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