Just because something is a bit complicated, it doesn't mean you can ignore it, especially when it's hurting you.
And yet, this appears to be the case with the loss of hundreds of thousands of manufacturing jobs in the past several years -- 627,000 by one measure -- mostly in Ontario and Quebec where these jobs have historically existed.
The phenomenon even has a name already: "Dutch Disease." Canada now has a bad case of it, yet you won't hear the government in Ottawa talk about it, since that would run counter to its blinkered agenda of accelerating the strip mining of Northern Alberta to push more oil through pipelines to China and America.
The term "Dutch Disease" was coined in the 1970s after the Netherlands discovered a large natural gas field. The country's exchange rate became tied to the rising price of natural gas, pricing its manufacturing goods out of international markets and leading to job losses.
In 2011, the Canadian dollar traded on average above the U.S. dollar for the first time since 1976. This puts an extra burden on Canadian companies who export, since it makes their products less competitive versus products from other countries.
While experts will tell you there are various factors behind our exchange rate, it's hard not to see the close correlation between the price of oil and the exchange rate, charted in a graph here. Thanks to increased oil production, we now have a petro-dollar that rises and falls with the price of oil.
And, with oil being a finite commodity, its price will only rise, taking our dollar and manufacturing jobs in Ontario and Quebec along with it.
How many? One economist at the University of Ottawa has estimated that 42 per cent of manufacturing job losses in recent years are due to Canada's case of Dutch Disease. Another study out of Montreal points out that while 95 per cent of Canada's oil reserves are in Alberta, 75 per cent of Canada's manufacturing output is located in Eastern Canada, making this a growing issue of regional fairness.
So when you hear boosters argue how great the tar sands are for the Canadian economy, it's a new kind of snake oil, this time of the viscous and toxic kind called "bitumen."
If we were at all serious about both regional economic fairness and about charting a new economic future that isn't based on trashing our planet, we'd reverse the growth of tar sands production and instead invest heavily in the ample renewable energy resources that exist all across the country.
For now, though, leaders in Ontario and Quebec need to recognize the reality of Canada's Dutch Disease and stand up for their citizens by working to pull Ottawa's head out of the tar sands. Their economies depend on it.
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Canada's dollar has always been tied to resources. If the manufacturing sector wants to be competitive on the world stage, they need to stop relying on a weak Canadian dollar to prop up their profit margins. They also need to look beyond the US to new markets for their goods.
Find a way to make use of Canada's resources before we ship them off elsewhere, only to buy them back once they're manufactured into finished products. We have lots of oil, why aren't we leading the leading the world in plastics manufacturing? Why isn't BC a huge hub for furniture manufacturing?
I live in Alberta, and work in the oilpatch. I moved here from Ontario 20 years ago.
Canadian manufacturing has collapsed because of the collapse of and protectionist ( buy American ) measures of the US, Canada's largest export market.
I deliver groceries to the Rig Camps, and can tell you that the accommodations, although not the Waldorf, are good. Steak night is quite popular, as are the lobster and shrimp. Fresh veggies and fruit are delivered a couple times a week. This is not misery.
The work is hard and dirty, but the pay is awesome. It's hundreds of kms in the bush, away from "civilization".
That's why people, yes men AND women, do it. Then go home to their paid mortgage, and high disposable income.
Another mine has been approved ( Joselyn ) needing 4100 souls to work it for the next 20 years. When was the last time a manufacturer offered that?
Quebec has it right. Look after the people. Social medicine, education and daycare provide the infrastructure that working people need. This is what allows companies to be effective in a global marketplace.
This is what taxes go to. It's what royalties should go to.
The failure of government to take advantage of this resource ( royalty reform ), or to develop more trade markets is the problem here.
What's that got to do with one man's religion?
A recent Explorational Zeitgeist Party of Canada survey asked whether I would support electric cars, solar power, wind power and geothermal power. Anyone with a brain would support all 4 endeavors. The Alberta Tories will tell us we have 100 years supply of oil at current consumption rates, not realizing that there is no such thing a current consumptionrate and that consumption increases at an exponential rate. Conservatives are in it for the quick buck. . . at every level of government.
