Canada suffers from Dutch Disease

[TimG]

Most species are completely priceless economically.

Then provide an example and demonstrate the 'priceless' economic value of a species. You won't be able to because your assessment is purely driven by your religion and has no rational foundation.

My opinions are based on logic and facts. I don't reject the principle that polluters should pay but I recognize that this is a impossible objective to achieve in many situations because we have no way to put an economic value on a environmental concern. This means that the decision comes down to an arbitrary judgment call that attempts to balance economic and environmental interests.

Edited May 23, 2012 by TimG

[waldo]

The oil sands provide a good counter example. The government allowed the development to proceed even though this meant some nasty toxic waste dumps were created. Recently, suncor has developed a technology that allows them to reduce the size of tailings ponds by 95%. It is unlikely that this technology would have ever been developed if the government did not allow oil sands companies to exploit the resource before they had any idea on how it would be cleaned up.

no - after 40 years of abysmal action in tailings management, public, 'eco-advocate' & Canadian Environmental Assessment Agency, etc., pressure forced the hand of the Alberta government - see Energy Resources Conservation Board - Directive 74, forcing tarsands operators to (finally) get serious about managing tailing ponds. By the by, Suncor projects a 80% reduction in it's overall land size requirements in regards it's new TRO process. Interesting you would claim a 95% 'result' given the 2nd phase of TRO doesn't actually complete until the end of 2012.

[madmax]

It means it is not simply a question of oil. The numbers I quoted earlier show that oil is only about 1/3 of Canada's resource exports. Picking on oil is completely unjustified.

Picking on it is unjustified, Analysing it effects is prudent.

[dre]

You won't be able to because your assessment is purely driven by your religion and has no rational foundation.

My opinions are based on logic and facts

[fellowtraveller]

The middle class is the main engine driving the economy.Always has been and always will be!No ifs ands buts or maybes!

Not true, the middle class in Canada is a relatively new force in the economy as well as being a relatively new force period, and they create nothing as it is simply a descriptor of relative wealth.

The real creator of jobs is small business, and the reason for that is that they are risk taking and able to adapt quickly to s shifting econmy.

We will adapt to new global economies, because we are educated, literate and the country has resources. Our economy has managed to survive structural change nuimerous times. Note that 90% of all Candians lived in rural areas just six or seven generations ago, and that adaptation was far more profound than what we face now.

That doesn't mean that everybody in Ontario gets back that great job in a factory.

[punked]

Another 200 manufacturing jobs lost in Ontario but nothing to see here people.

http://www.theglobeandmail.com/globe-investor/timken-to-shutter-ontario-plant/article2442271/

[TimG]

Another 200 manufacturing jobs lost in Ontario but nothing to see here people.

Total employment increase in manufacturing March to April 2012: +23,000

http://www.statcan.gc.ca/daily-quotidien/120511/t120511a002-eng.htm

Nothing to see here I guess....

[punked]

Total employment increase in manufacturing March to April 2012: +23,000

http://www.statcan.gc.ca/daily-quotidien/120511/t120511a002-eng.htm

Nothing to see here I guess....

Yah year over year it is unchanged which should scare us because the government keeps telling us the economy is making a come back which means year over year manufacturing should be up. The auto industry can't keep up with demand and the year over year growth is 0. Welcome to Dutch Disease. Do you think I am stupid? You are going to post a chart with year over year news and expect me to compare month over month numbers? Get a clue Tim.

Edited May 24, 2012 by punked

[TimG]

Do you think I am stupid?

You are the one who posted a story of the loss of 200 jobs and tried to imply it has some significance. I simply pointed out that the number is insignificant compared to the churn in the market.

As for the dutch disease: it appears to be a tempest in a teapot stirred up by union hacks and lefties who hate oil companies.

http://www.irpp.org/pubs/IRPPstudy/IRPP_Study_no30.pdf

However, none of the three subindustries associated with automotive manufacturing, which is often held up as a poster child for the difficulties posed by a strong Canadian dollar, shows a statistically significant relationship between output growth and energy prices. This provides strong circumstantial evidence that the woes of Canadian automakers and parts suppliers stem from cyclical changes in demand, lagging productivity growth and other structural obstacles to competitiveness.

Edited May 24, 2012 by TimG

[punked]

You are the one who posted a story of the loss of 200 jobs and tried to imply it has some significance. I simply pointed out that the number is insignificant compared to the churn in the market.

