OTTAWA - Tom Mulcair is heading to Alberta for his first tour of the oilsands, confident he can dispel perceptions that he's anti-development and anti-western Canada.
But even before the NDP leader left Ottawa for Thursday's tour, his political rivals were stoking fears that he'd shut down the engine of Canada's economy and throw thousands out of work.
Mulcair has earned condemnation by western premiers with his view that the booming oilsands have artificially boosted the value of the dollar, hurting other sectors of the economy — a phenomenon known as Dutch disease.
He won support Wednesday for his thesis from a study produced by the Alberta-based Pembina Institute. It concluded that Canada is suffering from a unique strain of Dutch disease, dubbed "oilsands fever," the benefits of which are unevenly shared across the country and could lead to economic turmoil down the road.
But another report, by the Ottawa-based Macdonald-Laurier Institute, countered that the cross-country benefits of the West's energy resources far outweigh any ill-effects caused by the higher loonie.
Shortly before leaving for Alberta, Mulcair shrugged off suggestions he was about to enter the lion's den. He insisted there's "almost unanimous" support across Canada, including in Alberta, for his vision of environmentally sustainable development in which polluters pay the costs of cleaning up their messes.
"So, I think a lot of us are actually on the same page," he said.
Indeed, Mulcair suggested his views are in sync with those of Alberta Premier Alison Redford, who is advocating a national energy strategy.
"This whole discussion is about breaking the boom-and-bust cycle, having sustainable development, looking at the environmental, economic and social aspects of the equation, coming up with a pan-Canadian vision. There are people in the West who believe in that as well."
Mulcair acknowledged he's got some work to do to clear up some of the distortions that political rivals have been spreading about his position, such as that he's anti-western Canada.
"One of the things that we've been dealing with is the straw man that was set up by some of our adversaries, which was relatively easy to knock down," he said.
He reiterated that his polluter-pay principle does not single out the West but would apply to the development of all natural resources right across the country, from logging in British Columbia to shale gas exploration in New Brunswick to the fisheries in Newfoundland and Labrador.
Mulcair has said it would be "senseless" to stop development of the oilsands. But that didn't stop Natural Resources Minister Joe Oliver from accusing him of wanting to do precisely that.
"If he approaches the visit (to the oilsands) with an open mind, he will be mugged by reality, the reality of the importance of the vast resource to jobs, growth and government revenues, the reality ... of how every region of the country benefits, including aboriginal communities," Oliver said.
"Unfortunately, Thomas Mulcair has been clear that he does not support the oilsands, that he does want to shut them down, killing hundreds of thousands of jobs. ... He can visit the oilsands but let's be clear that his real agenda is to impose a crushing new carbon tax, shut down the oilsands and kill hundreds of thousands of jobs."
As proof, Oliver pointed to a 2008 book by Andrew Nikiforuk, entitled Tar Sands: Dirty Oil and the Future of a Continent. Mulcair wrote a foreword to the book, which Oliver took as an endorsement of author's call for phasing out oilsands production by 2030 and imposing what Oliver dubbed a "crushing" new carbon tax.
During last fall and winter's leadership contest and since claiming the NDP leadership in March, Mulcair has repeatedly said he doesn't support shutting down the oilsands or a carbon tax. He does advocate putting a price on carbon through implementation of a cap-and-trade system, which the Harper government itself supported at one time.
But Oliver doubted Mulcair has genuinely changed his tune, suggesting he is just trying to accomplish Nikiforuk's goals by "stealth."
Oliver's views were echoed by interim Liberal Leader Bob Rae, who tried to position his party as taking a moderate "reasoned" position between the polar extremes offered by the Conservatives and NDP.
"I think we're seeing a kind of rhetorical drawing of lines in the oilsands, if you like, which I don't think is very constructive," Rae said.
He added that Liberals favour sustainable development of the oilsands and putting "a proper price" on carbon — much as Mulcair is advocating.
"I think the biggest mistake we can make is say that it's an either-or situation. The government says it's development or else and the NDP says shut it down or else because it's not sustainable. Our answer is let's have development that's sustainable," Rae said.
He also took Mulcair to task for having dismissed western premiers earlier this month as "messengers" for Prime Minister Stephen Harper.
"I think that's a lousy way to begin the discussion."
Some union leaders, however, defended Mulcair Wednesday, saying Albertans should be thanking him for igniting a long overdue debate about the pace of development in the oilsands.
"Every time anyone, whether it's here in Alberta or across the country, raises questions about the approach the Alberta government and oil companies are taking in developing the oilsands, they're shouted down. They're demonized. They're dismissed," said Gil McGowan, the head of the Alberta Federation of Labour.
"We've had the ghost of the national energy program thrown in our face."
Mulcair is not scheduled to meet with Redford during his Alberta trip. She is to be out of the province Thursday. However, he will meet with her deputy premier and the mayor of Fort McMurray.
— With files from Steve Rennie
It Began In The Netherlands
In 1977, <em>The Economist</em> coined the term "Dutch Disease" to describe the phenomenon of economies whose industrial bases suffer when large deposits of energy, such as oil or natural gas, are found. The magazine named it "Dutch Disease" because of the rapid deindustrialization seen in the Netherlands in the years after a major offshore natural gas find in 1959.
One of the effects of becoming an energy-exporting country is that speculators will start treating that country's currency as a "petro-dollar." The value of the currency rises (and sometimes falls) with the cost of the country's energy exports, which often means it becomes too high in value for exporters in other sectors. Those exporters then see their sales decline, and manufacturing suffers as a result.
As the energy export sector grows, it attracts workers from other sectors, including manufacturing, leaving fewer skilled people to fill jobs in those areas. This is known as "direct deindustrialization."
The Spending Effect
As money flows to the energy exporters from energy consumers around the world, it increases the amount of spending cash people have. That additional cash increases the demand for non-manufacturing labour -- things such as beauty salons, travel, entertainment -- which in turn sends people into those jobs, and away from manufacturing. This is known as "indirect deindustrialization," or "the spending effect."
Economists are in disagreement about whether Dutch Disease is real, whether it's an important phenomenon, and whether it actually happened in any given economy. Fifty years after the Netherlands' big natural gas find, there is no consensus on whether the country experienced the disease named after it, with many economists arguing excessive social spending was behind manufacturing's decline.
The Canadian Debate
In Canada, Dutch Disease has become a highly polarized political issue. When NDP Leader Thomas Mulcair and Ontario Premier Dalton McGuinty recently referred to what they see as the problem of manufacturing suffering under the weight of a booming oil industry, it prompted accusation of divisiveness from leaders of Western provinces. Economists don't agree either. While a recent study from the Pembina institute argues the phenomenon is real and having a negative impact, others argue the strength of Canada's oil sector is creating internal demand that's offsetting the loss of manufacturing exports. Yet others say Dutch Disease is only a part of the problem, and that other factors -- like offshoring of jobs to developing countries and increases in productivity -- are also to blame for manufacturing's decline.