[Unsound]

I think the biggest thing here is that Mcguinty sees it as a zero-sum equation. Either Alberta does well or Ontario does. It's way more complex than that. Ontario is in the dumps for the same reason that manufacturing sectors in the entire first workld are in trouble. Too many second and third world countires do the same work, for less.

Ontario needs to find away to re-orient is't economy and deal with the way the world has changed. Trying to go back won't work. Dragging Alberta down won't help either.

[andyt]

You're absolutely right. But ignoring the problem isn't a good idea either. I think we do have Dutch disease, and that's not good.

[BeaverFever]

I think it's defintion time, since the term seems to be going over people's heads:

$1:

In economics, the Dutch disease is a concept that explains the apparent relationship between the increase in exploitation of natural resources and a decline in the manufacturing sector. The mechanism is that an increase in revenues from natural resources (or inflows of foreign aid) will make a given nation's currency stronger compared to that of other nations (manifest in an exchange rate), resulting in the nation's other exports becoming more expensive for other countries to buy, making the manufacturing sector less competitive. While it most often refers to natural resource discovery, it can also refer to "any development that results in a large inflow of foreign currency, including a sharp surge in natural resource prices, foreign assistance, and foreign direct investment".[1]

The term was coined in 1977 by The Economist to describe the decline of the manufacturing sector in the Netherlands after the discovery of a large natural gas field in 1959.[2]

[DrCaleb]

andyt andyt:

Probably we both are. I took your comment to be making the case that interprovincial trade is sufficient to make an economy in Canada. That we don't need to concern ourselves about international trade.

Sorry then, no that isn't what I meant. I mean we need to do more interprovincial trade. There needs to be fewer bariers to goods and services between provinces. There will always be international trade, but we should do things like get cheaper oil to Quebec, damn the Canadian Shield.

andyt andyt:

Except for Alberta oil of course. The point being that we can't just say everything is fine in Canada on average, when it's really all about Alberta oil, which as McGuinty is saying may harm other regions.

And that's where he's wrong, as Premier Redford says. It's not about Alberta Oil. We have more than just oil. And we are only one province among ten.

andyt andyt:

I didn't agree when our Canadian policy was all about Ontario. I don't agree now that it's all about Alberta, and I wouldn't agree, I like to think, if it was all about BC. I want to live in a nation, not a collection of provinces.

On that, we agree.

[Yogi]

I got the real solution here!
Albertuh should just shut down the oilsands and all the other oil ($$$$) stuff they doing. Then fer shur the Loonie gonna drop outta the sky like a... well, like a dead duck! See, then that way, 'THE EAST' would return to being the manufactureen mecca dooin biz the old ways. Then El Prezidente Mawginty can by all the petrol we needs from Venoozwayla, Iran ( and I gonna keep on runnin too!), Irak, and some them A-rabb countrys for, like pennies for a barel.WEEEEE. Gazoleen @ .10/gal. WEEEEE!
Oh yah, and cince we all gonna be rollin in doe, nobody gonna have too werk anymore! Let the good times roll!

[eureka]

One good indicator here is the ridiculing of McGuinty be a few Westerners and a few Right Wingers. The same who are fawning over Redford.

There is no talking sense, economics, or politics to them.

The reality is that Alberta's oil is a net loss to the country and, in the future, as the oil is phased out - as it will be within a couple of decades no matter hos much there is - the gentle decline that has afflicted Canada since oil (and productivity, Lemmy) will become a precipice.

We will have no viable manufacturing sectot left. Not one that can compete on a world market.

[PluggyRug]

eureka eureka:

One good indicator here is the ridiculing of McGuinty be a few Westerners and a few Right Wingers. The same who are fawning over Redford.

There is no talking sense, economics, or politics to them.

The reality is that Alberta's oil is a net loss to the country and, in the future, as the oil is phased out - as it will be within a couple of decades no matter hos much there is - the gentle decline that has afflicted Canada since oil (and productivity, Lemmy) will become a precipice.

We will have no viable manufacturing sectot left. Not one that can compete on a world market.

Are you talking about daddy McGuinty, the person who is forcing his Ontarian children down the path toward the have not provinces.

$1:

oil is phased out - as it will be within a couple of decades no matter hos much there is

tell me where you buy your crystal balls so I can find out if a parachute will be needed to descend your vision of a precipice.

[Gunnair]

eureka eureka:

One good indicator here is the ridiculing of McGuinty be a few Westerners and a few Right Wingers. The same who are fawning over Redford.

