Tar Sands are Responsible for Canadian Job Losses
Source:
Matt Price, Huffington Post
What follows is a brief excerpt in terms even a non literate economist like myself would understand. I did expect that the tar sands were a sink hole for federal monies, not only directly in terms of capital investment based on tax write offs but also in giveaways through lack of environmental cleanup, CO2 emissions and resultant burden on the environment. I did think that as we were up until recently tied to costing on carbon tax, that there would be monies owed by high polluting companies. It is, in the main, a factor of petro dollars dictating our real finances.
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The term "Dutch Disease" was
coined
in the 1970s after the Netherlands discovered a large natural gas
field. The country's exchange rate became tied to the rising price of
natural gas, pricing its manufacturing goods out of international
markets and leading to job losses.
In 2011, the Canadian dollar traded on average
above
the U.S. dollar for the first time since 1976. This puts an extra
burden on Canadian companies who export, since it makes their products
less competitive versus products from other countries.
While experts will tell you there are various factors behind our
exchange rate, it's hard not to see the close correlation between the
price of oil and the exchange rate, charted in a graph
here. Thanks to increased oil production, we now have a petro-dollar that rises and falls with the price of oil.
And, with oil being a finite commodity, its price will only rise,
taking our dollar and manufacturing jobs in Ontario and Quebec along
with it.
How many? One economist at the University of Ottawa has
estimated
that 42 per cent of manufacturing job losses in recent years are due to
Canada's case of Dutch Disease. Another study out of Montreal
points out
that while 95 per cent of Canada's oil reserves are in Alberta, 75 per
cent of Canada's manufacturing output is located in Eastern Canada,
making this a growing issue of regional fairness.
So when you hear boosters argue how great the tar sands are for the
Canadian economy, it's a new kind of snake oil, this time of the viscous
and toxic kind called "bitumen."
If we were at all serious about both regional economic fairness and
about charting a new economic future that isn't based on trashing our
planet, we'd reverse the growth of tar sands production and instead
invest heavily in the ample renewable energy resources that exist all
across the country.