COLUMN: Solberg – Don’t let facts get in the way of Mulcair’s story

- May 29th, 2012

Facts a cure for Mulcair’s disease

by Monte Solberg

One of the best parts of a bona fide world financial crisis is it forces us to come face-to-face with reality, though that first meeting almost never goes well.

For instance, the Greeks are finally facing up to the unpleasant reality they’re broke. When this sad fact first became apparent, the Greeks rioted because they were mad about reality being so mean to them.

But now at least some Greeks are accepting reality, if not exactly celebrating that it has moved into the spare bedroom as a way to save money. Anyway, the people of Greece will be better off once they accept that for the next few years they will have to be worse off.

In Canada, Thomas Mulcair must face up to his own alarming reality, which is Canada isn’t broke. In fact, Canada is doing quite well due in part to our resource sector, which notably includes the oilsands. What I was shocked to learn from Mulcair is the oilsands gave us Dutch disease, which causes embarrassing symptoms like a flaccid manufacturing sector and excessive emitting from the petroleum sector.

Does Canada really have Dutch disease or is it Thomas Mulcair who has a disease? Could it be that he is allergic to prosperity?

I’m no doctor, but I am pretty good at arithmetic, and Mulcair’s story doesn’t add up. Canada’s oil and gas sector produced $54 billion in GDP in 2010, an impressive number to be sure. But manufacturing, mostly centred in central Canada, was almost three times bigger at $160 billion. Those manufacturers produce automobiles that run on petroleum, which in turn encourages more development of the oilsands.

Bigger yet is central Canada’s $257 billion financing, insurance, real estate and company management sector, which also finances the oilsands.

But we should ignore these facts because Thomas Mulcair has a disease he is determined to spread to us and you can only catch it if you ignore reality.

In this case, we are supposed to believe that, despite accounting for less than 5% of Canada’s total economic output, the oil and gas sector is somehow primarily responsible for the high dollar.

Then we are supposed to believe the high dollar is primarily responsible for the troubles in manufacturing. Then we are supposed to not notice the recent strength in the manufacturing sector.

We should also ignore the fact there wouldn’t be an oilsands if consumers, including millions of Canadians, didn’t demand more and more petroleum. For good measure, let’s ignore the new study that shows significant improvements in reducing carbon output per barrel in the oilsands.

But the real problem with Mulcair’s disease is it distracted us from noticing that a strong resource sector has helped protect Canada from economic shocks. Selling those commodities to the entire world ensures we aren’t too reliant on either just domestic consumption or manufacturing exports to the U.S.

The reality check for Tom Mulcair is the resource sector he derides gives Canada added protection and prosperity that is a comfort in these troubled times.

Categories: Contributor Columns

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4 comments

  1. Herman Dost says:

    Keep on writing Monte, you’re right on the mark, as usual.

  2. brian mouland says:

    Another reality check Mulcair you are not a national leader

  3. Kevin says:

    Nice column. As you say Monte, don’t let the facts get in the way of a good story.

  4. Stephen Smith says:

    I think to get an overal measure of the manufacturing sector you need about a 10 year chart on total produced value, just as you would for the oil sands. Even within the manufacturing sector it would be useful to break down the various ctegories of production to see which are growing and which are shrinking. You know basic economic stuff that seems to escape most politicians.

    The oil sands are what they are, but the fact is, as you state Monte, we need them, because hey we have nothing else to power our cars and trucks and make certain things we all us. As long as we can develop them and do it with regard to the environment, which I think we can all agree is important, then we have to do it until someone invents cold fushion reaction.

    The high dollar does hurt manufacturing exports, that is true, but innovative manf. does not get hurt by this as we may be the only ones doing this in the world. That is is the key to successful manf. consent innovation.

    I would have hoped Muclair had come out with an R and D paper on how to boost innovation. A new way of thinking rather than the old divide the country nonsense that he seems to be persuing.

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