A clear diagnosis of the Oil Sands fever variant of Dutch Disease may be just what the doctor ordered to rally Canadian workers in the fight against global warming.
A rapid increase in natural resource investment and revenue usually drives up a nation’s currency. This generally makes other industries less competitive and can greatly weaken a country’s manufacturing base.
Widely known as “Dutch Disease” (named after a period of rapid expansion of the natural gas industry in the Netherlands), this well established economic paradox has become a taboo subject in this country. Canada’s highly class-conscious elite is worried that manufacturing workers might make common cause with environmental groups and even some business sectors to challenge the carbon/profit bomb known as the tar sands.
A recent Pembina Institute/Equiterre report titled Booms, Busts and Bitumen argues that Canada’s economy is facing “Oil Sands fever”. The study points out that the Bank of Canada believes one-third of the Canadian manufacturing sector’s decline has been caused by a more expensive dollar, which rose alongside the price of oil from $.61 US in 2002 to $1.10 US in 2007 (and has hovered near par since). The study concludes that 40% to 75% of the currency increase has been caused by rising commodity prices, principally oil.
The higher price has led to a boom in production and export. Between 2002 and 2012 energy grew from less than 13% of total Canadian exports to over 25%. And if plans to double tar sands production over the next decade are realized, this dependence will increase.
A February Canadian Centre for Policy Alternatives study gives a sense of the jobs impact of Oil Sands fever. The Bitumen Cliff notes: “The forestry sector lost close to 30,000 positions. And the manufacturing industry, of course, haemorrhaged nearly a half-million positions. For every new job created in the petroleum sector during the past decade, 30 have been lost in manufacturing. Across all of the export-oriented goods industries… net employment declined by almost 520,000 jobs in the past decade.”
While the precise job toll is debatable, the rapid growth in tar sands exports has undoubtedly hurt manufacturers.
Despite the obvious link between tar sands expansion, a higher dollar and a decline in manufacturing, corporate sycophants denounce any politician or established organization that draws attention to the relationship.
Federal Leader of the Opposition Tom Mulcair was aggressively attacked for raising the issue as was former Ontario Premier Dalton McGuinty. In response to the Pembina/Equiterre report Financial Posteditor Terence Corcoran called the mainstream Pembina Institute “off-kilter … fomenter of oil sands phobia … keen on triggering a nation-splitting debate over the oil sands.” For his part, Sun Media’s Lorne Gunter wrote: “Left-wing environmentalists should just come clean: they hate the oil industry, they hate profits and love big government.”
Yves Engler is co-author of the recently released New Commune-ist Manifesto – Workers of the World It Really is Time to Unite. For more information go to www.newcommuneist.com
Source: Counterpunch