Some oilsands math
Gary Lamphier
The Edmonton Journal
Thursday, November 13, 2008
One day, it would be nice if the oilsands bashing lobby deigned to explain a few things to the rest of us.
Such as. If the oilsands are shut down -- as the good folks at Greenpeace would very much like -- or even significantly scaled back, where will the billions of dollars in federal equalization money that Alberta's (oilsands-dependent) taxpayers ship to Ottawa each year, come from in future?
Just wondering. It's a small-minded little nitpick, I realize. With Ontario now a "have-not" province, and the country's manufacturing sector flat on its back, you'd think Quebecers, among others, might like to know. Especially in the middle of a provincial election campaign.
Perhaps someone in the national media will ask. Ya think? I won't be holding my breath.
Seems it's OK in Canada to be outraged about the oilsands, since they're far away, and thus easy to demonize. But it's not OK to ask about the $8 billion in equalization money that Quebec receives every year, or where those funds come from. Unless you're the premier of Ontario, of course, in which case you're entitled to whine about equalization for as long as you wish.
Fact is, no oilsands means no equalization cash from Alberta taxpayers, who currently contribute more than $3,000 per capita each year to the feds than they get back in federal services. Not that anyone is complaining, mind you.
Simply put, the future of Alberta's oilsands isn't just an environmental issue. It's a national economic issue. Especially since Canada's economy now appears to be heading into the ditch, along with the U.S. With more than 40 per cent of the taxes generated in the oilsands flowing to Ottawa, their demise would obliterate the federal budget, and affect federal spending programs across the country. Yet, the enviro lobby never seems to get around to mentioning this. Or the national media.
It's not that I don't appreciate it when Council of Canadians chief Maude Barlow, actress Neve Campbell, or their eco-warrior soulmates take time out of their busy schedules to fly out here to the frontier for a few photo ops. Clearly, their recent visits took real commitment. Not to mention excellent speechwriting skills. I particularly enjoyed Barlow's slick put-down of the oilsands by likening it to the bleak kindgom of Mordor, in Lord of the Rings. How awfully clever of her. As for Campbell, the Scream Queen managed to look both fashionable and "horrified," as she put it, during her all-too-brief visit to the ol' tar pit, which was conveniently captured by a Vanity Fair photographer.
Sadly, the glamorous Hollywood star had to jet off to Paris shortly after her brief stopover in Oilberta. I look forward to her return. Maybe she'll deign to talk to us plebeians in the local media next time. Or not. Must be oh so demanding to be both a horror flick star and an environmental expert.
Jokes aside, these are indeed difficult days for the oilsands, one of the few remaining engines of Alberta's -- and Canada's -- sputtering economy.
With oil prices plunging to the mid-$50s from a July peak of more than $147, major oilsands producers like Suncor, Canadian Natural Resources and Nexen have put major expansion projects on hold, putting thousands of future construction jobs in jeopardy.
Yet, Barlow and other oilsands critics talk as if it's still 2006. They complain about "out of control" oilsands expansion plans, even though newspapers like The Journal have been reporting project delays for months.
Similarly, other oilsands bashers blame Canada's soaring "petro currency" for the demise of Ontario's manufacturing sector, even though the loonie has been plunging against the greenback for months.
While it's true that the loonie did make manufacturers less competitive last year, when the dollar spiked to $1.10 US, it's also true that Canada's manufacturing problems run far deeper than that.
More than a quarter century ago, amidst a sharp recession in the early 1980s, I wrote a long cover story for a national magazine on Ontario's manufacturing woes. The title of the piece? The Decline of Ontario.
At the time, dozens of Ontario manufacturing plants were shutting their doors, laying off workers, and moving to places like Mexico or Georgia, where labour costs and taxes were lower. Eventually, North America's economy rebounded, and Ontario's manufacturing sector came roaring back. A few years ago, Ontario supplanted Michigan as the single largest supplier of motor vehicles in North America.
Now, the province's manufacturers are again in deep doo doo. But it's not solely because of the once-lofty loonie. It's also because Ontario's entire manufacturing sector, like Quebec's, is built on a branch-plant model.
It's almost entirely dependent on the prosperity of parent companies -- notably Detroit's struggling Big Three automakers -- that are based elsewhere, and invest most of their research and development money in the U.S.
If Ontario's manufacturers had invested more money in R&D over the years, and more money in advanced equipment to become more competitive, the soaring loonie of 2007 wouldn't have inflicted so much pain.
But you won't hear that from the oilsands haters. It doesn't fit their script. Or their tidy little agenda.
glamphier@thejournal.canwest.com
