illegal drugs and immigrants. He uses tariffs as a bludgeon to bully other countries into giving him what he wants. He frightens Canadians. That is his intent. He wants Canada, and Canadians recognize this to be true.

Consider Canada’s water. Large swathes of the United States are parched. Water is needed desperately. Some Americans have re-introduced the idea that Canadian rivers and lakes could be diverted to feed their deserts to our south. Canadians will not embrace this. Some Americans have dreamed up massive engineering fantasies to take northern water. One would damn up the James Bay, and turn it into a reservoir to be pumped south. It is beyond silly.

The concept of massive water diversion contradicts Canada’s treaty obligation of returning land to nature, of rewilding. The United States might try to pull water from the Great Lakes, or dam rivers like the Red River that flow north.  There will be danger. There will also be allies in the United States that will oppose projects that may be ecologically disastrous.

 Some Trump supporters think the United States should simply invade and annex Canada. We famously share the world’s longest undefended border, and the invasion itself would be easy. They could then intend to open the north to mining, steal the resources, and divert rivers to the south. This is no longer unthinkable. The moment of greatest peril comes when Trump needs to distract Americans from their own woes, as the damage from his Presidency becomes clear. That damage will inevitably lead to riots and violence that will pre-occupy the White House. At that point, Trump will be tempted to engage in what scholars call a diversionary foreign policy.

The irony is that through tariffs and threats, Trump is promoting Canadian unity. It will cause economic harm, but it will force Canada to become more independent. 

This will impact many industries. The Canadian food processing industry has disappeared. It could make a comeback. Tariffs on lumber may decimate exports to the south. In response Canada could process the lumber to create engineered wood, and export it globally as a new green product for construction. The list of strategies for different sectors of the economy to survive is long. 

Ironically, Trump is forcing Canada to become less reliant on American trade. Self-sufficiency demands Canada sell to trusted partners elsewhere in the world. Europe, Mexico, Latin America and elsewhere, democracies will prefer to do business in and with countries that do not break their word, and do grasp the severity of the moment.

Of all the industries where Canada is strong, none has the potential for wealth that compares with mining. The good news is that Canada's mining sector has seen a growth in investments in recent years. It was projected that investments would reach C$16.4 billion in 2023, a 21% growth from the previous year. The bad news is that this is still barely scratching the surface, and the level of investment is simply rising from dismal lows.

Here is part of the problem mining companies face. Ideally, a mining company would like to go from discovery to production in as little as three or four years. That is very optimistic. In Canada, however, it can take up to twenty-five years. This delay is what mining investors call “the valley of death”. Investment in Canadian mines would be dramatically higher if this time lag were shortened, and if the cost of operating a mine in Canada was lower.

The demand for minerals will continue to grow. That is not the problem. Democracies want metals from politically reliable, environmentally sustainable sources.  Canada is one of the best.  

In the global free trade era now ending, many valuable minerals have come from politically unstable or hostile countries. The mining companies took the risk to invest there, and on occasion got their hands very dirty. Over time, they discovered that the reputational risk of bad behaviour was high. They learned the hard way that dictators do not honour contracts. Looking forward, the democracies of the world will increasingly demand that all their raw materials come from reliable sources. They will also require that mines be as environmentally benign as possible.   

Canada can become the alternative to China, which controls most of the global market in rare earth minerals. These minerals are essential in the electronics and computer chip industries, and in modern weapons. Trump declared he will impose a ten per cent tariff on goods from China. China responded, saying (among other things) it would cut off the supply of rare earth minerals to the United States. This would immediately hurt the American defense and high-tech industries, raising prices. 

Trump wants American control over rare earth materials. This was one of his key demands to Ukraine as he offered their surrender to Russia. The Americans have reserves of many minerals, but not enough for all their needs, and it is not all easily available. Ukraine has a lot, but it is apparently not great quality. Canada has more resources, richer resources, that are closer to the United States. This creates a danger.

Real wealth from mining is possible if Canadians recognize the opportunity of the moment, and plan for the future with fresh eyes. Canada can promise Trump access to mines, tighter borders, more defense spending. It is all theatre. There is no real negotiation or transaction that can be made with a mob boss. For Canada, it is all about delay. Trump’s supporters will soon discover they have been played by a con man when the economy implodes. That will not take long.

This said, it is essential that the Canadian mines be prepared to open for business, for Canada’s benefit. To do it right will take several years of investing in new technology, creating new industries for Canada.  It will take years to fix the political and regulatory speed-bumps, while preserving a green mandate.

We are the north. We must appreciate the north. It is how Canada can pay for eventual peace, order, good government and a sustainable planet.  The secret to achieve this will be through green mining, and that starts with a new relationship with the people of the north.