Opinion

How the Tar Sands Threaten Canada's Economic Fate

A short course in Dutch Disease, deindustrialization and the Bitumen Curse.

By Andrew Nikiforuk, 13 Aug 2010, TheTyee.ca

Maple leaf with tar sands detail

Dripping away: Nation's economic diversity and resilience.

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Every week Canada's least favorite Emir, Alberta Premier Ed Stelmach, earnestly lectures Canadians that the mighty tar sands are a boon to the national economy because "Alberta's engine drives Canada."

Just a week ago the eloquent Stelmach told the folks at the annual Canadian premiers conference that the project has the grandest of national visions: "It's all about jobs and it's all about the tax revenue that will flow to the federal government and the provinces." In other words dirty oil now cements prosperity and serves up stacks of cash for fat and lazy governments.

But simple-minded statements from members of Alberta's Wahabi-like sect, the province's well-tarred Tory party, are now a dime a dozen. They all read like incredulous Saudi Arabian press releases. For the real economic impacts of the tar sands, an almost untold business story, are really about a monetary hurricane and massive structural change. In fact the economic fallout from rising oil exports, in the absence of sensible national policy, totally dwarf the project's significant environmental messes.

Dollar dangerously pegged to oil prices

To date the $200-billion energy mega-project has not only changed Canada's economic life but also diminished the nation's economic diversity and resilience. Although the Emir pretends the tar sands is an economic "win-win," the project's chaotic development has planted several improvised explosive devices in the economy that should give any small-c conservative pause for thought.

In particular the oily behemoth has transformed the loonie into a volatile petro dollar, destabilized the country's manufacturing base with a bad case of the Dutch Disease, provided governments with access to easy revenue (always a problem), exported thousands of added value jobs to U.S. refineries and perilously yoked the nation's future to the yoyo world of global oil demand.

Now just about every economist and every Canadian who has traveled abroad recently knows that our dollar is now pegged to the price of oil. It started to appreciate in value against the U.S. greenback in 2002. That's the same year Canada outstripped Saudi Arabia as America's number one oil dealer. When the price of crude dropped from a high of $150 barrel in 2008 to $40, the Canada dollar sunk faster than oil-soaked duck in a Syncrude tailings pond. In other words the Canada's petro dollar tracks oil prices with the energy of a celebrity stalker.

For better or worse Canada's economic fate is now chained to oil exports and oil price shocks. That's what happens when a nation supplies the United States with 20 per cent of its oil and refuses to have a national conversation about the consequences.

Dutch Disease: the resource curse

But the steady appreciation of the Canadian dollar driven by rising bitumen production (from 600,000 barrels a day in 2000 to 1.3 million barrels today) has also created other dramatic risks. First and foremost is what economists call the resource curse or the Dutch Disease.

In the 1970s the Netherlands hurriedly exploited its rich offshore natural gas deposits. While gas exports drove up the value of the Dutch guilder, the nation's manufacturing sector found it hard to sell its goods. So while the gas sector expanded and the government overspent the revenue, the rest of the economy shrank and de-industrialized.

Graph of the Petro Dollar's worth

The ever-observant business magazine The Economist dubbed the economic malaise "the Dutch Disease," from which the astute Dutch eventually recovered. But just about every major oil exporter from Venezuela to Louisiana has suffered some form of the ailment. The political scientist Terry Karl notes in The Paradox of Plenty that if one conclusion can be drawn about the Dutch Disease it's simply this: "a country's economic performance following a resource boom depends to a considerable extent on the policies followed by its government."

Phillippe Bergevin first diagnosed Canada's growing infection in an excellent 2006 paper for the Library of Parliament entitled "Energy Resources: Boon or Curse for the Canadian Economy?" Bergevin detected a number of critical and telltale symptoms including "a rising resource-led export sector coupled with a struggling manufacturing sector and a rising currency."

Norway showed the way

Bergevin suggested that Canada could avoid a really nasty bout of deindustrialization by adopting Norway's fiscal discipline as well as saving hydrocarbon wealth in dedicated funds such as Norway's 20-year-old $400-billion pension fund. Such a fund, which invests in international capital markets, serves several purposes. By taking the money out of general revenue it curtails excessive government spending (another characteristic of petro states).

A sovereign wealth fund also restores balance and class to the currency. Unlike the loonie, Norway's krone does not bounce up and down like a basketball. Nor is Norway's exporting sector languishing. (Alberta's nearly 34-year old Heritage Trust Fund, which the Alberta government systematically loots whenever it feels like it, holds but a paltry $14-billion and couldn't balance the currency of Lagos.)

Bergevin pointedly recommended that both Alberta and Ottawa save its oil wealth for future generations. If the federal government had prudently separated tar sands taxes from its general revenue over the last two decades, Canada could boast a significant $100-billion rainy day fund by 2020.

"Norway's experience demonstrates that policies such as establishment of a petroleum fund can help alleviate the effects of the Dutch Disease," added Bergevin. But no one in Ottawa listened and the media yawned.

How the petro-dollar kills manufacturing

One of Quebec's largest and most important financial institutions, Desjardins also sounded the alarm about the Dutch Disease in 2006. Although oil exports had contributed to national revenue and created jobs, "there is reason to wonder about the benefits of exploiting the tar sands." While profit margins jumped for energy companies, the trade balance of the manufacturing sector tanked.

