Notable Linkage: The Tyee – Finally, Canada Goes to School on Dutch Disease

Excerpt:

“To the extent that the Dutch Disease does exist in Canada, Northern Gateway represents an entrenchment of the syndrome. The project promises a sustained increase in the price of crude oil which will serve to appreciate the Canadian dollar, raise inflation and interest rates. Those pressures will work negatively on Canada’s other exporting sectors to decrease output and employment further.”

A 2012 study by European and Canadian economists found that 42 per cent of the appreciation in the Canadian dollar was due to the resource boom and that the Dutch Disease accounted for between “196000 and 220000 jobs lost in the manufacturing sector for Canada.”

The Tyee – Finally, Canada Goes to School on Dutch Disease

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