We may be in a deep recession, but the fundamentals don't change. And they will play out over the decades to come

by Jim Meek

We didn’t expect much on an early March evening when we waltzed into the old hotel ballroom in Halifax. We were there to hear Glenn Scott, the clean-cut young president of ExxonMobil Canada. Scott’s company is so buttoned down that it’s hard to get roused up about an ExxonMobil after-dinner talk.

Turns out the man actually took us for a spin around the floor: The energy giant will spend $200 million this year drilling a new production well at the Sable gas project. He also said the Sable owners would look at producing gas from smaller fields on the Scotian Shelf. 

That same day, ExxonMobil CEO Rex Tillerson said the company intended to invest between $25 billion and $30 billion (U.S.) annually over the next five years. (In short, all systems go.) Tillerson also told analysts that his company, with its 30-year planning horizon, hadn’t been much impressed by the previous “year of extremes,” with oil prices fluctuating between over $140 and less than $40 per barrel. “We believe it is important to ignore the noise,” he said.

That’s the best advice I’ve heard all year—“ignore the noise.” We may be in a deep recession, and a prolonged one, but the fundmentals won’t change. And they will play out over the decades, no matter what happens in the next electoral cycle.

Good on Premier Danny Williams, then, for pursuing an energy policy that looks forward to 2041 rather than back to 1969. Forty years ago, Newfoundland signed that infamous power deal for development of Churchill Falls, which nets Hydro Quebec billions of dollars in profits for the resale of cheap power from Labrador.

Newfoundlanders have been whining about the deal virtually since it was made, which may have had a therapeutic effect but not a real one. Williams, bless him, was the first leader to understand that all the complaining wasn’t doing the province any good.  

With the Quebec deal set to expire in 32 years, Williams knew it might be wise to build a power corridor (or suggest building one) to connect Labrador to the island of Newfoundland, and possibly to Nova Scotia and New Brunswick as well.

The strategy was intended to rob Hydro Quebec of its leverage in the final three decades of the original Churchill Falls agreement.And lo and behold, it worked. In an historic agreement announced on April 2, Hydro Quebec gave Nalcor (Newfoundland’s provincial energy company) the right to sell power directly to U.S. customers after “wheeling” it through Quebec. Williams won by thinking deep and going long. And ignoring the noise.

U.S. President Barack Obama can’t entirely avoid the clamour of our times. Indeed, he made a little clatter of his own this spring, complaining about the super bonuses paid to super egos inside all of those bankrupt insurance and financial companies.

But Obama also found time, in a quieter moment, to introduce educational reforms that could help restore the U.S. as the world’s major economic power—over time. Under the president’s plan, the school year would be extended, students would be tested and ranked among their peers across the globe, and teachers would be rewarded on merit. In short, Obama wants to do what can’t be done in Canada if you believe regressive, reactionary chatter from teachers’ unions. 

Obama knows that if kids are educated better, rather than processed through an institution, they will make something of their lives—which is the definition of good citizenship, after all. This is the message Canada’s “beyond-the-noise” think-tanks have been touting for years, groups such as the Conference Board of Canada, NovaKnowledge, and the Atlantic Institute for Market Studies.

Educate kids well and they’ll create more wealth, live enriched lives, and be more flexible in the workplace because they can learn new things and do new jobs. That’s why Obama’s mother used to tutor him at 4.30 a.m.—schooling is good for you, son.

So there you have it: In this recession, let’s stick to fundamentals and ignore the noise. Gee, I’d even wager that a few more graduating classes of well-rounded, well-educated young people will do more for the economy in the long run than a dozen shovel-ready highway projects.

Jim Meek is a freelance writer and consultant with Bristol. He can be reached at jmeek@bristolgroup.ca