The way Forward: The Environment and the Economy

Today, I’m going to talk about the economy. But I’m going to take a longer term perspective on recent events. We all get the short term perspective through our 24/7 new cycle, and it’s good to step back once in a while and take the longer term perspective.

Clearly, we are at the start of a severe recession and restructuring of our economy. In Canada, as elsewhere, we are at the start of the most rapid economic contraction since the Great Depression, and according to the IMF, this year will be the first in 60 that the global economy will shrink. We all see the numbers rolling on our television screens each evening.
This morning, however, I want to step back from these narrow numbers and take a broader perspective. I’m going to make the argument that the root of our economic crisis is environmental, and therefore, the solution to our economic crisis is also environmental.

In my view, we cannot understand the current, global economic crisis without understanding our environmental challenges.
But before I explain the link between the two, let me first talk about what our greatest environmental challenge in Canada is.

The environmental challenge I’m talking about is the cause of most of our habitat loss, most of our watershed destruction, most of our rising GHGs and most of our farmland loss. Our greatest environmental challenge is urban sprawl.

Habitat Loss

We often focus on the on the symptoms, rather than the root causes, of our environmental problems. We look at species at risk, we look at rising GHGs or we look at watershed problems, without looking at the root of these problems. The root of many of these problems is sprawl.

Sprawl is destroying thousands of acres of habitat for flora and fauna. Wellington County alone, being in the Grand River watershed, is home to over a dozen species at risk of complete extinction, including the Great Egret, the Jefferson Salamander and the Green Snake. All are at risk of extinction due to habitat loss, most of it caused by urban sprawl. Most of this sprawl is taking place in the Carolinian forest zone, an area with the highest bio-density in Canada and in this country found only in Southern Ontario.

Last autumn, the International Union for Conservation of Nature and Natural Resources concluded that, on planet earth, 1 in 4 mammals is at risk of extinction and that 40% of all species, both flora and fauna, are at risk of extinction.

While farmland is not native wilderness, along its windrows and forest cover it nevertheless provides much habitat for a wide variety of species. Furthermore, farmland is one generation away from wilderness. Left fallow, it reverts back to its natural state in thirty or forty years, but land paved under will never go back.

Watershed Destruction

In addition, there are signs that the Great Lakes – containing 20% of the world’s freshwater – are under threat from urban sprawl. In recent years, several Great Lakes have experienced unprecedented drops in water levels, some are below long-term averages and some have been at record lows. All this growth is draining our aquifers and destroying our watersheds. Indeed, the biggest threat to the Great Lakes may come not from pressures to divert water to the dry American Southwest, but rather, from the explosive urban growth in southern Ontario.

Consumptive use is a technical term that scientists use to describe the practice of taking water from lakes but not returning it. Today, more than 115 cubic meters of water per second is lost from the GL basin due to consumptive use, for communities from Milton to Richmond Hill, and there is even talk of bringing in lake water to places like Guelph and K-W.

Rising GHGs

Perhaps the strongest environmental argument against sprawl is the global threat presented by rising greenhouse gas emissions. In destroying this farmland, in creating this sprawl, we are constructing a high-carbon infrastructure system of highways and communities that will not only prevent us from reducing our greenhouse gasses, but will in fact ensure we only increase them.
Canada, unfortunately, has the worst record in the G8 when it comes to climate change. According the Conference Board of Canada’s report of last November, Canada ranks second-to-last out of 17 countries for greenhouse gas (GHG) emissions per capita, even worse than in the US. Our GHG emissions have increased by 32 per cent in 15 years. In fact, in 2007, our GHGs rose 4% in one year alone. And while the development of the oil sands has contributed to this rise, what has equally contributed is the rising population and reliance on the automobile in Southern Ontario. And, we cannot blame our cold climate, for Scandinavian countries do not have the same record.

Climate is a dominant factor affecting water levels in the Great Lakes. Precipitation in southern Canada, the volume of runoff in the Great Lakes basin, evaporation losses — all these are functions of climate, and they all affect lake levels. With changing climate, the rate of evaporation is expected to increase dramatically, especially in winter when higher temperatures will result in more open water.

Although opinions vary on the effect a change in climate may have on the Great Lakes, computer models suggest that supplies of water to the lakes may drop dramatically. The mean levels of water in lakes Michigan and Huron may drop by 100 centimetres, while those in lakes Ontario and Superior by 40 centimetres over the next 40 years. These are dramatic changes.

Farmland loss

Urban sprawl also represents a threat to our food supply. We are destroying much of the farmland needed to grow our own food. While much of the food eaten today is imported and while much of farming is unprofitable, we cannot let the short-term economic problems in agriculture cloud our judgement about the long-term. Nothing is more vital to our long-term interest than the ability to produce our own basic food supply. Good farmland, good soil, good climate and consistent rainfall are needed to do that, precisely what we have in southern Ontario.

