NDP leader not advocating shutting down oilsands
A version of this letter appeared today (Sunday, May 27, 2012) in the Lethbridge Herald finally. I submitted it on May 18th.
Editor: Re: "NDP Leader continues to bash oilsands" (Herald, May 17, p. A1). Thomas Mulcair is definitely NOT advocating shutting down the oil sands, only developing them in a slower, more intelligent, and more environmentally responsible fashion, similar to Peter Lougheed and the Mayor of Ft. MacMurray.
We're all becoming familiar with the term "Dutch Disease"--when the manufacturing exports of a country decline because the international value of a country's currency has skyrocketed due to raw resource exports. It happened in the Netherlands in the 1970s due to their massive exports of natural gas. Mulcair says Dutch Disease is happening in Canada right now because of resource exports by mainly Alberta and Saskatchewan. Attacks have come from the premiers of BC, Alberta, and Saskatchewan.
But let's step back a moment and examine the situation. There have been 500,000 job losses. A report by the Institute for Research on Public Policy (IRPP) says, in an unfortunate choice of words, "“On balance, the evidence indicates that Canada suffers from a mild case of the Dutch disease." They go on to say that about 25% of the job losses are due to the high value of the loonie. I say unfortunate choice of words because 25% of 500,000 is 125,000 jobs. That's approximately the working population of Lethbridge, Medicine Hat, and Red Deer combined! This is mild?
You'd think a government, noticing large job losses, due in part to its policies, would consider what they could change. Indeed, the IRPP suggests in the same report some things the federal government should do: They should put tax revenues into infrastructure projects that improve the competitiveness of manufacturers. The IRPP also suggests that the resource-rich provinces could also help “neutralize” the upward pressure on the loonie by investing resource revenues offshore through sovereign wealth funds. One thing about the rising loonie that is being ignored is that, for every $.01 the dollar rises, the Alberta treasury looses $247,000,000 ((http://www.finance.alberta.ca/publications/budget/budget2012/fiscal-plan-revenue.pdf See page 62. If the dollar were at 81 cents instead of at par, the Alberta treasury would be ahead by about $4.5 billion per year.). This is because oil is sold in American dollars. So it's to Alberta's advantage to take prudent steps to keep the loonie closer to its real value. According to the OECD, the current “fair value” for the Canadian dollar (based on purchasing power parity analysis) is about 81 cents US.
So, rather than ganging up on Tom Mulcair, Harper and company might consider a national industrial strategy that does not penalize one region of the country at the expense of others.
Reality Check: The NDP and the Oil Sands, By Shannon Phillips, Keith McLaughlin, and Keith Gardner
Tuesday, May 29, 2012 at 1:05pm ·
Reality check: The NDP and the oilsands
By Shannon Phillips, Keith McLaughlin, Keith Gardner
Contrary to recent headlines, the NDP and Tom Mulcair do not want to shut down the oil sands. The NDP is not attacking Western Canada. The NDP is not trying to divide Canadians by pitting East against West.
The headlines are another example of the tantrums Conservative premiers, federal Conservatives, and the oil lobby throw every time an alternative model of oil sands development is proposed. Let’s be clear: Tom Mulcair and the NDP are talking about putting Albertans and Canadians first - not the oil companies - when it comes to developing the oil sands.
The NDP proposes a practical and legitimate alternative to resource development. This alternative deserves a grown-up conversation. Canadians deserve better than hysteria, smears, and hyperbole.
Here’s what is at stake. A range of credible voices - from conservative economists to former Alberta Premier Peter Lougheed - share Tom Mulcair’s view that runaway development in the oil sands is not in our interest. We ought to pace development, taking on fewer projects at a time. The benefits of slowing development far outweigh the risks. A slower pace of development allows Alberta’s infrastructure and health and education systems to keep up. It slows the skyrocketing cost of living and labour market pressures. A slower pace of development means we keep more good-paying jobs in Alberta, too: with fewer projects on the books, we would be able to upgrade and refine more bitumen in our province, rather than shipping the jobs to Texas or China.
A slower pace of development also takes the heat off our currency, ensuring we slow the decline of the manufacturing sector, both in Alberta and the rest of Canada.
The Alberta NDP is also saying we need to ensure we get full value from the oil sands. That means having yet another grown-up conversation: this time about royalties. We’re the only party that talks about how Alberta needs to increase our royalties to levels charged in other oil-producing areas. More appropriate royalties has the effect of slowing the stampede to our currency, mitigating job losses in other parts of the country. Better royalties allow us to save and invest in a green economy, which is the best way to show leadership and ensure all of Canada can be put on a more sustainable path to long-term prosperity.
Conservative Premiers, the Harper government, and the oil lobby do not want to have any conversation about their development model in the oil sands. They ask us to sign off on pulling the bitumen out of the ground as fast as possible and shipping it out without any regard for the jobs leaving the country or the value we get from the resource. This benefits the international oil companies, not Canadians. In fact, two-thirds of oil sands companies are foreign-owned. Conservatives in Alberta, Saskatchewan, and BC have reacted with such bullying childishness to Tom Mulcair because the questions he is asking threaten oil companies’ massive profits and privilege.
Conservative hysteria, smears, and hyperbole (whether from Alison Redford, local PC MLAs, or the Harper government) are strategies designed to silence legitimate alternatives. This strategy protects foreign-owned oil companies’ interests, not Canadians’ or Albertans’. The NDP, on the other hand, advocates a position that puts sustainable development and Canadians’ long-term economic prosperity at the centre of the conversation.
We are young, proud New Democrats, and represent a new generation of NDP activism in Lethbridge. We are concerned recent headlines mislead the people of Lethbridge with respect to what our party stands for. We’ll say it again: the NDP is not anti-oil sands. We want an economy that works for all of us, and we believe oil sands wealth belongs to Albertans first. If we take that approach, all Canadians can benefit from our enormous natural resource endowment. Our party wants to build a more inclusive and united Canada; we are not interested in cynical political games.
We are interested in a mature political conversation about the oil sands. We invite Conservatives at all levels of government to join us.
Shannon Phillips was the Alberta NDP candidate in the 2012 provincial election in Lethbridge West.
Keith McLaughlin is the former VP Academic of the U of L Students’ Union, a former editor of the U of L Meliorist newspaper, and the former Vice-Chair of the Council of Alberta University Students.
Keith Gardner was a manager on the 2012 Lethbridge West campaign, a former editor of the U of L Meliorist newspaper, and a former board member for the U of L Public Interest Research Group.