Dalton McGuinty, the Premier of Ontario, should not have responded ungraciously to an appeal by Premier Alison Redford of Alberta for solidarity from Ontario and Quebec, in the course of her speech on Friday to the Small Explorers and Producers Association on Friday. In particular, she wants the Premiers of the two Central Canadian provinces to help articulate the importance of the Keystone XL pipeline to the country as a whole.
“If I had my preferences,” said Mr. McGuinty – using the subjunctive mood to express what grammarians call a contrary-to-fact hypothesis – “as to whether we had a rapidly growing oil and gas sector in the West or a lower dollar, I’ll tell you where I stand: with the lower dollar.”
But Mr. McGuinty cannot enforce his preferences. Such exercises of the imagination are futile. There is of course a correlation between the exchange rate of the Canadian dollar and foreign demand for Canadian commodities, and a higher dollar means that Canadian goods – both manufactured products and natural resources – are more expensive. No politician, or anyone else for that matter, can alter this relationship – though opinions may legitimately differ on how much Ontario and Quebec manufacturers benefit from Western Canadian oil and gas.
If Mr. McGuinty favours an intervention by the Bank of Canada to lower the value of the Canadian dollar, he should address himself to its Governor, Mark Carney. He can hardly expect Albertan companies to decline to sell their petroleum products beyond Canada’s borders, or to lower their prices in order to reduce the foreign demand for Canadian dollars.
Canadian premiers are bound to have their differences, but they should not treat interprovincial relationships as a dog-eat-dog, zero-sum game.
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