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Thomas Mulcair's Dutch Disease Argument Slammed By Conservatives

Posted: 05/11/2012 7:48 pm Updated: 05/11/2012 7:48 pm

Thomas Mulcair Dutch Disease
The Conservatives continued to hammer NDP Leader Thomas Mulcair Friday, suggesting he is pitting the Prairies against Ontario and Eastern Canada. (CP)

The Conservatives continued to hammer NDP Leader Thomas Mulcair Friday, suggesting he is pitting the Prairies against Ontario and Eastern Canada.

Mulcair told CBC Radio last week he believes Alberta’s oilsands are artificially inflating the Canadian dollar and hollowing out the manufacturing sector in Ontario, Quebec and New Brunswick.

“It’s by definition the Dutch disease,” Mulcair said, referring to how a natural gas find in the Netherlands led to manufacturing declines in the 1960s.

“The Canadian dollar is being held artificially high, which is fine if you are going to Walt Disney World, not so good if you want to sell your manufactured product, because the American client, most of the time, can no longer afford to buy it,” he said on the CBC program "The House."

Mulcair went on to say that Conservatives are responsible for the loss of 500,000 good-paying manufacturing jobs in the last six years because the oilsands were not being developed in an environmentally conscious way and that industry should be forced to pay “now” for the pollution it's causing.

Mulcair’s comments plagued him all week and Friday Finance Minister Jim Flaherty as well as five Tory MPs in question period piled on some more.

Flaherty accused Mulcair of not understanding how the oilsands affect Canada's economy.

“What we see in Canada is a sharing of the wealth,'' Flaherty said at a news conference in Toronto.

''When we have a strong resource sector, as we do in Western Canada and in Newfoundland and Labrador, then we see manufacturers all across the country — including Ontario — profit from that.”

In the House of Commons, Ontario MP Larry Miller called the NPD the "no development party" and said its leader is “attacking the economic success of the Prairie provinces.”

Saskatchewan MP Ed Komarnicki said Mulcair is “trying to pit Canadians against one another instead of supporting sectors of the economy that create good high-paying jobs.”

Alberta MP Blaine Clakins accused the NPD leader of calling an important resource sector “a disease.”

Green Party Leader Elizabeth May, who came to Mulcair’s defence in chamber, said Conservative MPs were distorting a well-known term in economic literature for political gain.

NDP MP Peter Julian declined to tell The Huffington Post Canada that his leader should have chosen different words. “When we talk about the Dutch disease, everyone knows what that means,” he insisted.

“[Mulcair] raised reality,” Julian, the NDP’s critic for Energy and Natural Resources said. “The Canadian economy is unhealthy.”

“When we lose manufacturing jobs in B.C., when we lose manufacturing jobs in Alberta, we lose manufacturing jobs in other parts of the country, that should be a real concern,” Julian said. “When we see that those jobs are replaced with … jobs that are paying us $10,000 a year less on average than the jobs we have lost, that is something that everyone should be concerned about.”

The Conservative attack doesn't worry Julian.

“Every week the Conservatives are going to try to shoot back at us, every week,” he said. “The facts are on our side."

Although economists such as Jim Stanford, of the Canadian Auto Workers Unionand Luc Vallée of Canada Economic Development, side with the NDP, many others do not.

Writing in The Globe and Mail this week, economist Stephen Gordon argued the appreciating Canadian dollar has little to do with the decline of manufacturing, which has been happening for decades.

In the Financial Post, University of Calgary public policy professor Jack Mintz argued Ontario’s manufacturing decline tracked Michigan and Ohio.

Manufacturing is contributing less and less to GDP on both sides of the border and the Americans don’t export any oil, Carleton University’s Ian Lee told HuffPost. It not only takes less people to produce the same goods today than in years past, but Canada is facing increased pressure due to globalization and cheap goods from abroad, Lee said.

Although Lee suspects the NDP is trying to court southern Ontario voters who have lost their jobs in the manufacturing sector, he believes the move is a risky strategy for a party that needs to grow its Western base.

“If he tries to appeal to [his base] by coming out with policies that are critical of the oilsands, he risks alienating Western Canada like the Liberal Party did in 1981, 82 and 83,” Lee said.

"The Libearl Party is [still] essentially shut out of Western Canada and that is because of the National Energy Program. And so if Mulcair is trying to broaden the base of the NDP, this is not the way to do it."

