Thomas Mulcair does a disservice to the West

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The Gazette, Wednesday, May 23, 2012

Thomas Mulcair is right about one thing - we need a national conversation about energy and the environment.

He's wrong on the rest of it, beginning with his claim that Canada suffers from Dutch disease, with an overvalued currency driven by the price of oil. The "disease" he's referring to is the Netherlands of the early 1960s, when natural-gas exploitation buoyed its economy to the detriment of other industries. In particular, Mulcair argues that Canada's manufacturing heartland, Ontario, is hurting because of the Alberta oilsands, or as he still calls them, tarsands.

"We've lost 500,000 goodpaying manufacturing jobs since the Conservatives came to power," Mulcair said. "We're losing the balanced economy we had built up since the Second World War."

The NDP leader is simply wrong about this.

While it's true that the loonie is a petro dollar, rising with the price of oil over the last decade, other factors are also behind the strong performance of the Canadian dollar.

Canada has many other commodities the world wants. We are sixth in the world in the production of oil and second only to Saudi Arabia in proven reserves - 176 billion barrels, most of it in the oilsands. We're first in the world in potash, second in uranium, fifth in nickel and zinc, sixth in diamonds, eighth in gold and ninth in lead, copper and iron ore. The emerging economies of Asia, particularly China, want all of this stuff.

Then Canada has strong fiscal fundamentals: the lowest deficit and debt in the G7. Our economy has recovered all the jobs lost in the Great Recession, and then some. In the last two months alone, the Canadian economy has created 140,000 jobs.

We have the strongest banking system in the world, ranked No. 1 for the last four years by the World Economic Forum. Every one of the Big Five Canadian banks ranks in the top 10 in North America in terms of assets. A strong dollar also means that the Bank of Canada has no need to raise interest rates in order to protect the currency. Current low interest rates are based purely on fundamentals, such as inflation, which is within the bank's target range.

Dutch disease? Maybe "a mild case," concludes a report from the Institute for Research on Public Policy, which points out "small, surmountable problems" in the manufacturing sector, mostly due to lagging productivity.

What Mulcair neglects to mention is that the oilsands are a major contributor to the economies of Ontario and Quebec. A study for the Canadian Association of Petroleum Producers concludes the oilsands will contribute $55 billion to the Ontario economy, and $23 billion to Quebec's, in the next 25 years. In terms of jobs, the oilsands are projected to create more than 800,000 person years of work in Ontario and 375,000 in Quebec.

Mulcair's musings over Dutch disease and the environmental sustainability of the oilsands have understandably annoyed the western premiers. British Columbia Premier Christy Clark called Mulcair's comments "goofy."

Mulcair dismissed the premiers as nothing more than "messengers" for Prime Minister Stephen Harper, sent in to take him on. This is actually pretty mild stuff compared, say, to Mulcair calling Conrad Black a "British criminal."

Mulcair's dismissiveness triggered an appropriate response from Alberta Premier Alison Redford. "I was absolutely shocked," she said, "to see the fact that he would dismiss comments from western premiers, whether it's me or Brad Wall or Premier Clark, where he simply didn't think it was appropriate to have a conversation with us about resources we have jurisdiction over."

Saskatchewan Premier Wall put several postings up on his Twitter account, including: "There they go again, Mulcair sticks to attack on the West."

Redford nailed it when she further replied: "To have this idea that you want to be a national leader, and then target a particular resource that is fundamental to the economic development not only of Alberta, but Canada, is ridiculous."

And as Redford has also said, in a remarkable speech in Toronto: "I speak for all Albertans when I say that we are proud to join with Ontario in making this country strong. We rise together or we will fall together. There is no other way."

Perhaps this will prove to be a good lesson for Mulcair in leadership. You don't build this country by pitting one region of Canada against another.

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