What colour is the sky on your planet ?
The Oilsands is the number reason why provinces like Ontario , Quebec and Nfld. have not gone into a total economic Armageddon.
The Premier of Ontario thinks like you and look where their economy / enviro vision of the future is heading. As for the global impact of the OilSands; it's this :
Canada's contribution to global CO2 - 2% TWO PERCENT !!!!
OilSands contribution - 5% of Canada's contribution which makes the Oilsands GLOBAL , I repeat GLOBAL contribution - 0.1 % !!!!
But don't take my word for it - here's a reference to a group that was a main presenter at the Durban Conference . It's not a "shill" for the oil industry .
http://www.iea.org/co2highlights/co2highlights.pdf
The IEA is not a green creationism group or a 'my fuzzy slippers are green. com website
If you think the Oilsands are worst than the coal industry or the offshore US oil industry then you are either a paid shill for "Big Green" or another uninformed person with a soapbox.
I guess we can't have our tar cake and manufacture it too.
During the mid- to late-1990s, manufacturing was a major source of new jobs. By 2001, however, the high-tech sector began to collapse and many production workers were laid off. By the end of 2002, employees were being swept from factory floors in droves. Another challenge hit manufacturers when the Canadian dollar rose to a 14-year high in the fourth quarter of 2005. The higher exchange rate made Canadian products more expensive abroad and slowed sales.
The decline in manufacturing jobs that followed is the sharpest since the recession of the early 1990s, when factory jobs vanished at twice the current rate. Quebec and Ontario have seen 90% of the manufacturing job losses nationwide since 2002.
First, what the leaders of Quebec and Ontario need to do is practice sound fiscal management, provide incentives for manufactures to become more efficient and competitive in a global environment. But what have these provinces become; the equivalent of European PIGS countries, which included pathetic fiscal management, and massive overspending. Quebec specifically has European populist social policies in place with massive government spending programs, the highest taxes in North America and massive deficits and debt. Maybe these two provinces and their leaders would be more responsible with their finances if Western Canada cut off the billions of dollars in hand-outs provided to them every year.
Second, many eastern manufacturing firms rely on oil sands development for work. Many eastern families have relocated to western Canada in search of jobs and better lives. The oil/gas development in the west is responsible for providing thousands of jobs for Canadians living in the east but I guess you conveniently left this fact out of your article.
And your opinion is to have “Ottawa pull their heads out of the tar sands”. I see, so let’s shut down the oil sands, eliminating thousands of eastern manufacturing jobs in already struggling economies. Tell me how does this benefit the Ontario and Quebec economies?
As commodity prices surge so does our dollar.
As we continue to ignore the obvious currency manipulation by the chinese and yet still continue to purchase their 'slave labour' generated cheap consumer goods,our manufacturing sector continues its implosion.
If we dont call China to task on this issue the Canadian worker will be relegated to being "hewers of wood and drawers of water"
Actually their economies should depend more on sound fiscal management and leadership. Ontario and Quebec are the equivalent of the PIGS European economies with years of massive overspending and economic mismanagement. Maybe these politicians would be more competent in managing their budgets if Western Canada was to stop giving them billions in hand-outs every year.
Also, I guess you conveniently failed to point out how many manufacturing companies in the east support the oil and gas exploration in western Canada. The oil and gas sectors of the west largely contribute to the economies in the east providing eastern companies with manufacturing contracts while thousands of people employed. Take away resource production and you take away even more eastern jobs.
Stop your ridiculous propoganda and provide realistic and objective opinions.
"And capital that would have gone into infrastructure etc. are diverted to resource extraction" Infrastructure needs capital to build and where does that capital come from? Taxes, royalties etc (unless you want to print your own money or borrow it). Can't build infrastructure without the revenue. Also,maybe in countries with goverment owned oil companies would capital be allocated to resource extraction but in Canada capital provided for resource extraction is privately funded.