Mulcair: a good point
The following letter from Erin Weir was published in The Leader-Post on May 14, 2012.
Your May 8 front page reported Premier Brad Wall’s criticism of federal NDP leader Tom Mulcair’s concern that resource policies are eliminating manufacturing jobs (“Mulcair ‘ashamed’ of west?”). The Leader-Post has also printed columns by Murray Mandryk, Michael Den Tandt and Barbara Yaffe repeating this criticism.
But Mulcair is addressing a genuine economic problem. While several factors have hurt Canadian manufacturing, an overvalued exchange rate has clearly undermined its competitiveness.
Yaffe claims that “Saskatchewan’s own manufacturing sector is thriving despite the high Canadian dollar.”
But Statistics Canada reports that, since Wall took office, manufacturing employment has declined by 14 per cent in Saskatchewan compared to 12 per cent nationally.
Foreign investors have bid up the exchange rate by buying Canadian dollars to take over, or acquire shares in, Canadian resource companies. These corporations are so lucrative because they obtain public resources at low royalty rates and sell them at higher prices.
The Saskatchewan Ministry of Energy and Resources’ most recent annual report indicates that it collected only $2.2 billion of revenue from $17.6 billion of non-renewable resource sales in 2010. No wonder foreign investors are driving up the loonie as they clamour to get in on the action.
Provinces should collect more resource revenue to fund public services and save for the future. Higher royalties would also temper the inflow of foreign funds, help moderate the exchange rate, and thereby facilitate manufacturing employment in Saskatchewan and other provinces.