When Thomas Mulcair runs into Western public opinion there will be blood – by John Ivison (National Post – March 25, 2012)

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What has the NDP wrought with the election of Thomas Mulcair as the party’s new leader? There was likely great wailing and gnashing of teeth among Bloquistes on his elevation, so we can assume that this is good news for the re-election of federalists in Quebec.
 
But what of the rest of the country? An article Mr. Mulcair wrote for Policy Option magazine, entitled Tar Sands: Dirty Oil and the Future of the Country, suggests that the new NDP leader is an irresistible force about to crash into the immovable object of Western public opinion. And there will be blood.
 
In his inaugural press conference as leader on Sunday, Mr. Mulcair softened his language — referring to the “oil sands,” rather than the pejorative “tar sands” that has been his normal shorthand. But did not back away from his commitment to “internalize” environmental costs to help cure the “Dutch disease” that has, in his view, driven up the value of the Canadian dollar and destabilized the balanced economy of East and West.
 
“We are living off the credit card of our grandchildren and that’s something we’ve got to change,” he said.

In an interview with Tom Clark on Global’s The West Block, Mr. Mulcair lamented the fact the NDP has just three seats between Ontario and British Columbia. That is not about to change, given his musings on a “comprehensive” cap and trade plan are unlikely to win him friends in Canada’s resource-producing provinces. “The tar sands might be taking more out of the Canadian economy than they are putting in,” he said in Policy Options, without offering any evidence.
 
In Mr. Mulcair’s view, development should be slowed and crude exported only after it has been refined. Stephen Harper’s support for the oil sands was deemed “immoral” and the NDP leader envisaged “billions” of dollars being raked in by his carbon pricing policy.

There is no doubt that Canada has a two-track economy that threatens to pit region against region. But rather than adding balm to the wounds, Mr. Mulcair stands ready to rub salt. The average Albertan is already contributing $687 a year to pay for services in the rest of the country and, according to one study by former Bank of Canada governor David Dodge, that number is set to rise to $920 per head by 2020. The main recipients, of course, are Quebecers who help pay for their $7-a-day daycare, cheap university tuition fees and under-priced hydro with the $7.4-billion they get from wealthier Canadians. Ontarians are also recipients of equalization — $3.2-billion this year, likely rising to $5.5-billion by 2020, according to Mr. Dodge.
 
Given the already massive transfers of wealth taking place, the prospect of a federal government in Ottawa constraining development and re-distributing the proceeds to fund pet projects in the East would be provocative in the extreme.
 
Mr. Mulcair has been characterized as a “modernizer” but he shows no more understanding of economic realities than some of his more rustic colleagues. In Policy Options, he lamented the export of jobs, as un-refined oil is shipped out of Canada by pipeline. Yet, as the House committee on natural resources heard recently, refining capacity exceeds demand in North America — the result of demand for gasoline products having peaked. There is room to grow upgrading capacity to create diluted bitumen but the advent of super-refineries in India and China means there is little prospect of anyone investing the $5-15-billion in a new refinery in Canada any time soon.

For the rest of this article, please go to the National Post website: http://fullcomment.nationalpost.com/2012/03/25/john-ivison-when-thomas-mulcair-runs-into-western-public-opinion-there-will-be-blood/

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