Given the new lustre of "the petrocurrency" and the potential for tar sands exploitation, the analysts at Desjardin predicted that "manufacturing industries will still be facing very tough times." They weren't kidding.

A year later a parliamentary committee looking at the manufacturing sector noted that a rising dollar combined with volatile energy prices and cheap Chinese imports had decimated the sector. It cited the Dutch Disease and concluded that Canada was witnessing "a long-term structural change favoring both the resources and the services sectors at the expense of the manufacturing sector."

Graph measuring manufacturing employment

In other words the bitumen curse will make Canada look more and more like Saudi Arabia, where petro dollars buy imported luxuries and temporary foreign workers. (Ironically the report's authors recommended the development of clean and renewable energy sources for Canadian industry.)

The Bitumen elephant stomps BC and Alberta

Alberta, of course, has a classic case of the Dutch Disease. Bitumen is the elephant that has stomped the rest of the province. A 2009 PriceWaterhouse Coopers study noted that the project had surely enriched the oil cartels as well as the construction and the transportation sector. However it had weakened or impoverished the rest of the economy. Agriculture has recorded negative growth since 2000 while "petroleum refineries, chemical manufacturers and the pipeline industry" have "not fared well" and "grown at a rate much slower than the provincial average."

British Columbia has been affected, too. In a 2008 presentation to the Canada West Foundation, Jock Finlayson of the Business Council of British Columbia noted that every one cent rise in the Canada's petro dollar subtracted $150-$160-million from the forestry sector; and another $50-million from the mining sector. Since 2007 alone B.C.'s forestry sector has lost $2.5 billion due to Canada's wonky petro dollar.

Last year Statistics Canada documented just how thoroughly the Dutch Disease can hollow out an economy. Between 2004 and 2008, years of frenzied tar sands activity, Canada lost 322,000 manufacturing jobs. That means that one in every seven manufacturing jobs vanished. The majority of the losses occurred in Central Canada. Textiles, clothing, wood products, motor vehicles, machinery, chemicals and electrical equipment all suffered extreme losses.

Hollowing out an economy

Daniel Drache, a political economist at York University, also doesn't think Canada's rapid deindustrialization is smart or sustainable. "Hollowing out of the manufacturing in Ontario and Quebec is a massive price to pay even if the resource Canada is booming... Canada's share of technology intensive industries -- auto production, aerospace, advanced economic software and other high value-added industries -- is much smaller than a decade ago, and this has left its factory economy structurally and competitively weakened. Most of all, the transfer of power to the resource giants and the financial sector is troubling and problematic."

Serge Coulombe, an economy professor at the University of Ottawa, and two European colleagues recently asked just how much of the manufacturing losses could be attributed to the petro dollar and rapid tar sands development. In the end Coulombe calculated that 53 per cent of the manufacturing employment loss (a total of 322,000 jobs) was directly related to a petro dollar and "Dutch disease phenomenon." That means for every job created in the tar sands (approximately 100,000) another job has died in the country's manufacturing sector due to bad public policy.

In an interview Coulombe noted that when a country becomes richer because of oil revenue, it's not a disease if the money is invested wisely. But that hasn't happened in Canada or Alberta. Coulombe says he has repeatedly advised both Tory and Liberal governments to save oil revenue in stabilization funds. "It is well-known in Ottawa they should do it but they don't want to do it. They simply spent the money by bringing down the GST by two per cent... Neither the Tories nor the Liberals are willing to talk about it."

Tar sands send Canadian jobs to US

In addition to subtracting jobs from the manufacturing and forestry sector, the tar sands is also exporting jobs to the United States. Every pipeline that ferries 400,000 barrels of raw bitumen a day to the United States transports approximately 18,000 refinery jobs out of Canada. In this respect the tar sands confirms another disastrous Canadian tradition: that of high grading resources and letting other economies do the profitable value-added work.

Last but not least, the tar sands has become a shiny and ungainly Titanic en route to what the philosopher Nassim Nicholas Taleb would call "the impact of the highly improbable." The financial collapse of 2008 illustrated the fragility of systems with large concentrations of capital and complex support systems. (In fact nearly $100-billion in investments disappeared from the tar sands casino.) As Taleb astutely noted in his furiously important book The Black Swan, "unforeseen errors and random shocks hurts large organisms vastly more than smaller ones." After all the hubris the tar sands looks like an Enron or an AIG heading for economic humiliation.

Several random icebergs now patiently await Alberta's bitumen supertanker. They include dramatic oil price shocks, disruptive technologies such as the electric car, a U.S. military that has identified fossil fuels as a national security risk, low carbon fuel standards and growing public sentiment that the oil industry behaves like another morally challenged energy industry: 19th century slave traders A reasonable carbon tax could also limit the size of the bitumen express. Alberta's Emir and the merry crowd in Ottawa never talk about these national economic risks.

Canada's useless Energy Board

So the project has now rearranged the Canadian economy as thoroughly as the federal government's National Energy Program beat up Alberta's economy in the 1980s. Public policy that favours further expansion courts more fragility and vulnerability. By exporting vast volumes of oil without demanding that governments save the money in pension funds (and thereby stabilize the Canadian dollar), Alberta now has given the rest of the country a formidable case of the Dutch Disease. By approving one pipeline after another, Canada's dysfunctional National Energy Board has actively chosen to export thousands of high value jobs to U.S. refineries. And on it goes.

