Is Canada an oil nation? While debate grows in this country about the ethics of the oil sands or the implications of Dutch Disease, there is little doubt that petroleum is a major part of our economy and certain to become more significant in the future.

The Energy Conversation Canada Needs read more

Announcements, Events & more from Tyee and select partners John Horton’s Paintings Preserve History. His Seamanship Saves Lives Meet the fascinating Order of BC winner who also happens to be a Tyee supporter.

Canada is sixth-largest oil-producing nation in the world. Energy exports are seven per cent of our GDP and 19 per cent of our exports. The Alberta oil sands have reserves second only to Saudi Arabia, and some analysts believe production may double by 2020, reaching six million barrels per day.

But what is the future of Canada's petroleum sector? Has our country done an adequate job negotiating resource rents that protect the interests of Canadian taxpayers? Ensuring worker safety or protecting the environment? Building a national consensus around the development of this globally important resource? Providing a lasting economic legacy for future generations?

It seems the debate in Canada has become so polarized that it is impossible to clarify these questions without looking elsewhere for answers. So The Tyee sent me to Norway to try and shed new light on our own resource economy and see what lessons could be learned.

Norway's amazing savings account

Norway produces 40 per cent less petroleum than Canada and has one-seventh our population, but has saved more than $600 billion in oil revenue and counting. This is equivalent to about 140 per cent of Norwegian GDP, or about $120,000 for every man, woman and child in the country. In contrast, every Canadian is in the red about $16,000 due to our $566-billion national debt.

While Canada is eliminating 19,000 public sector jobs in an effort to balance the budget, Norway is debt-free, enjoys full employment and has fourth highest per capita GDP in the world. Canada is twelfth.

Beyond economics, Norway is an obviously fortunate place to live. It is routinely ranked number one in the world on the Human Development Index, is the world's best-governed nation according to the Democracy Index, and is the best country in the world to be a mother.

And in spite of being the world's third largest exporter of crude oil, Norway is ranked number three in the world on the Environmental Performance Index. Canada is thirty-seventh (behind Nicaragua, Albania and Colombia).

And while some Canadian politicians dismiss Dutch Disease -- an oil-driven currency eroding manufacturing exports -- as a discredited theory, the Norwegian government has prioritized avoiding this economic malaise for decades by strictly investing their oil wealth outside of their country.

Norway's national consensus

As a Canadian accustomed to bitter regional and ideological debates, perhaps the most striking characteristic while visiting Norway was the remarkable level of national consensus around the development of their oil industry. No one I met with (including representatives from the environmental movement) were advocating scaling back or shutting down existing oil facilities. There were no ongoing protests nor the heated political rhetoric that has become so commonplace in Canada.

Such broad public support has seemingly been earned through strict oversight by Norwegian authorities, a superb safety record achieved through collaborative management, and a taxation regime that benefits every Norwegian through generous social programs.

These benefits include free university tuition, universal day care and 25 days of paid holidays per year. Per capita spending on health care is 30 per cent higher in Norway; funding for arts and culture is more than three times higher than Canada.

Norway's tough deal with foreign firms

How is all this paid for? Since the 1970s, Norway as a matter of policy has collected between 70 per cent and 80 per cent of the resource wealth generated from their oil industry through corporate taxes twice as high as Canada, and a special tax on oil profits. In Alberta, royalties collected on all oil sands production in 2010 were 10 per cent of industry revenues.

Norway also required that foreign companies train Norwegian workers, transfer proprietary technologies to their state-owned oil company Statoil, and in some cases even hand over producing oil platforms free of charge after a predetermined period.

This insistence on national participation has paid off. Companies controlled by the Norwegian taxpayer now directly own about 30 per cent of the nation's oil production, providing another significant source of income as well as technical input on how their resource is developed.

With minor exceptions, Ottawa and the provinces have no equity share whatsoever in our petroleum resources. Canada remains the only nation of the top 10 oil-producing countries (excluding the US) without a state-controlled petroleum company. National oil companies elsewhere in the world now control 52 per cent of global oil production and 88 per cent of proven reserves.

Petro-Canada was created as a wholly owned Crown Corporation in 1975 but it was regarded with suspicion in Alberta as a federal intrusion into provincial jurisdiction. Ottawa's remaining minor stake in the company was quietly sold off in 2004.

Lessons for Canada?

Could the Norwegian model work here? Would industry and investment flee Canada if we were to demand greater oversight and resource rents? This view seems a common refrain from many pundits and politicians, and was a central issue in the last Alberta election.

Yet capital flight has never been a problem in Norway. More foreign petroleum companies than ever are lining up to invest billions, while submitting to levels of government oversight and taxation unheard of in Canada.

In fact these conditions seem attractive to investors since from the point of view of the Norwegian population, the development their oil industry has been a consensual act. This national buy-in by the taxpayers of Norway builds investor certainty, in contrast to the unpredictable pitched battles ongoing here in Canada.

Norway is of course far from perfect and there are several contentious issues around their oil industry. Unlike their Scandinavian neighbours, Norway has made almost no investments in emerging renewable technologies such as wind or solar.

There is also public opposition to offshore oil operations moving into areas of important fish habitat off their northern coast. Many Norwegians also worry that long-standing policies meant to insulate their economy from the sheer mass of oil money are beginning to falter as prices and salaries march ever upwards.

Yet by far the largest oil-related controversy in Norway is actually about Alberta. Statoil became a minor player in the Canadian oil sands in 2007 and many Norwegians feel this investment is unethical. The Norwegian Church Council and others are calling on their government to withdraw from the project on principle.

Obviously it is easier to be critical of petroleum practices in another country but this case illustrates the comparative consensus in Norway around how their oil industry is managed. Put another way, when Greenpeace was recently handing out leaflets to workers outside a Statoil facility in Norway, the oil company graciously provided the environmentalists with hot coffee and sandwiches. Would this happen in Canada?

Coming dispatches from Norway

How has this level of national civility around resource issues been achieved? What lessons can be learned from our differences and important similarities? Can the Norwegian oil experience inform First Nations as they negotiate expanding resource development on their traditional territories?

Norway and Canada share a Northern-European heritage. We are both sparsely populated resource-based economies. We are both well-governed and well-developed democracies with strong social programs.

Yet our North Atlantic cousin has taken a different path and arrived at a very different place regarding resource development. What follows is a series of stories that seek to recast the resource debate here in Canada, and suggest transformative changes on how our own country sees and manages our unparalleled natural heritage.

The Tyee is the only media outlet in Canada to have invested in this journey of discovery. Please come along for the ride.

Next Wednesday: Viking history, and other reasons tiny Norway stood up to the world's most powerful industrial sector.