A new report on manufacturing suggests the Canadian economy rebounded in March, reversing the previous month’s surprising contraction and pointing to a resumption of modest growth.

Statistics Canada said Wednesday that factory shipments rose by a bigger than expected 1.9 per cent to $49.7 billion during the month after two consecutive declines.

The robust report — the biggest gain since last September — also included strong future indicators as new orders were also up by two per cent.

“Not much to rant about with this report,” said economist Jimmy Jean of Desjardins Securities. “While it is still early to pinpoint March GDP (gross domestic product), this gain supports the view for a strong rebound during the month.”

Given that Canada’s GDP contracted by 0.2 per cent in February, analysts said it is still unlikely the economy will meet the Bank of Canada’s call for a 2.5 per cent gain for the first quarter of 2012, but the bounce-back does show the economy began growing again.

Statistics Canada had earlier reported that March also saw a rebound in job creation with the addition of 82,300 new jobs, followed by 58,200 in April. The agency will report the GDP numbers for March and the first quarter at the end of the month.

The Canadian number was matched by a consensus-beating U.S. report showing industrial production south of the border rose by 1.1 per cent in April, the strongest month in about a year and a half.

As well, U.S. builders broke ground on an annualized seasonally 717,000 homes in April, an indicator America’s battered housing market may be on the mend.

“Looking ahead, we anticipate that stronger U.S. demand will be the driving support for the (manufacturing) sector,” said TD Bank’s Francis Fong.

“However, there is no shortage of challenges and risks. With Europe struggling to contain its sovereign debt crisis, exports to the region have fallen substantially since late last year. In addition, the high Canadian dollar remains an ever present hurdle for Canadian manufacturers.”

A new report from the Institute for Research on Public Policy suggests the strong dollar has negatively impacted 25 per cent of total factory output, mostly in small, labour-intensive industries such as textiles and apparel.

The report, which attempts to debunk the notion that Canada’s increased reliance on oil exports is hollowing out Central Canada’s manufacturing base — a phenomenon known as Dutch disease — concludes that cyclical factors and global competition is mostly to blame for the decline in factory production in Canada over the past decade.

The issue was given great impetus last week after NDP leader Thomas Mulcair blamed Alberta’s oilsands for some of the difficulties facing manufacturers.

March’s rebound doesn’t settle the question, but suggests the recent softness was due to temporary factors.

Statistics Canada said sales in March rose in 13 of 21 industries and in seven of 10 provinces, representing just over three-quarters of the manufacturing sector.

Sales of petroleum and coal products increased 4.5 per cent to $7.5 billion — the highest level since July 2008 — mainly due to higher sales volumes at many oil refineries.

In the chemical industry, sales rose 3.2 per cent to $3.9 billion, with most manufacturers reporting higher sales.

Transportation also bounced back strongly from a week February, with motor vehicle sales rising 2.3 per cent and aerospace by 9.9 per cent.

The Canadian dollar racked up a solid gain Tuesday morning, reflecting a sharp runup in oil and copper prices Monday while domestic markets were closed for Victoria Day.

The commodity-sensitive loonie gained 0.41 of a cent to 98.37 cents US.

Commodity prices were mixed after oil and copper advanced Monday after closing at multi-month lows last week on demand worries and a strengthening U.S. dollar. Traders have avoided riskier investments such as commodities, equities and resource-based currencies such as the Canadian dollar and bought into the safe haven status of U.S. Treasuries.

A stronger greenback usually helps depress oil prices, which are denominated in dollars, as it makes oil more expensive for holders of other currencies.

The June crude contract on the New York Mercantile Exchange was off 12 cents to US$92.45 a barrel after gaining $1.09 Monday. Copper traded at US$3.50 a pound, holding on to Monday’s three-cent gain.

June gold was off $8.20 to US$1,580.50 an ounce after dipping $3.20.

The Canadian currency has swooned about three US cents during May, largely because of market nervousness over the future of the eurozone.

Uncertainty has persuaded traders to pile into U.S. Treasuries and avoid riskier assets such as commodities (which have fallen to multi-month lows) and resource-based currencies such as the Canadian dollar.

The worry is that Greek political parties dead set against the austerity programs that have made crucial bailouts possible will be in an influential position after the next election June 17. A repudiation of those agreements would likely trigger a default and Greece would have to exit the eurozone.