Perhaps Alberta's Emir was right when he said the tar sands is all about jobs and revenue. He just forgot to add two important qualifiers: lost jobs and squandered revenue.

Monday: Tyee reporter Geoff Dembicki on remote tar sands workers cracking under the isolated stress. [Tyee]

Andrew Nikiforuk, The Tyee's first writer in residence, is the author of Tar Sands: Dirty Oil and the Future of a Continent. It won the 2009 Rachel Carson Book Award.

41 Comments:

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  • Laura K.

    1 year ago

    First of all - it's nice to

    First of all - it's nice to see tar sands journalism that actually upholds some standards of the profession. I.e. from a journalist who has clearly done his research and presents clear rationale rather than a hysterical conservative rent-a-writer who appears to think it's part of his genetic code as a conservative to blindly defend the tar sands until death (referring to some pieces I've seen in a few Albertan papers in recent weeks). Secondly, this piece challenges all the tar sands defenders who dismiss the environmental criticisms of the tar sands as 'naive' or 'romantic' in light of the economic importance of the resource. The idea that the tar sands are an economic win-win scenario which we must develop rapidly at any cost is what is naive and romantic here.

  • alive

    1 year ago

    Why worry, be happy---- eh?

    They used to call BC "Lotus-land"; guess that Alberta really has the title these days?

  • CharlieR

    1 year ago

    Oil Sands threaten Jobs?

    The Article makes a great point linking Tar Sands income to Dutch Disease & following Norway model. But then it sinks into stupid environmental propaganda trying to tie lost mfg jobs & deindustralization to Tar Sands.
    Canada HAD to develop Tar Sands to replace huge loss its Conventional Oil - selling US is just short term export until next round Canada Refinery expansions. Like US the Canada energy system cannot be transitioned to "Green" state in real world that envrironmentalist seldom live in.
    Additionally like the rest of world - the loss of mfg jobs is because China is stealing them because it doesnt play by ANY WTO rules for free trade. It peggs its currency giving auto 10-20% advantage, it's plant do not have add environmental investments even though its now worlds largest polluter due its exemption to Kyoto, every year it subsidizes $Billions to Refining sector so it can buy $100/Bbl oil but sell Diesel/Gas at less $0.87/gal thereby giving huge agriculture & Transportation advantage to all exports. And of course private ownership of plants is just words on paper. Every industrialized mfg job loss is result of China's gaming the stupid bureacrats (& environmentalist) to maintain this huge advantage for over decade now.
    The article had good start & interesting angle but lost it to typical Anti-Industry environmental stupidity. Regards

  • HTC

    1 year ago

    Canada should split into two separate countries

    What benefits The industrial areas in Eastern Canada provide zero benefit to the resource and agriculture rich Western Canada and vice versa.

    Western Separation is the cure.

  • Van Isle

    1 year ago

    If Mr. Harper and his merry

    If Mr. Harper and his merry band of followers are so wise and all knowing, how come they can't see what the hell is happening? And Mr. Harper is suppose to be an economist too? I've been saying it for years that the 'tar-sands' is just one big ponsi-scam.

  • Fiat lux

    1 year ago

    Canada's deindustrialization

    Canada's deindustrialization began with the acceptance of the criminal neoclassical market economic theory, 40 years ago, and got into high gear with the FTA and NAFTA treaties, fraudulently called "free trade agreements. "

    The whole system is designed for global colonization, as many of us, who have fought against the FTA and still fighting the NAFTA have predicted 25 years ago.

    We're living under the biggest crime wave in human history, taught in our universities as a "science", and accepted by all governments, licking the boots of the multinational corporate mafia, hoping for directorships.

    We're selling our country to China for the same money we're paying them for products we used to make for ourselves as free people.

    Any politician and economist who supports this racket should be jailed.

    Ed Deak.

  • G West

    1 year ago

    Thanks again Andrew

    And thanks also for making the connection to the 'Dutch Disease' - something I've been trying to point out to readers here for ages.
    It's very pleasant to have an ally among the scribes here at Tyee.

    Keep up the good and important work.

  • Jerry Munro

    1 year ago

    Here In The Time Warp Loop...

    "We're selling our country to China for the same money we're paying them for products we used to make for ourselves as free people.

    Any politician and economist who supports this racket should be jailed." Ed Deak.

    Indeed, Ed Deak. In bloody deed.

    This "deindustrialization" currently underway within the Canadian economy, under the Harper corporate-fascist project titled FTA and NAU (initiated by the Liberals, to be sure), is a part of the old ruling class "colonialist vision" of this country. Only now, instead of Great Britain, its the imperialist ambitions of the US and, more and more, China, who really only want our resources, that is driving it. Within which, this "colonialist vision" of the country, the conservative/fascist agenda dovetails quite nicely, thank you very much.

