New Democratic Party leader Thomas Mulcair speaks during Question Period in the House of Commons on Parliament Hill in Ottawa September 18, 2012.
Credits: REUTERS/Chris Wattie
OTTAWA -- Bank of Canada governor Mark Carney could have been talking to a chair last week when he rebuked those who blame a slumping manufacturing sector on resource development and a high dollar.
And even though NDP Leader Thomas Mulcair has been the most vocal supporter of the Dutch disease theory, the former Quebec Liberal was adamant that Carney's smack down was not directed at the NDP.
When Mulcair first began heralding the Dutch prognosis, he was unequivocal that the dollar was "artificially" inflated because of a booming resource sector and that if "polluters" were taxed the dollar would lose value.
Carney had opportunities over the months to correct the record, but waited until he was in Calgary before tearing to shreds arguments he said were wrong.
"Canada's economy is much more diverse and much better integrated than the Dutch disease caricature," he elaborated.
"Numerous factors influence our currency and, most fundamentally, higher commodity prices are unambiguously good for Canada."
Carney illustrated that manufacturing has been in decline since the turn of the century while commodity prices have been on the rise.
"For the promoters of Dutch disease, this is the 'a-ha' fact, with the coincidental relationship described as casual," said Carney, who also chairs the G-20 Financial Stability Board and is an often mentioned figure to head the Bank of England.
"With a broader view, however, it is evident that the decline in manufacturing is only partially in response to the rising exchange rate and, in fact, is part of a broad, secular trend across the advanced world."
Muclair was kept away Tuesday from journalists on Parliament Hill.
But on Monday, he seemed to be climbing down from his position, back peddling from his use of "artificially" and now suggesting the dollar is "partially artificially" high because of a booming resource sector.