Oil Sands: Dalton McGuinty Dismisses Alberta Premier's Call To Defend Development

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TORONTO - Alberta Premier Alison Redford says Ontario counterpart Dalton McGuinty is being simplistic for suggesting a booming oilsands is bad news for Ontario.

Redford disputed McGuinty's comments Monday that a strong oilsands industry means a high Canadian dollar, which hurts Ontario's wellspring manufacturing and export sectors.

"This is a false paradigm," Redford said in a conference call from Chicago, where she is meeting with business leaders.

"We know how the value of the dollar works. It's in relation to an overall national economy. The reason the Canadian dollar is high is partly because the United States has been going through some economic difficulties.

"It's a very simplistic approach."

Redford also said the remarks caught her by surprise because McGuinty had not raised the issue previously.

Earlier Monday, McGuinty rejected calls from Redford for him to do more to publicly defend the oilsands. He said Ontario would prefer a lower dollar over a growing oil and gas industry in Western Canada.

"The only reason the dollar is high, it’s a petro dollar, driven by the global demand for oil and gas to be sourced in Western Canada," McGuinty said.

"If I had my preferences as to whether we have a rapidly growing oil and gas sector in the West or a lower dollar benefiting Ontario, I stand with the lower dollar."

During the weekend, Redford called on Ontario and Quebec to speak out in favour of the oilsands and the Keystone pipeline linking Canada to Texas. She said it's not enough for her to talk about the importance of the resource.

Since becoming Alberta's premier almost five months ago, she has also urged the provinces, territories, and the federal government to work as one to better market natural resources abroad.

Prime Minister Stephen Harper has said he wants more details.

Redford said that despite McGuinty's concerns, she'll continue to pursue the plan.

"(I'm) a little disappointed, but we'll carry on."

She pointed out that McGuinty's remarks clash with a study by the Canadian Energy Research Institute, which says Ontario enjoys the lion's share of oilsands benefits outside Alberta.

The Calgary-based think-tank suggests the oilsands will create $63 billion in economic spinoffs in Ontario and create 65,000 jobs over 25 years. It also points to smaller economic benefits for and thousands of jobs created in British Columbia and Quebec.

More than 350 Ontario-based companies are suppliers to the oilsands, according to the Canadian Association of Petroleum Producers.

However, any oilsands benefits to Ontario are more than offset by the soaring loonie, which went from 63 cents when his government was first elected in 2003 to hovering around parity with the U.S. dollar, said McGuinty.

"That represents about a 50 per cent increase in the value of the dollar, and that has knocked the wind out of exporters and manufacturing in particular," he said.

"I cannot believe that any success that we might enjoy here in Ontario (from the oilsands) is greater than the detriment that we are experiencing as a result of the high dollar."

Ontario's Progressive Conservatives called the oilsands a "national treasure" and said McGuinty should stop blaming other provinces for the fact his government's spending created a $16-billion deficit.

"We’ve got a jobs crisis in our province, and calling the oilsands an embarrassment as Dalton McGuinty’s government has done is wrong," said Opposition Leader Tim Hudak.

"Let’s support it. Let’s create jobs."

The federal government helps fund the oilsands and energy projects in other provinces such as Newfoundland and Labrador, but won't provide financial help for Ontario's move into wind and solar power, said provincial Energy Minister Chris Bentley.

"It’s long been our observation that federal governments over the years have been quite intent on investing in power projects around the country," said Bentley.

"We have launched a very ambitious move to clean, green energy, but we have not sensed the same financial support from the federal government for many years."

Ontario plans to turn off the last of its coal-fired electrical generating stations in 2014, but the Liberal government has come under fire for promising generous guaranteed returns to wind and solar power producers, especially when demand for electricity is falling.

— With files from Dean Bennett in Edmonton

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