Returning to colony status

Closer EU integration would not be a unique alliance so much as a one-way rulebook.

By Dr. Tammy Nemeth for The Nemeth Report

Read the original version of this commentary at the author’s Substack here.

Normally, I would take some time before writing on momentous events, but given what was said in the EU state of the union I thought I’d share some initial thoughts on EU President Ursula von der Leyen’s statement regarding a new category of “associate membership” for Canada.

For small context, Prime Minister Carney rejected the label “associate membership” and said Canada was pursuing a “unique alliance.” An article in the Wall Street Journal over the weekend quoted senior officials who said these negotiations have been ongoing for over a year, essentially since Mark Carney became leader of the Liberal party, and it was the Canadians who introduced the term “associate membership”. From this, one might be forgiven for considering the possibility that the “rupture” with the US was manufactured by the Canadian side, (and President Trump fell into a trap), because Carney already had the solution — some sort of membership with the EU. There’s been much polling in Canada in the lead up to Carney’s September trip to Europe about joining the EU, with 4 out of 5 Canadians polled supporting closer integration with the EU. It’s unlikely that Canadians would have supported such a move without the American trade dispute.

Here are my first thoughts on the implications of closer integration for the resource rich provinces of Alberta and Saskatchewan.

1. Any closer relationship with Brussels, whether its “associate membership” (which doesn’t exist and must be created) or a “unique alliance” that encapsulates the “four freedoms” will require taking at least the EU’s energy, environment, and consumer protection laws. That is the bare minimum.
2. Yesterday at the investment summit, Carney said that Canada would accept the “four freedoms” — that means the single market and the European Economic Area (EEA) framework. Is that the floor of the discussions or will there be an attempt to carve out something different?
3. Canada is a federal not a unitary state with very strong constitutionally defined jurisdictions. The EU will not accept “federalism” as an excuse for not taking the methane rules, the emissions trading, the phasing out of oil and gas, the industrial power contracts, the environmental rules, the climate finance rules, and so on. Europe expects one Canadian voice and one rulebook. Provincial power is therefore circumscribed.
4. If the EEA is the basis or starting point, then it will be like what Norway, Iceland, and Lichtenstein currently have:
   1. Laws, rules, and regulations pertaining to goods, services, capital, persons, plus competition, state aid, and public procurement.
   2. They are not part of the customs union, Common Agricultural Policy, or common fisheries policy.
   3. They have no vote in the Council or Parliament.
   4. When EU law in the EEA field conflicts with domestic law, the EEA law wins.
   5. Last year, Norway incorporated a record 597 EU acts and has a backlog of hundreds more. This would be the fate of Canada.
5. Closer relations would make a mockery of the MOU with Alberta. The oil sands and natural gas production would now be governed by the EU environment and energy rules. To be clear, it is in their law to phase out oil and gas production and consumption to net-zero by 2050 with stringent milestones along the way.
   1. Recent European court rulings, which would likely become applicable to Canada, have reinforced these policies. The courts have ruled that new production may not be permitted; scope 3 emissions (the emissions associated with using the product) must be taken into account when considering oil and gas operations, thereby removing the possibility of new production.
   2. The methane emissions rules are more stringent than the deal cut between Alberta and Ottawa.
   3. The environment rules will apply to agriculture. Canada will have to take the following:
      1. A 20% reduction in fertiliser use;
      2. Bans on pesticides and herbicides that Canada currently uses;
      3. Micromanaging of land use with borders of wildflowers, telling farmers how to rotate crops, and switching 30% of productive land to organic production by 2030, 50% by 2050.
      4. Extremely stringent livestock regulations that will make Canadian production uncompetitive.
6. All of the climate finance rules would be applied to Canada:
   1. The Emissions Trading System (currently being expanded in coverage)
   2. The Corporate Sustainability Due Diligence Directive
   3. The Green Taxonomy
   4. The Corporate Sustainability Reporting Directive — ALL of its 16 chapters covering every minute aspect of a business
   5. The Carbon Border Adjustment Mechanism (currently being expanded from 6 industries to
   6. The Single Market Banking Rulebook

Taken together, these measures make new oil sands barrels progressively harder to finance, permit and sell as single-market goods. Alberta won’t be able to renegotiate the terms because they are an imported condition of market access. Thus, Mark Carney and the Liberals won’t need to actually ban oil sands production, the EU aligned finance and rules system will do that work for them.

7. Europe’s economy is stagnant. Why? High energy prices and debilitating and oppressive laws and regulations (see the Draghi report!). One assessment refers to Europe’s regulatory complexity as a hidden tax. Since 2010, European productivity has run at half the US rate. The ECB is projecting a mere 0.9% growth rate, and honestly, I think that’s being generous and optimistic. Industries have been shutting down in Germany and relocating to the US or China because of the high energy prices and regulatory burden. Canada will be tying itself to a sinking ship.

If “associate membership” or “unique alliance” is acted upon, this will be an enormous loss of sovereignty for Canada and Canadian provinces in particular. A premier will no longer be able to say NO to anything because the rules, the conditions, have been written in Brussels. Provinces will be diminished to EU rule implementation units.

Canada can sell Europe the things it “wants and needs” — like potash, fertiliser, oil, LNG, uranium, copper, lithium, aluminum, steel, more defence equipment — without this new arrangement. We already have CETA, we already have the defence arrangement. We don’t need this.

Frankly, this is a return to Canada being a colony. Confederation means the provinces have the power and control to govern the land, the mines, the power plants, and the farms within their borders; “associate membership” or “unique alliance” takes that away and imposes the oppressive European energy, environment, climate and emissions rulebook.

The premiers of Alberta and Saskatchewan will be relegated to the role of clerks for a jurisdiction an ocean away, administering European permits, methane monitoring, reporting, and verification, CBAM invoices they didn’t write and can’t repeal. Is this not like the old colonial pattern but with modern tech? The terms are set in Brussels while the local government exists merely to manage compliance. This is not a partnership of equals it’s a return to colony status and bending the knee to Brussels.

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Dr. Tammy Nemeth is a prominent voice in the energy sector advocating for “energy humanism”—a philosophy that champions reliable, abundant energy and questions the timelines and economic impacts of strict net-zero policies. Originally from Saskatchewan, Canada, Dr. Nemeth is currently based in the United Kingdom where she works as an independent strategic energy and Environmental, Social, and Governance (ESG) analyst, researcher, and historian.