Exploitation of natural resources takes 3 things. (simplified version)
1. Capital Investment
2. Regulatory Approval
3. A market that can afford to pay after costs of Exploration, Extraction, Refining, Transportation, Repayment, Profit and Taxation establish the minimum price.
Let's take them in order:
Capital Investment
An investment in natural resource exploitation must always return enough to make the investment more attractive than simply leaving the money in the bank or in an alternative investment.
Regulatory Approval
It must be possible to exploit the resource. We know there is oil off the coast of BC, we aren't going to even be able to explore for it in the near future. The same goes for exploiting mineral resources.
We also have to recognize the effect of NAFTA. In BC, we have already been burned by our customers in the US deciding that they won't pay us for electricity that we had already delivered. NAFTA says that we must continue to deliver the same amount of electricity, despite the fact that they refused to pay for 300 Million dollars of it and have set prices that don't return enough profit to cover replacement of aging infrastructure.
If, we were to be stupid enough to sell water to them, they would apply the same rules to the water sales.
A market
The nearest market is not going to be able to afford many of the resources we know we have.
Many of the resources we have in BC don't even have a viable transportation system to allow the resource to be delivered to market. There is a worldwide credit crunch coming and lending to extract resources that can't be sold profitably is not going to be happening. Nevermind that the world has less money now than it did before the subprime crisis could no longer be ignored. I know that the money was imaginary, but the banks still have to write it off.
Then, we have the effect of US protectionism. If you think what happened to our Lumber Industry over the past 2 decades has been bad, you ain't seen nothing yet.
Canada will have its ups and downs but keep in mind that we are a nation full of natural resources. The countries that have the natural resources will always have a bright future, even more so as the world's population increases. Canada overall has very little to be concerned about, and that goes for all nations that have the natural resources. It doesn't mean they won't have their bumps along the way, but their future is brighter than most.