There is no talking sense, economics, or politics to them.

The reality is that Alberta's oil is a net loss to the country and, in the future, as the oil is phased out - as it will be within a couple of decades no matter hos much there is - the gentle decline that has afflicted Canada since oil (and productivity, Lemmy) will become a precipice.

We will have no viable manufacturing sectot left. Not one that can compete on a world market.

Ontario is becoming the Italy of Canada... Quebec is our Greece. You guys can go it alone anytime and see how it works out for you.

In the mean time, while you keep coming hat in hand to the west to supplement your big programs and chronic overspending, remember your fucking manners.

[Caelon]

peck420 peck420:

No, 'we' don't.

B.C., Alberta, and Saskatchewan have removed most of the barriers between us. And the agreement is open to other provinces (of course of limited use if the provinces in between don't sign as well).

As Dr. C stated above, Redford (and Stelmach at the end) are pushing for open economies between all the provinces.

The lowered trade barriers in the western provinces is a relatively recent event that is still ongoing. We still have more barriers to trade between western and eastern canada than we do between Canada and the US. As several have pointed out reducing interprovincial trade barriers would be a benefit to our economy.

You never know if Ontario lowered its trade barriers and participated in an east west economy then their manufacturing sector could start to take away some of the trade the ROC does with the US. They might actually improve their transportation infrastucture outside of the small area in southern part of the province.

[FieryVulpine]

Wow, and Redford's now a right-winger? That's news to me.

[Lemmy]

eureka eureka:

The reality is that Alberta's oil is a net loss to the country and, in the future, as the oil is phased out - as it will be within a couple of decades no matter hos much there is - the gentle decline that has afflicted Canada since oil (and productivity, Lemmy) will become a precipice.

I'm not sure what this has to do with me.

[FieryVulpine]

Lemmy Lemmy:

I'm not sure what this has to do with me.

I think he's referring to this...

Lemmy Lemmy:

That's a highly simplistic and mostly incorrect statement about the value of the dollar. I presume you're declaring it "high" in relation to the value of the US dollar. The reason for that is mostly US debt and few economists would regard the US debt, as a cause of economic phenomenon, artificial. Yes, the daily trend of our currency value is tied, in large measure, to commodity prices. But only within a narrow range and in the extreme short-run. Currency values still depend on larger economic factors than commodity prices, such as export demand, domestic stability, relative domestic interest rates, etc.

[dino_bobba_renno]

eureka eureka:

One good indicator here is the ridiculing of McGuinty be a few Westerners and a few Right Wingers. The same who are fawning over Redford.

There is no talking sense, economics, or politics to them.

The reality is that Alberta's oil is a net loss to the country and, in the future, as the oil is phased out - as it will be within a couple of decades no matter hos much there is - the gentle decline that has afflicted Canada since oil (and productivity, Lemmy) will become a precipice.

We will have no viable manufacturing sectot left. Not one that can compete on a world market.

You still haven't explained why other countries have seen a equal if not greater loss in their manufacturing sectors but yet they have no oil sands or Alberta boogeyman to blame. Or maybe Alberta is to blame for the manufacturing losses in other countries as well

eureka eureka:

There is no talking sense, economics, or politics to them.

Pot, meet kettle

[andyt]

$1:

Finally, Canada Goes to School on Dutch Disease

A growing political spat between Alberta Premier Alison Redford and Ontario Premier Dalton McGuinty has highlighted the deleterious impact of fast-growing oil exports on the rest of the Canadian economy.

When Redford, whose party has supported rapid oil sands expansion, recently asked McGuinty to support the petroleum mega-project as a national economic driver, McGuinty refused to do so.

The premier of Canada's manufacturing base then explained that the project had turned the loonie into a petro dollar and thereby undermined the competitiveness of Ontario's economy.

"That has knocked the wind out of Ontario exporters and manufacturing in particular," explained McGuinty.

"The only reason the dollar is high -- it's a petro dollar, right? It's been driven by the global demand for oil and gas to be sourced in Western Canada.

"So if I had my preferences, as to whether we have a rapidly growing oil-and-gas sector in the West or a lower dollar benefiting Ontario, I'll tell you where I'd stand -- with the lower dollar."


The controversial oil project accounts for more than five per cent of Canada's GDP and more than 30 per cent of its exports, as well as multi-billion dollar revenues for Ottawa.

