Canadian Press writes, “Mr. Mulcair’s analysis of what ails Canada’s economy is contradicted by a new independent study produced by the Institute for Research on Public Policy.” Really?
What does the study conclude? As quoted by Canadian Press, “On balance, the evidence indicates that Canada suffers from a mild case of the Dutch disease, which warrants a commensurate policy response.”
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 “neutralize” the upward pressure on the loonie by investing “windfall revenues” 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 “capping manufacturing wages or adopting the greenback outright.” 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 provinces’ non-renewable resources rather than collecting appropriate royalties to invest in savings funds.
- The Blackberry mess and what Canada needs (September 24th, 2013)
- Industrial Policy, Manufacturing Employment, and the Loonie (June 21st, 2013)
- Manufacturing Slump Threatens Q2 Growth (June 14th, 2013)
- Dutch Disease is Dead … Long Live Dutch Disease!!! (March 4th, 2013)
- The IMF and the Canadian Manufacturing Crisis (February 15th, 2013)