Why Did Sarnia Stay Industrial, But Port Huron Didn’t?

Port Huron — Looking across the St. Clair River from Port Huron, all you see is fire and steam along the opposite shore. Dozens of smokestacks and furnaces towering out of the vast industrial complexes along Sarnia’s “chemical valley.” By some reckoning, 40% of the entire Canadian petrochemical industry is located there.

Along the Michigan side are scattered cottages, boat houses, docks for recreational boating. Downtown Port Huron is surprisingly nice these days, pleasantly gentrified with shops, restaurants, and movie theaters. But the heavy industry, the commercial shipping, and manufacturing activity that built the city is mostly gone.

What explains the differing fates of these two cities? How was Canada successfully able to keep its heavy industrial base churning along in Sarnia, while Michigan’s industry suffered so greatly the past few decades?

In short—Canada has been extremely protectionist over its heavy industry the last few decades, while the U.S. abandoned ours to the whims of globalization.

As much as the Canadian government seethes about President Trump now, in truth, their policy over the years has been far more Trumpian than they let on. Since the Second World War, Canada has pursued a deliberate policy of industrial protectionism, which directly supports their continued industry today.

Sarnia is a great example of that. In 1942, the Canadian government established the Polymer Corporation there, a Canadian federal crown corporation. Wholly owned by the government, the company was given the express goal of manufacturing synthetic rubber for the war effort.

It was so successful that the Canadian government simply kept it going after the war. The company expanded into a massive petrochemical operation, and so did the entire region just south of Sarnia. So much industry became located there, it’s now known as “chemical valley.”

By the time the Canadian government privatized the Polymer Corporation in 1988, the region was responsible for a massive chunk of Canada’s GDP. Dozens of petrochemical firms remain working there, due to favorable government policies encouraging and protecting the industry.

Over the years, Canada has acted deliberately to maintain their own energy independence, often at the benefit of Sarnia. The Interprovincial Pipeline, for example, routes oil over 2,500 kilometers directly from Alberta’s oil fields to the processing plants in Southern Ontario.

It passes through the U.S., of course, and now falls under the threat of tariffs from the current trade war. No matter, Canada is already looking into building another, longer one passing only through Canadian soil. The Northern Shield Energy Corridor would pass 3,300 kilometers across Canada, ensuring that Canadian oil reaches the refineries in Sarnia without American tariffs.

There are too many examples to count, where Canada acted to protect their own industry in Sarnia. They’ve offered immense regulatory leniency, when firms faced lawsuits for pollution and cancer risks. During the oil crisis of the 1970s, they even put price controls in place, aiming to shelter the Canadian energy market from the global disruptions.

Point being, Canada has acted consistently, and actively, over many decades, to deliberately protect their heavy industry in Sarnia. Michigan, and the U.S., on the other hand, are facing the brunt of a decades-long project aimed at gutting our industrial base.

NAFTA and international free trade agreements proved disastrous to cities like Port Huron, unable to compete with cheaper labor costs from impoverished countries abroad. Or, for that matter, with developed nations like Canada who’ve actually protected their industry instead of letting it rot.

This is why it’s so ironic to see the Canadian government freaking out about the trade war. It will, if it keeps up, prove disastrous for Canada in the end, with billions of dollars lost. Yet it’s also reminiscent of the same policies they’ve employed over the years, from tariffs to infrastructure development and outright government ownership of key corporations.

President Trump, in a way, is simply employing the same methods that Canada has used for decades, but to encourage and protect American industry this time. One would think the Canadians would understand that, but in the end, they have to look out for their own.

They see a resurgent American industrial base, and a savvy American government, as a competitor. One that seems highly likely to put a serious dent in their longstanding, highly lucrative trade surplus with the U.S.

As much as the Canadian side of the river, with its fires and smokestacks and sprawling metal complexes, might seem uglier than the picturesque American side, it’s actually much more beautiful when you consider the lives and livelihoods it maintains.

The trade war with Canada is just one small part of the plan, but an important one, when it comes to rebuilding industry in America and in Michigan. Don’t let the Democrats confuse you into thinking it's arbitrary, or listen to the Canadian government acting like clueless victims.

In the end, it’s exactly what Canada has done for years, and now the shoe is on the other foot. Give it a few decades, and you might see industry back in Port Huron again too.