With files from The Canadian Press.

Related on HuffPost:

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    The refining or upgrading of the tarry bitumen which lies under the oil sands consumes far more oil and energy than conventional oil and produces almost twice as much carbon. Each barrel of oil requires 3-5 barrels of fresh water from the neighboring Athabasca River. About 90% of this is returned as toxic tailings into the vast unlined tailings ponds that dot the landscape. Syncrude alone dumps 500,000 tons of toxic tailings into just one of their tailings ponds everyday.

  • Boreal Forest and Coast Mountains / Atlin Lake, British Columbia | 2001

    This area, located in the extreme northwest of British Columbia, marks the western boundary of the Boreal region. On the border of the Yukon and Southeast Alaska, the western flank of these mountains descends into Alaska's Tongass Rainforest and British Columbia's Great Bear Rainforest. Far from the oil sands, the greatest remaining coastal temperate and marine ecosystem is imminently threatened by the proposal to build a 750-mile pipeline to pump 550,000 barrels per day of oil sands crude to the coast. Once there, it would be shipped through some of the most treacherous waters, virtually assuring an ecological disaster at some point in the future.

  • Tailings Pond in Winter, Abstract #2 / Alberta Tar Sands | 2010

    Even in the extreme cold of the winter, the toxic tailings ponds do not freeze. On one particularly cold morning, the partially frozen tailings, sand, liquid tailings and oil residue, combined to produce abstractions that reminded me of a Jackson Pollock canvas.

  • Aspen and Spruce | Northern Alberta | 2001

    Photographed in late autumn in softly falling snow, a solitary spruce is set against a sea of aspen. The Boreal Forest of northern Canada is perhaps the best and largest example of a largely intact forest ecosystem. Canada's Boreal Forest alone stores an amount of carbon equal to ten times the total annual global emissions from all fossil fuel consumption.

  • Tar Sands at Night #1 | Alberta Oil Sands | 2010

    Twenty four hours a day the oil sands eats into the most carbon rich forest ecosystem on the planet. Storing almost twice as much carbon per hectare as tropical rainforests, the boreal forest is the planet's greatest terrestrial carbon storehouse. To the industry, these diverse and ecologically significant forests and wetlands are referred to as overburden, the forest to be stripped and the wetlands dredged and replaced by mines and tailings ponds so vast they can be seen from outer space.

  • Dry Tailings #2 | Alberta Tar Sands | 2010

    In an effort to deal with the problem of tailings ponds, Suncor is experimenting with dry tailings technology. This has the potential to limit, or eliminate, the need for vast tailings ponds in the future and lessen this aspect of the oil sands' impact.

  • Tailings Pond Abstract #2 | Alberta Tar Sands / 2010

    So large are the Alberta Tar Sands tailings ponds that they can be seen from space. It has been estimated by Natural Resources Canada that the industry to date has produced enough toxic waste to fill a canal 32 feet deep by 65 feet wide from Fort McMurray to Edmonton, and on to Ottawa, a distance of over 2,000 miles. In this image, the sky is reflected in the toxic and oily waste of a tailings pond.

  • Confluence of Carcajou River and Mackenzie River | Mackenzie Valley, NWT | 2005

    The Caracajou River winds back and forth creating this oxbow of wetlands as it joins the Mackenzie flowing north to the Beaufort Sea. This region, almost entirely pristine, and the third largest watershed basin in the world, will be directly impacted by the proposed Mackenzie Valley National Gas Pipeline to fuel the energy needs of the Alberta Oil Sands mega-project.

  • Black Cliff | Alberta Oil Sands | 2005

    Oil sands pit mining is done in benches or steps. These benches are each approximately 12-15 meters high. Giant shovels dig the oil sand and place it into heavy hauler trucks that range in size from 240 tons to the largest trucks, which have a 400-ton capacity.

  • Oil Sands Upgrader in Winter| Alberta Oil Sands | 2010

    The Alberta oil sands are Canada's single largest source of carbon. They produce about as much annually as the nation of Denmark. The refining of the tar-like bitumen requires more water and uses almost twice as much energy as the production of conventional oil. Particularly visible in winter, vast plumes of toxic pollution fill the skies. The oil sands are so large they create their own weather systems.

