Dutch Disease and everything after

by Aaron Wherry

The NDP points to the Alberta budget to support Thomas Mulcair’s position that the high dollar has hurt the manufacturing sector. Saskatchewan Premier Brad Wall has concerns, but Mr. Mulcair rejects the idea of a regional fight.

“What I’ve said since the beginning is I didn’t want to deal with anybody else but Stephen Harper,” Mulcair said. “I’ll work with all the provinces. – If they want to turn this into a provincial federal fight with me, I’ll set the record straight every time, saying I’m not looking in any way to have the debate with them. I want to work with them. My debate is with Stephen Harper.”

The federal official Opposition leader also rejected the notion he is pitting the eastern part of the country against the West, saying that is “how some of my political adversaries are trying to portray it. ”Some people were trying to change the message, setting up an east-west straw man, saying that’s what it was about,” he said. “But that’s not the case. Since the beginning, this has been about sustainable development. Some people have tried to turn that into, ‘Oh, they’re attacking us personally.’ ”Having seen that sort of exercise before in my home province, I’m immune to it. I’ll keep talking over it and I’ll keep setting the record straight, as I’m doing now, and make it very clear that we want an energy future that is sustainable, we want an economic future that’s sustainable.”

Meanwhile, Stephen Gordon looks at who benefits from oil sands development.




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Dutch Disease and everything after

  1. Ah … Mr. Gordon has spoken. Consensus has been achieved.
    We can all go have a warm bath now.

    • Yes, it’s interesting…everyone is always calling for a ‘national debate’ on some subject or other….but when anybody tries to start one, people make massive efforts to shut it down.

  2. SG ends with:
    The biggest asset that environmentalists have is their intellectual integrity, and they simply cannot afford to fritter that credibility away by cheerfully adopting an economic analysis they know to be wrong in order to advance their agenda.

    Anyone who follows SG on twitter will take note of his frequent snark over individuals/media who conflate the run up in the exchange rate (due to a myriad of factors) with those that attempt to suggest it is wholly due to the booming oil sands.
    Yet, he does exactly the same thing. He attributes (implicitly, without stating it) to Canada’s favourable terms of trade to the booming oil sands. It’s due to a boom in many resources (though I would argue predominantly oil related) At least that’s how I read his analysis.
    Next, he tries to suggest that the Feds distribute revenues across all parts of Canada, and shows percentages over the boom period (2003-2008). However, why omit data before and after the “boom”? Isn’t that how one would tell the regional effect of the “boom”? He just uses multi-coloured graphs to make a stale argument – yes Albertans due to their higher incomes pay more income taxes. And purchase more goods (and GST)as a result of their higher incomes.
    One could just as easily make an argument that the additional Fed revenue that the oil sands investment /taxes funds a build up of our military, overseas wars, more international philanthropy, etc.
    But, this is a point he (and most other academic tweeting economists) neglect when talking about the oil sands:
    Firstly, income is what matters, not production.
    The oil sands are being developed to maximize production. They are not necessarily being developed to maximize income. This is a distinction he implicitly does not appreciate.

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