IRPP: No Denial of Dutch Disease
Canadian Press writes, â€œMr. Mulcairâ€™s analysis of what ails Canadaâ€™s economy is contradicted by a new independent study produced by the Institute for Research on Public Policy.â€ Really?
What does the study conclude? As quoted by Canadian Press, â€œOn balance, the evidence indicates that Canada suffers from a mild case of the Dutch disease, which warrants a commensurate policy response.â€
What policies does the study recommend? According to Barrie McKenna:
There is a treatment for the relatively mild impacts of Dutch Disease, the authors suggest. The federal government should pump tax revenues into big infrastructure that bolster the competitiveness of manufacturers. And the energy-rich provinces could also help â€œneutralizeâ€ the upward pressure on the loonie by investing â€œwindfall revenuesâ€ offshore through sovereign wealth funds. And they rejected more radical solutions, such as capping manufacturing wages or adopting the greenback outright.
How does any of that contradict Mulcair? He has not suggested â€œcapping manufacturing wages or adopting the greenback outright.â€ He has advocated infrastructure investment.
If anything, this study contradicts Brad Wall and Alison Redford, who have been completely dismissing the concept of Dutch Disease while giving away their provincesâ€™ non-renewable resources rather than collecting appropriate royalties to invest in savings funds.