Meanwhile, traders also digested a dire warning from the Organization for Economic Cooperation and Development that the 17-country eurozone risks falling into a “severe recession.” And the OECD, which comprises the world’s most developed economies, called on governments and Europe’s central bank to act quickly to stop the slowdown spilling over into the global economy.

OECD Chief Economist Pier Carlo Padoan called on eurozone leaders to adopt a “policy compact” to promote growth even while reducing deficits.

So-called eurobonds — debt issued jointly by countries in the currency bloc — could be used to recapitalize banks, Padoan said.

He also reiterated his call of six months ago for the ECB to do more to stem Europe’s crisis.

Traders also focused on a summit of European leaders that’s expected to be dominated by calls to boost economic growth across the continent.

On Wednesday, the leaders of the 27 European Union countries will hold an informal meeting in Brussels. The summit is expected to focus on ways to kick start the region’s faltering economy.

Canada booked its best two-month employment gain in three decades with news Friday that the economy churned out 58,200 new jobs in April, the strongest signal in some time the economic recovery may be coming out of a mid-winter stall.

The report was far stronger than anyone anticipated with Canadians able to find net new jobs in seven provinces across the country, many full-time and in the high-paying manufacturing, construction and resource industries.

Combined with March’s 82,300 jobs number, the 140,500 total is the best two-month employment performance the country has seen since 1981.

While welcoming another strong report, politicians and economists invoked caution about what the job creation numbers mean for the economy going forward.

“The job numbers ... are actually very good,” Prime Minister Stephen Harper said at an event in Edmundston, N.B.

“But I don’t want us to become complacent. We watch these numbers every month carefully and there’s lots of fluctuation, and the whole economy all around us remains very challenging, especially in Europe.”

Finance Minister Jim Flaherty echoed the sentiment, saying the global recovery remains “very fragile.”

Bank of Montreal economist Doug Porter said the Canadian data suggests the country is a kind of island of tranquility in a sea of turbulence, noting that while jobs climbed in Canada, the U.S. had shown signs of losing momentum and Europe slipped back into political and economic turmoil.

The only negative was that the unemployment rate edged up one-tenth of a point to 7.3 per cent. But Statistics Canada said that was because even more people went looking for work last month — a signal of labour market strength rather than weakness.

“Wow. Where did this come from?” Porter said.

“(This) doesn’t seem to jibe with very much else in the economy, but maybe this was a case of things being understated in prior months and now we’re getting catch-up.”

Analysts said the data presents Canadians with two separate pictures of the economy, given that prior to March, employment had been mostly flat going back to the summer.

Either job creation truly was stalled only to rebound with a vengeance as spring approached, or Canada had been experiencing moderate employment growth all along, a reality that was only captured in the household labour survey in the past two months.

Coincidentally, Statistics Canada’s less timely and lesser-known employers survey had been reporting steady growth throughout the fall and early winter, when the more well-known household survey was showing flat or falling numbers.

And with April’s numbers, the two surveys now appear to be in sync — both now show a 1.2 per cent job growth over the past year, although the employers’ survey is only to February.

Either way, the numbers point to an economy that continues to distance itself from the wreckage of the 2008-09 recession, although at a moderate rate, said analysts.

“With this report, the lull of last winter has been all recovered and employment is right back to its trend. Thus, further improvements of this size are highly unlikely,” said Jimmy Jean, economic strategist with Desjardins Economic Studies.

The jobs trend, if confirmed in subsequent months, could give the Bank of Canada more impetus to start hiking interest rates, as governor Mark Carney suggested last week.

But many economists still believe Carney will remain on the sidelines throughout 2012, given that the global environment is if anything worsening, particularly in Europe, and risks are rising.

The markets saw the report as positive, with the Canadian dollar leaping past parity on the morning opening, rising 0.31 of a cent to 100.14 cents US.

As impressive as April’s headline jobs number was — the details were stronger.

Unlike the previous month, when most of the new jobs were concentrated in Central Canada, this time the gains were spread across the country with employment rising in the Atlantic region, Quebec and the West — although Ontario, Nova Scotia and Manitoba missed out on the action with minor job losses.

Also impressive was that most new workers were full-time and all were in the private sector, as well as being new hires rather than in the softer self-employment category.

