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The wine stopped flowing and the light went on – so that’s what economic consequences look like

February 27, 20187:14 AM Terry Etam0 Comments

For a brief moment in its history, Alberta’s list of unacceptable interprovincial baggage included two things: rats and BC wine. The rat trade has never amounted to much, what with Alberta’s natural borders and elite (but not over-romanticized) rat fighting forces, and BC’s admirable restraint in not exporting them.

Fortunately, the wine blockade ended before similar liquor-sniffing border patrols were activated, but the halt in wine imports was around long enough to prove a point very eloquently.

At the heart of the issue was, of course, the Trans Mountain pipeline expansion. Opponents to the project have viewed and portrayed the opposition in stark, simplistic terms: that the reasons for stopping the project are overwhelmingly good, and that there was no downside whatsoever to stopping it – the only victims would be a multinational pipeline company, and oil sands producers who are killing the planet anyway.

No amount of reasoning or fact sheets or commercials were successful in diluting this view. The leaders of the protests, the professionals, have done a phenomenal job of convincing the average citizen of the terrors of the pipeline and the danger to the planet if it’s completed. According to them, there is no downside to not building it; how could anyone be so crazy to think there’s anything good that could come from it? According to them, the result of the expansion would be obvious: oil slicks up and down the coastline from Alaska to Seattle, no more wildlife, and none of that would matter anyway because the environment would be boiling from all the carbon released from oil sands bitumen that would flow down the line and destroy humanity like a 42-inch napalm hose.

Well, the wine fiasco shone a light on a whole other world that the professional protesters don’t want anyone to think about – economics. Not economics in the sense of the dismal science; economics in the sense of the pain caused to working people when perfectly good products are prevented from being sold in the markets where they are in demand.

The pain felt by BC wine producers – which was definitely substantial, despite Premier Horgan’s comments that there were plenty of other markets – showed everyone in a quick and simple way what happens when producers can’t effectively sell their product. This of course is exactly what’s happening to Alberta’s petroleum producers. And not just the producers, but all the spin off businesses as well.

A lot of people heard in no uncertain terms how damaging the embargo would be to the interior of BC. The evidence isn’t hard to see, particularly when it’s small businesses that are impacted, and that impact makes the evening news.

It’s the same for Alberta. No one should think that blocking Alberta from selling petroleum hurts only the big guys; they just shrug and reallocate budgets to some other global realm. For every winery that was hurt in BC, a hundred trucking businesses or restaurants or hotels or truck dealerships or you name it was hurt in Alberta by lower commodity prices resulting from a lack of infrastructure.

As part of the learning process, let’s hope people learn a few other things that the Trans Mountain protesters refuse to acknowledge: the staggering level of safeguards that will be demanded, expected, and implemented. That’s far more of a reality than theoretical scare tactics.

Read more insightful analysis from Terry Etam here. To reach Terry, click here

Column Trans Mountain Pipeline

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