Rather sticking with the "environmental" arguments, the NDP is recently stepping into a territory that it probably shouldn't venture into: the economy.
But, on the subject of "Dutch Disease", NDP Leader Thomas Mulcair has the right idea that it needs to be "cured". As I explained previously, because Canadian regional economies are structured differently -BC and Alberta have concentrations of natural resource sector, and Ontario and Quebec have larger industrial base- the gain in one region is the loss of another. General Motors, for instance, is shutting down one of its two assembly lines in Oshawa, leaving thousands without work.
Mulcair wants to shut down the oil sands project to save the economy. This doesn't work for several reasons:
1. To "cure" the Dutch Disease, Canadian dollar must devalue to make exports more competitive. Since Canada adopts flexible exchange rate, Mulcair has to control Canadian money supply on the international money market. The only country able to do this for a sustained time is China. Oil may bring in foreign dollars, but it does not print money.
2. The Dutch Disease is caused by rising commodity prices. Oil is only one of the resources. To effectively ease the symptoms of the Dutch Disease, Mulcair needs to end all other natural resource exports: mining, lumber, natural gas, fishing, water, wheat... Why single out the oil sands?
3. Natural resources are inputs to manufacturing. Rather than "shut down" the oil sands, Mulcair could've simply ask to place a cap on oil export. Since Canadian manufacturers also benefit from Alberta's oil sands, it back-fires to shut down the oil sands.
The guys in blue aren't that much more brilliant than the Orange.
1. Harper-led Tories have criticized Mulcair for preaching "Canadian resources are a disease"; this kind of rhetoric just shows how the Tories don't understand the issue-at-stake either.
2. Tories' arguments such as "raising the taxes will drive away the oil companies and create unemployment" is just bogus. If oil companies want to leave Alberta, go ahead ;) Where else are they going to find oil?
3. Alberta government plans to spend $16Billion on infrastructures over the next 3 years. While that's all good until the inflation takes place, housing bubble rises, and the little cashier at Tim Horton's makes $20+/hour. How about some plans to improve secondary-education resources or to save for the future when all that oil is gone?
Oh silly Canadian politicians... When it comes to the issue of Dutch Disease, it isn't even a matter of "Left Vs. Right" clash in ideology. I'll let you make your own conclusions, and I'll talk about some viable solutions next time.
But, on the subject of "Dutch Disease", NDP Leader Thomas Mulcair has the right idea that it needs to be "cured". As I explained previously, because Canadian regional economies are structured differently -BC and Alberta have concentrations of natural resource sector, and Ontario and Quebec have larger industrial base- the gain in one region is the loss of another. General Motors, for instance, is shutting down one of its two assembly lines in Oshawa, leaving thousands without work.
Mulcair wants to shut down the oil sands project to save the economy. This doesn't work for several reasons:
1. To "cure" the Dutch Disease, Canadian dollar must devalue to make exports more competitive. Since Canada adopts flexible exchange rate, Mulcair has to control Canadian money supply on the international money market. The only country able to do this for a sustained time is China. Oil may bring in foreign dollars, but it does not print money.
2. The Dutch Disease is caused by rising commodity prices. Oil is only one of the resources. To effectively ease the symptoms of the Dutch Disease, Mulcair needs to end all other natural resource exports: mining, lumber, natural gas, fishing, water, wheat... Why single out the oil sands?
3. Natural resources are inputs to manufacturing. Rather than "shut down" the oil sands, Mulcair could've simply ask to place a cap on oil export. Since Canadian manufacturers also benefit from Alberta's oil sands, it back-fires to shut down the oil sands.
The guys in blue aren't that much more brilliant than the Orange.
1. Harper-led Tories have criticized Mulcair for preaching "Canadian resources are a disease"; this kind of rhetoric just shows how the Tories don't understand the issue-at-stake either.
2. Tories' arguments such as "raising the taxes will drive away the oil companies and create unemployment" is just bogus. If oil companies want to leave Alberta, go ahead ;) Where else are they going to find oil?
3. Alberta government plans to spend $16Billion on infrastructures over the next 3 years. While that's all good until the inflation takes place, housing bubble rises, and the little cashier at Tim Horton's makes $20+/hour. How about some plans to improve secondary-education resources or to save for the future when all that oil is gone?
Oh silly Canadian politicians... When it comes to the issue of Dutch Disease, it isn't even a matter of "Left Vs. Right" clash in ideology. I'll let you make your own conclusions, and I'll talk about some viable solutions next time.
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