Mulcair's strange case of Dutch disease

            Thomas Mulcair’s recent visit to the oil sands probably confirmed everything he ever thought about the place.  What an environmental mess!  This place needs more regulation!  Bring on the carbon tax!

            You can’t really blame someone from Quebec, who’s accustomed to diverting natural-flowing rivers for electricity, to feel Alberta’s facing environmental Armageddon.  Whether we like it or not, the feeling is shared by most of the developed world.

            Soon there will be a black mark on Canadian oil if something isn’t done to change the perception that this is dirty oil and that Canada could care less about climate change.       

At one time, the prime minister himself proposed a cap and trade system that would tax carbon-intensive industry.  This was when there was the real possibility that the US would develop its own cap and trade system and Harper was a little more open to such environmental options (i.e. minority government).

            Now it seems that Harper has waged all-out war against environmental regulations, environmental groups and sound scientific research.  The closing of the Experimental Lakes Area research centre, where groundbreaking research on ecosystems was conducted for the last 55 years, is the latest example. 

            While I’m not against a government that wants to promote industry, this government is clearly tilting the table against the David Suzuki’s of the world. 

            And while a cap and trade program such as what Mulcair proposes could hamper the oil industry in Alberta and Saskatchewan, it could also save it.  As hypocritical as the European Union is on the issue (their greenhouse gases have grown less than ours not because of environmental sacrifice, but because of choices they would have made anyway), they need to be satisfied that we are pulling our weight when it comes to action on climate change.  Even the US, which has failed to make any significant movement on climate change, needs to be convinced.

            A $10 tax on each tonne of carbon produced would have a small but meaningful impact, and would go a long way.  Allow each province to keep its own carbon tax dollars for environmental programs and research, and you would eliminate the belief that Mulcair is developing another National Energy Program.  And that is no small fear.

            As much as I abhorred Mulcair’s implication that the East is suffering at the West’s expense, there is some truth to it.  How can one deny that a strong dollar is hurting manufacturing?   Our currency is clearly linked with the price of oil, and export industries typically benefit from a lower currency.  A study commissioned by the Harper government suggests one third of manufacturing jobs lost in Canada can be attributed to the strong dollar.

            But there are also studies showing that our case of Dutch disease is a mild one, and that Canada has benefited (even in Ontario) from high commodity prices.  Average incomes continue to increase, for example.  The greatest benefits, of course, accrue to Alberta, and the least to Quebec (where university tuition is half the cost of Alberta's)!

            More than anything, this seems to make it clear why Mulcair is not retracting the words he has said.  As popular as Brad Wall is in the West, he means little to Ontario and less to Quebec.  Mulcair will gladly become Quebec’s new champion, while taking as many votes from Ontario (and environmentally friendly BC) as possible.  Alberta and Saskatchewan will not vote NDP in the near future, just as Quebec will not vote Conservative.

            Mulcair is moving in the right direction when it comes to addressing the oil sands, as much as I hate to admit it.  If he can do it without dividing the country, so much the better.