  • Boreal Forest and Wetland | Athabasca Delta Northern Alberta | 2010

    Located just 70 miles downstream from the Alberta oil sands, the Athabasca Delta is the world's largest freshwater delta. It lies at the convergence of North America's four major flyways and is a critical stopover for migrating waterfowl and considered one of the most globally significant wetlands. It is threatened both by the massive water consumption of the tar sands and its toxic tailings ponds.

  • Tar Pit #3

    This network of roads reminded me of a claw or tentacles. It represents for me the way in which the tentacles of the tar sands reach out and wreak havoc and destruction. Proposed pipelines to American Midwest, Mackenzie Valley, and through the Great Bear Rainforest will bring new threats to these regions while the pipelines fuel new markets and ensure the proposed five fold expansion of the oil sands.

FOLLOW CANADA POLITICS

The Conservatives continued to hammer NDP Leader Thomas Mulcair Friday, suggesting he is pitting the Prairies against Ontario and Eastern Canada. Mulcair told CBC Radio last week he believes Alber...
The Conservatives continued to hammer NDP Leader Thomas Mulcair Friday, suggesting he is pitting the Prairies against Ontario and Eastern Canada. Mulcair told CBC Radio last week he believes Alber...
 
 
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freeSpeakr
I stand on the shoulders of giants
09:46 AM on 05/16/2012
The most divisive political group in our dominion's history ever to stain the HoP accusing someone of dividing the people? That's really rich.
HUFFPOST SUPER USER
okgranny
Egalitarian by birth
01:15 PM on 05/15/2012
Under the repressive Harper regime, we have all become poorer and more divisive no matter where we live.
This user has chosen to opt out of the Badges program
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BCPATRIOT
British Columbia
11:12 AM on 05/15/2012
Here in BC we are with Mulcair which is Canada's west, Alberta on the other hand is known as Texas North. it just about time we get rid of Harper & all his free loading ministers.
01:27 AM on 05/15/2012
Mulcair is a lawyer . Just another ambulance chaser on a Federal level.
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freeSpeakr
I stand on the shoulders of giants
09:48 AM on 05/16/2012
And Stephen is an "economist".

I think we will find that when we allowed Stephen Harper, the CPC and other straussian elements to attempt to inflict an economic agenda built on continuous war, perpetual debt, and planned obsolescence backstopped with a social agenda of greed, fear, and the delusion of separation then we allowed ourselves to begin the descent into a pit of dystopian oligarchic kakistocracy.

And by allowing a small group of people to control more and more of our economic, social and political through incremental lowering of standards through mindless deregulation we devalue those things which once made this country great.

If we don't step up and NON-VIOLENTLY oppose these conditions we are doomed.

"A 'No' uttered from the deepest conviction is better than a 'Yes' merely uttered to please, or worse, to avoid trouble."
Mahatma Gandhi
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HUFFPOST SUPER USER
ProgressiveCDN
A Progressive Moderate
02:07 PM on 05/14/2012
I can't stand this idea that Alberta = "Western Canada". Mulcair and any other prospective left-leaning leader knows better than to try to court Alberta, Canada's Texas. They're never going to turn NDP, so that last point was just dumb. If Mulcair keeps Quebec and expands Ontario he will have little need for huge support in the West (though they have alot of support in BC)... This "Dutch Disease" thing is not smart politics because it is not policy, it's just an attack without a solution. But a valid attack, nonetheless.
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HUFFPOST SUPER USER
Watson Richardson
10:21 AM on 05/14/2012
Mulcair should be arrested for Treason. He is an Enemy of Canada.
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HUFFPOST SUPER USER
4evercanadian
Still my guitar gently weeps
11:30 AM on 05/14/2012
Section 46 of CC:

