Diane Francis: The world needs more Canadian resources

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Governments must step back and facilitate, not sabotage, the mobilization of Canada’s natural wealth to fight inflation and play a leading role in a just cause

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The Great Resource Reset is underway, as punitive sanctions on Russia lock in its natural resources and agricultural production and provide opportunities for resource-rich countries like Canada, Australia and the United States.

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Russia is isolated by financial restrictions and the noose appears to be tightening as the European Union considers even tighter restrictions on imports of Russian coal, oil and natural gas. Equally important are the sanctions that bar Russia’s access to US dollar transactions, as well as the companies, capital, technology and expertise that have built its resource industries.

Almost immediately after the invasion, the world’s major oil and mining giants voluntarily withdrew from Russia. Their departure saw the withdrawal of money, engineers, geologists and technologists that Russia relies on to drill, develop and produce energy, potash, nickel and other metals and minerals. .

This means that Russia will not have the capacity to repair and modernize its existing operations, let alone build the pipelines and other infrastructure needed to deliver the huge amounts of oil and gas it has promised China.

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Geologically, Canada is a mirror image of Russia and the two are among the world’s largest producers of oil and gas, uranium, nickel, potash and wheat. Countries are now competing to ensure the Canadian supply of these and other products. Two weeks after the invasion of Ukraine in February, Brazil’s Minister of Agriculture flew to Canada to secure potash supplies for its gigantic agricultural sector.

The whole world comes to Canada

Mourad Al-Katib

Tereza Cristina, Brazil’s Minister of Agriculture, said in a public statement that she had secured an undisclosed increase in potash exports from Canadian producers after meetings with government officials and industry leaders. Before the conflict in Ukraine, Brazil imported about 36% of its potash from Canada, compared to nearly half imported from Russia and Belarus,” reads the Wall Street Journal.

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“The whole world is coming to Canada,” Murad Al-Katib, general manager of AGT Food and Ingredients, told the Journal. His Saskatchewan company buys grains and pulses from Canadian farmers and ships them around the world. He said demand for Canadian crops is increasing in countries like Turkey, Algeria and Tunisia.

The rush for supplies has led to soaring prices that can lead to food shortages and inflation, so rapidly increasing the production of food and other basic necessities will be a major topic at meetings of this week from the G7, the World Bank and the International Monetary Fund. The United States and Canada have already committed to increasing their food exports.

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Natural resources are the backbone of the global economy and Canada ranks third among the top 10 countries in terms of resource wealth, according to Investopedia. The Canadian economy in general, and its stock market, will be the major beneficiaries of global efforts to isolate Russia.

The resource reset will also benefit the federal and provincial governments, which is why they must step back and facilitate, not sabotage, the mobilization of the country’s natural resources to fight inflation and play a leading role in a cause. correct.

Some Canadian uranium and potash producers have increased production in response to market needs. Ottawa also said Canada has the ability to increase oil production by about 300,000 barrels a day by the end of the year. But more is needed.

“We need to do over 300,000,000/day and faster,” tweeted Alberta Energy Minister Sonya Savage. “And we can, if the federal government steps aside. It’s time to start treating our oil and gas reserves as a strategic asset we can be proud of, rather than a liability to be phased out.

The world needs more Canada…and that means resources.

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Read and subscribe to Diane Francis’ newsletter on America at dianefrancis.substack.com.

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