The name of the new leader of the Canadian opposition party,the NDP, is Thomas Mulcair. He is rather naive: before visiting the oil sands mines he said they are the cause of a plague of the Dutch Disease in Canada. On seeing the oil sands mines, he is reported to have exclaimed: “They are big.” Which of course they are by any standard.
The Dutch Disease is what happens to nations when, blessed by copious natural resources, they fail to develop supporting and secondary industry. If a ruling elite gets their hands on income from the resources, that ruling clique has no incentive to develop other industry. The Saudi princes and princesses are an obvious example of a lazy bunch whose only skill is to spend oil money.
The simple fact is that mining in Canada has had the opposite effect: mining has spurred an incredible growth of supporting and secondary industry and skills in the population. No Dutch Disease here except maybe in the pusillanimous mind of the opposition, who do not like money or personal success, period. There are not enough skilled workers for mining net alone most other Canadian activities. That there may not be enough jobs for the unskilled is, in my opinion, a result of their lack of skill; not of mining, which would have ‘em if they could do useful things.
Maybe the same is true of mining in the United States. There are no titans of mining listed in the June 7, 2012 issue of Rolling Stones in their article on the billionaires who are pumping money into getting Romney elected. These guys who are pouring money into Political Acton Committees inherited or made their money from hotels, venture capital, selling soap and vitamins, and running hedge funds. Pity they do not put some of their action money into supporting mining or even making jobs for the average ninety-nine percent. Concern for the masses has never been a feature of the one-percent elite. Let ‘em eat cake, get educated, become skilled—is as good a mantra as any. And certainly do not let them elect Obama or Mulcair.
Seems like Mulcair also has a touch of the one-percent disease: stop mining, or at least claim it is the fault of mining that there are no jobs for his labor elite.
But this is all controversial. Here is part of a recent report:
A new OECD report seems to support controversial claims by NDP leader Thomas Mulcair that Canada is suffering from an economic condition known as Dutch Disease. The Organization for Economic Co-operation and Development warns in a report released Wednesday that the run-up in commodity prices is leading to an uneven economy in Canada. As well, it says the country needs to do more to develop non-resource aspects of the economy so as to maintain high levels of employment and an equitable distribution of wealth across regions. Resource-rich provinces such as Alberta, Saskatchewan and Newfoundland have prospered, while others have fallen behind, in part because a commodity boom has strengthened the Canadian dollar. Last month, the Pembina Institute said what it called “oil sands fever” spread benefits unevenly across the country and could be hiding economic turmoil down the road. A second report from the Macdonald-Laurier Institute, however, argued that all provinces benefit from the commodity boom. And yet another, from the Institute for Research on Public Policy, split the difference — it found some evidence for the phenomenon, but said the impact was smaller than feared.
The report goes on to say that “Canada boost innovation and invest in churning out skilled workers. That will lead to higher productivity, which should benefit the non-resource sectors.”
I am always a little amazed by this “churn out skilled workers,” stuff. It is almost as though humans are mere automatons waiting to be stuffed with skills and churned into productive labor. Many of the unskilled and unemployed I know, have not the ability to become skilled. Nothing could churn them into productive workers. I mean, is there in Canada or the US for that matter, an absence of community colleges and trade schools awaiting the attendance of currently unskilled willing? We can hardly go around and press-gang the idle into an eduction churn-mill.
I would start with a better education for those who write such drivel about churning out skilled workers. Then I would get them all to read this link from the Calgary Herald, which in part says:
In simple terms, Mulcair is choosing to ignore the fact the energy sector is not just an economic engine of the country, but that the way it functions is that it facilitates the distribution of income across the country – to the benefit of all. In other words, what happens in the energy sector is good for the country because it creates jobs, income and more importantly for someone with NDP stripes, tax revenue. Late last month, Mulcair made it to the Suncor mining site for two hours – presumably so he could say he checked off that box on the to-do list. Had he spent more time in northeastern Alberta – as did TV Tokyo, which was touring the oilsands at the same time – he would have seen examples of how the energy sector benefits his home province.
He might have travelled on a bus made by Diversified, a Quebec company that supplies the hundreds of buses that shuttle oilsands workers to and from job sites on a daily basis. Had he walked through Devon Canada’s Jackfish site, he would have learned the steel weaving through the company’s in situ operations came from Quebec. He would have seen steel tanks stamped with blue ink saying they were made in Toronto and he would have seen massive lodgings in the process of being built by British Columbia’s Britco, with the modules coming from the interior of that province.
So for now, avoid statements by the rich, the uninformed, and the greedy unskilled. Vote your heart and mind, unsullied by propaganda and ignorance.
I hate to say it but there are grains of truth in Mulcair’s opinion about why manufacturing got hammered by the high dollar. As the dollar rises our trade balance adjusts to the higher dollar, and if it wasn’t for oil exports our balance of trade would be in terrible shape. Caterpillar’s move of the former GM locomotive plant from Ontario to Ohio is just one example of jobs moving to a location where labour is available and cheap. Thank goodness orebodies are impossible to move like that!
I don’t think our manufacturing problems are solely due to the high dollar though. The main issue is low productivity, which was well hidden in years gone by due to the low exchange rate. Canada’s productivity is low and the gap between us and the USA is widening. With a high dollar, manufacturers are exposed to world competition and are no longer able to count on an extra 20 or 30% extra on the income statement.
One might think low productivity can be solved by cutting labour costs, but that would be a mistake. We’re very much a consumer driven economy, just like the USA. Cutting labour costs would just cut consumer spending and send the economy into a tailspin. I think we need to make investments in technology and innovation to improve productivity, and I think this should be an industry long term priority with support from government. In the past I’ve seen some wonderful examples of technology in mining. Kiruna, in N Sweden is perhaps the most advanced mine in the world, and serves as a model for our BC pits and plants.
There truly is a lack of skilled workers in mining today. It’s a legacy from many prior years of hanging on by our finger tips as an industry. Apprenticeships were common in the early part of my career, but they disappeared as costs were cut to survive. Those people, who today would have 15 to 25 years of experience….they don’t exist….at least not in adequate numbers. Again, this should be a policy issue for mining.
The Greedy Unskilled
I love this phrase! It is way better than ‘the 99%.’
Do you think the occupy folks will accept the new term?
Tommy the Commie must have similar condemnation for mines in Quebec.