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Just to add an addendum to this, the decade the Conservative party has been in power has transformed the economic landscape in Canada- it is now wholly dependent on the strength of the oil industry. The Albertan tar-sands is an especially expensive form of oil extraction- break-even prices around the $70-$80 mark. With the loss of the Keystone XL and continued pressure on the Northern Gateway pipelines; Canada has a lot of over-priced oil and limited means of shipping it.

The problem with a oil dependent economy is that it's at odds with the "classic" Canadian economy- manufacturing/production and trades that directly benefit from low Canadian dollar. If oil does well, it raises the dollar and stresses one side of the economy; if oil does poorly manufacturing is strengthened but the overall health of economy falters.

It's a very precarious position that the Canadian government has put itself in and could result in some very long-term (on order of decades) problems to fully develop.




Out of curiosity - isn't an economy more diversified (and thus stabilized) by having both manufacturing (which benefits from a low $CAD) and oil (which benefits a high $CAD)?


yep, but without a large pool of internal demand to buffer things, these two work against each other.

http://en.wikipedia.org/wiki/Dutch_disease


Dutch disease is exactly what NDP leader Thomas Mulcair called it, and for some reason the Conservatives are trying to spin it as an attack against Mulcair. Personally I find the political spectrum in Canada just baffling.




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