As for the dutch disease: it appears to be a tempest in a teapot stirred up by union hacks and lefties who hate oil companies.

http://www.irpp.org/pubs/IRPPstudy/IRPP_Study_no30.pdf

Yep those Union Hacks. Who was the one who put out a study that said it was very real and effecting as much as 40% of Manufacturing? Oh yeah it was the Harper government. Those Union Hacks. Tim would never vote for someone like that.

Our own government says it is a problem and you ignore it. This is going to hurt Canada.

Edited May 24, 2012 by punked

[TimG]

ho was the one who put out a study that said it was very real and effecting as much as 40% of Manufacturing? Oh yeah it was the Harper government.

And that study is junk because it assumes that all changes in manufacturing were due to the exchange rate. It is not actually the fault of the authors because they were focused on a cool new method for separating the rise in the CND from the fall in the USD. The calculation is probably valid but the conclusions are not justified.

As for ignoring it: the only "solutions" I have heard is we kill the oil industry.

Edited May 24, 2012 by TimG

[punked]

And that study is junk because it assumes that all changes in manufacturing were due to the exchange rate. It is not actually the fault of the authors because they were focused on a cool new method for separating the rise in the CND from the fall in the USD.

Please quote the part of the study which you have issue with. I have read the study it is clear to me you making up what you think about the study and what it says as you go along.

Edited May 24, 2012 by punked

[TimG]

Please quote the part of the study which you have issue with. I have read the study it is clear to me you making up what you think about the study and what it says as you go along.

It is not what they say. It is what they don't say. Here is what they did:

Our analysis provides simple but important figures and conclusions concerning the case

for a Dutch disease in Canada. First, we show that the recent dramatic appreciation of the

CAD/USD exchange rate (around 50%) might be decomposed into a 62% appreciation of

the Canadian currency and a 38% depreciation of the USD currency. Second, the

decomposition of the Canada-US bilateral exchange rate into a USD and a CAD

component shed new light on the relationship between the Canadian exchange rate and

energy and commodity prices. Third and more importantly, given the estimated

respective responses of the Canadian employment to the evolution of each currency

component, we find in the end that only 54% of the CAD/USD appreciation that affects

Canadian employment might be ascribed to the rise in commodity prices

They made no attempt to even look at the effect of increased competition from Asia on manufacturing employment and we know this matters because manufacturing in the US has been hit hard too even though they have a depreciating currency. The omission of this extremely relevant factor makes this paper meaningless.

I gave you a reference to another paper that does take this into account and it concluded that dutch disease exists but it is a minor factor that had little effect on the auto industry.

You are the only one making up stuff about what you think the study says.

Edited May 24, 2012 by TimG

[punked]

It is not what they say. It is what they don't say. Here is what they did:

They made no attempt to even look at the effect of increased competition from Asia on manufacturing employment and we know this matters because manufacturing in the US has been hit hard too even though they have a depreciating currency. The omission of this extremely relevant factor makes this paper meaningless.

I gave you a reference to another paper that does take this into account and it concluded that dutch disease exists but it is a minor factor that had little effect on the auto industry.

You are the only one making up stuff about what you think the study says.

I have no clue what you are talking about. The US has gained more Manufacturing jobs of the last year then it has in any year out of the last 10-15 or so. I fail to see how that is a flight from manufacturing in the US. In fact they are calling it right now "The US manufacturing renaissance". You keep throwing out silly arguments not supported by facts and hoping I am not going to call you on them. I am telling you right now I am going to call you on them.

http://www.reuters.com/article/2012/05/15/us-urscorp-idUSBRE84E1MP20120515

Edited May 24, 2012 by punked

[TimG]

In fact they are calling it right now "The US manufacturing renaissance".

Why don't you try looking at those numbers in context:

http://www.creditwritedowns.com/wp-content/uploads/2012/05/us-employment-in-manufacturing.jpg

The so called 'renaissance' is a blip at the end of a decade long collapse.

The US manufacturing collapsed as the CDN rose to its peak in 2008.

Any analysis of Canadian manufacturing that does not take this drop in US manufacturing into account is useless.

Edited May 24, 2012 by TimG

[punked]

Why don't you try looking at those numbers in context:

http://www.creditwritedowns.com/wp-content/uploads/2012/05/us-employment-in-manufacturing.jpg

The so called 'renaissance' is a blip at the end of a decade long collapse.

The US manufacturing collapsed as the CDN rose to its peak in 2008.

Any analysis of Canadian manufacturing that does not take this drop in US manufacturing into account is useless.

Ok must be why we are seeing our Manufacturing jobs bleed to the US.

[Smallc]

Ok must be why we are seeing our Manufacturing jobs bleed to the US.

And I'm sure you can furnish proof of that.

