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McGuinty's Head Stuck in the Oil Sands

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It used to be people accused Alberta of being narrow-minded and suspicious of other provinces. There was never any truth to that stereotype, of course, but now it's Ontario Premier Dalton McGuinty who's making his province sound, well, downright provincial.

Alberta's premier Alison Redford has been trying to drum up support for a Canada-wide energy strategy, one in which she'd like the whole country to work in concert to maximize the value of our plentiful energy assets. But when she asked for Ontario to join her with some simple, symbolic support for the oil sands -- "a resource that matters to the rest of the country," she said --McGuinty gruffly refused. The country's success in exporting energy, he said, had increased the value of the dollar and that must be bad for Ontario. "So if I had my preferences, as to whether we have a rapidly growing oil and gas sector in the west or a lower dollar benefitting Ontario, I'll tell you where I'd stand: with the lower dollar," he said Monday.

McGuinty isn't just cynically pitting his government against Westerner Canadians when he suggests he'd rather see our oil industry shrink; he's pitting his government against the growing number of Ontarians working to support Canada's oil industry. More than 350 Ontario companies are currently supplying the oil sands industry, and that number is only destined to balloon. McGuinty's own government in 2008 released a primer for Ontario businesses encouraging Ontario manufacturers to take advantage of "The Oil Sands Opportunity." The Canadian Energy Research Institute calculates that oil sands development will provide $65 billion worth of work for Ontario, and 65,000 jobs. After Alberta, Ontario benefits more from the oil sands than any other province in the country. By comparison, in 2008, there were about 26,000 CAW members working for Ontario's big automakers.

Why does McGuinty want to hurt all those Ontarians making their living supplying equipment and knowledge to the oil sands industry? Ontario Opposition leader Tim Hudak understands the opportunity. This week he told reporters, "We've got a jobs crisis in our province, and calling the oilsands an embarrassment as Dalton McGuinty's government has done is wrong...Let's support it. Let's create jobs."

Andrew Leach, professor at the University of Alberta pointed out some facts that show McGuinty's posturing is not convincing. Leach notes that Ontario is a net importer of goods, buying $8 billion worth of goods and services from outside the country every single month, while Alberta is a net exporter. High dollars are good for people in provinces, like Ontario, that need to convert loonies into other currencies to buy imported goods. That higher dollar is actually making life more affordable for all Ontarians.

The oil sands are already showering money on governments across Canada, including Ontario's. As CERI reports, total federal taxes on the oil sands paid over the next couple of decades will amount to almost $200 billion, and provincial taxes another $118 billion. Add in royalties, and the oil sands are set to add nearly half a trillion dollars in government revenues from B.C. to the Atlantic. In a country of 34 million people, that's the equivalent for each family of four of $60,000 worth of education, social support services, and health care.

And Ontario's "Oil Sands Opportunity," as McGuinty's own government calls it, is just getting started as manufacturers ramp up production of equipment that gets shipped west to help produce Canada's oil. In addition, Ontario consumers might soon be able to buy more oil at the gas pumps, as Enbridge has proposed to reverse a portion of their "Line 9″ pipeline to bring more of Canada's "ethical oil" into Ontario and reduce our reliance on "conflict oil" from regimes like Saudi Arabia and Venezuela.

Ontarians should speak out and ask Premier McGuinty not to stand in the way of those benefits. Polling tells us the majority of Ontarians support oil sands development. Although Dalton McGuinty's government has bashed Canada's oil in the past, it is not too late for the Premier to embrace the opportunity in front him and help grow this national success story. Sensible Ontarians don't want envious and petty churls. Now is the time for the Premier to show leadership and help create jobs. As the state of Ontario's treasury shows, his province really needs it.