Thomas Mulcair's 'Dutch Disease' Strategy May Be Paying Off For The NDP

The Huffington Post Canada  |  By Posted: 05/11/2012 10:21 am Updated: 05/11/2012 10:21 am

Thomas Mulcair Dutch Disease
Ever since becoming leader – and during the leadership race as well – Mulcair has spoken of the dreaded ‘Dutch disease’ and how it can be remedied by limiting the expansion of the Alberta oilsands in a "sustainable" way. (CP)

When Thomas Mulcair became leader of the NDP, he promised a structured opposition that could take on the Conservative government. His strategy appears to be working.

Poll after poll has put the New Democrats neck-and-neck or ahead of the Conservatives, as yesterday’s Harris-Decima poll indicated. That survey pegged NDP support at 34 per cent, four points up on the Conservatives.

While some of this can be attributed to the honeymoon period that normally comes after a party selects a new leader, there might be more to the NDP’s good fortune.

Undoubtedly, Mulcair is benefitting from a series of bad headlines for the Conservatives. While any one of these stories might not have been enough to seriously dent the Tories’ support, the cumulative effect appears to have been quite damaging.

But on the other side of the aisle, the New Democrats are doing some of the right things.

Ever since becoming leader – and during the leadership race as well – Mulcair has spoken of the dreaded ‘Dutch disease’ and how it can be remedied by limiting the expansion of the Alberta oilsands in a "sustainable" way. His position has come under some scrutiny, both in the national media and from western politicians (including Saskatchewan Premier Brad Wall).

Dutch disease refers to when a commodity boom leads to strong currency which can badly hurt manufacturing exports.

While Dutch disease is a real economic phenomenon that many economists would agree is happening in Canada, others would deny it is even taking place.

The average Canadian has little interest in the nuances of these economic debates. Nevertheless, the economy is still the most important issue for voters, and with Mulcair making an economic argument for the sustainable development of the oilsands he hits a stronger note than he would if his plea were based on environmental idealism.

By focusing on the danger Dutch disease poses to the manufacturing sector, Mulcair boosts his appeal in Ontario, the province in which the NDP needs to grow to form government. In addition, by calling for the sustainable development of the oilsands rather than their abandonment, Mulcair strikes a tone that can resonate with (particularly eastern) Canadians who are no big fans of their environmental toll but recognize the industry’s importance.

This is part of Mulcair’s strategy to make the NDP appear more level-headed and responsible. By taking this approach, Mulcair squeezes the Liberals out of the political debate by removing an excuse to support a third party. Mulcair is framing as the NDP alone against the Conservatives.

So far, that is a fight the Conservatives are losing. Against a Liberal opposition, the Tories always had the Liberal record in their back pocket for rebuttals, and Canadians could shrug their shoulders and conclude that the two parties were the same.

Without a record, attacks on the New Democrats are harder to land. Though the Conservatives can stoke fears of the unknown — and the lack of experience on the opposition benches is indeed a powerful argument in the Tory deck — by 2015 Canadians might be open to something new. And in Quebec, where the NDP dominates, any attacks coming from the unpopular Conservative leader don’t register at all.

Where the NDP has a record, those governments are generally well-regarded: Darrell Dexter in Nova Scotia, Gary Doer and Greg Selinger in Manitoba, and Roy Romanow and Lorne Calvert in Saskatchewan. The provincial NDP is leading in the polls in B.C. as well. Ontario’s NDP government is not fondly remembered, but that government was headed by Bob Rae. Any attack on its history is also an attack on the Liberal leader, deflecting the blow.

Mulcair has capitalized on Conservative troubles and put his party in an ideal position. Less than two months after taking over the NDP, his strategy is hitting the right note. Only some 40 more months to go.

Éric Grenier taps The Pulse of federal and regional politics for Huffington Post Canada readers on most Tuesdays and Fridays. Grenier is the author of ThreeHundredEight.com, covering Canadian politics, polls, and electoral projections.