    Elsewhere on Tyee, I have referred to the attempt of capitalism everywhere, to turn back the social and economic clock. Deindustrialization, perhaps even possibly to "reindustrialize" once again at some future date, is the admission of capitalism that it is incapable of moving beyond itself and the limits of its own economic development potential, which has finally hit the proverbial wall. It can't go forward, or even back to the old Social Democratic State, which would but sooner or later seal their fate anyway, so it is right now all about going backward to an old imagined heyday, to reset the historical clock to some hour just in advance of the dawn of the Industrial Revolution.

    It simply does not know what the fuck else to do. It is incapable of any other solution that will at one and the same time assure capitalism's perpetuity. It is either "the peoples'" interest that prevails here, or "the capitalists". And they have made their historic choice.

    Everything now awaits the response of "the masses", here in suspended time and place. Here in the time warp loop.

  • Jerry Munro

    1 year ago

    More to Ed's comment....

    Only the manufactured products "we used to make for ourselves" that we now buy back, from the Chinese as we always have the US, take our resources and "add labour value". So actually, over all the transactions, plus and minus, we actually pay more than we get for our resources input.

    Which means, in order to stay ahead of the play, we have to over time keep increasing the quantity of the resources at a higher turnover rate we sell, to make up for the transaction difference. It's called, by me at least, "the colony trap"... in which still, is much of Africa, and once was India and China. (Until Western Capitalism lost its mojo, and decided that it needed to go backward in time to stay in the game.)

  • Notsure

    1 year ago

    Nice

    Great article, thank you very much. I would like to know a little more detail on "the fragility of systems with large concentrations of capital and complex support systems," and and just how complicated the tar sands' funding web is. Would they have the gall to use tax dollars to bail out a sector that has caused so much harm?

  • Merville

    1 year ago

    Hey Charlie... EDITED FOR INSULTS

    I will keep this short. Selling to the United States isn't a short-term fix, it's a long-term contract called NAFTA that is designed to ensure our economic security through access to US markets (albeit a highly contensious one at best). China's currency is no longer 'pegged.' The polluting of China's industries has nothing to do with their lack of commitment to Kyoto. Canada committed and even ratified, but as a federal state with a constitutional seperation of powers, the federal governments Kyoto commitment is a joke, it cannot be employed nation-wide and as such we have such lofty emmission reduction goals as Alberta's 2050 commitment that will surely be extended by 2025. EDITED FOR PERSONAL INSULTES TOWARDS ANOTHER COMMENTER. TOO BAD. A GOOD POST OTHERWISE, BUT THE SNIDE REMARKS RULE IT OUT AS A BEST COMMENT. -- TYEE EDITOR
    -Thanks

  • RickW

    1 year ago

    Charlie R.

    Quote:
    selling US is just short term export until next round Canada Refinery expansions

    Have you actually read this article? I cite just one little detail: "...a U.S. military that has identified fossil fuels as a national security risk..."

    And please to explain just WHY Canada should engage in refinery expansions - especially when the movers and shakers are going all gaga-brained over multi-billion doillar pipelines to ship crude to the US (and China).

  • YCSTS

    1 year ago

    Excellent Article. Spend Petrodollars on our Nuclear Technology.

    The obvious thing to do with a large portion of that Oil Revenue is to spend it on expanding Canada's already considerable Nuclear Energy Industry. The exact opposite of what Stephen "I'd Sell My Soul for Oil" Harper is doing. Trying to decimate Canada's Nuclear Industry. Instead that corrupt bastard is planning on replacing Canada's Coal Power Generation with NG - an incredibly stupid decision that will cost Canadians dearly.

    The ONLY WAY to make Tar Sands Oil equivalent to conventional oil in GHG emissions is to use Nuclear Process Energy. That's a good start. And conserve our NG for export income & winter heating loads for Canadians. We could be building ACANDUs along the US border and selling Clean, Green Nuclear Energy to the USA, developing good high paying, high tech Canadian Jobs.

    And that would promote ACANDU sales to Developing Nations - make Canada a world leader in Nuclear Technology, which is the Future of Energy Production, and will replace Oil as the #1 industry in the World.

    We have a Visionary Nuclear Engineer at the University of Carleton, who has designed a version of the DMSR (the Denatured Molten Salt Reactor), which would be proliferation resistant, cheap & fast to build, inherently safe, with 1/6th the fuel requirements of a similar sized modern Reactor. For $3B in R&D Canada could become the preeminent Clean Energy Exporter in the World.

    http://www.energyfromthorium.com/forum/download/file.php?id=728&sid=5a94910cc159198f9adc52d69955e817

    http://www.youtube.com/watch?v=8F0tUDJ35So

    http://www.energyfromthorium.com/TEAC1/02_LeBlanc_LFRchoices.pdf

    Interesting how Iran, UAE and other Arab Countries are gung-ho on installing Nuclear Power reactors so they can conserve their Oil for high priced, high profit, exports to the gullible SUCKERS in the West. Harper is taking the opposite approach, Harper instead wants to abandon our already advanced Nuclear Capability and convert our entire Energy Supply to Oil & NG, making us entirely reliant on Oil/NG = Big Oil for our Economic Survival.

    And Renewable Energy is a SCAM promoted by Big Oil as a way to misdirect resources from any effective alternatives to their Oil/NG smoke belching product.

  • RickW

    1 year ago

    YCSTS

    Too bad that Harper is intent on breaking up the country, and you will never see your dream.....