We cannot assume the long-term security of our imported food supply. Only 60 years ago, Western Europe – one of the world’s great breadbaskets – faced starvation. A disruption to imported foodstuffs would be a problem; Cuba has survived five decades without American automobiles. It would not survive a month without food.
So, as you can see, a pretty convincing argument can be made that the way we’ve built our cities, the way we’ve sprawled out in Southern Ontario – and in other parts of Canada – is one of the root causes of environmental degradation in Canada.

Economic Argument

You may now say, “So what”, “What does the environmental issue have to do with the economic crisis?”
A very convincing argument can be made that our greatest environmental challenge, urban sprawl, both here and in the US, is also the root of our economic crisis.

The simple reality is that for too long, too many people, borrowed too much easy money to purchase houses and cars they couldn’t afford to buy in sprawling subdivisions across much of North America. That all came to a sudden halt last September. While many blame the quote/unquote “financial system” and the US sub-prime mortgage market for the current recession, the rise of oil prices last summer to a record $147 a barrel had far more to do with derailing growth in North America and in Europe. With gas at $1.50 a litre and over $4 a gallon stateside, consumers in subdivisions across N.A. stopped spending at the mall so they could fill up their tanks with gas.

The other simple reality is that for too long, governments of all stripes have been culpable in facilitating this high energy infrastructure by approving and supporting these sprawling communities.

We must face the harsh economic reality. We cannot afford to maintain – either as governments responsible for roads, bridges and sewers or as citizens responsible for mortgage and car lease payments – the sprawling system of highways and communities we have built over the last 50 years.

Even with record government revenues from one of the greatest periods of economic growth over the last 15 years, there is simply not enough money to maintain all this infrastructure. There have been major bridge collapses in Montreal and Minneapolis. Closer to home, dozens of bridges and roads are in need of replacement. As a result, property taxes march upward and governments of all stripes pour tax dollars into maintenance.

And not much longer will this money be available. In the next two years alone, the federal government will accumulate $80 billion in deficits and we will likely amass about $200 in deficits and debt over the five years. Provincial governments face similar shortfalls. Five years from now, all governments will be struggling to balance the books, and not just federal and provincial governments.

Municipal governments face unique challenges. The reason why property taxes are rising more rapidly in places like Mississauga than they are in Toronto are simple. Statistics Canada shows that Toronto has a density of about 4,000 persons per square km, while Mississauga has about half that number. In other words, the ability of a city like Mississauga, built on low density sprawl, to raise property taxes from its population base is only half of that of Toronto.

Furthermore, new development is being subsidized. One study of an Ontario town found that for every dollar in development charges collected, a $1.40 in services were put in. Guess where the other 40 cents are coming from? From existing ratepayers, who are, in effect, subsidizing development. More growth means paying more in property taxes.

Even more than governments, citizens cannot afford to pay for what we have built. Families struggle to pay their mortgages and maintain a two car family, because they have to, because they have no access to public transit and because they have no alternatives to the car. In a sprawling city, an average household will pay about $13,000 a year for transportation; in a more compact city with access to public transit, the average household will only pay about $6,000 a year for transportation. That extra $7,000 a year in extra disposable income for the family living in the more compact city with public transit provides a cushion for them and a higher quality of life.

Our infrastructure system of highways and sprawling communities was built during that half-century period when oil was cheap. Oil broke through the $100 a barrel barrier last year, and even in the greatest economic slowdown in 70 years, oil is still selling for $50-60 a barrel. The long term outlook for oil is not good for consumers. What happens to sprawling suburbia and the commuter lifestyle when oil reaches $200 a barrel and gas reaches $3 a litre?

A typical family with two working parents has two cars and spends about $5000 a year on gasoline at 80 cents a litre. At $2.40 a litre they spend $15,000 a year on gas. Where is the extra $10,000 in after tax disposable income going to come from?
These predictions of much higher energy prices are not apocalyptic nonsense from a group of fringe players. These predictions come from the respected IEA in Paris, from bank analysts and from oil companies like Total, the fourth-largest, publicly traded oil company in the world with 96,000 employees.

Even if one disagrees with the exact timing of these predictions, there is no doubt about one thing: Oil is a finite resource and the long run price is going nowhere but up. Clearly, a lot of what we have built in the last 20 to 30 years is not economically sustainable.

So, many of the causes of environmental problems in Canada are also the causes of our economic crisis, and in that sense, the solution to our economic crisis must also be an environmental one.

So what can be done?

Zero Population Growth

One thing that can be done is to slow our population growth. Canada has one of the most rapidly growing populations in the advanced world. We cannot grow our population from 33 million – as it is today – to 40 million in 30 years, without significant environmental degradation.

So, what we could do is adopt a policy of zero population growth. This would not entail zero economic growth. Many countries, like many in Europe, have had little or no population growth, yet have had economic growth. In Canada, we have a below replacement birth rate but a growing population due to immigration. Since our birth rate is below replacement, we do need immigration to maintain population levels. A zero population growth policy would entail adjusting immigrations rates so a constant population level of about 33 million is maintained.

