Ottawa’s focus on Alberta oilsands is killing manufacturing jobs in Eastern Canada, economists say – thestar.com

You know that old saying, “When the U.S. sneezes, Canada catches a cold.”

It still applies. The United States remains our biggest trading partner. What happens there affects everything from our tourism to our exports.

But now, Canada is facing a bigger threat to its economic health.

It’s called Dutch Disease — and it’s complicated by Prime Minister Stephen Harper’s newly acquired China Syndrome. Stung by U.S. President Barack Obama’s rejection of the Keystone XL pipeline, Harper is looking to China’s government-owned oil companies.

Dutch Disease isn’t about tulips or wooden shoes or even sick elm trees. It’s about Canada’s steady conversion to a petro-state, fuelled by the rapid development of Alberta’s oilsands. It means that, more and more, Canada’s economy will be subject to the price of oil.

Coined by The Economist in 1977, “Dutch Disease” describes what happened to the Netherlands after natural gas fields were discovered off its shores. The little country became so economically entangled with its resource industry, its manufacturing sector tanked.

“Ontario is probably the province that has suffered the most from this,” says University of Ottawa economist Serge Coulombe, co-author of a massive study on the impact of Dutch Disease on Canadian jobs, published last fall.

“The biggest losers are typically the white males who had all those great jobs in manufacturing, much like in the U.S.,” he says, adding that Canadian salaries and environmental standards make our manufactured exports less attractive, especially as our dollar strengthens. “If we want to compete with China we have to be very, very smart. It is very, very difficult.”

In his report, Coulombe and his co-researchers determined that our petro-currency was responsible for 42 per cent of job losses between 2002 and 2007. That translates to at least 140,000 manufacturing jobs gone as a direct result of the oilsands development…

via Canada News: Ottawa’s focus on Alberta oilsands is killing manufacturing jobs in Eastern Canada, economists say – thestar.com.