Related on HuffPost:

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  • 10. Oil And Gas Accounts For 4.8 Per Cent Of GDP

    The oil and gas industries accounted for around $65 billion of economic activity in Canada annually in recent years, or slightly less than 5 per cent of GDP. Source: <a href="http://www.ceri.ca/docs/2010-10-05CERIOilandGasReport.pdf" target="_hplink">Canada Energy Research Institute</a>

  • 9. Oil Exports Have Grown Tenfold Since 1980

    Canada exported some 12,000 cubic metres of oil per day in 1980. By 2010, that number had grown to 112,000 cubic metres daily. Source: <a href="http://membernet.capp.ca/SHB/Sheet.asp?SectionID=9&SheetID=224" target="_hplink">Canadian Association of Petroleum Producers</a>

  • 8. Refining Didn't Grow At All As Exports Boomed

    Canada refined 300,000 cubic metres daily in 1980; in 2010, that number was slightly down, to 291,000, even though exports of oil had grown tenfold in that time. Source: <a href="http://membernet.capp.ca/SHB/Sheet.asp?SectionID=7&SheetID=104" target="_hplink">Canadian Association of Petroleum Producers</a>

  • 7. 97 Per Cent Of Oil Exports Go To The U.S.

    Despite talk by the federal government that it wants to open Asian markets to Canadian oil, the vast majority of exports still go to the United States -- 97 per cent as of 2009. Source: <a href="http://www.nrcan.gc.ca/statistics-facts/energy/895" target="_hplink">Natural Resources Canada</a>

  • 6. Canada Has World's 2nd-Largest Proven Oil Reserves

    Canada's proven reserves of 175 billion barrels of oil -- the vast majority of it trapped in the oil sands -- is the second-largest oil stash in the world, after Saudi Arabia's 267 billion. Source: <a href="http://www.ogj.com/index.html" target="_hplink">Oil & Gas Journal</a>

  • 5. Two-Thirds Of Oil Sands Bitumen Goes To U.S.

    One-third of Canada's oil sands bitumen stays in the country, and is refined into gasoline, heating oil and diesel. Source: <a href="http://www.nrcan.gc.ca/statistics-facts/energy/895" target="_hplink">Natural Resources Canada</a>

  • 4. Alberta Is Two-Thirds Of The Industry

    Despite its reputation as the undisputed centre of Canada's oil industry, Alberta accounts for only two-thirds of energy production. British Columbia and Saskatchewan are the second and third-largest producers. Source: <a href="http://www.nrcan.gc.ca/statistics-facts/energy/895" target="_hplink">Natural Resources Canada</a>

  • 3. Alberta Will Reap $1.2 Trillion From Oil Sands

    Alberta' government <a href="http://www.huffingtonpost.ca/2012/03/27/alberta-oil-sands-royalties-ceri_n_1382640.html" target="_hplink">will reap $1.2 trillion in royalties from the oil sands over the next 35 years</a>, according to the Canadian Energy Research Institute.

  • 2. Canadian Oil Consumption Has Stayed Flat

    Thanks to improvements in energy efficiency, and a weakening of the country's manufacturing base, oil consumption in Canada has had virtually no net change in 30 years. Consumption went from 287,000 cubic metres daily in 1980 to 260,000 cubic metres daily in 2010. Source: Source: <a href="http://membernet.capp.ca/SHB/Sheet.asp?SectionID=6&SheetID=99" target="_hplink">Canadian Association of Petroleum Producers</a>

  • 1. 250,000 Jobs.. Plus Many More?

    The National Energy Board says oil and gas employs 257,000 people in Canada, not including gas station employees. And the Canadian Association of Petroleum Producers says the oil sands alone <a href="http://www.capp.ca/aboutUs/mediaCentre/NewsReleases/Pages/OilsandsaCanadianjobcreator.aspx" target="_hplink">will grow from 75,000 jobs to 905,000 jobs by 2035</a> -- assuming, of course, the price of oil holds up.

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When Thomas Mulcair became leader of the NDP, he promised a structured opposition that could take on the Conservative government. His strategy appears to be working. Poll after poll has put the New...
When Thomas Mulcair became leader of the NDP, he promised a structured opposition that could take on the Conservative government. His strategy appears to be working. Poll after poll has put the New...
 
