[Oil] Lessons from Oslo – by Heather Mallik (Toronto Star – November 24, 2012)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

OSLO—Britain is cool, Denmark is heavenly and Norway is next. Two down and one to go in my three-nation quest to find out why Stephen Harper in 1997 sneered in a speech to Americans that “Canada is a Northern European welfare state in the worst sense of the term, and very proud of it.”

I can hold a grudge for 15 years, easy, but that isn’t the point. I assumed the innocent Harper simply hadn’t visited these northern nations or he’d have seen how badly we needed to nudge closer to their style, their way of thinking.

Britain and Scandinavia are full of good ideas for a Canada at the crossroads, with a Conservative government trying to take us back to the 1950s while provinces like Alberta and Quebec stare at the future with a wild surmise. We should study the northern nations. We are one of them.

On the other hand, Norway fills me with apprehension. Norwegians are famously rational and courteous, almost as good-looking as the Danes and rich as Croesus.

Teen poet Adrian Mole once saluted the nation in a 1984 novel by Sue Townsend:


Land of difficult spelling.

Hiding your beauty behind strange vowels.

Land of long days, short nights and dots over ‘O’s.

One day I will sjourn to your shores.

I live in the middle of England


Norway! My soul resides in your watery fiords fyords fiiords


Good Idea: Get rich, properly

Norway has become stupefyingly rich, something I am accustomed to in totalitarian women-hating countries like Saudi Arabia but not in sophisticated generous nations with photogenic industries like logging and fishing.

The great B.C. online magazine The Tyee ran a long — and brilliant — series by Mitchell Anderson this year on the economic glory of Norway. I urge you to read it. It shocked me to my greedy Canadian core.

The Norwegians discovered offshore oil in the 1960s but, unlike Canada, learned to manage it well and now, well, they’re loaded. Norway’s Sovereign Wealth Fund, is worth $650 billion (U.S) and will hit $1 trillion in this decade. (Alberta’s Heritage Fund, set up in 1976, is at a banana republic level of $15.9 billion Cdn.).

As Anderson says stolidly, that’s equal to “140 per cent of GDP (gross domestic product), or about $120,000 for every man, woman and child” in Norway. (They have 5 million people, we have 31 million.)

The fund owns 1 per cent of the world’s stocks. Norway has a debt surplus. It has full employment, a phrase that in my world ranks with “cure for cancer” and “climate stability.”

According to the International Monetary Fund, it has the third highest per capita GDP in the world, after Luxembourg and Qatar, where you do not want to live. We’re 10th. I am filled with retroactive shame for how Canada — most notably Alberta — messed up its stewardship of natural resources. It’s like a lottery ticket we failed to cash.

Let’s look at how Norway has dealt with rapacious multinationals, mitigated environmental damage and decided to rule its own destiny, along with feeling a certain amount of guilt at its good fortune.

“We have an abundancy problem,” says Prof. Dag Harald Claes, head of political science at the University of Oslo. “It seems like a nice problem but it’s still a problem.”

There is a startling right-left political consensus in Norway, but it may be the consequence of wealth. For instance, when the so-called right-wing wants to get difficult, I am told, it argues that not enough is being spent on welfare. No one blinks.

It wasn’t always this way. When oil extraction began, regulation was weak, Claes says. “The American companies came, did it the way they did it in Texas with no labour, health or environmental regulations.” Then in 1980 an offshore oil platform collapse killed 123 workers. “The Nordic logic kicked in.”

Now the industry is heavily regulated, taxed and structured for the future, the only debate being at what pace extraction should continue, to avoid the “Dutch disease” of an oil-dominated economy crushing manufacturing exports.

Canada faces this problem in its rush to pull money out of the tarsands at full speed. It uses low-paid foreign workers, for instance. Here, local workers are trained, so that the expertise doesn’t leave if a multinational departs.

Einar Lie, a history professor at the University of Oslo, says the Norwegian government initially had a semi-war with multinational oil firms because it wanted control of its own resources and a marginal tax rate of at least 90 per cent. (In 2010, Alberta charged only 10 per cent royalties on its all its oil revenue, Anderson reports.)

The multinationals threatened to leave the Norwegian shelf. “(Norway) didn’t want them to leave but they didn’t beg them to stay because that’s not how we do things in Norwegian politics,” Lie says.

For the rest of this article, please go to the Toronto Star website: http://www.thestar.com/news/world/article/1292239–mallick-lessons-from-oslo