You might say Ontario Premier Dalton McGuinty’s regrettable comment that he would prefer a weak Canadian dollar and a low price for oilsands oil to the obverse is more of a gift to Alberta Premier Allison Redford than a slap at Alberta.
Wishing doesn’t make things so, we all know that. But Redford could hardly wish for anything better than an opportunity to pick another fight with Central Canada, just before an election.
For his part, McGuinty can play his role as a protector of Ontario’s manufacturing base to an audience more than willing to hear his message. He certainly didn’t lose much by withdrawing his comments later.
Who in Ontario will remember that McGuinty even needed to backtrack? Not the thousands of laidoff Ontario factory workers who have seen their jobs disappear over international borders, but whose debts and mortgages still remain, along with worries about what happened to their pensions. Given what we all know of human nature, it’s easier to demonize someone else for your troubles than look at complex reasons why industries cycle through growth and decline.
Industry experts were quick to point out that although 94 per cent of the money invested in expanding production in the oilsands remains in Alberta, most of what’s left finds its way to Ontario. There’s an awful lot of steel in a bitumen mining project, and an awful lot of skilled labour and engineering involved with turning steel into working machinery, pipeline and instrumentation, and the trucks to carry it all.
It would have been nicer if some of the Ontario firms that have won contracts to supply services and materials to Fort McMurray had spoken up to remind McGuinty about how many jobs all over Canada are linked to oilsands development. But in the end, it wasn’t needed.
Besides, both premiers win, as long as they continue in their roles.
For the record, it’s long been shown that oilsands activity benefits the federal government more than the Alberta government. What’s the GST on a new oilsands plant and everything needed to run it? What are the federal income taxes on all those salaries and the GST on everything those salaries buy? Even at their current low rate, what are the federal business taxes collected on a multibillion-dollar mining operation and all their subcontractors?
The sum of all that is far, far greater than anything provided by Alberta’s flat income tax rate, business taxes, plus royalties.
Never mind transfer payments that Alberta makes and Ontario makes no longer; a lot of Ontario’s health care and physical infrastructure is covered by taxes collected in Alberta.
The real victim in this is Redford’s effort to build consensus toward a national energy strategy. As long as people charge that Canada’s dollar is a petro-dollar, and that every gain made by the West comes at the expense of everyone else, that consensus will not be made.
Alberta, Saskatchewan and B.C. want a strategy designed to make Canada energy self-sufficient. Every province and territory would benefit through incentives to use our natural resources as national and not just provincial or regional advantages.
McGuinty would do well to allow that wage and productivity differences between countries have as much to do with Ontario employment rates as the value of the dollar, or the price of oil. He should acknowledge that Canadian advantages in resources, skills and education have not widely resulted in the innovation we see elsewhere in the world.
Nevertheless, the technology used to extract oilsands today is vastly improved over what was used 10 or 15 years ago. Energy extraction is greener and more efficient than it’s ever been, and the corporations involved spend a lot to make it even better. So demonizing the oilsands is a no-gain game.
If the premiers can get past their roles in this tiff, there are huge opportunities waiting in co-operation.
Greg Neiman is an Advocate editor.