 
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09:20 PM on 07/12/2012
Mr. Mulcairs financial understanding of the economy between the east and the west is a little far out of touch. If you do your research and watched the Dow Jones which consists of the 30 top companies in the U.S. going back 10-12 years ago. The Dow Jones is a reflection of the U.S. economy, what has happened to the U.S. within those years 1-Terrorists 2- Financial melt down with mortgages and spending. The U.S. deflated their own dollar which is on par with Canada's, research the exchange rates over ten years. Then compare the Canadian dollar with British, there is not much change! The Canadian Resouces pulled Canada out of the world wide recession with flying colors, when the manufactoring sector was hurt around the world, people needed transportation, grow foods, energy which Canadas resources is mainly in the west. Canadas dollar is only high compared to what the U.S. was originally. If anything Mulcair should blame the world economy!
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racc
12:55 AM on 05/20/2012
What all the oilpoligiest attacking Mulcair fail to mention is that it will get even worse with the massive expansion that is planned for the oil sands. Things typically don't end well for petro states economically or environmentally. There is actually no correlation between oil output and economic health. Time to leave most of it in the ground for future generations.
Donna Meness
www.findmaisyandshannon.com
09:34 AM on 05/17/2012
During the 1988 election debates, the topic of the North American Free Trade Agreement (NAFTA) arose, prompting a heated exchange between Liberal leader John Turner and Brian Mulroney.

And Turner fought back.

“We built a country east and west and north. We built it on an infrastructure that deliberately resisted the continental pressure of the United States. For 120 years we’ve done it. With one signature of a pen, you’ve reversed that, thrown us into the north-south influence of the United States and will reduce us, I am sure, to a colony of the United States, because when the economic levers go the political independence is sure to follow.” (1)

But it was too late. Too many powerful people had contributed to Mulroney's success on the promise of a free trade agreement, including the National Citizens Coalition and their corporate sponsors, who spent an estimated 19 million dollars (2). Mulroney was given a second term and the Americans were given a golden key to our future.

Turner appreciated that FTA was not about achieving “Free Trade” with the U.S. that had pretty much already been accomplished. Turner, appreciated that FTA was really about transferring the control of Canadian institutions and resources into the United States political-military-industrial complex. (3)

http://pushedleft.blogspot.ca/2010/09/has-john-turners-premonition-come-true.html

http://harpercrusade.blogspot.ca/2010/05/ernest-manning-and-national-citizens.html
11:42 AM on 05/13/2012
you can tell by how much the conservatives engage in even-more-lying, and dismissing the (real) argument, that the argument hits their weak spot.
10:30 PM on 05/12/2012
A famous (or infamous if you prefer) Canadian was quoted as saying, "Let the bastards in the east freeze." Well wait until they finally understand that the oil sands reserves in Saskatchewan dwarf those in Alberta!!! Then it might be Brad Wall's turn.

The stuggling manufacturning sector in Central Canada forgets that without the resources and transfer payments it gets from Western Canada and the Maritimes, they are almost 3rd world status.

I think they need to focus on how to make their ecomomy sustainable..............
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albertarick
These are questions for wise men with skinny arms
12:14 AM on 05/13/2012
By definition, resource extraction is unsustainable.
12:29 AM on 05/13/2012
An so is trying to manufacture things that require it.
12:32 AM on 05/29/2012
Resource extraction does not have to be unsustainable, per se. For instance, if the money obtained from the extraction of resources is not used as cold hard cash, but rather invested, the owner of said resources stands to gain a lot more over a longer period of time. Alas, this is not the case in Alberta.
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1846
Deir Yassin Survivor
10:28 PM on 05/12/2012
What's the remedy for Dutch Disease more talk?
Cap tar sands output at present day levels and be done with it.

Pump oil for 70 years or 100 years the no big difference. It is all in what you charge as a royalty for exporting.
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Billk29
Justified Ancient of Mu
01:56 PM on 05/12/2012
4 percent is not 'hammering''.
08:37 AM on 05/12/2012
To the Alberta separatists out there: good luck. How in Gords name can you forget that the oil economy is boom and bust? When it busts (again) and you have shunned your Canadian brothers and sisters who do you expect will stand with you?

As for TM's call for sustainable exploitation of the oil sands -- what is your issue. There is no rush to exploit this non-renewable resource. It becomes more valuable every day it sits in the ground.

Rushing to exploit it at current low prices (and give-away royalty rates) for the benefit of U.S. refiners rather than slowing down and building refining capacity is foolish. It is like tearing down your house to sell the lumber -- a strategy that only makes sense to a transient with a view only to their own immediate personal benefit.
03:51 PM on 05/12/2012
Totally agree, clean it up and get your act together.
NDP is opening my eyes.
10:54 PM on 05/12/2012
Hmmmom ... "Separatist" eh? How many referndums has Alberta had on leaving Confederation??? How many times has Alberta threatened to "take our ball and go home"???

How about we give Northern Qubec back to the First Nation's, let the Qubequois region become the French territory they so deperately covet, the Anglophone region of Qubec join their bretheren from the north, Western Ontairo become it's own province, make Ottawa a "District" and cut the rest of Ontario loose?

