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Geog 2227 Natural Resource Management Lecture #3 Canada’s Resource Economy cont. Review Staples Theory Post-Staple Theory Review Resource and environmental policy Reasons for increasing resource and environmental concern Size Wealth Public land Stakeholders Spectrum of ideologies (deep ecology, bioregionalism, ecofeminism) Review Sustainable development Neo-classical Ecological economics Resource management Interdisciplinary Frontier economics Evolution of Canadian resource policy Staples Theory Origins of the staples political economy The staples thesis set out an export led model of economic growth and attempted to describe how regional natural resource endowments led to the autonomous demands for the dependence upon exports, their spreading effects (linkages) to the rest of the economy and technological social change” (Wellstead 2008, 20). Staples Theory Definition of a staple: a commodity which dominates an economy’s exports. In the staples thesis, the commodity must be relatively unprocessed. Fish, wheat and flour, timber and furs are all considered Canadian staple products. Staples Theory Spread effect linkages Backward (agriculture inputs) Forward (agriculture milling and processing) Final demand linkage (required for diversification but difficult with foreign direct investment) Staples trap - a dependence on the economies that receive exports or supply manufactured goods Staples Theory Four main assumptions of the staple theory Linked to other state economies Expanding resource exports New world economies Difficult terrain requiring state involvement Staples Theory Growth and evolution of staples 1) Rapid expansion as the new staple is developed using easy to access supplies 2) Maturing phase as limits of low cost resource supplies are reached and/or competition limits market growth and the rate of expansion 3) Disequilibrium phase is in slow growth requiring subsidized growth, weaker regulations and search for new supplies - usually a short term solution 4) Decline phase as subsidies stop and industries downsize, move to other countries, new resource activity (aquaculture from wild fish) Staples Theory Canada’s staple economy Lack technological capacity to process Relied on importing consumer goods Cheap supply of raw materials Policies and local resources support developing exports Railways to transport wheat and lumber, later minerals and pulp and paper Breaking the staples trap: Canada “The Staples Trap” - a high living standard supported by local or global demand must remain constant or increase, otherwise drastic consequences 1890s to 1920s Wheat exports supported the manufacturing industry in central Canada 1950s Resource economy impact of provincial development and foreign direct investment (Gordon Commission) Staples approach only applies to new countries - ratio of natural resources to labour and capital Staples Theory Four phases of growth 1) Frontier staples 2) Expanding staples 3) Mature staples state 4) Post staple state Post-Staples Theory Significance of the transition to post-staple economy 1) Large scale development (staples trap or addictive economy) 2) Limited need for education and technical skill 3) Uncertainty - boom bust cycles, public expenditures over other societal needs (health care, education, more capital and less labour…) Post-Staple Theory Empirical evidence in Canada Post-Staple Theory Empirical evidence in Canada
"Geog 2227 Natural Resource Management Lecture _3 Canada's "