INSIDE POLITICS

Redford chides Ontario over ‘simplistic’ critique of oilsands benefits

Premier Alison Redford was blindsided, she says, by her Ontario counterpart’s mini-rant Monday against the high dollar caused by booming demand for western energy.

She was “surprised” at Dalton Mcguinty’s “very simplistic approach. . . . I have not at all had this impression from him before.”

Simplistic is one word for it. Simple-minded would be better. Not only do we get blamed for wrecking the environment; now we’re destroying the national economy, too.

One part of Redford must be delighted. There’s nothing like the old Ontario pinata to get Alberta PCS swinging their sticks during an Alberta election campaign. Redford can now keep Dalton on a string for handy use in a few weeks.

Whatever Mcguinty says, though, he’s a minority Liberal premier facing three more years of Prime Minister Stephen Harper. The chance of a return to state control of oil and gas markets and prices — Ontario’s age-old dream — is sub-zero.

Remarkably, that does seem to be what Mcguinty wants. After a speech to rural politicians in Ontario, he said: “If I had my preferences as to whether we had a rapidly growing oil and gas sector in the West, or a lower dollar benefiting Ontario, I can tell you where I stand — with a lower dollar.”

Mcguinty traces his troubles back to 2003, when the dollar began to rise as energy prices took off. Within three years, the province’s big trade surplus became a deficit.

“What does that mean?” Mcguinty asked. “It means that the high Canadian dollar — and it’s high because of the price of oil and gas in the West — is hurting the Ontario economy.”

Mcguinty’s knowledge of western economics is truly dim, if he really thinks natural gas prices are driving up anything but medication bills for Alberta producers.

And the high dollar, of course, just doesn’t hurt eastern manufacturers. It’s trouble for western exporters of anything, including oil and gas. When the buck goes up one penny for a year, the Alberta treasury loses $247 million.

The flip side of this petrocoin is that companies can buy equipment and goods from the U.S. for good prices. That’s an advantage in Ontario as much any western province.

Rather than strive to compete internationally, though, Mcguinty dreams of a retreat to the artificial protection of a low currency. There was a time when such talk from Ontario really worried Albertans, for good reason. Now the only reaction can be — poor Dalton. I mean, really poor. Ontario will run a $16-billion deficit this year. The province’s total debt, according to the Ontario Financing Authority, is $251.9 billion. It now receives equalization, paid in the main by guess what petro-province.

For Ontario premiers in this kind of trouble, the traditional reaction is to lob rhetorical shells over the western horizon.

My favourite moment came in 1979, when the Tory premier, Bill Davis, arrived at a premier’s conference in Quebec with a plan for sharing oil and gas revenues equally among consumers across the country.

This burglary he called a “national energy and employment adjustment program.” Davis not only intended to seize Alberta’s energy revenues, but cap prices as well. A year later, a new Liberal government was pleased to do his bidding, leading to a decade of deep trouble for Alberta.

Only in 1988, when the Mulroney government enacted free trade with the U.S., did the West finally get protection from these resource raids.

Ontario premiers never change, though. We’re just lucky that Canada did.