The move is over. Let the unpacking begin. Thank you, my committed readership, for staying with us here at DWR during the transition to our new home. It has been a wild and hectic couple of weeks. I should be able to commit a little more time to blogging and finding the information I find interesting and sharing it with you. With that in mind I’d like to share and and comment on the recent furor about Tom Mulcair’s comments about the “Dutch Disease” in Canada.
The noise generated by his comments are out of proportion to what his observation was:
“Mulcair claims that “Dutch disease” has hit the country, blaming energy exports from the Alberta oilsands for artificially raising the Canadian dollar and hollowing out the manufacturing industry.
Coined in an article in The Economist in 1977, the concept refers to the adverse economic effects that the discovery of large natural gas fields off of the coast of the Netherlands in the 1960s had on the country’s manufacturing sector.
The theory goes that a boom in a natural resource sector can lead to an appreciation of a country’s real exchange rate. That increase in the dollar value makes exports more expensive, and has an adverse effect on the manufacturing sector by making it less competitive.”
Okay, so it sounds reasonable so far. Our dollar goes up and makes our manufacturing industry less competitive. But what has got the defenders of corporatism all up in arms? Mulcair takes his statement one step further…
“Mulcair said the problem is the government is not enforcing legislation that would include the environmental costs of exploiting natural resources.
“Those statistics with regard to the overall losses of jobs in Canada are irrefutable,” he said this week. “And they are directly related to the fact that we’re not enforcing federal [environmental] legislation.”
Oh snap. How dare you mention that pillaging the land in the hog-wild foo-fur-ah that is Fort McMurray might be anything less than a calm nuanced approach to 
resource management is beyond the pale. Fainting couches were needed *stat* across much of the Canadian media and parliament.
“I am wondering when the leader of the Opposition will apologize to western Canadians for suggesting the strength of the western Canadian economy is a disease on Canada,” Heritage Minister James Moore said in the House of Commons.
“He attacks western Canada, he attacks our energy industry, he attacks all of the West and the great work that is being done by western Canadians to contribute to Canada’s national unity. He should be ashamed of himself,” he said.
Yes, he should be ashamed for trying to keep the government accountable to for environmental legislation that is currently on the books, oh the villainy. The tar sands have gained a love-halo that is growing in magnitude. Speaking out against them is sacrosanct,with reasonable debate being drummed out by “it’s good for the economy!!!1!” and other nonsense.
Good On Mulcair for pointing out some of the problems with the oil-sands vis-a-vis the rest of Canada, the man is doing his job as leader of the Opposition.
bleatmop
Mystro
The Arbourist
Dead Wild Roses 
1 comment
May 27, 2012 at 1:34 am
bleatmop
First off, congrats on the move! I hope you enjoy your new place!
Second off, interesting post. I considered writing a post of the same statements from Mulcair, but from a different point of view. One mostly from the point of view that he is a douche. His argument hold no merit, in my opinion, though your comments hold more than his.
First off, economic activity does not actually “artificially” inflate an economy. Having 0% down mortgages does “artificially” inflate an economy, creating an industry of flipping houses that basically creates money out of nothing. Producing and selling oil simply just grows your economy. There is an actual product there, that is worth money and is being sold. Aparantly when Alberta has an economy, its bad for the country. When Ontario has an economy, its good for the economy. Check, gotcha Mulchy, you only care about Ontario vote and are going to Chretien route to winning a majority (namely beat up on Alberta).
Second, the dollar going up doesn’t hurt manufacturing near as much as exporting all our manufacturing during the 80’s and 90’s to china and allowing this near slave labour products that come from there to be imported into our economy. The assult on unions, consumers demands to have the cheapest product, no matter the cost to our economy, and allowing multinationals to relocate all their labour to China and India have done far more damage than a rising dollar could ever do. A rising dollar is a sign of a healthy economy, and any CEO of a successful business can adjust to this. Any business that relies on a weak dollar to survive is the sign of an incredibly poor economy.
Third, our dollar may have increased significantly against the US dollar in recent years, but this is a more a sign of the US dollar decreasing drastically and only minor increase in the relative value of the Canadian dollar. Since 2003 we have gone from 0.72 cents/USD to now parity with the USD whereas against the Euro we have only gone from .63 cents/Euro to .76/euro. And not only that, we’ve lost tremendous ground to the Australian dollar, now actually having their currency being worth more than ours in the first time for as long as I remember. Point being is that there is a lot more in play to the value of our dollar than simply “Alberta is producing oil and we must stop those bastards!” that Mulchy would have you believe. Our strong banking system and that we didn’t get caught as bad in the 2008 world economic crisis as most of the rest of the world, particularly our largest trading partner, would be a much larger driving force for our “strong” dollar.
http://www.oanda.com/currency/historical-rates/
Fourth, citing the economist from the 1970’s for economic and trying to apply it to today is like citing other 1970’s magazines about climate change and trying to apply them to today.
http://en.wikipedia.org/wiki/Global_cooling#1974_Time_Magazine_article
Fifth – ““Those statistics with regard to the overall losses of jobs in Canada are irrefutable,” he said this week. “And they are directly related to the fact that we’re not enforcing federal [environmental] legislation.” Evidence please. That is actually counter to what actually makes sense. Environmental regulation are an actual barrier to economic activity. Not enforcing them an allowing corporations to rape our environment stimulates economic activity.
Not to say that I think environmental legislation should not be enforce. I think it should, and should be done so with legislation that is stronger than what is currently written. My point here is that Mulchy is full of shit and he knows it. That’s why he has such an asinine source as a 1970’s magazine article. This is pure politicing, nothing more and nothing less. And it’s going to fail. The Chretien strategy (vilify Alberta) worked really well when he was facing Preston Manning who was upfront about what he wanted to do with the country. Mulchy isn’t facing Chretien, he is facing Harper, who is a far more accomplished politician and has already beat better politicians that Mulchy could ever hope to be.
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