Dutch Disease

Does Canada suffer from the “Dutch Disease”?

Proposal

Introduction

The Dutch Disease is a theory which clarifies the perceptible association between a drop in the industrialized division and the boost in natural resources utilization. Rising value of Canadian dollar obstructed its industrialized division starting in the 2000s and goes on at present because of foreign pressure for mineral deposits, with the Athabasca oil sands getting progressively more prevailing. This paper will study if Canada is suffering from the “Dutch Disease” or not.

Literature Review

A review of the literature related to the Dutch disease shows that Canada has been both cursed and blessed by its immense wealth of natural resources. Vast reserves of natural resource give the wrong impression to the politicians who therefore consider that planning and thinking for future is needless when highest international costs force economic growth at a wild speed.

Research Method

In order to study if Canada is suffering from the “Dutch Disease” or not, secondary dat related to the subject will be utilized. Moreover online database will also be consulted to obtain key information. It is expected that the study will shed light on the key cause and effects of Dutch Disease on the economy of Canada.

Does Canada suffer from the “Dutch Disease”?

Introduction

In economics, the Dutch Disease is a theory which clarifies the perceptible association between a drop in the industrialized division and the boost in natural resources utilization. The system is that an boost in incomes from mineral deposits will create the currency of specific country more powerful contrary to that of other countries, ensuing the country 's other exports getting more pricey for other nations to obtain, creating the industrialized sector less aggressive. For example, growing dollar of Canada's obstructed its industrialized division starting in the 2000s and goes on at present because of foreign pressure for mineral deposits, with the Athabasca oil sands getting progressively more prevailing. This paper discusses if Canada is suffering from the “Dutch Disease” or not.

Discussion

Canada has been both cursed and blessed by its immense wealth of natural resources. Vast reserves of natural resource give the wrong impression to the politicians who therefore consider that planning and thinking for future is needless when highest international costs force economic growth at a wild speed. the Dutch disease ('loss of manufacturing competitiveness') short-termism, and continuing looking for rent manners from the business segment turn into the small policy set by default. (Peter , 2008)

Oil sands drives the growth of Canadian economy. The industry's focus is shifting from conventional crude to oil sands, due to the development of technologies that allow oil to be more easily extracted from oil sands and the high cost to produce conventional crude oil. Production from oil sands is expected to increase from 1.4 million barrels per day in 2010 to 3.3 million in 2025. Canada's oil sands deposits are estimated to hold about 170 billion barrels of economically viable oil. The industry's capital investment in oil sands mining averages $17 billion, ...