    Manifest Destiny lives on!

  • MkumbaJoe

    1 year ago

    excellent article

    It makes the heart ache that this country is run by yahoos. If only we had an economic leader with an informed discerning vision, the way Trudeau had vision about the nature of Canada.

  • RickW

    1 year ago

    It CAN Be Done!

    http://wiki.answers.com/Q/What_raw_materials_does_Germany_import
    Germany has few natural resources apart from coal and agriculture. The main raw materials imported are oil and gas, metals and foodstuffs
    http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x553613
    A vast expansion of a program paying to keep workers employed, rather than dealing with them once they lost their jobs, was the most direct step taken in the heat of the crisis. But the roots of Germany’s export-driven success reach back to the painful restructuring under the previous government of Chancellor Gerhard Schröder.
    By paring unemployment benefits, easing rules for hiring and firing, and management and labor’s working together to keep a lid on wages, Germany ensured that it could again export its way to growth with competitive, nimble companies producing the cars and machine tools the world’s economies — emerging and developed alike — demanded

    And to think, Canada HAS the natural resources, and doesn't have to import them to support value-added industries.

  • morechatter

    1 year ago

    Pumping Canada Up

    As Harper has Canada jumping to the pumps to fuel a war the rest of the country pays the price. The Alberta Conservative has had his eye on the prize as Trudeau's Petro Canada is sold along with his dreams as Harper is up to his neck in Oil as Industry can do no wrong despite when not doing right as rules and regulations are now a thing of the past.
    Backing education and infracture has become a thing of the past as universities and colleges are filled up with students from other countries. It is simply amazing companies come and go, as get sold off or go bankrupt or simply close business doors but education now that sticks with you for life along with grand buildings. The markets can jump up and down and crumble and take your lifesaving and homes but you got your education for life as its what is needed to pick up the slack as a country filled with dummies may keep Conservatives in power but who is going to pick up the slack.

  • Fiat lux

    1 year ago

    The sale of resources is not

    The sale of resources is not an income, anyway, in any correct business accounting system, because the GDP, or whatever silly excuse they use, has no debits, or liability columns.The GDP is an accounting system by fools for fools

    If you sell your house, or land, and live high off the hog till the money runs out, you didn't "earn and spend and income", but gave away real capital.

    Also, the proudly touted "service economy" is not an asset, but
    liability.

    Ed Deak.

  • morechatter

    1 year ago

    Oil Sands threaten jobs

    And the food on your table as just take a look at the disasters that have just occurred as it said that it will take billions to help with the many lost jobs that helped feed the planet and no one knows when things will return. These disasters aren't going away either and in fact can only occur more often as operations are beefed up and transportation of oil is expanded as the only winners are the dirt bag corporation CEO's and investors for sure as the rest of the country is out of luck.

  • DNA

    1 year ago

    The oil sands need not result in deindustrialization

    While I don't like a lot about the oil sands, I don't think it inevitable that a high ("petro") dollar necessarily need lead to depression in Canada's manufacturing industries. The problem, it seems to me, is that our manufacturing companies (like most of our companies) are largely controlled by foreign ownership which has no incentive to build a solid manufacturing base in Canada. A strong dollar means it would be easier to invest capital in manufacturing technology and plant. I find it rich that the author brings up the example of the forestry sector: our lumber barons do darn little manufacturing except to ship two-by-fours and raw logs out of the country - not exactly high value added stuff. Certainly it is true that a strong dollar makes it harder to sell manufactured goods cheap, but it can be done. The article mentions the Netherlands; may I remind you of Germany, which certainly has not had a cheap currency (until lately), and where BC went to buy its ferries!

  • Jerry Munro

    1 year ago

    We have the resources everyone else wants for their development

    Good points, DNA. There is more at work here than a high petro dollar, which as you suggest is the degree of foreign ownership, who actually hamper our industrial development, because the real prize is our resources, to fuel other's industrialization plans. This has always been our underpinning problem... and the lack of real vision of our ruling class, which has always been too willing, as Fait Lux in effect correctly notes, to enrich themselves selling off our land, house and fine furnishings. Which leads to a zero sum game, looking in from the outside and sitting on the curb in the end, for the Canadian nation.

    The country really does have to wake up soon. For it is the fascists, with the "nice guys" co-operation of a tame parliamentary opposition that are facilitating this great betrayal of the nation and the people.

  • bilgladstone

    1 year ago

    Too late, my friends

    The oil-soaked Corporatists have taken over the country in a bloodless coup. Duped by mendacious slogans like "fiscal responsibility" and "get tough on crime", the voting public - the insouciant, aging demographic who actually bother to vote - has handed power to the evil and autocratic Stephen Harper. How is anyone really surprised that this "Calgary Wahabist" is destroying our country?

    "One may smile, and smile, and be a villain" Harper does. And is.

  • Fiat lux

    1 year ago

    Look at the man's eyes. They

    Look at the man's eyes. They speak volumes.

    I have seen those eyes under Totenkopf and Red Star caps and they give me the creeps.

    Ed Deak.

  • RickW

    1 year ago

    DNA

    Quote:
    Certainly it is true that a strong dollar makes it harder to sell manufactured goods cheap

    Unless we can make something desirable that few others (or no one else) can make. But bigger businesses in Canada think entreprenurial expertise is seeing what can be wrung out the governments.

