Nova Scotia's Resource Reckoning--A Lesson For Canada's Have-Nots

“We must take the ‘no’ out of Nova Scotia. Special interests have captured too many parts of our economy and have had an outsized voice in policy creation. That must end. Outright bans of entire sectors are lazy public policy, and we will reverse bans and focus on meaningful, mature discussion,” Houston said.

He added, “[We] can’t expect Nova Scotia to prosper when we ban industry after industry after industry.” The premier also questioned why the province has banned activities that are important to the economy but are done quite safely in other jurisdictions.

In another surprise move, the premier called for the revival of the Energy East pipeline project that proposed transporting oil from Alberta to New Brunswick.

For those unfamiliar with Nova Scotia’s resource issues, the province has banned uranium exploration and mining since 1981, maintained a ban on hydraulic fracturing (fracking), and imposed a moratorium on oil and gas development around the fishing grounds of Georges Bank.

However, the premier’s words were raised in relation to looming U.S. tariffs. He raised concerns over what tariffs could do to provincial revenues. The government is re-exploring resource development with locally generated revenues to counter these potential losses.

The premier also invoked concerns over the province’s aging population and the growing costs of delivering health care as justification for finding other sources of revenue.

Either way, he has opened a necessary and long overdue conversation in Nova Scotia. His opening of this proverbial can of worms raises deeper questions about resource development in other underperforming parts of the country and the equalization formula.

One may be tempted to interpret past animosity in Nova Scotia and the reluctance toward resource development as opposition to industry or climate change-supported policies. However, it is often the case NIMBYism (‘not-in-my-backyard’) is the culprit. Residents who already have jobs and a good livelihood complain loudly about the effects of industry in their community or often how development interferes with the view from their summer cottage by the ocean. Some commentators have documented the coastal building boom in Nova Scotia over the last several years.

The issue of property rights and land use is always fraught with tensions as competing users share common spaces. While Nova Scotia fancies itself, “Canada’s ocean playground,” as its license plates read, it appears the province’s residents have to learn to share this playground with all users, including those into energy and mining.

If Nova Scotia wants to maintain a growing economy, it should accommodate a much stronger resource sector. Politicians and policymakers across Canada, including Nova Scotia, must ensure land use and provincial planning support multiple property uses and protect commercial interests, as these benefit all residents, even if they don’t realize it.

Speaking of competing users, another major impediment to resource development is the organized muscle of the fisheries sector. No one doubts that fisheries are a staple for the province and represent a cultural anchor for many communities. However, one can see how often anti-resource opposition can be traced to fishing opponents. All ocean-facing provinces should support all industries and opportunities.

Finally, Nova Scotia can address NIMBYism and legacy industries’ influence while demonstrating how to overcome the challenges posed by equalization incentives. David MacKinnon, a senior fellow at the Frontier Centre for Public Policy, wrote about how the regional subsidies of equalization create “moral hazard” where the recipient provinces are shielded from the consequences of their actions. For average Nova Scotians, everything appears ‘normal’ despite structural problems.

Former federal finance minister Joe Oliver highlighted how the equalization formula created another form of moral hazard by providing no incentives for a jurisdiction to develop its natural resources. He wondered if penalties should apply to jurisdictions avoiding resource development.

If Nova Scotia can embark on the course Houston favours, it would also benefit Canada. It might inspire other Have-not provinces. It can animate a necessary conversation about responsible resource development and how to counter the policy choices that conspire against it.

Joseph Quesnel is a senior research fellow with the Frontier Centre for Public Policy.