(1) Every one commits high treason who, in Canada,
(a) kills or attempts to kill Her Majesty, or does her any bodily harm tending to death or destruction, maims or wounds her, or imprisons or restrains her;
(b) levies war against Canada or does any act preparatory thereto; or
(c) assists an enemy at war with Canada, or any armed forces against whom Canadian Forces are engaged in hostilities, whether or not a state of war exists between Canada and the country whose forces they are.
(2) Every one commits treason who, in Canada,
(a) uses force or violence for the purpose of overthrowing the government of Canada or a province;
(b) without lawful authority, communicates or makes available to an agent of a state other than Canada, military or scientific information or any sketch, plan, model, article, note or document of a military or scientific character that he knows or ought to know may be used by that state for a purpose prejudicial to the safety or defence of Canada;
(c) conspires with any person to commit high treason or to do anything mentioned in paragraph (a);
(d) forms an intention to do anything that is high treason or that is mentioned in paragraph (a) and manifests that intention by an overt act; or
(e) conspires with any person to do anything mentioned in paragraph (b) or forms an intention to do anything mentioned in paragraph (b) and manifests that intention by an overt act.
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HUFFPOST SUPER USER
ProgressiveCDN
A Progressive Moderate
02:15 PM on 05/14/2012
You assume constitutional facts would have any affect on the kind of person who would write such an idiotic statement. But who knows, maybe you clarified it for him
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Daniel Kilgallon
Calgary Heavy Oil
12:47 AM on 05/16/2012
He'll just move back to France and hide behind his French passport.
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Gnomish
ego doctus ignarus
07:56 PM on 05/13/2012
I take it we no longer count BC as West then because we are not on side with Alberta at all.
07:52 PM on 05/13/2012
Harper and the oil companies (if those can be referred to as separate entities) already pit the oil producers against everyone else.

The only question now is how to manage that wealth better so it doesn't get squandered by the current timbits for brains in charge.
This user has chosen to opt out of the Badges program
05:48 PM on 05/13/2012
If HarperCo and his oil patch base don't give a damn about the livelihood of 2/3 or the country, then it is high time somebody said something about it.

A little more inconvenient truth is badly needed to offset the powerful foreign influence of Big oil dominating Canada's political affairs.

And just 'cause some people are worried about the whole Canadian economic picture doesn't make them anti Alberta/Sask. Grow up.
08:48 PM on 05/13/2012
AB/SK are already spreading billions across the country, never enough for Lefters, though.
02:25 AM on 05/14/2012
Enjoy riding your Hog while you can Harley 'cause the way Harper is governing this country you and your CONS are headed straight for a crash and burn. It certainly did not take long, a year into it and already tanking in the polls.
Robocall me, we can talk some more.
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HUFFPOST SUPER USER
Jason Bullock
10:58 AM on 05/14/2012
I guess the oil companies don't need those subsides anymore then.
03:41 PM on 05/13/2012
Re: the photo: I'm open! Throw me the ball!
10:34 AM on 05/13/2012
It is the harper government's policies that are dividing the country. Mulcair's proposed policies provide the country with a long-term solution that will benefit all parts of the country and its economy. It does not say "shut down the oil sands". It says that resource industries should pay their full social and environmental costs. This will certainly not put them out of business. Canada needs all sectors of the economy to do well if it is to flourish long term. The present government's policies focus only on the very short term (until the next election?). Such policies are extremely dangerous to the economic, social and environmental fabric of this country.

And note, that the BC premier's comments on Mulcair's policy are purely driven by her fear of the provincial NDP in her upcoming election - they are not a "national" perspective..
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emphatico
....is politically radioactive.
11:07 AM on 05/13/2012
BC Premier is only making her ordeal worse by drifting more and more to the right in an attempt to get back the conservatives who are deserting her party. That's why she would lose. It would have been a better idea for her to appeal to the moderate-left voters, but the train has left the station now for her. She will be gone in the next election.