  • RockyRacoon

    1 year ago

    The only way out of this mess is to Nationalize the commanding

    heights of the economy. Energy, Transportation telecommunications in Canada are all natural monopolies that are better served being treated as such in reality. We need tarrifs, we need laws that ensure our industries are Canadian owned by Canadians and by Canadians I don't mean our own domestic capitalist class I mean the Canadian people. We have to reclaim that which has been sold off such as Petro Canada and such resources as Ontario Hydro. How do we do it. We do a forensic audit follow the money and expose the corruption behind such deals because I know there was corruption somewhere along the line. That is how to do it. 90% of the tar sands can be shut down just for environmental abuses alone. Taken them over in the name of national security is another route and given the condition of those toxic lakes where they store whatever the heck the pollution tar sands production entails it is a matter of national security. Harper wants Canada dependent on tar sand so that we can't shut them down. We we are going to have to pick up the tab when those toxic lakes leak even more than they already are so we may as well take them over now. Maybe we should let Harper beef up the military we might need them to march in there and take things over. Nothing less than a socialist revolution will secure this nation from the predatory capitalist class who have no one's interests in mind than their own. It is about time Canadians start to think along the lines of what is best for their own class and not the ruling class of this nation and the world. Look at South America they have had it with American Imperialism so has the middle east, they care less about Canada except what they can exploit out of us and it has always been that way. The only country to ever attack Canada has been the USA and our alignment with them has put us in greater not less danger. Yeah lets put up a bigger fence secure the border we will make sure no terrorists get IN or OUT through economic or otherwise.

  • Fiat lux

    1 year ago

    The "free trade" racket at work

    www.ips-dc.org/articles/mining_for_el_salvadors_gold_-_in_washington

    Gouging CAFTA for El Salvador's Gold: Pacific Rim goes to Washington

    Mining for El Salvador's Gold -- In Washington

    An international tribunal gives the green light to a lawsuit brought
    by two companies attempting to overcome strong public and government
    resistance to their destructive gold mining.

    August 11, 2010 · By Manuel Pérez-Rocha

    Earlier this year, I had the opportunity to travel toCabañas, El
    Salvador,to meet with some of the bravest and most successful
    environmental activists in the world. Ordinary villagers in this
    remote area of the country have joined with religious groups,
    research centers, and others to take on the powerful international
    mining companies that are seeking to plunder their country's gold. So
    far, the activists have been winning this David-vs.-Goliath fight.
    Two successive Salvadoran governments have denied permits for gold
    mining on environmental and human health grounds.

    Last week, however, these activists suffered a setback - not from
    their own government, but from an obscure tribunal in Washington,
    DC.Two transnational mining companies have used rules in the "free
    trade" agreement between the United States and six countries in the
    region to sue the government of El Salvador.They are demanding
    hundreds of millions of dollars in compensation for the denial of
    mining permits. The first company to file suit, [Canadian-
    based]Pacific Rim,has just won the first stage of the proceedings
    by overcoming the Salvadoran government's effort to get the case
    thrown out on jurisdictional grounds.

    Continued....

  • pwlg

    1 year ago

    more at play than petro dollars-pt1

    In 2006 the leading export to the US was petroleum. It accounted for 21% of all Canada's exports to the US ($63.7 billion) whereas lumber only accounted for 2.2% of Canadian exports to the US or $6.6 billion.

    However, if you put together all the manufactured in Canada vehicles and associated vehicle parts etc that Canada exported to the US in 2006 you would find these products lead Canada's exports to the US, just barely, rather than petroleum exports. Finished vehicles and vehicle parts accounted for 23% or $68.4 billion of Canada's exports to the US.

    The average US$ price for a barrel of oil in 2006 was $58.30.

    Much has been written about the rapid price increase for a barrel of oil in the summer of 2008 when it reached almost $150. What one needs to consider is this price lasted for a very short period in 2008. The year average price for a barrel of oil in 2008 was $91.48. In 2009, the average price dropped to $53.48 a barrel or less than the price in 2006.

  • pwlg

    1 year ago

    more at play than petro dollars-pt2

    Oil as well as other commodities are subject to investor whims and fancy. Most analysts link the rapid rise of a barrel of oil in 2008 to hedge funds. As fast as the price of oil increased it crashed just as fast in 2009 to a low of $31 a barrel. This was at a time when the you know what hit the fan when many of the largest global investment houses collapsed along with many hedge fund operators.

    (Canadian exports to the US fell 33.8% in 2009. Our trade surplus with the US fell 75%. Petroleum products exports to the US dropped to $59.6 billion).

    CAW, the Canadian Auto Workers, claimed Canada lost 160,000 manufacturing jobs in 2004 due directly to our trade deficit with certain countries. The average price for a barrel of oil in 2004 was just $37.66.

    Canada's trade deficit in 2004 with China, who have artificially pegged their currency well below value, was over $20 billion, with Japan $8 billion and with Korea $4 billion.

    Our trade surplus with our neighbour south of us is what keeps us in the black as they say. With the US economy sputtering almost on empty, oil prices, which again are artificially high, have somewhat stablilized. The rush to add more tar sand developments has slowed to a trickle with billions of dollars of previously announced projects on hold indefinitely.

