PERSPECTIVE: Lesson in oil sands economics

Something is missing from the discussion as we push ahead with oil sands development. That’s the opinion of Ken Neumann, national director of the United Steelworkers, and Rick Smith, executive director of Environmental Defence, writing in...

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Something is missing from the discussion as we push ahead with oil sands development. That’s the opinion of Ken Neumann, national director of the United Steelworkers, and Rick Smith, executive director of Environmental Defence, writing in the Ottawa Citizen on March 5, 2012. They wrote: “Policy-wise, we desperately need a conversation about the pace and scale of the tarsands industry, not just on environmental grounds, but on economic grounds as well.”

The point being that there is not only an environmental impact to mining the oil sands but an economic impact. The environmental impact has gotten wide and noisy discussion about the damage that can be done. The economic impact is missing from our discussions, and it must be examined.

As Neumann and Smith point out, Canada’s currency is now the “Petroloonie”. The strength of the Canadian dollar, relative to the U.S. dollar, rises with the rising price of oil. Our high dollar is making Canadian goods too expensive in the world marketplace, and this country is loosing jobs in manufacturing, tourism and other industries.

Over the past nine years, Statistics Canada estimates that Canada has lost more than 627,000 jobs in manufacturing. Other experts believe that 40% - as many as 250,000 - of those lost jobs are directly attributable to the rising oil price. Those loses are only partly offset by growing employment in the oil and gas industry.

Including the economic outcome as well as the environmental footprint of is a necessary, but often missing, part of the oil sands development discussion. It is not enough to measure the effects of fast-tracked development as polluted waters, greenhouse gases and ruined landscapes.

Neumann and Smith suggest that we look to Norway as an example of mitigating the negative economic effects of development. That country is using its oil revenues to build a fund for the day when the oil runs out. By investing that fund outside the country, inflation at home is kept in check.

Billions of dollars have been poured into the Canadian oil sands and tens of billions will flow to that industry in the future. Let us take a balanced view – economic as well as environmental. Let’s give equal weight to controlling the economic effects of the oil sands industry as we do to mitigating the environmental effects.

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