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Whom do you believe Pembina Institute versus Canadian Manufacturers and Exporters over the benefits of oil sands development.
The always reliably off-kilter Pembina Institute, fomenter of oil sands phobia in Alberta and organizing backer of green energy madness in Ontario, seems keen on triggering a nation-splitting debate over the oil sands. In a report Wednesday, the Calgary-based organization, advised by political heavyweights such as Preston Manning and David McLaughlin, said development of the oil sands threatens to impose burdens on manufacturing and other sectors across Canada.
The arguments in the new report—Booms, Busts and Bitumen: The Economic Implications of Canadian Oil Sands Development — hinge mostly on the discredited idea that energy development turns the Canadian dollar into a “petrocurrency” which in turns makes Canadian manufacturing a victim of “Dutch disease.” The Dutch disease theory had been widely dismissed by the Bank of Canada and others over the last year or so, but Pembina has never been inclined to let its bad ideas die a respectable death.
And so Boom, Busts and Bitumen is an attempt to perform CPR on Dutch disease. Canada, it says, is suffering from what “appears to be a uniquely Canadian strain of Dutch disease that we call ‘oil sands fever.’” Such fever, it said, is beginning to create clear winners and losers in Canada’s economy. The claim is that “oil sands expansion exacerbates challenges currently being faced by the manufacturing sector, and could pose a significant risk to Canada’s long-term economic competitiveness.”
It turns out, however, that this is news to the manufacturing and exporting sectors in Ontario and elsewhere. The Pembina Dutch disease scare report landed simultaneously on Wednesday with a report from the Canadian Manufacturers and Exporters, which said the whole Pembina approach was bunk. Jay Myers, head of the CME, told me in an interview that Pembina’s analysis is “fundamentally flawed” and part of a “ridiculous argument” that resource development is detrimental to the Canadian economy.
The CME report — Oil Sands Manufacturing — dismisses the Dutch disease scenario directly: “In recent years, much of the discussion linking the oil sands with manufacturing has included so-called ‘Dutch disease,’ with any supposed relationship being characterized as inherently negative.
For the rest of this article, click here: http://opinion.financialpost.com/2013/11/13/terence-corcoran-the-tale-of-two-oil-sands-pembina-vs-canadian-manufacturers/