Overhaul of Urban and Transit Planning

The other part of the answer to the environmental and economic challenge posed by our sprawling communities lies in overhauling urban and transit planning. In other words, we need to ensure that the vast majority of any additional population growth is absorbed within the existing built up urban areas of the GGH, while building much more public transit.

Cities like Toronto and Mississauga will have to significantly increase their populations, while undertaking massive expansions of public transit systems. Some of this is underway, but we must go much further and much faster.

This will result in higher populations and densities in cities, an easing in the flow of commuters and goods, and in turn, an end to sprawl. But it requires a major rethink of urban planning and massive investments in public transit.

These increases in densities and populations are required to provide the level of transit ridership needed to justify the operational costs of major public transit systems. These transit systems do not come without a price.

Tens of billions in public monies would be required to build the kind of public transit systems needed to move people and goods around these denser cities. This level of investment is beyond municipal means and requires commitments from federal and provincial governments. But the alternative – more sprawl – comes with an even higher price.

National Public Transit Act

That’s why I’ve argued for the creation of a National Public Transit Act. This act would create a National Public Transit Fund and would set the criteria for the release of those monies from the Fund. For example, a National Public Transit Fund could commit $30 billion of federal money over the next 15 years for public transit – a rate of $2 billion a year, less than 1% of the federal budget – only to be release to provinces and municipalities if matched by their funds. This would create a national fund of $60 billion dollars to build the Canadian cities of the 21st century.

It can cost up to $200-300 hundred million dollars a kilometre to build a subway system, and about $80 million to build an LRT system. So a $60 billion fund could build up to 1000 kilometres of subways and rapid transit in Canada’s urban areas. This would help our economy by spur productivity growth, reduce congestion, and create a higher quality of life. This would also help the environment by reducing our reliance on the auto, and would help Southern Ontario grow its population through a more compact urban form. It would also help our manufacturing sector, most of it located in small town and rural Ontario, by utilizing an already developed Canadian expertise in manufacturing public transit systems and equipment. The largest manufacturer of rapid transit systems in the world is a Canadian company: Bombardier Transportation. Ironically almost all of its business is outside of Canada.
We re-tooled our auto sector during WW2 to build Spitfires, bombs and guns. Now would be a good time to “re-tool” our manufacturing sector from building cars to building rapid transit.

Too ambitious? Does this all sound too ambitious? I don’t think so. Sir John A. Macdonald forged Confederation by building a rail network of 6400 kilometres across a virgin wilderness, in a country that had only 4 million citizens, about 1/10 the population we have today and a far poorer one at that.

Surely we, in a much richer, much more populated Canada, can build 1000 kilometres of public transit systems to forge the Canada of the 21st century. We surely have that kind of ambition within us, that kind of collective purpose.

A denser population does not necessarily require turning these cities into canyon of towering skyscrapers, where entire neighbourhoods are levelled to make way for forty story condo towers. These increases in population can be accommodated by building five to eight story densities along major transit corridors throughout the city, along streets like Yonge and Bloor in Toronto or Eglinton and Hurontario in Mississauga, like King Street in Waterloo and Kitchener. Either way – 40 story condos in the core of the city or five to eight story structures throughout the city – these cities would be the better city for it.
What is not viable is building more single unit, tract housing on agricultural lands. The era of sprawl must come to an end if we are ever to tackle our environmental and economic challenges. What happens in cities Toronto and Mississauga will have a profound impact on us in Wellington County.

Aesthetic

I’d like to leave you with a couple of thoughts. First, the most important argument against sprawl is that we are consuming what is most beautiful and what we cannot ever re-create: the land. Our land has influenced our culture and imbued our sense of identity. How can one read and understand Archibald Lampman, Margaret Atwood, Ross Sinclair, Robertson Davies, Michael Ondaatje, or any of the other greats of Canadian literature if one has no connection to the land? If one has never seen the undulating hills of Wellington County, or the vastness of the Peel-Halton plain – now paved under and once upon a time the breadbasket of Ontario – how can one understand what it means to be Canadian? The land in which we live is intrinsically tied to who we are as Canadians. The way we treat it is a reflection of who we are as a people.

Second, the longer term solution to our economic crisis lies in environmental sustainability. The scarcity of oil supplies and the rise in oil prices precipitated our economic crisis. The new economic imperative dictates that we must use less energy and fewer resources. If we can do so while achieving the same economic output, we will achieve real productivity growth and real prosperity.

So, the way forward is not the economy or the environment. It’s not just the economy. It’s not just the environment. It’s the economy AND the environment.

In this century, those economies that embrace environmental sustainability will survive and thrive; those that don’t won’t. In my view, it’s that simple.

Thank you.

If you are interested in viewing the Public Policy Forum “Rebooting the Economy” conference you may do so by clicking on this link

Michael Chong is the Member of Parliament for Wellington-Halton Hills and can be reached through his website

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