In Alberta, the same thing happened: conservatives were leaving the centrist PC in droves, and Alison Redford (who is probably more to the left than most members of Alberta Liberal Party) realized that and started appealing to the voters on the left. She won her election in a landslide because of this.
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TT Esty1
Failure is a temporary condition.
01:54 PM on 05/13/2012
The BC Liberals are liberals only in name. The Party's composition is of the old Socreds and conservatives. When the Socreds collapsed in BC, these right of centre evangelicals combined with the establishment conservatives and absconded with Wilson's Liberal Party and reshaped it in their own image. The Party recognizes this faulty branding and will be looking for a new name. Bob Rae should be pleased.
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HUFFPOST SUPER USER
4evercanadian
Still my guitar gently weeps
11:23 AM on 05/14/2012
Interesting observation. I think there might be something to that.
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HUFFPOST SUPER USER
SidelineBoy
10:18 AM on 05/13/2012
Saskatchewan, Alberta and British Columbia should just exit this country. Alberta's support of these arrogant eastern provinces is ridiculous. This sort of cry baby mentality asks the world to change in order for it to better itself, not that it changes itself to fit into a new world better. It's not about any of this anyways - its about politics and appealing to the people of eastern Canada who lament their fall from economic favor.
11:52 AM on 05/13/2012
As separate entities? Not likely there are enough shared interests to keep the group together. The current tenure of the debate means less than what will happen. Mr. Mulcair has voiced an opinion, perhaps he will be prime minister. But what a leader says in opposition doesn't always carry over into actions of a government. We have seen this back to leaders like Trudeau and up to and including Harper. It will be an exciting election, in three years or so.
HUFFPOST COMMUNITY MODERATOR
canobserv
08:56 AM on 05/14/2012
you DO realize that oil is a NON-renewable resource......right???
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HUFFPOST SUPER USER
SidelineBoy
10:32 AM on 05/14/2012
I do! That's why we should leave now, before we spend all of the royalties on supporting eastern provinces that seem to despise the west. It it is a finite resource - and shoud not be used to prop the east. We would still have crops and lumber.
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TT Esty1
Failure is a temporary condition.
04:45 AM on 05/13/2012
It is refreshing to hear a politician who not only understands the economic components and how they relate but is prepared to be open and honest in speaking about the conditions. It is so tiring to have a government constantly hedging or hiding information for political reasons. Mulcair's clarity acknowledges that he has respect for Canadians and is prepared to talk to them as intelligent adults. Please let us have more.
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HUFFPOST SUPER USER
SidelineBoy
10:20 AM on 05/13/2012
It's called politics. This is more of a therapy for the easterners than it is a legitimate talking point. He's appealing to everyone's fond memories of the good old days. When Alberta's oil is gone and the next cycle of the economy pulls jobs in another direction, Alberta will cry about its fortune that its wasted to. Nothing about his arguments are refreshing - they're just playing politics and he's tickling your ears.
12:32 PM on 05/13/2012
Mr. Mulcair is either willfully myopic or really stupid, He strikes me as and an intelligent sort, it would be willful myopia. Manufacturing started on the skids in 2004. The prime minister was Martin, the dollar worth about 70-80 cents US. Oil was about 40 dollars a barrel. By 2007 the dollar for the first time in long time reached parity. By 2008 the jobs losses in manufacturing were already 322,000. The rest of the economy in this time made 1.5 million jobs. The main problem with Dutch Disease is that it ignores some rather stark and uncomfortable questions for eastern governments. If they were on top of the file, how did they lose all those manufacturing jobs? Did the rise of emerging economies, and a lower cost of production, not play into the minds of anyone? Why didn't these same governments and industry not invest then to improve competitiveness? If the dollar fell tomorrow, would manufacturing magically return? Sure the west is flush with cash, maybe instead of a tax, why don't we set up a fund for innovation, projects could be funded based on merit and either repaid as a low interest loan, or stock could be given. It works for increasing the competitiveness of the economy as a whole and give Canada a chance to diversify as well.
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Another Pesky Canadian
Talk - action = 0
03:26 AM on 05/13/2012
Re: “What we see in Canada is a sharing of the wealth,'' Flaherty said at a news conference in Toronto."

That's certainly not how I would describe what I am seeing.

I'm seeing the divide between haves and have-nots growing greater and greater, facilitated by the Corporate agenda of the Conservative Government.
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freeSpeakr
I stand on the shoulders of giants
09:27 AM on 05/13/2012
Good point - I'm sure a lot of people feel the same way but are living in fear of economic punishment.

What we are witnessing, IMO, is nothing less than the privatization of government. Say hello to rule via the autocratic whims of a small cadre of business "leaders".
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Gnomish
ego doctus ignarus
07:59 PM on 05/13/2012
A Government by those who have no long term stake in the country, won't serve anyone well.
10:43 PM on 05/12/2012
comparing the NDP to the NEO-CONS is like comparing Hitler to Gandhi. Just sayin.
02:41 AM on 05/14/2012
Why is it that the Harper CONS think that the left are like Hitler and the left think that the Harper Cons are like Hitler? Just askin'.
11:48 PM on 05/16/2012
Harpercons are neither left nor right. They are corporatist evil.