In fact, the number of employees rose by 66,600, more than making up for a small loss of self-employed workers, and the private sector added 85,800 as government jobs fell by 19,200.

Over the past year, Canada has added 214,000 new jobs, more than half in the last two months.

By industry, Statistics Canada said construction added the most workers, 24,600, followed by manufacturing, 23,800 — welcome news in an export-dependent sector that has been struggling due to weak foreign markets and the high Canadian dollar.

Other gainers in April included natural resources, 11,000; agriculture, 10,000; and education services, 17,000.

Offsetting the gains, public administration shed 32,400 workers, likely an indication of government restraint.

Although Canada’s unemployment rate at 7.3 per cent is still more than a full point above pre-recession levels, Statistics Canada inserted a historical note to show how much better Canada’s labour market has fared since the recession and in the past decade compared to the United States.

From the early 1980s until 2008, Canada’s unemployment rate was consistently higher than south of the border, it notes. But since 2009, the Canadian rate has been about 2.5 percentage points lower on average.

As well, Canada now has a greater number of workers as a percentage of the working-age population than the U.S., a reversal of pattern than existed prior to 2002.

“In April, the employment rate was 62.6 per cent in Canada when adjusted to the U.S. concepts,” the agency said. “This was 4.2 percentage points higher than the comparable rate of 58.4 per cent in the United States.”

While the Canadian economy continues to grow at a moderate pace, there is a widening gap between commodity-rich Western provinces and the manufacturing-heavy provinces in Central and Atlantic Canada, according to the latest edition of the Provincial Monitor report from BMO Economics.

Western Canada/Prairies
"The resource sector continues to fuel growth in Western Canada, with Alberta likely to lead the pack in 2012 after posting five per cent real GDP growth last year," said Doug Porter, Deputy Chief Economist, BMO Capital Markets. "Crude bitumen production rose 12 per cent in the province, and job growth is currently the strongest in Canada. Meanwhile, Saskatchewan is also benefiting from rising oil production in the Bakken, and continues to see a very tight labour market and strong population flows. Manitoba's diverse economy should see above-average growth in 2012."

Central Canada
The report notes that improved U.S. economic momentum since late last year is good news for exporters in Central Canada, but fiscal restraint continues to dampen the medium-term outlook in Ontario and Quebec. "Growth in the central provinces will likely run below two per cent in 2012," stated Porter. "The auto sector is one bright spot, with sales in both Canada and the U.S. showing strong momentum, and production climbing back to pre-crisis levels. But a rising tax burden will continue to weigh on growth in Quebec, and spending restraint will begin to bite in Ontario as the Province grapples with a near-$15-billion deficit."

Atlantic Canada
In Atlantic Canada, modest U.S. economic growth, a strong loonie and fading public-sector capital spending will mean lower growth in Atlantic Canada this year, with all provinces in the region at or below two per cent. "While preparatory work for Nova Scotia's $25 billion Federal shipbuilding contract is underway, growth likely won't get a significant boost until 2013," noted Porter. "Meantime, Newfoundland & Labrador, the region's recent growth leader, is likely to see offshore oil production drop in 2012 amid maintenance shutdowns and gradually falling output-broader domestic demand, however, should remain solid."

"Despite some clear regional differences, Canadian businesses are demonstrating their remarkable adaptability by diversifying their supply chains, opening-up new markets for their products and services, and by making critical investments in their companies," said Cathy Pin, Vice-President, BMO Commercial Banking. "This year we are also seeing many businesses beginning to look for opportunities to strengthen their financial underpinnings and competitive positioning, by taking greater advantage of available cash flow management tools and strategies."

The full Provincial Monitor can be downloaded at www.bmocm.com/economics.

WASHINGTON — U.S. manufacturing grew last month at the fastest pace in nearly a year. New orders, production and a measure of employment all rose.

The Institute for Supply Management, a trade group of purchasing managers, says its index of manufacturing activity increased to 54.8 in April. That’s the highest level since June and up from 53.4 the previous month. Readings above 50 indicate expansion.

Solid growth in manufacturing suggests the slowdown in hiring and factory output in March may have been a temporary lull. Economists have noted that a mild winter may have accelerated some economic activity at the start of the year, making March’s data weaker.

The report exceeded analysts’ expectations, prompting investors to shift money out of bonds and into stocks. The Dow Jones industrial average rose 80 points in morning trading.

