mikerickson asked: Will Obama's rejection of the Keystone XL Pipeline sour US-Canadian relations, or is it purely a private matter between the government and the TransCanada Corporation?
(So I typed up a big long response to this and then tumblr seemed to be having technical trouble please try again later but it deleted my reply. This version’s going to be a little shorter and isn’t going to have links in it, because I’m not sure whether it’s worth it if it’s just getting deleted again. If you want more info or you want sources on anything, please let me know.)
Well it definitely isn’t positive - the reaction by the Canadian government has been really negative - the Prime Minister was expressing “profound disappointment” and so on.
You have to remember that the Canadian economy is increasingly structured around digging up hydrocarbons and shipping them to the US or China - even more so now than previously, because manufacturing has all dried up and the pine beetle has killed off the harvestable lumber and the cod have been fished out of existence but mostly because oil is currently around $100/barrel while in the mid-90s it was more like $12/barrel. The government has realized that as long as they remove all regulations on the tarsands, the industry will continue to grow and the Canadian economy will further specialize in tarsands extraction. This is basically straight out of a trade-economics textbook - it’s what we have a comparative advantage in, so it’s what we’re specializing in. Conversely, any additional regulation would drive away the extraction firms (because it wouldn’t be profitable) and the government is terrified that this would lead to a recession (which could in turn lead to them being unelected).
So yeah, on that front this is not something that’s going to bring us closer together. But conversely there are two reasons why we’re not about to burn down the White House and sack New Orleans again.
The first is the more obvious one - namely, we’re totally dependent on the US for all our trade and financial and cultural links, and that’s not changing any time soon.
The second might be a little trickier for Americans. The Republican Party is perceived incredibly negatively here, while Barack Obama is perceived relatively positively. Also, we get a lot of American TV here, including US political ads. Accordingly, the Canadian government has to make sure they don’t appear to be too Republican-friendly, or else their soundbites start showing up on TV in the Republican-favouring context and voters get worried that our government is in cahoots with the Republicans. To an extent this happened during the 2008 US primaries, when the Prime Minister’s Office (same PM as now) leaked a memo stating that Obama’s desire to renegotiate NAFTA was just political posturing and shouldn’t be taken seriously. (In all fairness, that was a true statement. But it’s not right to meddle in other countries’ political process.)
So probably there’s going to be no net change in relationship. Things could change if the US takes some policy that makes tarsands oil less desirable or profitable, or if regulatory approval for new cross-border projects becomes totally impossible. But honestly I’m thinking that’s pretty unlikely.