Redford, whose party has ruled Alberta for 40 consecutive years on the basis of its oil wealth, called McGuinty's analysis faulty. But a growing number of economists and reports say the facts solidly support McGuinty.

They argue that the Dutch Disease, a well-known affliction of oil exporting nations, has already damaged Canada's economy by raising the value of the Canadian dollar and eroding central Canada's manufacturing base.

Symptoms appear in manufacturing

Avrim Lazar, head of the Forest Products Association of Canada, was one of the first to sound the alarm.

"The obvious signs of Dutch Disease have been in place in Canada for some time, yet there was a collective complacency in the Canadian economic establishment," said Lazar in a 2008 speech. "This complacency has allowed policymakers to remain adamant that everything is fine. Only now are policymakers beginning to wake-up to the realization that the Canadian economy is not as immune to Dutch Disease as some had predicted."

Statistics Canada reports, for instance, that between 2004 and 2008 one in seven manufacturing jobs disappeared in Canada (322,000). The majority of these losses took place in Quebec and Ontario.

Just last November, two Montreal economists writing for the Institute for Research On Public Policy concluded that Canada's manufacturing base was suffering Dutch Disease-like symptoms and that commodity exports driven by oil had been hollowing out the nation’s economy since 2002.

"The initial problem with the Dutch Disease is that massive exploitation and export of natural resources erodes the competitiveness of the manufacturing sector through the appreciation of the exchange rate."

Added the 2011 IRPP report: "The effects of higher raw materials prices and of a stronger Canadian dollar on various sectors of the economy are a particular concern for regional wealth distribution. In Canada, 95 per cent of oil reserves are located in Alberta, whereas 75 per cent of manufacturing output is produced in central Canada (Quebec and Ontario)."

The economists called for a national policy that stabilizes the currency and that would also encourage both Alberta and federal governments to save more of their oil wealth in a sovereign fund. But a Canadian program to deal with the Dutch Disease caused by oil exports would not be easy because it "would likely require the participation of the different levels of governments," they said.

An 'entrenched' syndrome

An independent investment firm MacroResearchBoard reached even more damning conclusions last April 2011:

"A severe case of Dutch Disease has dramatically reduced the breadth of the Canadian business sector over the past decade, hollowing out manufactured goods exporters and making the nation increasingly reliant on commodity demand. Canada has often been referred to in jest as the 51st state, due to its historical reliance on the U.S. as a key export market. However, it is becoming more accurate to regard Canada as another Province of China," wrote MRB partner Phillip Colmar.

Economist Robyn Allan also cited the Dutch Disease in her critical report on the economic impact of the Northern Gateway Pipeline:

"To the extent that the Dutch Disease does exist in Canada, Northern Gateway represents an entrenchment of the syndrome. The project promises a sustained increase in the price of crude oil which will serve to appreciate the Canadian dollar, raise inflation and interest rates. Those pressures will work negatively on Canada's other exporting sectors to decrease output and employment further."

The phenomenon takes its name from the rapid development of natural gas reserves off the coast of the Netherlands in the 1970s. Gas exports changed the value of the guilder and totally rattled that nation’s economy.

Ever since then, oil-exporting regions including Alaska, Venezuela, Iran and Louisiana have experienced the disease, which often makes petro states highly vulnerable economic monocultures.

"Persistent Dutch Disease provokes a rapid, even distorted, growth of services, transportation and other non-tradeables while simultaneously discouraging industrialization and agriculture -- a dynamic that policymakers seem incapable of counteracting," wrote Stanford political scientist Terry Lynn Karl in 1997.

Her classic book on oil booms and petro states, The Paradox of Plenty, has now become required reading for Canadian politicians.

http://thetyee.ca/Opinion/2012/02/29/Ca ... h-Disease/

[saturn_656]

eureka eureka:

One good indicator here is the ridiculing of McGuinty be a few Westerners and a few Right Wingers. The same who are fawning over Redford.

McGuinty deserves to be ridiculed. Not just by the right, but by everybody. Anyone backing this joker doesn't live in Ontario, lives under a rock, or is a member of one of the public sector unions McGuinty likes to throw money at like it's going out of style.

The man has presided over one of the worst economic declines this province has ever seen, and his response is to shrug his shoulders and blame it on Alberta? Really? How about some real solutions from our fearless leader, preferably ones that don't involve robbing the middle class taxpayer OR decimating the value of CDN currency.