A measure of employment rose to a 10-month high, an indication that factories are still hiring at a healthy clip. That’s a good sign ahead of Friday’s April jobs report.

A measure of new orders jumped to its highest level in a year. That could point to faster production in the coming months. New export orders also rose, which could offset worries that Europe and China could drag on exports.

Factories have been a key source of jobs and growth since the recession ended almost three years ago. The sector has expanded for 33 straight months, according to the ISM’s index.

Manufacturing has also been a big source of hiring. Factories account for only about 9 per cent of total payrolls but added 13 per cent of the new jobs last year. Manufacturers have added 120,000 jobs in the past three months, about one-fifth of all net gains.

Other reports on manufacturing have been negative. Factory output fell in March, the Federal Reserve said last week. Companies made fewer electronic products and cut back on steel and other metals.

Even so, the decline came after three months of strong gains and economists said the slight downturn wasn’t enough to suggest a major slowdown.

Last month, consumers cut back on their purchases of big-ticket items such as automobiles and appliances. And while the job market is improving, incomes are barely growing. That could weigh on consumer spending in the coming months.

Business investment is also slowing. Companies increased their spending on equipment and software at the slowest pace in nearly three years in the January-March quarter, the government said last week.

Even so, economists expect most of the challenges will be temporary. Companies may be ordering less heavy equipment because an investment tax credit expired at the beginning of the year. Orders are likely to rebound later this year, economists say.

Operating conditions in Canada's manufacturing sector strengthened in March, according to the RBC Canadian Manufacturing Purchasing Managers Index (RBC PMI), a monthly survey, conducted in association with Markit and the Purchasing Management Association of Canada (PMAC), which offers a comprehensive and early indicator of trends in the Canadian manufacturing sector.

The headline RBC PMI - a composite indicator designed to provide a single-figure snapshot of the health of the manufacturing sector - registered 52.4 in March, up from 51.8 in February, signalling a modest improvement in Canadian manufacturing business conditions. Index readings above 50.0 signal expansion from the previous month; readings below 50.0 indicate contraction.

The RBC PMI found that new orders and output both increased further in March, reflective of greater client demand. However, production growth was nonetheless the second-weakest in the 18-month survey history. Job creation was at a four-month high in March, while the rate of input price inflation eased since February.

"Activity in the Canadian manufacturing sector has been bucking the general trend of softening conditions, particularly in Europe and Asia," said Craig Wright, senior vice-president and chief economist, RBC. "Canadian manufacturers will continue to benefit from the strengthening U.S. economy, which started 2012 on a much more promising note. We expect to see continued demand for key Canadian exports, such as autos, machinery and lumber, south of the border, with real exports returning to pre-recession peak levels in 2013."

In addition to the headline RBC PMI, the survey also tracks changes in output, new orders, employment, inventories, prices and supplier delivery times.

Key findings from the March survey include:

• Output and new orders both increase modestly in March;
• Fastest rate of job creation since last November; and
• Average selling prices fall for first time in 18-month series history.

Firms generally linked the latest improvement in business conditions to greater client demand. Incoming new work rose modestly in March, with the latest expansion the strongest in three months. Moreover, new export orders also increased over the month, albeit fractionally, in contrast to declines reported in January and February.

Reflective of greater client demand, Canadian manufacturers raised production during the latest survey period. Output has increased in each month since data collection began in October 2010, but the latest rise was nonetheless the second-weakest in this sequence of growth. Panellists also depleted stocks of finished goods to help fulfil new order requirements, while backlogs of work fell moderately overall.

The amount of inputs purchased by monitored companies increased in March, albeit marginally and at the weakest pace in the 18-month series history. Meanwhile, input inventories were depleted for the seventh consecutive month. A number of panellists cited leaner stock holding policies. Concurrently, suppliers' delivery times lengthened further in March. Anecdotal evidence suggested that vendors struggled to meet greater demand for inputs during the latest survey period.

Employment in Canada's manufacturing sector rose solidly in March. Approximately one-fifth of respondents hired additional staff (while 11 per cent reduced their workforces), with the overall rate of job creation the strongest since last November.