[bush_cheney2004]

Ok must be why we are seeing our Manufacturing jobs bleed to the US.

Your manufacturing jobs? IIRC, the Timken Company is an American firm based in Ohio. Welcome back American jobs!

[Claudius]

The bottom line here is what is the end game of this "Dutch disease" accusation?

Assuming this is true, and further assuming oil and gas commodities are the only reason manufacturing jobs are suffering (this is not remotely true, but let's just take it for sake of argument) what's the answer the valiant NDP are proposing?

Alberta, Saskatchewan and the Eastern provinces are just supposed to shut everything down and give up all the income (to the entire country that is) just so Ontario can give it another go at a manufacturing sector that will...what? Support the country?

That's pretty silly.

Edited May 25, 2012 by Claudius

[socialist]

Ok must be why we are seeing our Manufacturing jobs bleed to the US.

Mulcair cant become PM soon enough. mulcair will have a huge mess to clean when he wins in 2015 but there is no politican more earnest than mulcair. he has renewed my hopes for canada. right now im ashamed.

[mentalfloss]

Alberta, Saskatchewan and the Eastern provinces are just supposed to shut everything down and give up all the income (to the entire country that is) just so Ontario can give it another go at a manufacturing sector that will...what? Support the country?

That's pretty silly.

Yea that is pretty silly.

I don't know why anyone would think that this solution is even being suggested in the first place.

Edited May 26, 2012 by mentalfloss

[Claudius]

Yea that is pretty silly.

I don't know why anyone would think that this solution is even being suggested in the first place.

Well it hasn't been verbally suggested because when you lay it out like that people can easily see that proposal is stupid, but like said, what's the end game with Mulcair's accusations then? What? He just wants to wag his finger and make sure these provinces to know that they're the supposed reason no one in Ontario can get a job? The say-it-out-loud suggestion isn't there but that's the insinuation.

[punked]

The bottom line here is what is the end game of this "Dutch disease" accusation?

Assuming this is true, and further assuming oil and gas commodities are the only reason manufacturing jobs are suffering (this is not remotely true, but let's just take it for sake of argument) what's the answer the valiant NDP are proposing?

Alberta, Saskatchewan and the Eastern provinces are just supposed to shut everything down and give up all the income (to the entire country that is) just so Ontario can give it another go at a manufacturing sector that will...what? Support the country?

That's pretty silly.

Manufacturing is bigger in all the Eastern provinces then resource extraction. This isn't only a problem for Ontario. As China stops buying resources and resource wealth crashes Canada should be able to fall back on manufacturing to keep the country growing. However if we are short sighted that wont be there and hello depression. Stop playing the short game and start playing the long.

[Claudius]

However if we are short sighted that wont be there and hello depression. Stop playing the short game and start playing the long.

Fair enough and a good answer. I have long been disappointed with the fact that resource extraction is all Canada ever seems to fall back on and as industries go you're right; you can't count on them. I don't think anyone is really proud of the fact that's all we seem to be able to do for quick money. However I would point out two things:

1) It's been that way for a very very long time and it's hardly the fault of the past decade or so's governments, (or put another way it is directly the fault of the passt 50 years worth of governments), it's been like that for a century. Do you know what the Chretien government did 4 weeks after signing Kyoto? They bought $18 billion worth of oil sands land schemes as a federal investment, these were in turn sold to suncor (and Shell I think).

2) The major impediment to a healthy manufacturing sector in this country has always been the low population. It was Laurier who recognized this way way way back when he instituted a wide range of policies designed to woo European settlers from Europe and away from the US. The economic principles here were just a newborn science at the time but it was he who envisioned Canada with a population of 100 million by the 1950's. It was his assertion that this was the magic number that would allow Canada to be a competitive industrial nation with the US and the rest of Europe. Imo and the opinion of many smarter than me he was dead on the money with this, but it just never transpired. To this day the 100 million number is still passed around. So how do we fix that?

Edited May 26, 2012 by Claudius

[Claudius]

Oh and a side note to the above:

'In the first place, we should insist that if the immigrant who comes here in good faith becomes a Canadian and assimilates himself to us, he shall be treated on an exact equality with everyone else, for it is an outrage to discriminate against any such man because of creed, or birthplace, or origin. But this is predicated upon the person's becoming in every facet a Canadian, and nothing but a Canadian.

There can be no divided allegiance here. Any man who says he is a Canadian, but something else also, isn't a Canadian at all. We have room for but one flag, the Canadian flag. We have room for but one language here, and that is the English language. And we have room for but one sole loyalty and that is a loyalty to the Canadian people.'

Wilfrid Laurier 1907