The Canadian-Dutch Disease: What the OECD wrote (plus the Figure)

“Thomas Mulcair’s Dutch Disease warning supported by OECD report ” wrote the National Post.

What did the OECD actually said :

The economy continues to undergo structural adjustments due to these persistent relative price movements since the early 2000s. The export-oriented manufacturing sector had by 2011 shrunk sharply to only 12.6% of total value added, down from a peak of 18.6% in 2000. Its share of employment has also fallen substantially over the past decade (from 15.2% to 10.2%), and somewhat more than in the United States (Figure 3). Both outcomes have been clearly correlated with exchange-rate developments. Regional growth disparities – based on a real disposable income per capita measure – mirror these divergences in sectoral activity: the resource-rich provinces of Alberta, Saskatchewan, and Newfoundland and Labrador have enjoyed the largest per capita income gains during the past decade (Figure 4), whereas growth has been more sluggish in the manufacturing centre of Ontario. Much of Alberta’s strength has been attributable to population increases due to employment opportunities. Alberta remains the most affluent province, thanks to its energy wealth. Strong prices for energy and other primary commodities are likely to persist, given the gradual recovery in world growth and continuing turmoil in the Middle East.

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