Canada remains as 10 Provinces and 2 Territories, all prosperous, cutting loose the only parts of the country that are a true financial drain on our economy???

Ontario is not the "Engine that drives Canada", it's the old, sluggish big V8 that needs to be replaced by a new fuel injected hybrid that can team up with the rest of the drivetrain to move us into the new millenium!!
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Kenneth T Tellis
07:53 AM on 05/12/2012
So! Mulcair is at it again setting Canada;s East against the West. I only hope that Tom Mulcair gets his Christmas present early this year in the form of A Brain Transplant. Because that might change the inane course that he has brought about.
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Kristopher Leang
training to take down the elite
10:29 PM on 05/12/2012
"insane change" that he has brought about? compared to harper trying to essentially bring an internet spy police state to canada and called anyone not supporting it a pedophile. what a joke
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racc
12:58 AM on 05/20/2012
What are you talking about. BC is as west as it gets and we certainly don't support the economically distractive expansion of the oil sands. To us, Alberta is the east too.
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opprobrious
More speech. Less Flagging.
03:27 AM on 05/12/2012
It will be interesting to see how the NDP (and the Cons for that matter) fare in Ontario and BC. What I find most interesting, however, is how the Liberals have become pretty much invisible since Mulcair's ascendency. It is way too early to tell but I get the strong impression that the NDP (no matter what you may think of them) might just have themselves a leader. And no, I don't think Mulcair has made a gaffe. I think that was intentional as much as it was factual.
10:01 PM on 05/11/2012
The irony of this debate is that it is Alberta who will eventually be hit the hardest because the oil industry has priced other industries out of the province. Even Peter Lougheed[ the architect of it all] has argued against the size of the tar sands expansion as it created a one trick pony in Alberta.

When the fall from grace eventually comes the rest of the country will have adjusted to symptoms of the dutch disease and Albertans will be just like everybody else with their hands out. Even worse than the dutch disease is the lack of foresight when one seems to have it all, but there is hope through , they have just elected one of the smartest Conservatives to ever hold office in Alberta.
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Mike Keohane
09:12 PM on 05/11/2012
Mulcair's a shrill. Eastern Canada got itself into it's own mess. They're in too deep and it's unlikely that can be turned around. The politics of the next 20 years will be all about how much the rest of the country can suck out of the West and the West's tolerance of putting up with it.
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SayBlade
This micro bio intentionally left blank.
11:19 PM on 05/11/2012
Mulcair is a shrill? Shrill what? I don't hear him screaming.
11:45 AM on 05/13/2012
unthoughtful, naive commentary
yer
Stop the Alberta Taliban
12:26 AM on 05/12/2012
Thanks for coming out. I hope you made your quota today.
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Ryan L Painter
Activist, friend to labour, blogger, progressive
09:06 PM on 05/11/2012
I was rather shocked when I watched the As Issue Panel the other night and saw David Andersen hypothesize that this was a Mulcair blunder. This is a clear strategy, as this article expertly points out, to shore up support in BC and Ontario (environmental and manufacturing support is huge in these provinces, respectively). Does it score points to attack Alberta? Absolutely, given that so often in the past the provinces has wanted to "firewall" itself off from the country and given it's animosity to central Canada. I'd wager there are a lot of smiles in boardrooms in Calgary these days.

Stephen Harper and the Conservative government has done a wonderful job of pitting segments of the population against others and I believe through Mulcair's strategy that he feels Canadian regions can be brought together.

Here's the thing; Mulcair hasn't called for shuttering of the oil sands. He's called for sustainable development and made in Canada jobs. How, in anyone's mind, is this a bad plan?
yer
Stop the Alberta Taliban
12:28 AM on 05/12/2012
Yes. He has mentioned before that the oil should be developed here not shipped out for others to develop. A position largely supported and is the real issue that Harpergeddon is trying to smokescreen. That is not the call of someone who is banning it.
08:33 PM on 05/11/2012
Ok so its not nice ot point out, but what part of Mulclairs spiel about artificially inflated oil prices and the dollar and how it harms our export market was FALSE?

Ok so he annoyed Alberta, not nice, but he only told the truth.
yer
Stop the Alberta Taliban
12:29 AM on 05/12/2012
Harpergeddon can't handle the truth (thanks for the setup :)
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dread
08:31 PM on 05/11/2012
Mulcair is not the reason that the NDP are gaining, Harper is the reason that the NDP are gaining.