Canadian manufacturers reported higher input costs in March, with fuel, steel and resin all particularly mentioned as having increased in cost. Although the rate of input price inflation remained strong, it was nonetheless the weakest in three months. Meanwhile, firms reduced their selling prices during the latest survey period, largely commenting on stronger competitive pressures. Notably, this was the first reduction in factory gate prices in 18 months of data collection.

Regional highlights include:

• PMI data signalled that manufacturing business conditions improved in all four regions in March. The weakest monthly improvement was registered in Alberta and British Columbia, however.
• New order volumes increased at the fastest pace in Quebec, but were broadly unchanged in Alberta & British Columbia.
• Job creation was registered in all four regions during March.
• The fastest rate of input price inflation was reported by manufacturers in Ontario.

"Following the sharp slowdown in January, growth in the Canadian manufacturing sector continued to recover in March. New orders increased at the fastest pace in 2012 so far, helped by greater client demand. However, the latest improvement in overall business conditions was modest, with output growth the second-slowest in 18 months of data collection," said Cheryl Paradowski, President and Chief Executive Officer, PMAC. "Input cost inflation eased in March, while Canadian manufacturers reduced their selling prices slightly."
www.rbc.com

Canada’s economy started off the year on positive, if tentative, footing in January, registering a modest 0.1 per cent gross domestic product gain after the strong handoff from the end of year.

The increase matched expectations, although markets were pleasantly surprised by an upward revision of a tenth of a point for the December reading to 0.5 per cent.

Analysts were initially mixed on the portents going forward, with some expecting better results in upcoming months.

“It was weaker, but if you take the last two months together and average them up, you get an economy growing by 0.3 per cent monthly and that’s actually a solid performance,” said TD Bank chief economist Craig Alexander.

Alexander said January’s GDP reading doesn’t change his view of the economy for the year. He recently upgraded his outlook for the year to 2.2 per cent growth, up half a point from his December estimate, mostly because of the good news coming out of Europe and the uptick in the United States.

Scotiabank’s Derek Holt, however, worried about the softer details in the report, with key sector such as mining and oil extraction, forestry and fishing, construction and public administration falling back.

The biggest contribution came from surprising strength in utilities and manufacturing, particularly auto production.

Some of the setback in key sectors may have been due to temporary factors. Statistics Canada cited the Rio Tinto aluminum smelter lockout in Alma, Que., as contributing to the decline in primary metal sales. The Caterpillar lock-out former Electro Motive employees at London, Ont., also likely played a role, said Erin Weir, an economist with the United Steelworkers union.

In the details of the Statistics Canada report, manufacturing rose 0.7 per cent in January, a fifth-straight monthly increase.

Production of durable goods rose 0.8 per cent with higher output of fabricated metal products, transportation equipment and wood products.

There were also increases in the finance and insurance sector, utilities, wholesale trade, some tourism-related industries and the public sector.

Decreases were recorded in forestry and logging, arts, entertainment and recreation as well as in construction.

Oil and gas extraction declined 0.9 per cent as a notable drop in natural gas extraction outweighed a gain in crude petroleum production.

Production of non-durable goods advanced 0.6 per cent on the strength of chemical and food production.

The finance and insurance sector rose 0.4 per cent, mainly as a result of an increase in management activity for mutual funds, residential mortgages and business loans.

Wholesale trade increased while retail trade was flat.

OTTAWA — Canada’s factories were humming in November, a strong signal for the economy and jobs, and suggesting the battered manufacturing sector may have more life than previously thought.

Statistics Canada said Thursday that manufacturing sales rose an above-consensus two per cent to $49.6 billion during the month — the fourth increase in five months — as output in machinery, petroleum and coal products, and motor vehicle industries posted strong gains.

In real terms, manufacturing sales were up 1.7 per cent.

Analysts had expected factory activity to taper off in the final months of 2011 due to the slowdown in the global economy and because of the unsustainable 14 per cent pop in the third quarter, which was mostly make-up for supply-chain disruptions in the spring.

But on an annualized basis, October and November combined show an additional seven per cent gain in terms of volumes, which bodes well for growth in the fourth quarter.

This week, the Bank of Canada upgraded its growth prediction for the final three months to two per cent from 0.8, but even that revision may not be adequate to cover the contribution of the key factory sector.

“I, like the Bank of Canada and a number of others, have bought into the argument that we’ve lost trade competitiveness with the strength of the Canadian dollar and weak productivity, but at some point you’ve got to let the facts speak for themselves,” said economist Derek Holt of Scotiabank.

