In 1975, after the Rambouillet G6 summit, the U.S. asked that Canada be added to the group of leading industrialized nations, French President Giscard d'Estaing at first refused. While he had no animosity towards Canada — having in fact taught at Montréal's Collège Stanislas in 1948 — Giscard d'Estaing was of the view that Canada was too small and would only serve as a pro-American counterweight to the continental Europeans. However, the Americans eventually prevailed and Canada was invited to the 1976 summit at Dorado, Puerto Rico, as the seventh member of the club.
The G7 is now approaching its 50th anniversary and Canada's weight within the club is about to grow. The G7 is the hard nucleus of the world's democracies, a political genre currently under pressure politically and economically. Until the situation improves, its members will need to increase their cooperation, and, while still the smallest member, Canada has an important ongoing role:
- As a stable multicultural democracy with a large landmass and extraordinary natural wealth, Canada is strategically located at the geographical centre of the G7, with Japan to the west, the U.S. to the south, and the four European members to the east.
- With many energy sources and critical and strategic minerals (CSMs) necessary for a modern economy under the control of the G7's geopolitical competitors, the importance of Canada as a friendly and relatively close supplier of essential resources will only grow in importance.
Recent G7 Activity in Canada's Resource Sector
Examples in the news recently include:
- Japan is looking at Canada as a potential source of, among other things, CSMs and LNG (liquefied natural gas), including through the LNG Canada project in British Columbia.
- On March 16, 2021, Germany and Canada announced the signing of an agreement to cooperate on the Canadian production of green hydrogen for export to Germany. Hydrogen is currently considered the only fuel capable at this time of decarbonizing heavy industry and freight transportation by rail.
- Reuters reported on March 18, 2021 that President Biden and his administration were looking to assist U.S. manufacturers and miners to explore and produce CSMs in Canada. Knowing how the preferred American solution to problems tends to be to throw large amounts of money at them, this augurs well for Canada's remote regions and the populations that inhabit them, including First Nations who have become central to most resource development in Canada.
Issues on the Horizon
This trend is bound to continue. In order to avoid awkward conversations in the future, Canada should begin to discuss with its G7 allies, as well as with the provinces, the conditions under which G7 members can expand their access to Canada's wealth of minerals and energy. The goal should be to dovetail all this future investment with Canada's needs and ambitions.
For example, Germany's current vision for green hydrogen involves Canada's East Coast and more specifically Newfoundland & Labrador and Québec. Québec's electricity grid currently includes more than 5,400 MW of hydro generation at Churchill Falls, Labrador. At this time, nearly all of the generated electricity at Churchill Falls is purchased by Hydro-Québec and exported to Québec. The electricity contract governing Churchill Falls ends in 2041. What happens to the renewal of the contract if green hydrogen is successfully produced in Newfoundland & Labrador, with hydrogen producers clamoring for more electricity?
Canada has long tried to shake, with mixed results, its image of "hewers of wood and drawers of water." The notion that nations — even G7 allies — could invest only to extract and export CSMs without value-addition in Canada runs counter to economic development plans of some provinces, including Québec. In February 2021, Québec published the Québec Plan for the Development of Critical and Strategic Minerals2021-2025 (see related article). Moreover, Québec's Mining Act (section 101.0.2) expressly states that the Government may condition the grant of a mining lease to the creation of value-added activities in Québec. In other words, resource extraction is no longer the end goal. What happens if such requirements as those in Québec run counter to the express needs and wishes of a powerful G7 nation?
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