Mulcair’s east-west gambit has potential
Thomas Mulcair has rushed headlong into open warfare with the western premiers, or anyone whose livelihood depends on the oilsands, with his talk of “Dutch disease” — the notion that the loonie has become “artificially” inflated by burgeoning demand for energy, and that our manufacturing base is getting hammered as a result.
Projected seat count in Alberta in the next federal election? Zero. Saskatchewan? Zero. What can Mulcair be thinking? The answer has little to do with Alberta but with the seat count in the House of Commons. The New Democrats are writing off the Prairies and staking all their future hopes of forming a government on Ontario.
The extent to which the ploy succeeds will depend a great deal on how well the Tories can communicate a rebuttal to the “Dutch disease” argument. And communication is not these Conservatives’ forte.
Ontario, with 106 seats now, will
“The fertile soil in which Mulcair will plant his seeds will be Ontarians’ resentment of their declining fortunes vis-a-vis Albertans’.”
have 121 after re-allocation, out of a total seat count of 338. Quebec will have 78 seats, B.C. 42, Alberta, Saskatchewan and Manitoba 34, 14 and 14, respectively. In other words, the three Prairie provinces combined will hold just 62 seats — less than half Ontario’s tally.
Alberta is an economic giant on the rise, and recent census data suggest population patterns are shifting. If he keeps his stronghold in Quebec, and establishes a solid beachhead in Ontario, dominated by Toronto, Mulcair can put together a winning formula — just as Stephen Harper did by uniting Alberta, rural and suburban Ontario.
The fertile soil in which Mulcair will plant his seeds will be Ontarians’ resentment of their declining fortunes vis-a-vis Albertans’.
In his February report, economist Don Drummond forecast longterm economic growth for Ontario of just two per cent — if that. As for the province’s manufacturing economy, it is locked in long-term decline, oil or no oil. In 1976, factory jobs accounted for 23.2 per cent of total employment. Today, that number is 11.8 per cent.
Writing in Policy Options magazine, economists Luc Vallee and Celestin Bimenyimana have noted that, between 2001 and 2007, the value of Canadian crude-oil exports rose to $41.8 billion from $16 billion.
In the same period, revenue from auto exports dropped to $32.6 billion, from $41 billion.
And here’s the kicker: Ninety-five per cent of Canada’s oil reserves are in Alberta. Seventy-five per cent of manufacturing output is based in Quebec and Ontario.
The Conservatives perceive the threat: A group has already formed within the Tory caucus, dedicated to selling the benefits of the oilsands to the nation. In the months ahead, Conservative MPS will pound home the message that Alberta and resource development generally are rays of light in an otherwise bleak economic picture. And they’ll be telling the truth.
They’ll point out, for example, that energy companies account for nearly 28 per cent of the weighting of the S&P/TSX Composite Index — just behind the big financials. That means that any balanced portfolio in Canada, including, of course, the big public-service pension funds, will necessarily hold a substantial weighting in oil and gas.
What of those if oilpatch profits slump? The Tories will likewise note that Canada’s upstream oil and gas industry in 2010 generated $51 billion in capital spending and $18 billion in taxes and royalties. Would Mulcair truly like to see this put at risk?
The answer, of course, is no — he would not. But he’ll say that he would, for now, even at the risk of fomenting an east-west rift, to dislodge what many consider to be a still-fragile Conservative presence in Ontario.
It’s cynical in the extreme. And, barring a concerted, effective and consistent rebuttal, it may just work.