The interesting and disturbing phenomenon of people voting against their own interests - particularly in the U.S. - has been fairly well explored, but aren't Canadian business people supposed to be rational actors when it comes to their economic interests?Not entirely, it turns out. The Canadian Manufacturers and Exporters (CME) have joined tar sands interests in a big lobby push on Parliament Hill this week, pushing the one sided argument that tar sands means all economic upside. But, in doing so, is CME actually acting against the interests of its own members? Well, could be, if "manufacturing" and "exporting" are what it's all supposed to be about.
As we've explored before, because of expanded tar sands production, Canada is succumbing to "Dutch Disease," a term coined in the 1970's to describe the hollowing out of the Netherlands' manufacturing base when a major natural gas find pushed up the currency rate and priced its products out of international markets. The Canadian dollar now tracks closely with the price of oil, and with increasing scarcity, will go ever higher over time, thereby making the products of Canadian manufacturers more expensive vis-a-vis their international competitors.
One study found that 42 per cent of recent Canadian manufacturing job loss was due to our petro-dollar. The Government of Ontario estimates that a sustained 5 cent change in the dollar affects about $6 billion in Ontario's GDP. The Government of Quebec recently flagged the petro-dollar issue in its budget.
So, the question is whether CME lobbies on behalf of all of its members, or only those involved in the tar sands. If we are to have healthy manufacturing and exporting in Canada, we need to cure our Dutch Disease.
Matt Price
Policy Director
Environmental Defence
Posts
