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NEWS: Mulcair says tar sands causing ‘Dutch disease’ in Canadian economy

Postmedia News reports, “NDP leader Thomas Mulcair said Saturday that, because of the way it raises the value of the Canadian dollar, other parts of the country are paying a price for the prosperity enjoyed by natural resource sectors such as the oilsands in Alberta. ‘It’s by definition the ‘Dutch disease,’ Mulcair said Saturday on the CBC Radio show, The House.”

“(Mulcair says,) ‘The Canadian dollar’s being held artificially high, which is fine if you’re going to Walt Disney World, (but) not so good if you want to sell your manufactured product because the American clients, most of the time, can no longer afford to buy it.’ …Mulcair cited Ontario, Quebec and New Brunswick as some of the places affected by the high loonie. ‘We’ve hollowed out the manufacturing sector. In six years since the Conservatives have arrived, we’ve lost 500,000 good-paying manufacturing jobs.'”

The Toronto Star editorial board took a similar position in early-March. They wrote, “The facts are irrefutable: the vast majority – an estimated 94 per cent – of economic benefits from the oil sands remain in Alberta. The booming oil and gas sector has contributed mightily to the high Canadian dollar. That has damaged Ontario’s traditional strength in manufacturing. …Every new job is a good thing, but let’s keep this in context. (While it has been speculated that the tar sands will generate some 65,000 spin-off jobs over the next 25 years for Ontario), Ontario’s auto sector employs 400,000 people, the IT sector more than 270,000 and bio-tech involves some 43,000 jobs.”

In comparison, according to the government of Alberta, “In 2010, about 140,000 people were directly employed in the mining, quarrying, oil and gas extraction sector, including the oil sands.”

And the Globe and Mail has reported, “(Ontario premier Dalton McGuinty says) the harm caused by the high Canadian dollar relative to the U.S. greenback far outweighs any spin-off benefits Ontario might derive from Alberta’s oil and gas sector. A study by the Organization for Economic Cooperation and Development supports his stance. It says Canada has entered into a form of the dreaded ‘Dutch disease’, whereby the increase in exploitation of natural resources is leading to a decline in manufacturing.”

Back in 2009, the Council of Canadians stated, “The destructive pace of tar sands development has helped to increase the value of the Canadian dollar, which has had serious impacts on the manufacturing sector and jobs in the pulp and paper industry. This impact has been particularly harsh in Ontario and Quebec with job losses causing hardships on families.”