    Other factors are at play and perhaps the entire investment culture, making money from money, has caused economies all over the globe to wobble and bend. Whether these economies straighten out and real jobs are created is uncertain.

    Jeff Rubin, former chief economist for CIBC, is on record claiming that triple digit oil will return and the impacts of triple digit oil will be far greater to world economies than was the financial collapse of 2008. Rubin claims that the impacts of $147 for a barrel of oil was barely felt back in 2008 due to the financial institution collapse.

    As nations attempt to shore up their financial institutions with band-aids one wonders what will happen when demand drives the price of oil rather than speculation.

  • Jerry Munro

    1 year ago

    Tweaking our vision of the present and the future I...

    "The only way out of this mess is to Nationalize the commanding
    heights of the economy. Energy, Transportation telecommunications in Canada are all natural monopolies that are better served being treated as such in reality..." Rockyracoon.

    There is a level on which I actually agree with this assessment... though it is an attempt, in part, I think, to return to the Capitalist Social Democratic State. Which, as "nationalization" per se, or "state ownership" of these commanding heights of the economy, runs the perpetual risk as we are living through, of the next "conservative capitalist" government down the road, at some future date, simply again undoing it... which Britain certainly and we in part should by now understand.

    I propose that "the commanding heights" of the economy be removed forever from this risk by rather than "nationalizing" them, "democratizing" them instead, in a "new public ownership" model way.And by that I mean, that ownership and management/directorship control of these critical enterprises be shared by some formula to yet be determined, between the workers in these enterprises and "the public/various community/ngo interests".

    The advantage of this method over outright "state ownership" is first, it removes these enterprises forever, short of counter-revolution, from them ever being returned to capitalist hands. They become a "worker-public" joint venture.

    Secondly, it extends the reach of the principles of "democracy", in a new way, into the commanding heights of the economy... establishing an important historical precedent that can be applied "by degrees" over time to the entire economy, as practical and the issues are resolved.

    There has been a historical experience with "nationalizations" per se already, in the West's early Social Democratic State, the old Soviet Union and elsewhere, and that experience has not been particularly good, and continues to leave the working population and broader public outside of the real power loop.

    To change the future, we need to change the "power" relationships within society AND the economy.

    pwig writes, "Our trade surplus with our neighbour south of us is what keeps us in the black as they say. "

    continued next post...

  • Jerry Munro

    1 year ago

    Tweaking our vision of the present and the future 2

    Continuing from above...

    And this is true because of their relatively higher degree of industrialization. Though one must hurry to not that our southern neighbour, on whom our "colonial dependency" has been some weakened as well, because it is going through the same "deindustrialization" process that we have, relying more and more on the same off-shore sources for cheap labour and goods.This, since the collapse of the British Empire "colonial dependency" of ours, which went to the US by earlier default, because the pattern of hewer of wood and drawer of water has never really been broken in our economic development, has of recent begun as well, as the US Empire comes unglued, to pass to "industrializing" China in growing measure, (The overarching reality increasingly for the US is, it is over-developed economically of its own home "resource supply" ability, and cannot sustain current levels without some kind of security of foreign supply.)

    This deindustrialization process is incomplete and still in flux, and beginning to meet resistance in the US and elsewhere, as it is here, but is still the direction of development to which global capitalism is committed over all. (On the other hand, Germany, for example, has no real choice. Without resources, it is industrial capitalism still, or no capitalism at all, certainly not without especially Russian security of supply.)

  • RickW

    1 year ago

    pwlg

    You need to factor in the ownership of the companies who export to the US. How may are home-grown, and where the profits are invested back into the nation?

  • Fiat lux

    1 year ago

    Let's be careful about the

    Let's be careful about the impacts of investments.

    Investments are like alcohol. To a certain degree they can be enjoyable and beneficial, but nobody ever talks now about the damage caused by overcapitalization, which is like alcoholism, that destroys the real economy and humanity at large.

    The old textbooks have been limiting the benefits of capitalization at one wage year per worker.

    Now we have, even in the lumber industry 70-80 wage year investments per job, that drains the benefits of the economy away from its purpose, which is the "management and distribution of scarce resources" for the benefit of humanity and not for the parasitic growth of special interest predator sectors.

    Ed Deak.

  • RickW

    1 year ago

    Preston Manning....

    ...was on Suzuki on the radio today, talking about private investment in carbon reduction.

    From your post above, Ed, "... "management and distribution of scarce resources"..." I would be curious to know what his answer would be on the following: How would the marketplace deal with the plunder or sustainability choice of resource extraction?

  • freebear

    1 year ago

    Sigh, so much to look forward too!

    "Every week Canada's least favorite Emir, Alberta Premier Ed Stelmach, earnestly lectures Canadians that the mighty tar sands are a boon to the national economy because "Alberta's engine drives Canada."

    Right off the proverbial road!

  • lazybones

    1 year ago

    the oil sands - public enemy number 1

    I applaud Mr. Nikiforuk for taking a controversial stance in his home province but I feel he presents much too simple a picture. The dollar is not a petro-currency, it is a commodity currency. The ground-breaking research by Coulombe et al shows, not surprisingly, a connection between the loonie and energy prices, but this relationship is one of many factors driving the loonie. Moreover, it leads Mr. Nikiforuk to advocate singularly against the oil sands. He and other critics take an antagonistic stance, ignoring the economic history of our country and the potential contribution of natural resources to our future prosperity.

