Mulcair digs in for long debate on ‘Dutch disease’ – by Gloria Galloway (Globe and Mail – May 19, 2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Thomas Mulcair says it was never his intent to spar with the leaders of the Western provinces as he blames Alberta’s oil sands for the loss of hundreds of thousands of jobs in Canada’s other economic sectors.

“I have far too much respect for provincial premiers or for provincial politicians, having been one myself for so many years, to ever want to be interpreted as trying to dismiss them,” the Leader of the federal New Democrats, who was once a provincial cabinet minister in Quebec, said on Friday in an interview with The Globe and Mail.

“And if that is the way it was interpreted, of course,” he said, “I regret it.”

But Mr. Mulcair continues to press his belief that allowing development of the oil sands to proceed without demanding a greater price for the toll on the environment is driving up the dollar and hurting a wide range of industries including manufacturing, fishing and forestry. New Democrats say that without the oil companies paying the true cost of environmental remediation, their profits are unrealistically high and that is driving up the dollar.

“This is the defining issue for the next election campaign in Canada, what type of country we want to leave to our children,” Mr. Mulcair said. “I am convinced that Canadians are going to be with us on this one. But, you know what? For once, we are going to have a real political debate in this country on a substantive issue.”

Mr. Mulcair has said Canada has a case of the Dutch disease – the situation in the Netherlands in 1959 when the discovery of natural gas increased the value of the country’s currency and caused other industries to collapse.

Not everyone who has studied the issue agrees. But Mr. Mulcair was not the first to suggest that Canada has lost jobs as a result of a thriving resource sector. Ontario Premier Dalton McGuinty has made that claim. So has the Organization for Economic Co-operation and Development.

A research paper that was funded by the Harper government and is about to be published in a prestigious journal, Resource and Energy Economics, concludes that a third or more of job losses in Canada’s manufacturing sector can be attributed to resource-driven currency appreciation.

For the rest of this article, please go to the Globe and Mail website:

Comments are closed.