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McGuinty's oilsands talk hits a Wall; Saskatchewan premier calls remarks divisive
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The Canadian Press
REGINA - Saskatchewan Premier Brad Wall says his Ontario counterpart's comments on the oilsands are divisive and don't help the relationship between east and west.
Dalton McGuinty said Monday that a strong oilsands industry means a high Canadian dollar, which hurts Ontario's manufacturing and export sectors. He said Ontario would prefer a lower dollar over a growing oil and gas industry in Western Canada.
Wall said Saskatchewan, which is Canada's second-largest oil producer, has a bone to pick with that kind of talk.
"I just don't think it's helpful when any of us say that the energy sector in this case is bad for another part of the country, because it may or may not have an impact on the dollar," Wall said Tuesday.
"He could be saying the same thing about our potash. We're the world's number 1 exporter of potash. We get paid in U.S. dollars. When we export resources, that has an impact on the dollar. It's true of potash, it's true of oil and I think that those two industries are positive for the country.
"They're good for Ontario, they're good for us, and I think the remarks are unnecessarily divisive that Mr. McGuinty has made."
Wall said Saskatchewan loses millions in revenue each time the dollar goes up. But he said it would be a big mistake to confuse a low dollar with productivity and competitiveness.
"There's no question the dollar has an impact on governments. I get that, I know where the premier is coming from there," he said.
"I think you can make those two comments exclusively though. I think you can comment on the challenges of the high dollar and maybe regret any impact that the resource sector has on it, but then also herald the fact that the resource sector also provides opportunity and investment for all Canadians."
Alberta Premier Alison Redford said Monday that the reason the Canadian dollar is high is partly because the United States has been going through some economic difficulties.
She also pointed out that McGuinty's remarks clash with a study by the Canadian Energy Research Institute, which says Ontario enjoys the lion's share of oilsands benefits outside Alberta.
The Calgary-based think-tank suggests the oilsands will create $63 billion in economic spinoffs in Ontario and create 65,000 jobs over 25 years. It also points to smaller economic benefits for and thousands of jobs created in British Columbia and Quebec.
Experts from east and west suggested it's not a win-loss situation for any one province.
Professor Peter Phillips, with the Johnson Shoyama Graduate School of Public Policy at the University of Saskatchewan, said it's the nature of being in a monetary union.
"You can only have one interest rate and you can only have one exchange rate and, so at any point in time, somebody's going to feel that it's the wrong rate for their role in the economy and society," said Phillips, a former economist in the governments of Saskatchewan premiers Grant Devine and Roy Romanow.
"The premiers probably intuitively know that perhaps this is benefiting the resource sector of Western Canada right now, but there are offsetting benefits to most parts of Canada from the high exchange rate."
"You can't have a strong financial sector and logistical sector and engineering sector in downtown Toronto, that's earning its revenues from Alberta and Saskatchewan, without having Alberta and Saskatchewan getting some revenues. They're in the same boat."
Phillips said the oil and gas sector is a contributing factor in the high dollar, but so are strong agri-food prices, the mining industry and other products spread across the economy.
Warren Mabee, assistant professor and director of the Queen's Institute for Energy and Environmental Policy at Queen's University in Kingston, Ont., said he agrees with McGuinty that the strong energy resource sector has inflated the value of Canadian currency, making it hard for the manufacturing sector to compete.
"The fact that these sectors are in different jurisdictions within the federation increases the challenge," Mabee said.
"This is going to stress relations between governments across the country, although it's not as simple as east versus west."
But Mabee also said Wall's arguments have merit.
"What Ontario needs to recognize is that the energy sector does benefit us. What the energy-rich provinces need to recognize is, Ontario is an important part of the whole Canadian economy. And the country as a whole needs to think about how to get it back on its feet."
Wall said people shouldn't be ashamed that Canada is "an emerging energy superpower" that supplies oil and uranium to the world.
"I would hope that all Canadians would be proud of the fact that we are producers of energy, that we do so in a way that's as sustainable as possible," said Wall.
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