    Professor Coulombe’s paper pours cold water on the old theory that energy prices only affected the loonie in the short run. For that I applaud him. However, his research finds that commodity prices have a greater effect on the loonie than energy prices. Moreover, his model has fairly weak explanatory power for the movements of the Canadian dollar. He also finds that more than half the loonie’s post-1983 movement stems from the US dollar. Yet, critics of the oil sands take the link between energy prices and the loonie as justification for drastic economic intervention.

    Mr. Coulombe’s study goes on to show how increases in the dollar negatively affect manufacturing employment. Again, many take this relationship as justification for targeting the oil sands for economic intervention. Why don’t we also intervene in Saskatchewan’s potash and uranium industry, Ontario’s nickel industry, and the North’s diamond, gold, and copper industries? We might also reorient our monetary policy away from inflation to that of currency manipulation. With such measures, we might just be able to preserve a few manufacturing jobs in Ontario and Quebec. Even still, it might not work – despite US currency depreciation, their manufacturing sector wasn’t so hot over the last decade. There is a global rebalancing of manufacturing and the big & bad tar sands make a convenient villain.

  • lazybones

    1 year ago

    rethinking the oil sands

    Instead of slamming economic activity in Canada’s resource sectors, we should be attempting to create East-West linkages between this economic activity – much like that which has defined Canada’s economic development. Political economist Harold Innis described Canada’s economic development as a process whereby resource sectors such as fisheries, fur trade, wheat, lumber, and minerals act as “leading” sectors for the economy. The economic activity from these staple sectors spills over into the manufacturing sector, processing sectors (making felt hats, furniture, gasoline, etc.), and service sectors.

    For Canada, the manufacturing sector represents a key linkage to the primary resource sectors. Manufacturers throughout Canada are manufacturing machinery and equipment used in bitumen extraction and processing. For example, the Canadian Energy Research Institute estimates billions of dollars in economic spill-over from the oil sands to Ontario’s economy. However, companies are finding it cheaper to import much of this manufactured equipment in modules from places like South Korea and China. Entrepreneurial manufacturers in Ontario would realize this and increase their focus on the oil sands. Governments would also be wise to evaluate strategic choices to increase the competitive advantage of domestic manufacturing. We should be looking for these sorts of solutions rather than seeing the oil sands as an economic burden.

    With too much time on my hands,
    lazybones

  • G West

    1 year ago

    Tar Sands

    Andrew Nikiforik doesn't go far enough. IN fact, I hope all Tyee readers saw the documentary film GASLANDS on HBO Canada tonight: The same people who are messing with American water and the environment are doing exactly the same thing in Alberta, Saskatchewan and North Eastern BC.

    Why anyone would give these people the benefit of the doubt is inexplicable and dangerous.

    They should be run out of the country on a rail before it is too late...peripheral advantage from incidental and short term economic gains will not bring back either the jobs, the quality of life or the environment once it has been spoiled.

    You don't like what's coming?

    You'll like it a lot less when you're in the middle of it.

  • zalm

    1 year ago

    Thanks, Andrew

    Fabulous article. Couple of good comments above, too.

  • zalm

    1 year ago

    Funniest comment?

    Notsure said:
    "Would they [the government] have the gall to use tax dollars to bail out a sector that caused so much harm?"

    LOL! CAE, Litton Systems, Bombardier, Pratt & Whitney, Allied Aerospace....shall I go on? All their hardware is tested, tried and true in the Persian Gulf and Afghanistan, to the detriment of thousands of lives, not to mention the unintended deaths of hundreds of Canadians. All thanks to the contributions of well-meaning Canadians through their tax dollars, gratis. (Oh yes, it's said that some of these are loans, but only 2.6% of the approximately 12 billion in subsidies has ever been repaid.)

    I'm looking forward to the storm of outrage ....sometime. When the people or the media or politicians or someone gets around to it. Maybe.

  • sicntired

    1 year ago

    environmental disaster that dwarfs the gulf

    Mr's Harper and Stelmach keep telling us that closing the tar sands down would destroy the countries economy.This is typical of Harper's style and bears no resemblance to reality.What he could have said was that he has made the country so reliant on dirty oil dollars that they'd be lost if there was a moratorium.We are destroying the planet.These plutocrats who quickly raised the price of oil to make tar sands technology workable are now doing machiavellian things to try to expedite delivery to the US through Kitimat,B.C.We await the first and inevitable west coast oil spill.I love the cute little commercials in which some woman tries to tell us how they reuse the water that is pumped out of the river so that the actual amount is much lower.That place will be a permanent scar on the planet but most of the workers probably won't have to deal because they'll have moved on.

  • nbeeerman

    1 year ago

    Tar Sands another symptom of a broken system

    It is clear to me that only a broken political system is a key part of the problem. Good government should work for the good of it's citizens. We now have a system that allows a party to effectively be dictators during their term of office or even have that power when they have less than half of the population behind them.

    Niether the Conservatives or Liberals want to change things as it would make them more accountable.

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