Mr. Obama, it’s the economy, stupid

Why is this significant? Jobs, the economy and the political base. Both Canada and the United States would benefit tremendously if the Keystone pipeline project were approved. Thousands of jobs would be created in the United States if the administration were to give it the go-ahead. In Canada, it goes without saying that we would share the windfall of the economic benefits.

The hitch, however, is the political base of the governments in our respective countries. For Mr. Obama, he has calculated that despite a backdrop of a fragile underemployed American economy, the environmentalist base is vocal enough that it could make things tricky for his re-election. In Canada, the opposition is more of a passive nuisance on this. TO be sure, we are facing down not only the American left on this issue for Keystone, but delays and filibustering of the process at home threatens development of the Northern Gateway pipeline to the West Coast.

Interestingly, the Canadian political tone has switched from one of defence (playing the shield on an issue) to one of offense (playing the sword). For Mr. Harper, a deliberate re-positioning on energy and the environment is becoming clear as Canada steers away from the Kyoto protocol and from paying lip service to action on the ‘green’ file. The government is indeed finding its confidence to push back on the environmental lobby and this is a marked change from just two years ago. Of course, this confidence comes from Parliamentary stability via a majority mandate. Mr. Obama, on the other hand is glueing together the pieces of his fractured base as he faces a tough fight this year.

Two politicians, one confident, the other fragile. Two positions on energy policy and economic development.

It is in Canada’s economic interest to drive up the political cost of delay and deferral on Keystone to help President Obama appreciate that lost jobs in the US comes at a greater price than upsetting another shard of his fractured base.