Premiers both have a lot to learn – by Jesse Kline (National Post – February 28, 2012)

The National Post is Canada’s second largest national paper.

Hot on the heels of Alberta Finance Minister Ron Liepert’s North American tour, Premier Alison Redford is hitting the road – visiting key American cities, including Chicago, New York and Washington – to sell her vision of a more co-operative energy strategy. But along the way, the rookie Premier seems to be getting a hard lesson in the harsh reality of politics.

Ms. Redford is facing a tough challenge: The capacity of existing pipelines will soon be maxed out and Alberta needs to get the approval of other jurisdictions (either B.C. or the United States) to build new ones. Oil sands opponents have a keen understanding of this dilemma. Their strategy has been to block Alberta’s access to foreign markets, in the hopes of preventing further expansion of the oil sands. In order to counter its opponents and enable the land-locked province to export its bitumen, Ms. Redford has been trying to get other politicians to help her sell the oil sands – specifically, the Premier of Canada’s largest province, Dalton McGunity.

“We in Alberta have a resource that matters to the rest of the country,” said Ms. Redford. “It’s not enough for Alberta to be talking about the importance of Keystone in the United States. We need the Premier of Ontario talking about that.”

Indeed, the economic benefits realized by the oil sands are not confined to Alberta – Ontario is the second-largest beneficiary. According to the Canadian Association of Petroleum Producers, 255 Ontario companies are involved in manufacturing supplies for the oil sands. A study by the Canadian Energy Research Institute estimates that Ontario will see $63-billion in economic benefits from oil sands projects between 2010 and 2035 – creating 65,520 jobs in the province.

But these numbers aren’t enough for Ontario’s Premier, who thinks the high Canadian dollar has “knocked the wind” out of the province’s manufacturing sector. “If I had my preferences as to whether we had a rapidly growing oil and gas sector in the West or a lower dollar, I’ll tell you where I stand: with the lower dollar,” said Mr. McGuinty.

Who says Mr. McGuinty didn’t pass Economics 101? It’s true that the value of our dollar is inflated by this country’s natural resource wealth, and that a high dollar is good for importers and bad for exporters. The entire economy is interrelated – pulling any one string will affect many other economic indicators. What Mr. McGuinty fails to realize is that economies function best when labour and capital are able to move freely.

For the rest of this article, please go to the National Post website: http://www.nationalpost.com/Premiers+both+have+learn/6219332/story.html

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