“The kind of gains we’re seeing in manufacturing should challenge that belief.”

The Canadian dollar climbed about a quarter of a cent to break through the 99-cent US barrier in morning trading.

David Madani of Capital Economics said it is still unclear how long this surprising strength can continue, and he noted that November’s output was partly based on unusual temporary factors.

The machinery industry reached its highest sales level ever in the month, as sales rose 13 per cent to $3.4 billion as a “number of companies completed large projects” in the mining, oil and gas field machinery industry, Statistics Canada noted.

Still, sales were up in 14 of 21 industries, representing approximately 80 per cent of Canadian manufacturing, the agency said.

Motor vehicle sales rose 7.1 per cent to $4.1 billion in November and have increased 25 per cent since their low point last June.

Holt said there is reason to believe the factory momentum could hold at least well into the first quarter of this year.

New orders climbed 3.6 per cent from the previous month, and are up 20 per cent from a year ago.

“That suggests it’s sustainable for a least a few months,” he said. Does it last beyond the first quarter is much more uncertain, he added.

Overall gains in November were somewhat offset by declines in the computer and electronic product industry, where sales were down 11.0 per cent to $1.2 billion. Inventory levels rose 0.4 per cent.

Manufacturing sales rose in nine provinces in November, with Ontario, Alberta and Newfoundland and Labrador posting the largest provincial increases in dollar terms.

A new Conference Board of Canada study released by the International Trade and Investment Centre challenges the conventional wisdom about Canada’s trade profile. Canada is less trade-dependent than previously thought, has a smaller trade relationship with the United States than commonly believed, and relies on the services sector for a much larger share of its trade.

“These findings challenge some of the core views about what Canada trades, who it trades with and how much it trades,” said Michael Burt, Director, Industrial Economic Trends. “Using value-added trade measures, the description of Canada as a ‘small, open economy’ may be less accurate than previously believed. Value-added trade may also help to explain in part why Canada was less affected by the recent global recession than other countries.”

The publication, Adding Value to Trade Measures: An Introduction to Value-Added Trade, argues that conventional trade data—namely measures of imports and exports—can distort the “real” trade picture. Conventional trade measures have not been adapted to gauge transactions accurately when more than one country is involved in the production of a single good. This analysis utilizes a new methodology to estimate value added in the context of trade.

Value-added trade refers to the increase in worth of a good or service due to a specific step in the production process. For example, if a chair is worth $10 before being painted and $12 after, the value added by painting is $2. The first major outcome of the value added trade method is to eliminate double counting, which occurs when inputs cross borders multiple times before becoming a finished product. The second is to allocate the value embedded in a traded product back to its source. For example, an exported car contains a variety of inputs including raw materials, engineering services and even electricity.

From the analysis, the three key findings are:

• Canada is less trade-dependent – Using value-added trade measures, Canada’s share of global trade falls from 3.1 per cent to 2.9 per cent. These results may help to explain why declining global trade during the recession had less of a net effect on Canada’s economy than it did in other countries.
• Canada’s trade mix is different – using value-added trade, the services sector becomes more important relative to goods-producing sectors. When measured in value added terms, services account for about 40 per cent of Canada’s trade, compared to 16 per cent using conventional statistics. Gaining increased prominence are business and financial services, as well as trade, transportation and communications services.
• Canada’s trade relationships change – the largest adjustment occurs in Canada’s relationship with the United States. Using value-added measures, the U.S. share of Canada’s overall trade falls from 69 per cent to less than 62 per cent. Other regions of the world increase their share of Canada’s overall trade, particularly Europe (up more than two percentage points) and Japan (which gains more than one percentage point).

This is the first of three Conference Board publications on value-added trade. The next briefing will examine in more detail how the Canadian industrial trade mix changes when estimated in value-added terms and how our trade relationships with the rest of the world change. It will also shed more light on Canada’s role in global value chains. The final briefing in the series will reveal Canada’s comparative advantage and competitiveness in a world of value-added trade.

The analysis is supported by the International Trade and Investment Centre, which helps Canadian leaders better understand what global economic dynamics —such as global and regional supply chains, barriers to trade, U.S. policies, or tighter border security—could mean for public policies and business strategies.
www.conferenceboard.ca/itic/default.aspx

Natural Resources Minister Joe Oliver says he isn’t opposed to all environmentalists — just the foreigner ones who are trying to damage Canada’s interest.

“We are not demonizing,” Oliver said Monday after releasing a letter that referred to “environmental and other radical groups” trying to “hijack” with foreign money hearings on a pipeline that would bring Alberta oilsands bitumen to port at Kimitat, B.C.

“I have not called everybody radicals, nor do I think they are, nor do I think they’re trying to stop every kind of development. But there are some that do.

“I thought we’d just get the facts out without being politically correct about it.”

Environmentalists — who called Oliver’s letter everything from appalling to a hyperbolic rant — pointed out the vast majority of the people and money behind their campaign against the proposed Northern Gateway project is Canadian.

They released a poll taken last spring that suggests British Columbians are much more concerned about foreign money funding the oilpatch.

Policy experts criticized the letter for singling out Canadians who have concerns and wondered if the government is setting the stage for further attacks on environmentalists and the regulatory process.

“I’m appalled that the minister responsible for the National Energy Board would so brazenly demonize and discredit legitimate Canadian voices in this process,” said George Hoberg, a University of British Columbia political scientist who’s studied such issues for years.

“It’s remarkable that they’re saying these things.”

Oliver said in the letter that foreign-funded environmentalists and jet-setting celebrities are trying to further a “radical ideological agenda” during hearings into Enbridge Inc.’s proposed (TSX:ENB) $5.5-billion proposed pipeline, which are to begin Tuesday.

“Their goal is to stop any major project — no matter what the cost to Canadian families in lost jobs and economic growth. No forestry. No mining. No oil. No gas. No more hydro-electric dams,” Oliver wrote.

In an interview, Oliver said he didn’t mean to describe all opponents that way.

“There are people with legitimate concerns and interests, including people in British Columbia on the coast. They have every right to express their legitimate concerns on environmental impact.”

The problem, he said, is when people start lining up to appear at the hearing not to bring forward new perspectives, but to slow things down.

“We just don’t want the system gamed. We want it to take as much time as needed, but no more.

“In a court environment, if there’s a group of people concerned, they wouldn’t all be heard. The courts would take notice of their numbers, but if they all had the same thing to say, once their view is heard, it doesn’t have to be heard again and again and again.”

Oliver’s targets shot back Monday, saying one man’s red tape is another man’s hard look.

“Although minister Oliver and Prime Minister Harper may think this is a dictatorship and whatever they say goes, it’s actually a democracy,” said Will Horter of the Dogwood Initiative, a Victoria-based group that opposes the pipeline.

“This aggressive language that they use with anybody who disagrees with them is indicative of their approach to governing.”

Environmentalists released an online poll of 830 adults taken last April that found about 15 per cent of respondents were concerned about U.S. funding of Canadian non-governmental organizations. The same poll found nearly 75 per cent of respondents were worried about Americans investing in Canadian natural resources.

The conservationists pointed to a series of polls over the last few years that consistently suggest about three-quarters of respondents oppose tanker traffic along B.C. coastlines. They say the great majority of their funding is Canadian — 80 per cent in the case of West Coast Environmental Law and 86 per cent for the Dogwood Initiative.

Oliver said he isn’t bothered by the hundreds of millions that flow into the Canadian oilpatch from everywhere from France to China.

“There is not enough capital in this country to finance (oilsands development), so we welcome capital from other countries. These are countries that are supplying billions of dollars of capital to help build critical infrastructure to help us in our overarching objective, which is to move our resources from where they are to the new markets.”

Jessica Clogg of West Coast Environmental Law said that if anyone is importing U.S. influences, it’s the pipeline advocates.

“In recent days, we’ve seen the petroleum industry advocates use misleading U.S.-style attack ads in an attempt to discredit the fierce local and First Nations opposition,” she said.

“There have been a number of signals of a threat that federal environmental assessment legislation is on the cutting block. It would be a very sad thing indeed if the misleading information and attack ads from petroleum lobby groups were to create the political space for what would be a very sad turn of events.”

Green party Leader Elizabeth May wrote her own letter in which she suggested Oliver has been taken over by the “spin machine” in the prime minister’s office, which has in turn been hijacked by lobbyists from foreign oil companies.

“You should not have signed such a hyperbolic rant,” she wrote.